This is more for posterity than anything else, but check this out. In today’s post Krugman writes:
I happened to notice Greg Mankiw citing some bogus claims that the one percent is an ever-changing group, not a persistent elite, and I thought “Wait — didn’t we deal with that one long ago?” And that brought to mind the piece I wrote for the American Prospect 22 years ago, “The rich, the right, and the facts.” (It doesn’t say this on the Prospect site, but it was indeed published in 1992). See the section on income mobility.
The truth is that inequality denial is largely a crusade of cockroaches — the same bad arguments just keep coming back.
Oh, and I do think that my old piece looks surprisingly contemporary. In particular, I was focused on the one percent even then.
This is fascinating for several reasons:
1) Krugman makes it crystal clear that he is talking about the 1% (not the 0.01% as his defenders tried to say, when the awkward $225,000 CUNY post to study income inequality story broke), and that he’s talking about annual income, not wealth. Incidentally, I should point out that I believe Krugman’s defender in Slate, who wrote, “As Krugman has made clear on more than one occasion, his quarrel is not with members of the top 5 percent or even with members of the top 1 percent. The real problem, in his view, lies with the top 0.01 percent.” Just as I believe Krugman now, when he tells us, “I was focused on the one percent even then.” Now you guys know why I coined the term Krugman Kontradiction.
2) This raises the very ironic fact that back in 1992, Krugman was probably not in the 1%, whereas today he almost certainly is, at least depending on the payment of his book advances. (In addition to his $225,000 salary for raising awareness of income inequality, Krugman can command a high speaking fee if he wants, he gets royalties on his books, he probably has a lot of financial assets since he never had kids, and–something I had forgotten before–he runs a hugely popular blog, for which the NYT might pay him a lot. Although I don’t know, since it’s a great perch for him so maybe he doesn’t need to get paid much.) So I don’t know, I just think it’s really really weird that Krugman quite specifically blasts the 1% of income earners, and says there’s not much mobility in the US, without ever mentioning to his readers the fact that he climbed up and now resides in the 1%. (I actually have never read the biographical pieces on Krugman in detail; I am assuming he comes from a middle class background, since he has written several articles and given speeches bemoaning the loss of Middle Class America. If he came from a rich family, then that’s even weirder.)
3) Regular readers of Krugman know that he often explains the wonderful fact-checking of the New York Times, in contrast to conservative-leaning newspapers. Well, the article that Greg Mankiw cited–which Krugman says contains “bogus claims”–ran in the NYT.
4) The “bogus claims” about the 1% from the NYT piece that Mankiw linked include this: “Although 12 percent of the population will experience a year in which they find themselves in the top 1 percent of the income distribution, a mere 0.6 percent will do so in 10 consecutive years.” So think about what that means: If you’re looking at “the 1%,” fully 40 percent of them will not be a part of that group for the next decade. (In contrast, if “the 1%” were a stable group, then 1% of the US population would be in the top 1 percent of income earners for 10 consecutive years–not the actual figure of 0.6% of the US population.) So that’s a pretty good indication of how stable (or not) the elite 1% are. Is Krugman saying that these data are faked?
5) No, as far as I can tell, Krugman is simply throwing some other stats around. He doesn’t offer a single stat (in the section he tells us to examine, on income mobility–I didn’t read the rest of the 1992 article) concerning the 1% directly. The best thing in his defense is where he cites two studies that find “about half of the families who start in either the top or the bottom quintile of the income distribution are still there after a decade, and that only 3 to 6 percent rise from bottom to top or fall from top to bottom.” Thus, to show how bogus the claims about the 1% are, Krugman gives claims about quintiles.