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Piketty Fudged His Wealth Data But Progressives Still Support His 'Compelling Theoretical Predictions'

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Submitted by Robert Murphy via Mises Canada,

Thomas Piketty’s Capital in the Twenty-First Century is a moving target. The book contains foundational theoretical problems, a misreading of the empirical literature that blows up his whole case, sloppy and absurd factual errors concerning tax rates and minimum wage hikes, and shocking quotations that reveal he has no desire to actually raise government revenue with his massive soak-the-super-rich schemes, but instead merely wants to prevent the formation of fortunes in the first place.

I am now beginning to suspect that this is the Frenchman’s rope-a-dope strategy. By this point, after I (and others) have been harping on one problem after another, the poor blogosphere reader is too fatigued to take it seriously when Chris Giles at the FT alleges that Piketty’s most important scholarship–the thing that supposedly warrants Piketty a Nobel Prize, according to Larry Summers–is not only wrong, but contains deliberately fudged data. Uh oh.

You can click the FT link to read the big-picture (ungated) story, and this (gated) link to see the specific allegations about Piketty’s data errors. Giles explains what led him to start questioning Piketty’s historical figures on wealth and income concentration, which most other reviewers (including me!) had simply assumed were in the ballpark:

[W]hen writing an article on the distribution of wealth in the UK, I noticed a serious discrepancy between the contemporary concentration of wealth described in Capital in the 21st Century and that reported in the official UK statistics. Professor Piketty cited a figure showing the top 10 per cent of British people held 71 per cent of total national wealth. The Office for National Statistics latest Wealth and Assets Survey put the figure at only 44 per cent.

Whoa! Piketty’s figure for wealth concentration in the present–so we’re not quibbling over 1810 here–was off by 27 percentage points. Like Will Ferrell, that’s kind of a big deal.

Yet more amazing than Piketty’s apparent errors–and his rather odd reply amounting to “prove me wrong, kids, prove me wrong”–is the response that his defenders are mounting. For example, Danny Vinik at the New Republic tries to blow it off as the FT making a big deal about nothing. Let’s walk through Vinik’s apology for Piketty.

First, Vinik argues that the only significant changes have to do with Britain and the US; Giles’ reconstructed time series for France and Sweden match up almost identically with Piketty’s original figures in the book. OK so let’s look then at Britain and the US:

Giles vs Piketty UK

In the figure above (which Vinik reproduced from Giles’ FT post), the top lines refer to the total amount of wealth (“capital” in Piketty’s broad definition, which includes land) owned by the top 10% of wealth owners. The bottom lines show the amount owned by the top 1% (obviously it’s lower). The blue lines show the estimates as Piketty charted them in his book, while the red lines show the FT analysis (which has different options for the year 2010, based on whether one includes the “ONS Wealth and Assets survey or not”).

As the figure shows, there is an enormous discrepancy in Piketty’s figures and those that the FT computed. In addition to the figure for the top 10% being off by up to 27 percentage points–the discrepancy that originally caught Giles’ attention–we also see that, depending on which data point one uses for 2010, Piketty’s figure for the wealth held by the top 1% is off by around 9 to 18 percentage points, in the worst case with Piketty reporting a figure that is almost triple the actual value (about 29% instead of 11%, just eyeballing the bottom lines).

Yet beyond the discrepancy in values for given years, step back and look at the overall historical trend if the red lines are correct (as opposed to Piketty’s blue lines): We see that wealth inequality continued its downward trend even throughout the Thatcher years, and after a spike upward during the 1990s, is now (if we use the lower data points for 2010) at the lowest level in recorded UK history.

Let’s now look at the US:

Giles vs Piketty USA

Here things are trickier, because (apparently) there are no good long-term estimates for these data. The top lines (according to Giles) have a huge gap in them, because there are no estimates of the concentration of US wealth ownership by the top 10% between 1870 and 1960. So how, you ask, does Piketty generate that nice blue line, which zooms up to about 80% in 1910, then gradually falls through 1940, etc.? According to Giles, Piketty literally just made that blue line up (presumably guided by the trends in the other countries, and in the US 1%, for which there were better data).

For the bottom rows (showing the concentration of wealth held by the top 1%), there are better estimates, and Giles has shown some of them, along with Piketty’s reported line (in blue). Now notice: Piketty’s blue line shows a gradual trend upward in the ownership by the 1% from 1970 onward. This, after all, is the whole warning of the book: The rich are getting richer, and if governments around the world don’t start taxing the heck out of them, soon we’ll be back to the Gilded Age.

Yet the funny thing is, if you look at either of the longer data sets (the bottom red lines) upon which Piketty presumably based his blue composition, you’ll see that neither shows an upward trend in recent decades. In particular, if you look at the longest red series, it shows that the U.S. is currently hovering near the lowest level of wealth concentration in the hands of the 1% in recorded history.

But I’ve saved the best for last. Here is how Vinik handles the awkward fact that Giles has arguably just shown that when you correct Piketty’s factual mistakes, then the trend in both the UK and the US is the exact opposite of what everyone took away from the book:

Even if you believe that Giles’s findings dramatically change Piketty’s results, they have little bearing on his economic theory. Giles makes a passing comparison to economists Carmen Reinhart and Ken Rogoff (R&R), who drove a significant part of Republican austerity agenda, but saw their findings disproven in 2013. Liberals celebrated when Thomas Herndon, a graduate student from UMass Amherst, discovered a spreadsheet error in R&R’s results that invalidated their main finding. But unlike Piketty, Reinhart and Rogoff largely had no economic theory to ground their argument that national debt crises occur when a country’s debt level surpasses 90 percent of GDP. Once their data fell apart, their theory had no legs to stand on. On the other hand, Piketty fits data to this theory, but does not depend on it. Piketty’s theoryright or wrongis largely unaffected by these results.

Everyone got that? Vinik realizes he has to walk a tightrope here–progressives were quite pleased to pounce on R&R when their Excel errors came to light. So Vinik is trying to avoid charges of hypocrisy by saying that R&R had no theory to back up their warnings about government debt, whereas Piketty doesn’t need no stinking historical analysis of inequality in order to push through his theories (and consequent policy recommendations).

This should sound oddly familiar for those of you have been following my Piketty posts here at Mises Canada. For in his own review of Piketty–the one where he said Piketty should get the Nobel Prize for his historical work on wealth inequality–Larry Summers wrote:

I have serious reservations about Piketty’s theorizing as a guide to understanding the evolution of American inequality.

 

 

But if it is not at all clear that there is any kind of iron law of capitalism that leads to rising wealth and income inequality, the question of how to account for rising inequality remains. After Piketty and his colleagues’ work, there can never again be a question about the phenomenon or its pervasiveness. The share of the top 1 percent of American income recipients has risen from below 10 percent to above 20 percent in some recent years.

 

 

Even where capital accumulation is concerned, I am not sure that Piketty’s theory emphasizes the right aspects. Looking to the future, my guess is that the main story connecting capital accumulation and inequality will not be Piketty’s tale of amassing fortunes.

 

 

By focusing attention on what has happened to a fortunate few among us, and by opening up for debate issues around the long-run functioning of our market system, Capital in the Twenty-First Century has made a profoundly important contribution.

In the interest of brevity, I had to limit my quotations from Summers’ review. But I hope the limited excerpts above show my point: Summers was absolutely devastating in his critique of the theory underlying Piketty’s book. Yet Summers overall kept coming back to praise it, because Piketty gosh darn it had done “meticulous” work documenting the disturbing accumulation of wealth among the super rich over the last few decades. Except, as it turns out, that maybe a big chunk of those results were due to stupid mistakes or worse. (Be careful not to conflate wealth and income; that’s part of the confusion behind the various volleys of statistics from one camp to another in this debate.)

So that’s where we now stand: Plenty of progressives up till literally yesterday were saying yes yes, Piketty’s theoretical framework leaves much to be desired, but he’s a top scholar when it comes to the trends he’s documented. And now that much of that empirical work might be totally bunk, the defense is to argue that yes yes, the historical data might be the exact opposite of what Piketty claimed, but boy he offers some compelling theoretical predictions with which we must grapple.

Until this sorry episode, I had no idea just how much progressives hated rich people, and how little regard they had for intellectual integrity. Live and learn.

 

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Sat, 05/24/2014 - 13:42 | 4791441 TeamDepends
TeamDepends's picture

Never let facts or truth get in the way, comrade!http://www.uhuh.com/nwo/communism/comgoals.htm

 

Sat, 05/24/2014 - 13:43 | 4791447 DoChenRollingBearing
DoChenRollingBearing's picture

Piketty probably believes in Global Warming too.

Sat, 05/24/2014 - 13:45 | 4791451 TeamDepends
TeamDepends's picture

Come on Chen get with it, it's climate disruption now!

Sat, 05/24/2014 - 13:48 | 4791455 Serfs Up
Serfs Up's picture

Until Picketty understands that wealth accumulation, or should I say fiat currency accumulation, is simply a 'feature' of a debt-based money system, his analysis will fail to describe reality accurately or completely.

It's not political or partisan at all.  Neither is gravity. 

Sat, 05/24/2014 - 14:05 | 4791470 ZerOhead
ZerOhead's picture

If Larry Fucking Summers says (in his long-winded way) that the Picketty piece is good then I know it has to be bad...

Let's end the Fed first and strictly regulate banks to stop them from creating massive debt for the purposes of consumption or speculation rather than production, R&D etc. Then we cut government spending by say 50%, remove 90% of onerous laws and over-regulation on productive industries and see what happens first.

http://www.democracyjournal.org/32/the-inequality-puzzle.php?page=all

Sat, 05/24/2014 - 14:06 | 4791491 chumbawamba
chumbawamba's picture

This is a stupid controversey, notwithstanding the fact that I don't know anything about it, don't understand it, and don't care.

All I know is the banksters and a bunch of finance fags have way too much money, they didn't earn it--heck, they almost quite literally pulled it out of their ass--and they are using it to fuck the rest of us up.

Let's stop talking about ism's and start talking about how we're going to take the money (more like purchasing power) away from those that didn't earn it.

It's time to lay down some fucking law.  These mother fuckers need to volunteer to give it all back or away, before it's time to come in and take it all away.  And it'll be collected with interest.  Four hundred years worth, mother fuckers.

I am Chumbawamba.

Sat, 05/24/2014 - 14:08 | 4791498 ZerOhead
ZerOhead's picture

Yes you are...

Sat, 05/24/2014 - 16:13 | 4791709 max2205
max2205's picture

Moar cowbell please

Sat, 05/24/2014 - 18:03 | 4791904 James_Cole
James_Cole's picture

To point out for all the drooling "commies is destroyin' merica by agw" crowd crawling out of their caves to whine about this 'gigantic controversy'... this is one book by one author in the field of economics where data is always very debatable.

For the love of the internet just try to use your limited critical thinking skills to put this 'controversy' into context.

Sat, 05/24/2014 - 18:28 | 4791952 0b1knob
0b1knob's picture

Meanwhile in California a privileged wealthy hedonistic offspring of the 1% is killing other members of the 1% because they are marginally more privileged wealthy and hedonistic than he is.    If the 1% are going to kill each other I say make popcorn and enjoy the show.    Unbelievable video at the link.

http://www.theblaze.com/stories/2014/05/24/extreme-caution-this-frighten...

This has false flag written all over it.

Sat, 05/24/2014 - 19:50 | 4792129 nmewn
nmewn's picture

I don't know about false flags but the kid is a fucking moonbat who was obviously raised by moonbats.

http://www.youtube.com/watch?v=FWWGtee14pA

Sat, 05/24/2014 - 21:25 | 4792325 August
August's picture

Hollywood Party!

Sun, 05/25/2014 - 10:23 | 4793095 BigJim
BigJim's picture

"Rodger declares that the video will be his last, and laments a life of loneliness.

“Girls gave their affection and sex and love to other men but never to me,” he says."

Women rejected him? Gee, I wonder why.

Sun, 05/25/2014 - 10:42 | 4793136 nmewn
nmewn's picture

It would seem they were good at picking out a born loser when they saw one huh? ;-)

Sat, 05/24/2014 - 15:32 | 4791650 kchrisc
kchrisc's picture

"heck, they almost quite literally pulled it out of their ass--and they are using it to fuck the rest of us up."

Not out of their asses, because they stole it from us. So in effect, they pulled it out of OUR asses.

As for laying down the law:

 

The Four Rs
Rejection: Quit paying, quit obeying, quit playing
Revolution: It is inevitable, so prepare, as they are.
Retribution: The guilty must answer for their crimes against the American people and the Constitution.
Restoration: Restore the American people, country and Constitutional republic.

Sat, 05/24/2014 - 15:59 | 4791693 swmnguy
swmnguy's picture

I agree, Mr. C.  It's a stupid controversy and a smokescreen distraction, whether this guy made up the whole damn thing or not.

You can't base an entire economic system on the assumptions of unlimited resources, energy, markets and money in a finite world.  When you inevitably encounter finiteness, the only one of those things you can keep pretending is infinite is money, and that only by making it abstract.  Doing that opens up the Pandora's Box we see so abundantly emptied all around us. 

As for income inequality, the problem resembles the game of Monopoly.  At a certain point, somebody has all the money, property, hotels and houses and nobody else can play.  At that point, the whole thing becomes worthless.  Dress it up in all the "isms" you want, all the other kids are going to go outside and play something else, no matter what you want.  A system that has that flaw in it ain't gonna work eventually.

Sat, 05/24/2014 - 14:37 | 4791553 25or6to4
25or6to4's picture

Whaaaaa? Only cut guberment spending by 50%??? Do you work for the government or something? 50% would be a slow start.

Sat, 05/24/2014 - 14:38 | 4791476 wee-weed up
wee-weed up's picture

They're not Progressives - that's the term they've recently given to themselves.

They're Liberals! Fukin' Liberals! And Socialism is their creed!

Sat, 05/24/2014 - 14:39 | 4791555 Anusocracy
Anusocracy's picture

The world is full of data-molesters with agendas.

Just another reason not to have government.

Sat, 05/24/2014 - 14:56 | 4791575 putaipan
putaipan's picture

yeah well... fuck you too libertarian-fuck -tards! see dr. hudson's critique of this piketty crap if you you want to get past the great divide and seek some truth and justice.

Sat, 05/24/2014 - 15:08 | 4791604 disabledvet
disabledvet's picture

who? never even heard of this guy. there is only one reason a 600 billion dollar (bwhahahahahahaha. i can't even believe i can say that number) passes overwhelmingly over a feckless veto threat by our President...who is spot on to issue this veto threat i might add. Namely "we're not at war with the Taliban anymore" but with China, Russia and the entirety of the Middle East.

Don't even get me started on spending one trillion dollars on a two tiered healthcare system. You can do that with one dollar actually.

I'll exclude the VA for now because they actually have doctors and they do in fact show up for work and provide care that is more than palliative.

If i were President I would immediately eliminate HHS.

I also see zero need for the public education infrastructure as we have the internet now...although i would keep all the school teachers. "Your home is the new one room school house." the teachers will come to the consumer now.

That would save another 200 billion.

Plus i'd privatize the entire school bus fleet. "drive your own darn kid to school if its that important." And yes, pay for that sports program too.

Did i miss anything? I'm sure there's another trillion out there ready for eliminating. All cars will be hovercrafts? (no more potholes that need fixing.)

Subway systems are okay i guess.

Privatize the bulk of federal assets. Let Elon Musk, Jeff Bezos, et al take over NASA as well. They can launch as many rockets as they want.

Simply put...if it costs more than a million bucks "the Government people can pay for that out of pocket."

Sat, 05/24/2014 - 14:56 | 4791576 headhunt
headhunt's picture

Actually they are progressives; it's just a cute name for communists

Sat, 05/24/2014 - 16:29 | 4791733 RevRex
RevRex's picture

They are NEOCOMS

 

 

What kind of dirtbags down arrowed you?

 

Socialist assholes who cannot stand the truth and stupid people who still argue that 'both parties' are the same

 

Sat, 05/24/2014 - 17:28 | 4791840 wee-weed up
wee-weed up's picture

 

 

"What kind of dirtbags down arrowed you?"

We have a few loony Libs here on ZH. I blast their incompetent president every chance I get, and that makes them get their panties all in a wad. But they usually only "junk and run" - they know they can't intelligently defend him.

Sun, 05/25/2014 - 01:57 | 4792731 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Most of my junkers say jack-squat!

Sun, 05/25/2014 - 10:28 | 4793106 BigJim
BigJim's picture

 and stupid people who still argue that 'both parties' are the same

They ARE the fucking same! You have the tax-and-spend party and the spend-and-tax party. Neither want to shrink the empire, get rid of the Federal Reserve or fiat currency, end welfare or warfare, legalize recreational drugs, demilitarize the police, stop supporting Israel, stop meddling all over the world, etc etc.

Saying the two parties are different is like saying a white bread shit sandwich and a wholemeal shit sandwich are different.

Sat, 05/24/2014 - 17:02 | 4791783 TheReplacement
TheReplacement's picture

You sure it isn't climate challenge now?

Sat, 05/24/2014 - 15:15 | 4791611 Kirk2NCC1701
Kirk2NCC1701's picture

And Flat Earth (talking heads) theorists and their bosses also had "very compelling arguments" for a long time. 

And where theory failed to control the masses, the Church (= MSM today) and the Oligarchs/Monarchs decreed its acceptance, and their minions enforced it.

Same as it ever was, same as it ever was...

Sat, 05/24/2014 - 22:00 | 4792396 Remington IV
Remington IV's picture

Obama will nominate him to the CEA

Sat, 05/24/2014 - 14:07 | 4791496 XitSam
XitSam's picture

Even more broadly: The end justifies the means.

Nothing is too morally repugnant to them.

Sat, 05/24/2014 - 19:18 | 4792049 sgt_doom
sgt_doom's picture

Speaking of getting the facts straight, please get YOUR facts straight:  Prof. Piketty went by income tax returns, not capital gains, which is where the real concentration of wealth be, plus he completely ignores the data on foundations and trusts, admittedly difficult to obtain, not to mention offshore finance centers and hedge funds, etc.

This blog post is typical Von Mises Frankenstein bullcrap.

Sun, 05/25/2014 - 10:30 | 4793111 BigJim
BigJim's picture

Dickwad, how can Piketty use 'data' to establish that 'capitalism' leads to more inequality, when we don't have anything like capitalism from which to draw the data from in the first place?

Sat, 05/24/2014 - 13:44 | 4791450 q99x2
q99x2's picture

I often say about my dog, "She's a dog. She can't help it." 

Same with progressives: They're progressives; they can't help it that they are poor and stupid.

Sat, 05/24/2014 - 13:49 | 4791458 NotApplicable
NotApplicable's picture

Fools for sophistry, they are.

Sat, 05/24/2014 - 13:51 | 4791462 Atomizer
Atomizer's picture

Progressive strategy; if you can't sell the program, make up false data to instill fear. 

Sat, 05/24/2014 - 14:10 | 4791468 TeamDepends
TeamDepends's picture

....all the while letting them know, IN NO UNCERTAIN TERMS, just how fucking brilliant you are.

Sat, 05/24/2014 - 14:02 | 4791483 Anusocracy
Anusocracy's picture

More of a strategy by those who want to foist their beliefs on others.

Sat, 05/24/2014 - 13:53 | 4791464 aardwolf
aardwolf's picture

Larry Summers is a murderer and traitor. Why should I give a shit about what this 0.01% hack says?? It's clear to a blind man that wealth inequality is too high and that the debt based fiat fractional reserve money system we use is broken once the consumers that power the economy are so tapped out with excess debt that even the slave owners won't create the money to lend them anymore...Bill Gates, Larry Summers etc. literally can't spend the money they have fast enough in the correct sectors of the economy to support the perpetual growth required by this stupid debt based system. Once money is created free of debt then we can have a discussion about tax rates, abolition of income tax to be replaced by land value wealth taxes for sustainable carrying capacity growth on this finite planet...until then all this noise is just bollocks.

Sat, 05/24/2014 - 13:56 | 4791466 ebworthen
ebworthen's picture

We don't need a book or Pikkety or data or theorems to know we have a fucked up kleptoligarchy with a lot of corrupt assholes that need to be hung.

Sat, 05/24/2014 - 21:30 | 4792330 August
August's picture

>>>corrupt assholes that need to be hung.

I'll take hanging, but seeing them torn apart by hyenas would be more educational.

Sat, 05/24/2014 - 14:00 | 4791472 falak pema
falak pema's picture

What bullshit. It suffices to say that.

The FT covers itself in ridicule in implying that, and ZH which has factually supported this phenomenun unfurling before our eyes has made the Wealth gap one of its MAJOR analytical arguments since 2010 as irrefutable proof of prevailing MALINVESTMENt.

How can ZH post just aggressively oriented garbage to defend the Oligarchy point of view? 

Remember your motto  ZH : Don't hedge the truth ! 

 

Sat, 05/24/2014 - 14:06 | 4791492 LetsGetPhysical
LetsGetPhysical's picture

The truth is real enough. Making up bullshit doesn't help the cause. 

Sat, 05/24/2014 - 14:15 | 4791513 Sticky Wicket
Sticky Wicket's picture

The argument isn't that there is no wealth inequality, it's that this chucklefuck made up his own data to push an agenda.

Sat, 05/24/2014 - 14:41 | 4791558 Spastica Rex
Spastica Rex's picture

I haven't read Picketty, but I've always been under the impression that the critique of wealth distribution in itself is un-American.

Sat, 05/24/2014 - 15:37 | 4791656 falak pema
falak pema's picture

lol, like Luther was un-christian and also Erasmus. 

And, Jesus was  a communist. That really nails it; literally. 

Sat, 05/24/2014 - 14:49 | 4791565 holmes
holmes's picture

I don't give a fuck about wealth inequality. I care about theft. If the bankster pricks are made whole by the gov't after screwing up bigtime (see 2008) then the banksters and govt officials shoud be thrown in jail. And #1 on my list is Hank scumbag Paulson.

People get wealthy honestly, my hat's off to them. That's what made this Country great.

Sat, 05/24/2014 - 15:05 | 4791594 Spastica Rex
Spastica Rex's picture

People get wealthy honestly, my hat's off to them. That's what made this Country great.

A lion eats gazelles without any encumbrance of honesty. I would think that any alpha predator should be given praise: the bankers won.

Sat, 05/24/2014 - 15:08 | 4791600 holmes
holmes's picture

Last time I checked, humans should be behaving a little differently than lions.

Sat, 05/24/2014 - 15:13 | 4791608 disabledvet
disabledvet's picture

there is something fitting when all the limosine liberals distill the entirety of their Federal Edifice to "bank bailouts."

It's like "aha. I understand now. There never was a war to begin with but only a way to finance an imaginary one." The whole thing was probably started by New York City to begin with as they knew this already.

Certainly the stock market has been more than happy.

Sat, 05/24/2014 - 15:18 | 4791617 fencejumper
fencejumper's picture

Ah, so those who live as though their society is a civilized one are really just the stupid prey for the smart ones....or psychopathic / sociopathic ones.

Sat, 05/24/2014 - 16:14 | 4791712 Freebird
Freebird's picture

Yes. Secrets-and-lies-of-the -bailout penned by Matt Tabbi a reminder lest we forget. Sure Zh had similiar at the time. Paulson among others should be tried for treason.

 

Sun, 05/25/2014 - 10:09 | 4793074 TruthHunter
TruthHunter's picture

 "I don't give a fuck about wealth inequality. I care about theft."

There are only two ways to make money: Work for it or steal it.

In some professions such a banking, its hard to separate which is which.

(BTW, Inherited wealth and wealth by marriage aren't exceptions. you work

to deserve it or steal it. Welfare is the same. But social policy institutionalizes theft)

Sat, 05/24/2014 - 15:26 | 4791612 falak pema
falak pema's picture

he didn't make it up he "smoothed it out" using a technique which he himself said, for the period considered, was a question of trying to categorise pineapples as either apples or oranges--if you don't mind the fruit analogy.

When you try and assimilate data about social categories of expenditure along divide lines that change as society changes over a 300 year period you have to make simplifying assumptions about how to break down that expenditure as "rentier" or "useful" component of GDP of that age (i'm just using the analogy in general).

Very often its a question of definition or of interpretation over such long periods where social classes and their associated expenditure change. This guy has provided all his assumptions and deductions for his peers to improve on. He does not pretend to be Milton Friedman ! 

Economics is not chemistry or physics. There is NO table of elements like for Chemistry.  To do GDP type compilations and subsequent breakdowns two hundred years after its an approximate game, as social dividing lines have moved and expenditure is not clear cut in terms of classification.

These FT guys, if they know anything about Economia and economic modelling and analysis, know its a "grey" science or they be SHAMS.

ANd VON MISES is a sham pseudo science cabal; out and out. We've seen that here at ZH. 

Those "smoothing out" tit bits of fuzzy data in no way confounds his overall conclusions. As we all know from observing the economic reality of the past 10 years. 

Sat, 05/24/2014 - 19:23 | 4792068 sgt_doom
sgt_doom's picture

falak pema has the 1,000% sgt_doom Seal of Approval!!!!!

And to all you doucheys who drool over von Mises, a Rockefeller stooge, answer me this:

How many trusts does the Rockefeller family have and control, and what is the connection between the actual number and their owning the ONLY National Trust Fund Bank in North America?

Awaiting your most "learned" response......

Sat, 05/24/2014 - 20:42 | 4792239 DoChenRollingBearing
DoChenRollingBearing's picture

I am not learned on the Rockefellers (other than having seen one in action in school, uh, not impressed), but it is curious how neither the Rockefellers nor even the Rothschilds appear on the Forbes list of world billionaires...

I have seen the wealth of the greater Rothschild family to be anywhere from $500 billion to $1 QUADRILLION.

Funny that.  Put that in your pipe and smoke it...

Sun, 05/25/2014 - 10:37 | 4793122 BigJim
BigJim's picture

Falak Pema is blinded by his ideology, as are you.

I repeat, form earlier: how can Piketty use 'data' to establish that 'capitalism' leads to more inequality, when we don't have anything like capitalism from which to draw the data from in the first place?

Sat, 05/24/2014 - 19:18 | 4792000 Frilton Miedman
Frilton Miedman's picture

We can cherry-pick data sources till the fat lady sings, bottom line, there is absolutely no denying disparity has grown, especially after 2008.

Median h-hold wages were $54K in 2007 with a 67% participation rate and 4% U/E, now it's $50K with participation @ 63% and 6.3% U/E.

 

As for net worth, wealth -

I recall this ZH article just a couple of years ago, confirming the growth of wealth disparity -

http://www.zerohedge.com/news/guest-post-if-market-crashes-who-owns-enou...

Then there was this ZH article of income disparity growth over the last 3 decades -

http://www.zerohedge.com/article/20-facts-about-us-inequality-everyone-s...

Somehow, in recent years, it seems like ZH has changed course, seeming to edge away from it's old raw, honest & unfearful truth about exposing plutonomy & oligarchy, leaving the question - why the change?

Is it possible the above mentioned Von Mises has anything to do with it?

Has one of Koch's tentacles reached this once fearless source of journalistic honesty in the face of hidden plutonomy?

I don't mean to insult Tyler, but something's not right here, the articles, the reporting, it's different now.

 

 

 

Sat, 05/24/2014 - 19:24 | 4792072 sgt_doom
sgt_doom's picture

I believe, Good Citizen Frilton, it is called ZH schizophrenia.

Sun, 05/25/2014 - 06:32 | 4792871 RedPelican
RedPelican's picture

Fudged data or not, it looks like a fine idea to tax the rich people with their expensive cars, private islands and other easily despisable excessive luxury.  So let's have a one-time wealth tax.

The problem people have with this is that what seems far more likely than a one time wealth tax for the fantastically rich, is that this whole discussion will simply be used to push for higher income taxes on salary earners.  The threshold of those considered rich will probably start at an income of around 200k if you remember what we were told during past debt limit struggles.  Hardly the billionaire banksters and such, and this threshold will most assuredly come down as more revenue is required over time.  So the fear is that you will see the well-connected, the banksters, the party apparatchik's fortunes still growing, while the high wage earners, small businessmen (and eventually the middle class) that don't have the resources to circumvent this will get to pay the higher taxes and you will get even more inequality and even less upward mobility.

 

Sun, 05/25/2014 - 17:08 | 4793899 Frilton Miedman
Frilton Miedman's picture

Pelican,

I emphatically agree, the middle class is the easy target in an age where billionaires make & break political careers and the majority lower end have voting power.

The middle gets squeezed.

The advent of Scalia's "bribery is speech" ensures the most corrupt of the 0.01% will keep the burden on the middle.

A large portion of that corrupt 0.01% are TBTF executives, continually lobbying DC to maintain the status quo & mutlinational executives continually pushing for more trade agreements with preferential tax treatments.

 

 

 

Sat, 05/24/2014 - 13:59 | 4791475 stopcpdotcom
stopcpdotcom's picture

Fiddling the figures - just like they do with the man-made global warming fraud.

Sat, 05/24/2014 - 14:00 | 4791479 CrashisOptimistic
CrashisOptimistic's picture

Wealth equality is right around the corner.

Global starvation does that.

Sat, 05/24/2014 - 14:02 | 4791485 LetThemEatRand
LetThemEatRand's picture

Are we going to start pointing to BLS statistics now too, Mises of Canada, to "debunk" something?  So wealth inequality isn't a problem, then?

Sat, 05/24/2014 - 14:04 | 4791488 LetsGetPhysical
LetsGetPhysical's picture

lies...damn lies... and statistics

Sat, 05/24/2014 - 14:06 | 4791494 gcjohns1971
gcjohns1971's picture

Surprised at progressive hatred of wealth?

They don't hate wealth at all!  They love it.

The lust for larcency simply needs no recourse to integrity to stand.  Lust for Larceny stands on its own.

Sat, 05/24/2014 - 19:36 | 4792097 Frilton Miedman
Frilton Miedman's picture

As a business owner, I'm fucking disgusted at the thought of yet more blame, name calling & finger pointing at the "other party".

I need more customers, not fewer wealthier customers.

The few that have higher income do not spend enough to replace those who can no longer afford my business.

 

 

Sat, 05/24/2014 - 19:42 | 4792110 nmewn
nmewn's picture

You mean, like the mafia guy you were talking about doing business with last night over on Banzai's post? ;-)

Sat, 05/24/2014 - 19:54 | 4792135 Miffed Microbio...
Miffed Microbiologist's picture

Now now nmewn. I'm sure once he realized the source of the ill gotten gains he dutifully returned the money. Shall we immediately assess him as duplicitous business man without an ounce of scruple?

Poor man is just stuck in the Red/Blue team morass. He just needs a bit o' the tasty Red pill to shake him loose. I'm confident as to your abilities in this matter.

Miffed;-)

Sat, 05/24/2014 - 20:09 | 4792165 nmewn
nmewn's picture

I'm not so sure he returned the money or my abilities to convince him why he should have. He seems stuck on the "virtues" of flowery language proposed by people whose intentions aren't pure.

There's not much one can do with that ;-)

Sat, 05/24/2014 - 20:33 | 4792217 Miffed Microbio...
Miffed Microbiologist's picture

This is a sign of youthful immaturity. Something I was guilty of as a teenager but quickly learned the worth of flowery speech. I can't really believe a business owner could be so fooled. Reality would have done its proper instruction.

So I guess that leaves us not being fooled by a potential government troll or a simpleton who is grasping at an ideal for perceived safety, not seeing it for what it is or where it came.

Miffed;-)

Sat, 05/24/2014 - 22:00 | 4792400 Frilton Miedman
Frilton Miedman's picture

Miff, In your display of internet bravery, you're a moron if you're implying I'm a "teenager" for saying I have less business now than I did in 2006.

You have no clue wtf you're talking about, but willing to talk nonetheless.

Business has not rebound to where it was pre 2008, you're a fucking idiot if you dispute this.

Open a business, put your own ass on the line and get back to me, put up or shut up.

 

 

Sun, 05/25/2014 - 01:46 | 4792717 Miffed Microbio...
Miffed Microbiologist's picture

You have completely missed my point. I did not in ANY WAY imply what you have accused me. Reread my post.

I have for many years put my life and soul on the line. Many here know this. My decisions have been life and death calls for many. And yes, I have caused a death due to inexperience of which I have suffered greatly. Don't you go fucking assuming you know who I am. EVERY FUCKING DAY I put my ass on the line and people can live or die based on my actions and decisions. Is this adequate for you? Or is simply running a business a requirement for worthiness?

You imply false bravado. Sorry sonny I have walked the walk. I have dealt with HIV infected people who tried to infect me out of anger. I've had prisoners spit in my face while under arrest because they didn't want to have their blood drawn. I've held a 3 year olds hand as she lay dying because a neighbor accidentally ran her over. I've seen the worst and best society has to offer.

Frankly I could care less about your business problems. You don't have a fucking clue what Hell really is. Let me tell you, I have seen it in my personal as well as professional life and I have little tolerance for namby pamby know it alls that claim they know suffering. Perhaps you should invest some time when joining a blog getting to know the participants before making wild assumptions and accusations.

I have no problem with debate. I have relished my time here as a path of discovery. Three years ago I was a completely different person. Many here have educated me in alternative ideas and I am truly grateful what they have done for me. I am respectful of others opinions but I won't tolerate judgement or people telling me who I am. Respect is the key to discourse.

Miffed;-)

Sun, 05/25/2014 - 17:55 | 4793486 Frilton Miedman
Frilton Miedman's picture

 

Miff, I made no assumption, whatsoever, about who you are or what you do.

I responded to your assumptions About me - that I'm a government shill or a teenager, that if you disagree with my statement that biz is slower since 2008, you truly don't know what you're talking about.

Inversely - If I tell you how to treat a gunshot victim on the way to the hospital, feel free to call me a "fucking moron" if I insultingly undermine your professional opinion.

Last -

"I won't tolerate judgement or people telling me who I am. Respect is the key to discourse."

 

That's a two way street. - 'nuff said

 

Sun, 05/25/2014 - 19:03 | 4794136 Miffed Microbio...
Miffed Microbiologist's picture

FM,
I never implied I thought your business hadn't slowed. How could I have ever made such a statement not knowing who you are or what you do? Most of my friends businesses have suffered terribly in the last 5 years so I would have assumed the opposite. As a wage slave I have suffered myself. Every year I have watched my wages erode through inflation. I pay 45% in state, federal and sales taxes alone.

I did not call you a teenager. I stated I thought you were caught up in the Red Team propaganda machine based on your political statements. So I was insinuating you were duped by the MSM vomit spewed forth ad naseum today. Not to imply superiority because I had been a flag waving republican for many a year. Now I lean Libertarian but I flag wave for no one. I have determined voting a dubious act today due to outcomes are the same no matter which candidate is chosen. So I haven't voted in years. The system is corrupt to the bone and I will not participate.If,miraculously, this country changes, I shall return to voting but I'm not expecting this anytime soon.

Many here have come to similar conclusions but I don't mean to speak for anyone. Their are many rugged individuals here that pledge alliances to no one. The poor reaction you got is based on your perception an adjustment of the Republican Platform is a path to revitalizing this country. Something I have completely rejected as possible. To promulgate ideas as such tends to get one labeled a government shill here.If the label is misplaced I will ask for forgiveness. If not, beware.

Miffed;-)

Tue, 05/27/2014 - 00:38 | 4797486 Frilton Miedman
Frilton Miedman's picture

Miff, we're good. ;-)

Sat, 05/24/2014 - 22:02 | 4792383 Frilton Miedman
Frilton Miedman's picture

 

Mew,

Aahhh, yes, the Benghazi investigation, that'll generate more business & boost the economy, I never thought about it in the capitalistic sense.

Credit due, at least you pay attention (to what you want to hear)

 

Sat, 05/24/2014 - 22:39 | 4792467 nmewn
nmewn's picture

There are very few who ever called me Mew on the internet (or anywhere else for that matter...lol) and apparently one has resurrected himself here.

Good luck with all that, again.

As for Benghazi, your determination to relegate that into the dustbin of history after your boy provided an air force to the very same people who killed Stevens, says all I need to know about you.

Sun, 05/25/2014 - 02:19 | 4792735 Frilton Miedman
Frilton Miedman's picture

No, Mew, I'm not whoever it was that called you "Mew" past, it just struck me as an easy nickname....I'm not "resurrected".

As for the insinuation that my lack of desire to see a sixth investigation, after five have yielded nothing, equates to what I think you're implying, that Libya killed Stevens and not Al Qaeda (airforce?), and that means I abide...? (clarify)

No, I'm just a little disgusted with the timing for political intents in 2016 & Hillary, the wasted time, money and resources when America has problems that actually CAN be resolved.

Investigating Hillary, Obama, or the Democrats isn't going to catch the assholes hiding out in Libya who did this, send the investigation there, apply resources where they have more potential for results.

The GOP needs to find a constructive platform, McCarthyist witch-hunts backfire every time.

 

 

Sun, 05/25/2014 - 08:06 | 4792916 nmewn
nmewn's picture

"As for the insinuation that my lack of desire to see a (1) sixth investigation, after five have yielded nothing, equates to what I think you're implying, that Libya killed Stevens and not (2) Al Qaeda (airforce?), and that means I abide...? (clarify)"

Crarify? Sure, be glad to.

(1) Your claim of "six investigations" rings hollow...I AGAIN ASK that you provide me with what entities conducted these investigations and what were their conclusions. You see, an investigation has a beginning and an end, with the results/findings from that investigation put before the public. An investigation does not end when someone refuses to testify or screeches "What does it matter now?!?!" (like some child caught with an empty cookie jar between her legs)because the truth (and her culpability) is getting close to hand. The investigators don't then just walk away, especially on something like this, where we have regional commanders fired/retired, the Commander in Chief missing in action all night long, air support only an hour or two away, pleadings by Stevens for increased American security falling on deaf ears and a dead ambassador along with CIA contractors.

(2) Ansar al-Sharia is one of the groups the US GOVERNMENT USED ITS AIR FORCE TO PROTECT during the latest Libyan war. It is also the one who killed Stevens and the others. If a president (or his underlings) is going to use the US air force to provide cover for AQ affiliates, by what logical extension can't he use that same air force to protect its own personel, unless they didn't want to?

One thing is inescapable in this fiasco, through gross incompetence or treachery, they left them there alone that night to be killed and we need to know which it is...incompetence or murder.

Sun, 05/25/2014 - 14:16 | 4793607 Frilton Miedman
Frilton Miedman's picture

Mew, 

http://en.wikipedia.org/wiki/2012_Benghazi_attack#Five_House_Committees

If you include the FBI and others, it's actually more than five.

Darrell Issa's main reason for this newest investigation is the implication that the White House knew in advance the attack would happen.

Yet, ironically, he's already leaked a White House document showing the White House asking YouTube to take down the Muslim video as the attack was under way.

All I'm saying, if you make a serious, incendiary accusation and it doesn't stick, you look like the ass in the end.

It's on Darrell now to prove his accusations that the White House colluded with Al Qaeda, trust me, it won't end well

The fact that Trey Gowdy was implicated in fundraising off the investigation, regardless of details, is bad, very bad.

Al Qaeda claimed responsibility, as details come out in this "investigation", Issa is going to lose credibility...He's left with the burden of proving his claims of White House involvement now, not possible.

 

Perhaps Issa has visions of Hillary or Obama on the stand saying "You can't handle the truth.." or something, but it's not a well thought out plan, period.

 

 

Sun, 05/25/2014 - 23:42 | 4794624 nmewn
nmewn's picture

And you write that as if "every inquiry" equals a separate investigation, instead of one incomplete investigation into the facts.

Amazing.

So the facts so far are that Stevens asked for American security forces (instead of local Libyan militia, oh, you didn't know that?) and was denied by his "good friend" Hillary. That his jogging habits were noted and posted on the internet by militants (hey, he's staying in shape! says Hillary), that EVERY WESTERN GOVERNMENT FLAG had hauled ass out of there except ours, that he met with the Turkish General Counsel in Benghazi (for what?...there is a small civil war Assad is having in that country, or haven't you heard?), that air power to protect Americans was only two hours away for an all night fight that never came...I could go on.

But you're too dense for any of this to have any real meaning.

Mon, 05/26/2014 - 00:08 | 4794655 Frilton Miedman
Frilton Miedman's picture

 

 

I made my point, the GOP will make an ass of themselves if they assert the White House colluded or abetted Al Qaeda if they don't prove it. And they won't

Five investigations and nothing, a sixth won't make it different, it'll only serve to make Issa look McCarthyist.

Take it or leave it, at this point you're arguing for the sake of it....I'm off to a substantive debate with my kid about the pro's and con's of cleaning his room.

Sun, 05/25/2014 - 09:23 | 4792990 ncdirtdigger
ncdirtdigger's picture

As a 'business owner', I suggest you figure out who has the money (that is what we all chase) and cater to them, and stop worrying about the dumb asses who have none.

Sun, 05/25/2014 - 13:35 | 4793511 Frilton Miedman
Frilton Miedman's picture

That's a given,

Presents a problem you've missed, as the % of populace that has increasing wages grows smaller, my competitors grow more numerous competing for that group.

Resulting in lower revenues & less business.

Meanwhile, advertising costs are up, gas, materials & supplies are higher.

I need more customers, not fewer with higher incomes.

 

 

 

Sat, 05/24/2014 - 14:07 | 4791497 PeeramidIdeologies
PeeramidIdeologies's picture

This book seems to have garnered a lot of attention, but I for one have no interest in reading it. This article highlights perfectly the waste of energy and intellectual pursuit. It is much simpler to say this; you can not force people to devote themselves, in any form of investment and expect to achieve maximum attainment of the stated goal.

This is also the defining line between Austrian and Keynesian theory, and why one of them isn't realistic.

The good news is that it is not necessary to use this form of moral coercion that economists like Piketty propose. Why we* as a society, are still arguing over moot ideas like these is beyond me.

Sat, 05/24/2014 - 15:16 | 4791613 CrashisOptimistic
CrashisOptimistic's picture

Interesting how it was scheduled to get Lewis' Flash Boys off the number one spot after just a week or two.

And be aware, publishers know pretty well just how much money a book is going to earn before it's released.  Surprises are very, very rare.

Sat, 05/24/2014 - 16:00 | 4791695 PeeramidIdeologies
PeeramidIdeologies's picture

Media is as media does! Lol If anything, at least more people are gaining an interest in the subject.

Wouldn't you agree a more worth while endeavour would be to begin identifying possible projects that require capitalization? From there one would be able to decern who has the abilities to complete the desired task and the negotiation of trade can begin.
From what I can see there are already some big players who are getting into the swing of things.

Sat, 05/24/2014 - 19:38 | 4792102 Frilton Miedman
Frilton Miedman's picture

There is a 3rd choice between Austrian (classic Liberal) and Keynesian.

Libertarian, Milton Friedman.

Sat, 05/24/2014 - 14:11 | 4791504 Gringo Viejo
Gringo Viejo's picture

The left has no intellectual integrity? Why would one expect children that base their decision making on "feelings" to have ANY comprehension of reason/logic?

Sat, 05/24/2014 - 14:14 | 4791511 flysofree
flysofree's picture

Par for the course from Von Misses Institute(aka Koch stooges), but at least it's a break from typical posts that attack food stamps, minimum wage, and bread crumbs fed to pigeons

Sun, 05/25/2014 - 09:25 | 4792994 ncdirtdigger
ncdirtdigger's picture

Wouldn't your time be better spent begging from those who produce that which you desire?

Sun, 05/25/2014 - 09:50 | 4792995 ncdirtdigger
ncdirtdigger's picture

dup

Sat, 05/24/2014 - 14:20 | 4791524 Catullus
Catullus's picture

The period from 1910 to 1940 of gradual declining concentration of wealth is a progressive white washing. This is when they set up all their cartels.

It didn't even take 2 months to discredit this guy.

It's not Marx was that careful with facts either. They just want a story, a new parable in their messianic socialist campaign to eternal happiness via their god the State. Complete with "thought crimes" and "impure thoughts" of racism and the new racism -- libertarianism.

 

Sat, 05/24/2014 - 14:28 | 4791529 Joebloinvestor
Joebloinvestor's picture

Wealth data, climate data, whatever fits your agenda.

if you can't find it, create it.

Sat, 05/24/2014 - 14:32 | 4791544 AchtungAffen
AchtungAffen's picture

Hah, the Douchebags Institute now talks about someone they don't ideologically like fudgeting numbers... You'll know the truth by the mouth it comes from...

Sat, 05/24/2014 - 14:56 | 4791574 stant
stant's picture

French gov is broke, he wrote this crap so they can justify stealing more money. It's what socialist do

Wed, 05/28/2014 - 10:35 | 4791580 headhunt
headhunt's picture

What is it the left likes to say 'It's the seriousness of the charges' - never mind the facts.

That is their mindset 24/7

Sat, 05/24/2014 - 15:02 | 4791588 discopimp
discopimp's picture

Wow I know both side are poppy cock but making _hit up just seems to be such a hobby of these pseudo intellectuals After publication of the book, Reich received criticism for embellishing events with invented dialogue. The paperback release of the memoir revised or omitted the inventions.[18]  http://en.wikipedia.org/wiki/Robert_Reich


Sat, 05/24/2014 - 15:11 | 4791602 shovelhead
shovelhead's picture

Duh, I may not be too smart, but when certain people can make up trillions of units of value from nothing, that you and I have to work to get ours...

I'm not going to be surprised when someone comes to the obvious conclusion that this might be a bit of unfair advantage.

Flawed accounting is the least of the argument.

Fractional lending and fiat money is a FLAWED SYSTEM that insures unfair advantage right up until it implodes from it's own excesses.

I might be a bit more forgiving if I could print money at will. I'll bet I could even come up with a theory that would justify my doing so without too much trouble.

Free money would get you motivated, for sure.

No doubt, I'd be doing it 'for the children' at some point down the line. That always seems to be a popular explanation in some circles.

Sat, 05/24/2014 - 16:03 | 4791603 Kreditanstalt
Kreditanstalt's picture

By arguing on the basis of DATA, you are playing the progressives' game.  Piketty's whole premise - that fairly-earned wealth and inequality are somehow evil - should be challenged.

We should be observing, deducing and drawing logical conslusions from what we ourselves see around us - not relying on "facts", "opinions", footnotes, citations, "expert" opinions, government stats, details, charts and references, all of which can be manipulated and can be used to support any conclusion...that's the game of central planning advocates. 

Sat, 05/24/2014 - 17:41 | 4791860 calltoaccount
calltoaccount's picture

"fairly-earned wealth"  -- rare 

Sat, 05/24/2014 - 20:08 | 4792137 Frilton Miedman
Frilton Miedman's picture

Was the transfer of Trillions in wealth from the CDO /sub-prime scam "fairly-earned wealth"?

When multinationals lobbyists influence Congress to impose a 2.5% tariff on Chinese imports, while we pay 25% to export to them and 60% of Chinese imports are U.S multinationals already gaining from cheap labor...is that "fairly-earned wealth"?

Is the added income from banking executives paying less than 10% effective tax rates on profits made off the sub-prime folly, HFT manipulation and market manipulation "fairly-earned wealth"?

How about Romney's 13% rate for shutting down a factory, firing 100 workers and reselling it?

That "fairly-earned wealth"...even if he gets that rate for being a "job creator"?

I'm 1000% all in for rewarding success & job creators, but how are we defining success here? ...What country are those jobs created in?

What exactly is "fairly-earned wealth"?

 

 

Sat, 05/24/2014 - 20:56 | 4792273 nmewn
nmewn's picture

"What exactly is "fairly-earned wealth"?"

These days, fairly earned wealth is whatever "the law" (with its hoards of regulators, armed thugs and bribed politicians) allow.

Kinda like Solyndra or Microsoft not supporting XP anymore or the Community Reinvestment Act or Warren Buffet playing with his train set or $100,000 Fisker sports cars.

If you don't like it, stop contributing to it.

Sat, 05/24/2014 - 22:29 | 4792456 Frilton Miedman
Frilton Miedman's picture

I'd like to take the opportunity to finally agree with something you said -

"These days, fairly earned wealth is whatever "the law" (with its hoards of regulators, armed thugs and bribed politicians) allow."

No argument, none whatsoever, get bribery out of politics, period, no more divide and conquer bullshit"their party caused this..." or "Damned progresisves did that...".

Just stop the bribery and the continued divisive propaganda that enhances the division, the rest falls in place, period.

 

 

Sat, 05/24/2014 - 23:23 | 4792551 nmewn
nmewn's picture

And the armed thugs & pencil pushing regulators of the "ruling class" descending like locusts across the land...what are we to do with them?

Come on, you can say it, its the Hedge ;-)

Sat, 05/24/2014 - 15:10 | 4791607 Multivariate Man
Multivariate Man's picture

I've read both the Pikkety book and today's critique in the Financial Times.  As usual, the oligarchs and their media resist any facts which might interfere with their wealth and income enhancement.  The FT critique is primarily focused on a few errors committed in analyzing a large amount of data and those can be debated but are largely inconsequential to Pikkety's analysis.  In the US for example, we have very clear data, often presented here at ZH, that Commerce data, Saez's research on who benefitted from the bailouts, spreads between executive and financial industry compensation vs. median salaries for employees, etc. that inequality is the highest it's ever been and rising.  My biggest critique would be that Pikkety's work is way to heavy on policy prescriptions and a wealth tax that will never happen.

I have no way of knowing the financial situation of those of you who are posting here but if you want to believe the FT and it's critique then I hope you are in very good financial shape.  I'm in the top 0.25% or so and I can assure you that things have never been better as we live in a very comfortable bubble, rarely see or socialize with the median income and net worth folks, don't eat, work, shop or travel with them, rarely have to be concerned about the price of anything, etc.  If you live in the bubble then it's best to believe that it's your own effort and smarts that got you there and the Fed is good and is fixing things, cheap money is helping everybody, and concerns about inequality are overblown, all is well and opportunity is everywhere.  If you don't, then your median income may be declining, real incomes down about 5% in the last five years, and if you have the median net worth of boomers including home equity and retirement accounts, your net worth is a paltry 120k.  Worse still, I can assure you that income and wealth inequality is not an issue with my peer group and is rarely if ever brought up as a topic, when money is discussed the focus is almost always on how to get more of it, not who isn't getting it.  This is the way of the world.

Sat, 05/24/2014 - 15:47 | 4791664 Sticky Wicket
Sticky Wicket's picture

It's cute when the sheep who just repeat vertabitm what the NYT article states pretend to pass it off as their own analysis. "Few errors" "minimal impact". The FT's finding, if true, show the complete opposite of Piketty's assertion. The guy is accused of MAKING UP data, and all you can say is so what?

 

Of course you mentioned those scary oligarchs so you must be correct!

Sat, 05/24/2014 - 18:03 | 4791880 falak pema
falak pema's picture

Accusations don't make facts...unless you believe in the premise of the Inquisition.

Try making "truth" out of stale statistics that are like a bowl of spaghetti. He did not extrapolate but he did interpolate.

Slight difference. 

His "extrapolation" is that his conclusion from analysing the past trend is that in all probablity it will make the current wealth gap  even wider. And his conclusion is based on an historical trend which seems irreversible as it feeds on itself.

ZH has not said anything different on that subject for 5 years.

Now that is a prediction that you don't have to believe just like you don't HAVE to believe that the FED balance sheet or the federal debt will GROW.

Sat, 05/24/2014 - 18:51 | 4791993 Sticky Wicket
Sticky Wicket's picture

There's a difference between stating Wealth inequality will grow and Wealth inequality is going to grow by this much and here's how the government can fix it. It was just happenstance that he finds Capitalism at fault for the woes of man while he himself is in favor of more state control.

Sat, 05/24/2014 - 22:32 | 4792152 Frilton Miedman
Frilton Miedman's picture

He (Multivariate) read the book, did you?

Sat, 05/24/2014 - 18:25 | 4791947 moneybots
moneybots's picture

"In the US for example, we have very clear data, often presented here at ZH, that Commerce data, Saez's research on who benefitted from the bailouts, spreads between executive and financial industry compensation vs. median salaries for employees, etc. that inequality is the highest it's ever been and rising."

 

But what does that have to do with capitalism?  Bailouts are not capitalistic, nor are artificially suppressed interest rates, leading to that highest inequality we have now.  Suppressed interest rates and bailouts are not a free market.  In a free market, the rich fail, right along with the rest.  Fortunes get wiped out.

Sat, 05/24/2014 - 22:59 | 4792178 Frilton Miedman
Frilton Miedman's picture

Moneybots,

Lower interest rates have done a lot to reduce the cost to service household debt, which is 50% higher as a % of income now than in 1980, yet the cost to service is the same.

i.e. - low rates are the Feds reaction to fiscal imbalances due to lack of wage growth, not the other way around.

While I agree with Tylers constant assertions that Fed policy has been abused in numerous instances to the benefit of banks especially, I don't agree that Fed is the cause, it's only the reaction to the cause, piss poor fiscal/tax policy, foreign trade and technology that has all reduced labor demand over 30 years.

 

 

Sun, 05/25/2014 - 14:20 | 4793620 moneybots
moneybots's picture

"While I agree with Tylers constant assertions that Fed policy has been abused in numerous instances to the benefit of banks especially, I don't agree that Fed is the cause, it's only the reaction to the cause, piss poor fiscal/tax policy, foreign trade and technology that has all reduced labor demand over 30 years."

 

Volker artificially raised the FED rate to 20%.  Greenspan artificially dropped the rate to 1% and artificially held the FED rate at 1% and artificially raised it 1/4% per meeting.  Bernanke artificially dropped the rate to practically ZERO and has artificially held it there for several years.  Bernanke has also bought treasuries to artificailly suppress longer rates.

The FED is reacting to its own cause.  All financial roads lead to the FED.  As Greenspan himself wrote back in the 1960's, 1920's FEd policy lead into the Great Depression.  When in charge, Greenspan doubled down on 1920's policy.  That is Greenspan's fault, not external events.

Mon, 05/26/2014 - 15:52 | 4796260 Frilton Miedman
Frilton Miedman's picture

Bot,

That's a lotta rabbit holes there.

Not looking to get into a lengthy debate on Fed conspiracies, I only pointed to the fact that current Fed policy is unavoidable without Fiscal rebalancing from Congress/Senate.

In 2008, household debt to income was at 125%, had the Fed not reduced to cost to service mortgages, we'd be fucked right now.

I'm not endorsing the Fed, only pointing to the fact that Banksters stole upwards of 40% of the net worth from the middle class and Congress was too busy arguing about "big government regulations" or "rewarding success" to do something about giving the stolen money back.

If you want to point to the oxymoron that the same banks comprise the Fed, I won't argue...from there, we focus on Congress/Senate and why nothing has been done.

In that sense, the Fed is a distraction.

 

 

Sat, 05/24/2014 - 23:02 | 4792510 Frilton Miedman
Frilton Miedman's picture

"In the US for example, we have very clear data, often presented here at ZH, ..... that inequality is the highest it's ever been and rising."

"But what does that have to do with capitalism? "

 

Right, what does 2+2 have to do with 4?

Sun, 05/25/2014 - 14:44 | 4793639 moneybots
moneybots's picture

"But what does that have to do with capitalism? "

 

"Right, what does 2+2 have to do with 4?"

 

A government bailout is not a part of capitalism.  Failure is a part of capitalism and a bailout prevents failure.

3-5 does not equal 4.  In business it would equal bankruptcy.  In capitalism, AIG was bankrupt.  AIG was bailed out by forcing tax payers into debt, which is not capitalism.  Capital comes from savings.  Americans are 59 trillion dollars in debt.  59 trillion in debt does not equate to 2+2=4.

Mon, 05/26/2014 - 15:55 | 4796275 Frilton Miedman
Frilton Miedman's picture

 

.

Bot, that has nothing to do with my original response, your implying that excess income inequality has nothing to do with capitalism.

It has everything to do with capitalism, no consumption, no capitalism...2+2=4, period.

 

 

 

 

Mon, 05/26/2014 - 01:00 | 4794701 Seek_Truth
Seek_Truth's picture

This is the way of the world.

"... the whole world is under the control of the evil one." - 1 John 5:19

 

 Woe to those who call evil good and good evil,

who put darkness for light and light for darkness,

who put bitter for sweet and sweet for bitter.

Woe to those who are wise in their own eyes

and clever in their own sight.

Woe to those who are heroes at drinking wine and champions at mixing drinks,

who acquit the guilty for a bribe, but deny justice to the innocent.

Therefore, as tongues of fire lick up straw and as dry grass sinks down in the flames, so their roots will decay and their flowers blow away like dust;

for they have rejected the law of the Lord Almighty

- Isaiah 5:20-24

Sat, 05/24/2014 - 15:14 | 4791609 Atomizer
Sat, 05/24/2014 - 16:12 | 4791707 shovelhead
shovelhead's picture

A very interesting guy. Thanks.

Sat, 05/24/2014 - 21:00 | 4792275 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 to both of you.

Atomizer posts very interesting stuff.

 

Note: IMO many of the banksters are leftist/socialist, they just don't talk about it...  They are hypocrites.

Sat, 05/24/2014 - 15:14 | 4791610 Duude
Duude's picture

Well, sure. Its not about whether Piketty can back up his idea with evidence based on facts. Its about whether he reverberates the ideology they love.

Sat, 05/24/2014 - 15:26 | 4791640 bugs_
bugs_'s picture

peak fudge?

Sat, 05/24/2014 - 15:33 | 4791651 Joebloinvestor
Joebloinvestor's picture

It is a little known fact this guy was in charge of checking the train widths also.

Sat, 05/24/2014 - 15:48 | 4791672 Barry Freed
Barry Freed's picture

All these charts are meaningless because the, "top 1%" is made up almost entirely of people that the top .001% would consider destitute.  No doubt if you chart the wealth and ownership of the top .001% you'd see a line going straight up.

Sat, 05/24/2014 - 16:28 | 4791731 Vint Slugs
Vint Slugs's picture

We live in an age of anti-intellectualism:  men are taught that reason cannot comprehend reality.  When reality is incomprehensible nothing is predictable or foreseen and everything is the result of some deus ex machina or other; there is no cause and effect.  No one is responsible for the outcome and every one is a victim of circumstance.  Therefore, to the anti-intellectual - who is particularly exemplified by the statist-collectivist/anti-individualist philosophy - actions do not have consequences.  When people such as Piketty do not use reason to interpret reality, they must fabricate an “explanation”.  When the reality no longer corroborates the purported facts (the "explanation") they change the factsThat act of intellectual dishonesty is the underlying reason why statist-collectivists/anti-individualists are so frequently found to be liars.

Sat, 05/24/2014 - 16:35 | 4791741 Bruce Krasting
Bruce Krasting's picture

Another "Progressive" has chimed in in support of Pickety. Good old Paul Krugman comments on the FT article today. PK's words:

 

"Giles finds a few clear errors, although they don’t seem to matter much"

 

Bunch of crap.........Errors always matter. 

 

The PK article:

http://krugman.blogs.nytimes.com/2014/05/24/is-piketty-all-wrong/?_php=t...

Sat, 05/24/2014 - 17:23 | 4791794 falak pema
falak pema's picture

You can smell the "political" hype a mile away when the scions of Economia and the Internet start to make generalisations like "Errors always matter"... Of course they do, but  who makes perfect omelettes without breaking eggs? 

And who makes economic correlations that are 100% certain ? 

One standard dev from mean, two? three ? And what does "variance" mean?

Such a mean word for people who believe in certitude.

Why don't we ask Bernouille or his ghost? 

Sat, 05/24/2014 - 16:43 | 4791754 withglee
withglee's picture

Regardless if the numbers are fudged ... if the opinion is set and then the data is harvested to support it, one needs to question a game where 10% can do better than the sum of the other 90%.

If those 90% were to disappear, the 10% would perish. They could not sustain themselves. However, if the top 90% were to disappear, the bottom 10% would probably not even notice it. They would go about their day to day business as if nothing happened. I know. I live in a neighborhood of mostly bottom 10%.

Taxing the top 10% and trusting anyone (especially a govenment made up of people with good hair) to use the proceeds to level the playing field is not the answer. It's just not the way to solve the problem. And besides, those govenment people are already part of the top 10% or are assured of getting there ... ( who nows how they do it?).

I have some ideas for a totally natural negative feedback system that would make this impossible ... yet nobody would "run it". But first people must recognize that we "do" have a problem with the game. It's not fun the way it is currently set up.

Sat, 05/24/2014 - 20:49 | 4792254 Frilton Miedman
Frilton Miedman's picture

withglee,

It's not that binary, it's about balance, not just blindly transferrring from everyone in the top 10%.

The best way to put it is from my personal view as a business owner.

If I have 100 clients and 95 of them are seeing lower, or stagnating wages over time while I gradually increase my price to counter material cost inflation, the other 5% do not consume any more than the 95%, even if they have more money left over from reduced taxes.

In short, 5 people will not eat, wear clothes, buy cars or buy goods and services that 95 will.

There'd be a serious obesity problem for that 5% if that were the case...no?

Make of that what you will, but as a small business, I need a broader target demograph, competing with my peers for a smaller and smaller group of wealthier households only decreases my revenues.

 

 

 

 

Sun, 05/25/2014 - 11:32 | 4793268 withglee
withglee's picture

Frilten Miedman,

I guess I didn't understand my own comment.

Sat, 05/24/2014 - 17:03 | 4791784 TrulyStupid
TrulyStupid's picture

Comrades:

Your diligent servants at Mises Canada have uncovered a hitherto unknown threat to the established order - Progressives.

Heretofore  liberals and fellow travelers must be referred to as Progressives... and subject to the scorn we used to reserve for (drum roll)... Keynseism, a term that is losing its emotional impact and no longer can be tied to the theories and practises of John Maynard Keynes.

Rupert, please ensure that all past media references to liberals and Keynes be corrected to the term progressive.

 

Thanks

Big Bro

 

 

 

Sat, 05/24/2014 - 18:07 | 4791910 moneybots
moneybots's picture

So Picketty pulled a Stockman.

Sat, 05/24/2014 - 18:47 | 4791982 moneybots
moneybots's picture

"Yet more amazing than Piketty’s apparent errors–and his rather odd reply amounting to “prove me wrong, kids, prove me wrong”–is the response that his defenders are mounting."

 

Seems he has already been proved wrong. 

Heck, France proves him wrong.  Gerard Depardieu left France after the first announcement of a 75% tax rate.  Some French business men announced they were moving to Belgium, as well.  What does a 75% tax rate on nothing, amount to?  Zero?  And Picketty wants 80%?

 


 

Sat, 05/24/2014 - 21:44 | 4792355 August
August's picture

What does a 75% tax rate on nothing, amount to?  Zero?  And Picketty wants 80%?

What Picketty wants is "global governance".  Or, at a minimum, tax "harmonization".

Sat, 05/24/2014 - 18:57 | 4792002 moneybots
moneybots's picture

"[W]hen writing an article on the distribution of wealth in the UK, I noticed a serious discrepancy between the contemporary concentration of wealth described in Capital in the 21st Century and that reported in the official UK statistics. Professor Piketty cited a figure showing the top 10 per cent of British people held 71 per cent of total national wealth. The Office for National Statistics latest Wealth and Assets Survey put the figure at only 44 per cent."

 

That is a factual gap big enough to drive an M1A1 through.

Sat, 05/24/2014 - 20:56 | 4792266 Frilton Miedman
Frilton Miedman's picture

Strangely enough, a ZH article from 2011 put US stock ownership for the top 10% at over 80%.

 

Is the UK really that different?

Here's the article, call it a lie, but again, it's Tyler himself presenting the data.

http://www.zerohedge.com/news/guest-post-if-market-crashes-who-owns-enou...

Sat, 05/24/2014 - 19:23 | 4792067 nevket240
nevket240's picture

Just another dog-fucking Socialist wasting other peoples money to buy other peoples loyalty. That will never change.

Same dodgy number scam as the AGW fraud.

regards.

Sat, 05/24/2014 - 19:24 | 4792073 notadouche
notadouche's picture

Oddly reminsiscent of the handling of climate change data in which questioning it is verboten.  

Sat, 05/24/2014 - 20:42 | 4792242 heresy101
heresy101's picture

Only looked at this article to verify that putting my money is guillotines is the correct thing to do because this had to be from Mises somewhere!

Guillotines it is!!

Sat, 05/24/2014 - 20:52 | 4792255 I Write Code
I Write Code's picture

You said:

reveal he has no desire to actually raise government revenue with his massive soak-the-super-rich schemes, but instead merely wants to prevent the formation of fortunes in the first place.

Yes, well, I think that is exactly the right answer, but it's also hard to do without negative side-effects, suppressing honest effort and achievement, or imposing government controls that will always misfire.  More important yet is that after the fact, when crimes have CLEARLY been committed, the perps should be arrested, tried, and executed, not necessarily in that order.  Does Picketty have any comment on that?  If there is no law, doesn't matter wtf he says.

So what about the data?  The modern "liberal" does not do data, does not do truth, is perfectly happy with "fake but accurate", so my surprise that Piketty's data is rickety is about zilch.  So does it matter?  Well, even if he got it wrong for Britain, we know it's mostly true in the US anyway - as several have already pointed out here.

All I get from my scanning of reports on Picketty including a few brief excerpts, is that it's all a dog's dinner, he makes some points, he recites some dogma, he throws out a grabbag of good and bad ideas, and have a nice day.

He ought to hang out at ZH for a few months, then try again.

Sat, 05/24/2014 - 23:09 | 4792533 PGR88
PGR88's picture

All Piketty has proven is that crony-capitalist, centrally-planned industries like banking and medicine lead to increasing wealth disparities.  

 

We all knew that.

Sun, 05/25/2014 - 00:10 | 4792623 damicol
damicol's picture

All that's been proved here is once again that fucking socialist  scum are devious filthy lying despicable degenerate  utterly useless shit for brains wankers, that will use any fucking lie excuse and fucking sob story  to thieve , steal , cheat beg  borrow,  corrupt or any other possible way try to justify why they these inbred cock sucking faggots should even exist.

As a creed socialism is  nothing more or less than a devious form of fascism or Nazism,  with the filthy lying scum  at the top, inadequate retarded cunts like the fucking obummer monkey, eaten by envy and who nothing short of total control over other fuckers life.

I prefer the fucking mad Islamist cunts or the fucking Taliban to a fucking devious lying socialist cunt any day.

A socialist is the fucking cockroach in society. burn them

Sun, 05/25/2014 - 00:45 | 4792663 Totentänzerlied
Totentänzerlied's picture

I'd like to know exactly what is included in everyone's definition of "wealth", and more importantly, how wealth was measured. I'm almost positive it was done using econometric models, little or no measurement actually occurred, or it what measuring easily misconstrued data such as, say, personal income tax returns. So it's all bullshit. No ideas or arguments which we haven't already heard 10,000,000 times from any/all sides.

I have still yet to hear a coherent evidence-supported PARSIMONIOUS AND FALSIFIABLE argument showing how even more taxation is 1) the solution and 2) actually possible in reality. Additionally I'd like to know how, as I have asked before, how an increase of tax revenues of even such a flagrantly impossible amount as 100% (completely unsustainable even if it was politically possible, which it emphatically and obviously is not - subjected taxpayers would simply clean out and leave) would solve the problem of growing costs, debts, and deficits (as a matter of logical and mathematical certainty within this debt-based, energy-scarce economy of our civilization) on a forward basis. You could perhaps pay off this year's deficit. You could not even begin to dent the debt or unfunded liabilities or prefund costs or anything else. This entire bullshit Kabuki theater play is just another purely performative but highly effective narrative-framing distraction - ask the wrong question, get an irrelevant answer. Anything to protect the Ur-Ponzi.

Sun, 05/25/2014 - 00:48 | 4792666 BeerMe
BeerMe's picture

I knew it was bullshit even before these numbers came out.  Apparently though our society is completely intellectually bankrupt.  It seems to be the whole he is "our" guy phenomenon.  Same thing happening in politics.  Complete corruption is fine as long as they are on "our" side.

Sun, 05/25/2014 - 03:22 | 4792800 monad
monad's picture

I'm an old man. I did my best by MY OWN children. Everyone else can die.

You'll figure it out.

I AM THE BEST

Sun, 05/25/2014 - 14:59 | 4793676 trader1
trader1's picture

i'd take a piece written by Tyler with more credibility than one from a Mises chap.  are they still relevant?

not defending piketty here, and he deserves to have his entire case, methods, and data heavily scrutinized.  

 

 

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