06 Jan 2015

Piketty Gives the Frenchie Response

Piketty 28 Comments

Recall Jon Lovitz’s character “Frenchie” from SNL, who would say outrageous things and then say, “Oh I’m sorry, didn’t mean to offend anyone!” That is quite apropos for Thomas Piketty’s response to FoxNews when they asked him about the accusations Phil Magness and I made in our recent paper.

“I am really sorry if I attributed one specific tax decision to FDR instead of Hoover, etc.; many readers do mention typos of this sort, and of course they will be corrected in future editions; but I really do not see anything here that’s affecting any conclusion,” Piketty told FoxNews.com.

Say what you will about the passages in question, but they weren’t “typos.” If Piketty said, “I was drunk when I wrote those paragraphs” or “You know, we were using a French data base of US tax records and I have no idea what the hell those people were thinking,” or something like that, then OK I would still have been suspicious, but fair enough. But to dismiss them as quibbles over “typos”? Give me a break.

And then when Auerbach and Hassett say inequality peaked in 1995 with a corrected graph, Piketty says even if they’re right, this wouldn’t affect his conclusion.

In a way, I agree with him: Piketty knew what his conclusion was–calls for massive income and wealth taxes on the rich–before he constructed his graphs.

28 Responses to “Piketty Gives the Frenchie Response”

  1. Transformer says:

    I had a few days off over Christmas and started to read Piketty.

    I’m only half way through so haven’t got to the bit yet where he “calls for massive income and wealth taxes on the rich” (I think this probably comes in part 4).

    But on what I’ve read so far it seems reasonable for him to claim “I am really sorry if I attributed one specific tax decision to FDR instead of Hoover, etc…I really do not see anything here that’s affecting any conclusion”. So far (in the first half of the book) he is talking about long term, global movements in wealth and income distribution over long periods of time and specific tax changes in specific times in specific countries would indeed be a minor part of this narrative.

    • Bob Murphy says:

      Transformer, if you finish the book and don’t see Piketty calling for massive taxes on the rich, I’ll apologize for my typos suggesting otherwise–but explain that they don’t affect the substance of my reviews of Piketty.

  2. Zack says:

    I also liked this line: “Everybody recognizes that the Saez-Zucman series are indeed the best series on US wealth inequality we have so far”

    I guess that settles it.

  3. LK says:

    “Piketty knew what his conclusion was–calls for massive income and wealth taxes on the rich–before he constructed his graphs.”

    Your evidence for that? Or are we supposed to take it on blind faith?

    • Z says:

      Dude, don’t pretend your side doesn’t also question people’s motives. Virtually all sides do this.

    • Bob Murphy says:

      Give me a break LK. We wrote a 20+ page paper showing what I mean. Under your criterion, nobody could ever question anyone’s motives.

    • Bob Murphy says:

      BTW LK, Piketty himself says that the reason certain economists oppose progressive taxation is that they are highly paid and do so out of self-interest (not because they actually believe confiscatory taxes slow growth). So I hope you wondered aloud what his evidence for such a speculation was, whenever you talked about him on your blog.

      • Transformer says:

        I know he calls for massive taxes on the rich – so that’s not the point. I’m just not seeing that a few errors about dates and Presidents should be seen as anything other than genuine mistakes, that even when corrected don’t change the story much.

        I see your paper is also challenging the data itself – that’s more serious and I hope to read it in more detail later.

        • Transformer says:

          This was meant to be a response to Bob’s reply to my earlier comment (above)

      • Andrew says:

        LK would have been more comfortable if you had couched your statement in weasel words. For example:

        Piketty probably knew what his conclusion was–calls for massive income and wealth taxes on the rich–before he constructed his graphs.

        He wants you to give your statements more wiggle room, like his hero PK.

    • Tel says:

      Your evidence for that?

      Since the conclusion is the only part of the book that doesn’t contain typos, it stands to reason he must have written that first.

      • AcePL says:

        Not exactly one-liner, but close.
        NICE ONE!

    • Major.Freedom says:

      Piketty’s goal in this book was to data mine modern history to find empirical confirmation of the Marxist prophecy of capitalism.

      He certainly did not spend 10 years of his life without his mind already made up. He was a philosophical Marxist before he was a historical data collector.

    • Major.Freedom says:

      Blind faith? You mean like claims of what will happen in anarcho-capitalism without a single data point of anarcho-capitalism?

  4. Jim says:

    Looking at the graph they mention, the top 1% share goes up and down with the booms and busts of the market. Piketty’s graph totally distorts the reality of those points in history. In other words, it is a total misrepresentation.

    And assuming that data from 1870 is the same as 1900 is simply ridiculous and just bad. Piketty is lazy and clearly manipulated data to fit his 99% vs 1% premise.

  5. Major.Freedom says:

    Capital for the 21st Century, 264th Edition, published by Will Getthis E. Ventually Printing House.

  6. Andrew says:

    Maybe Piketty doesn’t believe that invalidation counts as an effect.

  7. Daniel Kuehn says:

    I want to understand how much of the concern here hinges on “typos”. So if he said “mistakes” rather than “typos” what would your opinion of the quote be?

    Because I think it’s reasonable to say that the minimum wage/tax/history mistakes do not affect the fundamental conclusions. The meaty question is about the wealth share trend lines. Do you agree with that?

    • Andrew says:

      I hate it when I mistakenly cherry pick and fabricate data that better supports my preconceived notions.

      • Z says:

        Cherry picking is not good at all, especially when I reached for a blueberry.

      • Daniel Kuehn says:

        Andrew – so my whole point is separating the “typos”/mistakes from the alleged cherry picking, not bundling it all up.

        Indeed I think the alleged cherry picking is getting more mileage than it ought to because of the other mistakes.

  8. Bob Murphy says:

    Really quick:

    (1) By itself, the “typos” about FDR, minimum wage, etc. don’t affect the case about wealth inequality trends or progressive taxes.

    (2) Since Phil dug up many irregularities in the crucial charts about wealth trends that prima facie seem dubious, and that serve Piketty’s narrative, it helps when we have smoking gun examples where Piketty is clearly making up crap that cannot possibly be described as a mere “typo.”

    (3) When faced with accusations of this nature, to blow them off as quibbles over “typos” is itself a red flag.

    • Daniel Kuehn says:

      Great – agree on 1. and 3. completely. Disagree on your characterization of 2. which is precisely why I think separating it out is useful.

      • Brian says:

        Do you see any mistakes in crucial charts that when corrected, would improve Picketty’s case? It seems to me that even if there are only 5 of these types mistakes, the chances of them all being made in support of the overall hypothesis and not being due to bias is pretty slim, no?

        • Daniel Kuehn says:

          Brian – my take on all this is based on a skim of the two recent articles and my detailed read of Bob and Phil’s various posts on this (including going to the excel files myself) and Giles’s post.

          Just ball-parking it my assessment of those criticisms of the wealth share trends (not the minimum wage stuff, etc.) is 40/60: 40% I would agree are errors or interpolations with unclear assumptions behind them. I don’t think ANY of those change the story for better or worse. Generally they seem to add noise or fill in gaps for the sake of filling in gaps. The other 60% I disagree are even errors in the first place.

          It’s been many months since I’ve read any of this stuff in detail, so I could very well be forgetting anything but I can’t think of a single criticism of the wealth share charts that I think is both a legitimate concern and clearly biased in Piketty’s favor.

          I had a few blog posts on this if you want to look at them, but a lot was also on facebook and Bob’s blog.

          • AcePL says:

            Reading paper linked in post I would say that “typos” are pretty consistent and lend to specific point and final conclusions of the Piketty’s book.



            And while I agree that they do not change overall picture MUCH, they DEFINITELY cause the book to be MUCH LESS definite on the issue.

            Thus – much less IMPORTANT.

          • Phil Magness says:

            So switching away from one inequality estimate right before it goes flat for the next two decades, then bringing in a completely different estimate that gives you your predicted upswing isn’t at all biasing in Piketty’s favor? Got it.

  9. Zack says:

    I suppose you could make an argument about the minimum wage stuff, but the tax mistakes are much more than just “typos.” When talking about the Great Depression, he portrays Hoover as a tax-cutter when in fact he signed huge tax increases. This seems like a major error to me. And I don’t think the 1932/1933 difference is trivial either when you look at changes in output and unemployment during those years.

Leave a Reply