This chart shows the percentage of wealth in the United States held by the 0.01%. That’s not a typo. I’m not talking about “the 1%,” and I’m not even talking about “the 0.1%.” No, I’m talking about the “0.01%,” in other words the wealthiest one-ten-thousandth of the population. As the chart shows, as of the year 2000 the fraction of wealth they held had been roughly flat since the mid-1980s, and moreover this flat trend was much lower than it had been through most of the 20th century.
Let me give you some more information about this graph, which probably surprises most readers who may have gotten their information from Krugman or Piketty. This graph isn’t based on unreliable survey data; no, it’s based on estate tax data–the kind that Krugman says he likes (at least when Piketty uses it to bolster his case for surging inequality). Further, let me assure you that this graph doesn’t come from the Heritage Foundation or the Cato Institute. No, it comes from a paper co-authored by Emmanuel Saez, who is a co-author with Piketty on many pioneering papers on inequality.
At this point the reader might be horribly confused. Was Piketty just lying to Neil Irwin when he said that every published ranking shows surging inequality? No, what Piketty could have meant was that the Forbes-type surveys show surging inequality among the very top.
That’s the key to all of this, folks, There are careful empirical papers, based on tax return data, that show relatively flat wealth concentrations among the top percentiles in both the US and UK since the early 1980s. What Krugman and Piketty need to do, in order to get monstrously surging inequality, is to not look at the 1%, not even the 0.1%, and not even the .01%, but instead to focus on things like “the richest 400 people on Earth.” THEN you get massive concentration of gains over the last few decades. (But even there, it’s worth pointing out that these aren’t the same 400 people, over time. There is great mobility in this super elite status.) If the Occupy crowd want to remain faithful to the data, they are going to have to change their slogan to: WE ARE THE 99.9999%!
In conclusion, neither Paul Krugman nor Thomas Piketty can be trusted to tell their readers an accurate picture of what the published research actually shows on wealth inequality. When it comes to things like: surveys or tax data? 1% or higher concentrations? the answer for these two is: Does it help me make my case or not?
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