Home > Uncategorized > Penn Economist Demonstrates NYTimes Op Ed Contributors Flawed Arithmetic, But Misses One Key Point

Penn Economist Demonstrates NYTimes Op Ed Contributors Flawed Arithmetic, But Misses One Key Point

In a March 16 post to RegBlog, University of Pennsylvania Economist Adam Finkel takes his University of Chicago colleague Deirdre Mccluskey to task for her flawed math in an op ed piece she wrote for the NYTimes. In the op ed essay published on December 23, Ms. McCloskey asserted that

“[a]s a matter of arithmetic, expropriating the rich to give to the poor does not uplift the poor very much. If we took every dime from the top 20 percent of the income distribution and gave it to the bottom 80 percent, the bottom folk would be only 25 percent better off.”

As Mr. Finkel pointed out in this post (and to the NYTimes editors), this would only be true if EVERYONE started with the same level of wealth… and in our country that is clearly NOT the case. Indeed, instead of using Ms. McCloskey’s assumption that everyone has equal wealth of $500,000, Mr. Finkel used some real world numbers to calculate the impact of redistribution:

In the real United States, however—where $500,000 is indeed a reasonable estimate of the average individual networth, but where the top 20 percent own 85 percent of all wealth—the math is very different. Among a representative sample of 1,000 Americans, there would be $425 million to redistribute among the bottom 800 people, who would each start with only $93,750.

When Mr. Finkel dissembles Ms. McCloskey’s argument further, however, he overlooks one key flaw in her thinking:

First, McCloskey asserts that once the poor have “a roof over their heads and enough to eat,” they have no further need for any of society’s accumulated wealth. Elsewhere, she claims that all progressives seek a “forced equality” that would require brain surgeons and taxi drivers to earn the same amount. The former assertion is callous, and the latter is a strawman: even the most repressive Communist regimes in history sought equality of opportunity—not equality of outcome. Surely, somewhere within the 99 percent of the ideological distribution between dystopian Darwinism and utopian equality-for-its-own-sake, there is room for fruitful discussion about whether we should favor some modest redistribution via a progressive tax code and social programs. But McCloskey’s caricature of both positions makes any compromise impossible.

This just in, Mr. Finkel: Ms. McCloskey’s assertion is more than callous. It completely overlooks the fact that in January 2015, 564,708 people were homeless on a given night in the United States. and 42,200,000 Americans lived in food insecure households, including 29,000,000 million adults and 13,100,00 million children. In all, 13 percent of households (or 15,800,000 million households) were food insecure. So by Ms. McCloskey’s logic, those lacking a roof over their heads and enough to eat, HAVE a further need for society’s accumulate wealth. 

The most discouraging part of Mr. Finkel’s article was this section:

Unfortunately, the basic mathematics of McCloskey’s claim are mangled. She may not prefer that we seek progressive tax and regulatory policies, but her claim that these policies do not “uplift the poor very much” is erroneous. That the Times has decided not to correct her error—even in the face of an email exchange in which the author herself acknowledged her mistake—may be an example of how tempting it is to ascribe black-and-white factual issues to the realm of “healthy controversy.”

We cannot hope to have a meaningful dialogue about redistribution until we face the unpleasant truths of homelessness and hunger… as well as some basic mathematical truths.

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