Economics, U.S. Economy

Jonathan Chait seems to be ‘Coming Apart’ over income inequality

New York magazine’s Jonathan Chait doesn’t much like Charles Murray’s new book, Coming Apart: The State of White America, 1960-2010. In particular, he doesn’t like that Murray links the increasing social polarization of America to the abandonment by poor and working-class whites of the”Founding Virtues” of industriousness, honesty, marriage, and religion. Here’s Murray:

As recently as half a century ago, Americans across all classes showed only minor differences on the Founding virtues. When Americans resisted the idea of being thought part of an upper class or lower class, they were responding to a reality: there really was such a thing as a civic culture that embraced all of them. Today, that is no longer true. Americans have formed a new lower class and a new upper class that have no precedent in our history. American exceptionalism is deteriorating in tandem with this development.

But that’s not what Chait wants Murray to write about. Chait doesn’t want Murray to write about culture. Chait wants Murray to write about rising income inequality as the driving force behind pretty much all of America’s troubles. Here’s Chait from his column titled “Inequality and the Charles Murray Dodge“:

Rising income inequality is a phenomenon of the top one percent pulling away from everybody else. Conservatives want to redefine the question as concerning the top 20 percent against everybody else. If you redefine the question as being about the top quintile against the bottom four-fifths, then you can start talking about marriage and Charles Murray and safely steer the debate back onto comfortable conservative terrain.

Chait also doesn’t like that I have repeatedly questioned the liberal-MSM consensus on “exploding” income inequality, calling me “the right’s most enthusiastic inequality denier.” And he really doesn’t like this chart that I wrote a blog post about. The chart displays the Gini Coefficient, a common inequality metric:

Basically, what this chart shows is that inequality has been rising among families and households, but has stayed steady among individuals. Now, I grabbed this chart from the must-follow Political Calculations blog, which explains the divergence this way:

1. We have already confirmed that there has been absolutely no meaningful change in the inequality of individual income earners in the years from 1994 through 2010. If income inequality in the U.S. was really driven by economic factors, this is where we would see it, because paychecks (or dividend checks, or checks for capital gains, etc.) are made out to individuals, not to families and not to households.

2. It would seem then that the real complaint of such people isn’t about rising income inequality, but rather, how people choose to group themselves together into their families and households. With a near rock-steady level of income inequality among individual income earners over time, it is only possible for income inequality to rise among families and households if the most successful income earners group themselves into families and households and if the least successful income earners likewise group themselves together into families and households as well.

3. Think about it. The reason that the income inequality levels recorded for families and households are lower than those for individuals are because most families and households may have one high income earner, who is balanced out by individuals within the families or households who have low or no incomes. But, if people with very high income earning potential join together to form families and households, and increasingly do so over time, perhaps because such people might have things in common that make forming themselves into families and households an attractive proposition, then income inequality among families and households will increase.

4. The same holds true for the opposite end of the income earning spectrum. If people with really low income earning potential join together to form families and households, or perhaps if they choose to split apart, and increasingly do so over time, then the resulting low income family and household will also make income inequality among families and households rise, even though there has been no real change in the amount of actual income inequality among individuals.

Indeed, this explanation fits quite well with Murray’s thesis in Coming Apart. What we have, to a great extent, is a values and virtue problem rather than a “the rich stole all the money” problem that Chait would prefer for reasons of political ideology. In short, Chait’s theory of the case has come apart.

One thought on “Jonathan Chait seems to be ‘Coming Apart’ over income inequality

  1. I wouldn’t advise repeating anything from “Political Calculations” that you haven’t independently validated yourself.

    I was a fan of the site until I saw a strange debt chart that the site has been pushing for seven years.

    Doing some investigation, I realized that it was a completely bogus approach that was essentially taking the debt per population SQUARED.

    Now we all make mistakes and even whoppers like this. What really soured me on the site was that when I contacted the author by email he persisted and even hinted that people had been trying to point out the mistake for some time unsuccessfully. So that was enough info for me.

    Now I haven’t bothered to check any of his other political calculations, because frankly as long as he keeps his debt / population-squared graph up, it’s really not worth the trouble.


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