Revisiting Piketty’s Summary of the U.S. Minimum Wage
The good news is that one person responded to my labor of love (i.e. my long comment) on Scott Alexander’s post on Piketty. The bad news is that the guy’s response contained stuff like this:
If that’s the worst, most partisan error in Piketty, then I’m not too concerned. If anything I’m more concerned about you, Bob Murphy. You’ve dismissed a 696 page book on a single, minor historical detail that was corrected in the second edition (contrary to your assertion).
The only out-and-out error in Piketty’s above statement is the attribution of multiple minimum wage increases to Obama when he signed none*, and this was duly corrected in his 2nd edition.
and
tl;dr Piketty got it essentially right. You characterize the question as “not hard”, but it is only easy if you simplify minimum wage history down to which presidents signed off on increases. When you consider length of delay between increases, party control of congress during increases and between increases, and inflation effects it becomes clear that Democrats are pro-labor legislation. Which shouldn’t be surprising really. Everyone knows Democrats are pro-labor and Republicans are pro-capital.
I wrote a response to him in turn (and thanks to David R. Henderson for reviewing a draft of it for clarity and calmness in tone). So of course feel free to go read the whole exchange at Scott Alexander’s site for the gory details.
However, what I want to do here is revisit Piketty’s narrative. When I first read it, it was so totally bonkers that I couldn’t make heads or tails of it. (But again, as Phil and I stress throughout our paper, the “typos” we kept identifying all seemed coincidentally to favor Piketty’s narrative. It wasn’t like his cat jumped on the keyboard occasionally when Piketty wasn’t looking–unless it was a progressive feline.)
But now that this guy on Scott Alexander’s blog reviewed my particular claims and tells me there was a slight thing that may have been a bit off, which Piketty duly corrected in the 2nd edition, I read the whole thing again with fresh eyes. And now I think I see why Piketty believes he ironed out any difficulties with the 1st edition, even though (to my eyes) he didn’t even address the 4 most glaring problems.
The real kicker here is that if I’m right, I think it makes Piketty’s treatment FAR WORSE and should make us not touch anything in his book with a ten-foot pole.
So I’m curious to hear your thoughts on whether I’m right in my analysis, and in my related judgment.
* * *
For convenience let me reproduce Piketty’s 1st edition summary, and then give the actual history of the U.S. minimum wage:
PIKETTY 1st edition: “From 1980 to 1990, under the presidents Ronald Reagan and George H. W. Bush, the federal minimum wage remained stuck at $3.35, which led to a significant decrease in purchasing power when inflation is factored in. It then rose to $5.25 under Bill Clinton in the 1990s and was frozen at that level under George W. Bush before
being increased several times by Barack Obama after 2008” (2014b, p. 309).
ACTUAL MINIMUM WAGE HISTORY:
Date……………..Minimum Wage………..President in Office
January 1, 1980…..$3.10…………………Jimmy Carter
January 1, 1981…..$3.35…………………Jimmy Carter
April 1, 1990……….$3.80…………………George H. W. Bush
April 1, 1991……….$4.25…………………George H. W. Bush
October 1, 1996……$4.75…………………Bill Clinton
September 1, 1997..$5.15………………..Bill Clinton
July 24, 2007……….$5.85…………………George W. Bush
July 24, 2008……….$6.55…………………George W. Bush
July 24, 2009……….$7.25…………………Barack Obama
Now in his 2nd edition, the only change I saw Piketty make is acknowledged to have fixed all genuine mistakes by my hostile critic. Here’s how that guy put it at Scott Alexander’s blog:
The only out-and-out error in Piketty’s above statement is the attribution of multiple minimum wage increases to Obama when he signed none*, and this was duly corrected in his 2nd edition. Changing “frozen at that level under George W. Bush before being increased several times by Barack Obama after 2008” to “frozen at that level until legislation passed under George W. Bush led to an increase under Obama” is arguably a typo if you squint your eyes, though I would prefer to call it a minor detail.
So in this light, let me make two observations:
- There is still the (presumably genuine typo) of saying Clinton raised it to $5.25 when in fact it was $5.15. Again, that mistake helps Clinton, but let’s assume it is a genuine typo. This one just shows Piketty is sloppy. (The mistake survives into the 2nd edition.)
- Apparently both Piketty and my hostile critic are fine with looking at the above table of dates and describing it like this: “From 1980 to 1990, under the presidents Ronald Reagan and George H. W. Bush, the federal minimum wage remained stuck at $3.35, which led to a significant decrease in purchasing power when inflation is factored in. It then rose to $5.[1]5 under Bill Clinton in the 1990s…”
Just look at the table and look at that quoted sentence (where I’ve patched the erroneous $5.25 with the correct $5.15) to see now, why Piketty/my critic think it’s fine. If we are really sloppy on the front end and start with the minimum wage in 1981 and say it held in 1980, then it is indeed a true statement that the minimum wage remained stuck at $3.35 from 1980 [sic] to 1990 (specifically up to March 31, 1990) and it is indeed true that during this period (if we start counting inside 1980 after the November election and consider that he was president-elect) Ronald Reagan and George H.W. Bush were in office.
Next, one could see how a person might say it is indeed a true statement to say that the minimum wage then rose to $5.15 under Bill Clinton in the 1990s.
I realize some of you may not care about this stuff, but I want you to really SEE what these guys are doing with the facts vs. the narrative. If Piketty really is doing what he apparently is doing (and which, for sure, my hostile critic agrees with), then the above treatment is, I think, the most misleading, dishonest historical summary I’ve ever seen that one could claim is not technically lying. His technique of ending in 1990 in order to avoid mentioning the two increases under George H. W. Bush exhibits the precision of a surgeon.
(To be clear, I’m not myself admitting it isn’t false. As I said at Scott Alexander’s blog in response: “The only way you can say Piketty’s summary is correct here, is if you also endorse the following statement, “Reagan remained fixed in the White House, until it was then occupied by Bill Clinton.””
So in conclusion, this whole revisitation makes me adjust my previous weight on the possibilities that Piketty was merely sloppy to “he is intentionally deceptive.” But I grant I’m biased, so I’m curious to hear your thoughts.
What I Said to the “Mises Caucus” of the Libertarian Party
This was the speech I gave last Saturday in New Orleans. Here’s Scott Horton’s speech and Tom Woods’ grand finale.
Potpourri
==> At IER, I discuss Doug Ford’s election (in Ontario). He ran on a platform promising to roll back cap-and-trade.
==> Sorry if I already pushed this: In the latest Contra Krugman I go solo and talk about the economics of climate change policy.
==> FEE’s Blinking Lights award, given this year to Nelson Nash.
==> I haven’t had time to read this carefully, but Ilya Somin doesn’t think “enforcing the existing law” requires breaking up families, contrary to the Trump Administration’s claims (at least its initial claims before the revamp).
==> Rob Bradley gives a list of some failed climate doomsaying.
==> Jacob Huebert has been traveling in Austro-libertarian circles for years so I was very pleasantly surprised to see he was one of the lawyers behind the recent union ruling.
==> Conservatives ruin everything!
==> The submissions are in for the Contra Contest 2018!
==> I chime in at Scott Alexander’s blog. Topic: Piketty.
Two Possible Functions of Confession
(This is a Religious post but I was traveling yesterday and won’t be doing anything secular today so…)
I was talking with a Catholic friend and the topic of the sacrament of Confession (or Penance) came up. I said that besides the theological arguments for and against, one could argue that the act of confessing your sins out loud to somebody could provide psychological relief, let you “forgive yourself,” and get on with your life. My friend said something like, “Yeah and just knowing that you would have to admit what you did to somebody might keep you in line.”
I chuckled and pointed out that he and I had given entirely different justifications for the activity, which (perhaps not coincidentally) related to our doctrinal views. As someone who (now, after years of study and transformation) endorses salvation through faith alone (sola fide), the way I handle the obvious, “So if a serial killer confesses on his death bed?!”-type objections is to say that once you have been freed from the slavery of sin, you have no desire to inflict pain on others except if you are harboring feelings of insecurity, shame, guilt, etc. One of the easiest tricks the devil can play is to convince you that you’re worthless, God doesn’t actually love you, etc., and that drives you to seek comfort in alcohol, strip clubs, and so forth.
A Krugman Kontradiction
Sure, he said “government official” probably to mean “employee in the Executive Branch” but c’mon. This notion that the U.S. Republic suddenly hit the rocks on November 2016 is crazy–especially coming from Krugman, who periodically reminds his readers that the GOP has been this awful all along, it’s not a Trump thing.
More on Krauthammer
Paul Gottfried gives grudging respect to Charles Krauthammer in The American Conservative. An excerpt:
The contemporary Right bears little if any resemblance to what it was during the 1950s and 1960s, when it resisted the civil rights revolution, opposed communism as a godless enemy that worshipped state power, and favored traditional social relations. Then in the 1980s the neoconservatives came along and imposed their will on a movement into which they and their sponsors invested megabucks. The neocons also moved conservatism towards the Left by identifying it with a global democratic foreign policy, a centralized welfare state (albeit one that was to be “prudently” managed), and a mainstream liberal view of the evolution of American “liberal democracy.” Both support for the Israeli Right and constant warnings about recurrent anti-Semitism became veritable fixations within this transformed conservatism.
This transformation required figures who could present it credibly, and Krauthammer may have been the most indispensable of those who assumed this role. There were others who contributed to this effort, like the political theorist Harry Jaffa and the journalist and fundraiser Irving Kristol. But Krauthammer was clearly superior to them as an exponent of what the appropriate media marketed as “conservatism.” He carried out his task with such pedagogical skill and such obvious conviction that even someone who disagreed with where he took American conservatism had to be impressed. Unlike my friends and followers on the shrinking Old Right, I was not so much upset as awed by Krauthammer’s laying down of conservative party lines as a TV commentator and newspaper columnist. He was so far superior to others attempting to do the same thing that listening to or reading him was like watching an Olympic swimmer after seeing kiddies splash around in a plastic pool.
As I said before, I personally did not think as highly of Krauthammer as even some of his opponents do (e.g. I saw Justin Raimondo on Twitter also say nice things about him), although I certainly defer to Gottfried’s superior knowledge of the American conservative movement. (Also for what it’s worth, I remember that back when I was a fan of Rush Limbaugh etc., that Krauthammer had best crystallized my views on a “principled” approach to foreign policy.)
As a good antidote to the thesis of, “Say what you will, that Krauthammer was a principled, respectable opponent,” yikes! check out this Krauthammer column from 1996 (which someone linked in the comments of Gottfried’s piece):
DISARM THE CITIZENRY. BUT NOT YET.
In an election year you expect Washington to be full of phony arguments. But even a cynic must marvel at the all-round phoniness of the debate over repeal of the assault weapons ban. Both sides are blowing smoke.
…
In fact, the assault weapons ban will have no significant effect either on the crime rate or on personal security. Nonetheless, it is a good idea, though for reasons its proponents dare not enunciate. I am not up for reelection. So let me elaborate the real logic of the ban:
It is simply crazy for a country as modern, industrial, advanced and now crowded as the United States to carry on its frontier infatuation with guns. Yes, we are a young country, but the frontier has been closed for 100 years. In 1992, there were 13,220 handgun murders in the United States. Canada (an equally young country, one might note) had 128; Britain, 33.
Ultimately, a civilized society must disarm its citizenry if it is to have a modicum of domestic tranquillity of the kind enjoyed in sister democracies like Canada and Britain. Given the frontier history and individualist ideology of the United States, however, this will not come easily. It certainly cannot be done radically. It will probably take one, maybe two generations. It might be 50 years before the United States gets to where Britain is today.
Passing a law like the assault weapons ban is a symbolic — purely symbolic — move in that direction. Its only real justification is not to reduce crime but to desensitize the public to the regulation of weapons in preparation for their ultimate confiscation. Its purpose is to spark debate, highlight the issue, make the case that the arms race between criminals and citizens is as dangerous as it is pointless.
…
Yes, Sarah Brady is doing God’s work. Yes, in the end America must follow the way of other democracies and disarm. But there is not the slightest chance that it will occur until liberals join in the other fights to reduce the incidence of and increase the penalties for crime. Only then will there be a public receptive to the idea of real gun control. The passionate resistance to even the phony gun control of the assault weapons ban shows how far we have to go.
Murphy Twin Spin Podcasts
==> I talk about climate change policy on a Woodsless Contra Krugman.
==> Carlos and I talk about Trump’s playbook for the economy in the latest Lara-Murphy Show.
Potpourri
==> In the latest Contra Krugman, we use a suggestion from one of our Contra Cruise bonus winners, and explain what Krugman won the Nobel Prize for. (Obviously if any technical wizards are listening and think I got something fuzzy, let me know.)
==> He interviewed me over the phone so some of my position didn’t come through fully, but this Reason writer used quotes from me to challenge Greg Ip of the WSJ.
==> This is apparently a famous lecture about the power of exponential growth. (Someone on EconTalk cited it.) I think this is a great example of how smart people who don’t know economics, end up saying silly things. Should I critique this somewhere or does nobody care? (Be honest, I can take it.)
==> James Bovard on the IG report on the FBI.
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