Berkeley's bSpace Content Management System WROSE THAN HILTER!!1!!11! Update
Alien Lizard People on the Radio: KQED 88.5 Forum Update...

Hoisted from the Archives: Cranks and Charlatans: Stephen Moore and the Club for Growth

Cranks and Charlatans: Archive Entry From Brad DeLong's Webjournal: One of my very worst book-purchase investments is looking me in the face from the fourth middle shelf right now: a yellow-covered book called It's Getting Better All the Time: 100 Greatest Trends of the Last Hundred Years (Washington, D.C.: Cato Institute). I bought it because I saw the late Julian Simon's name on the cover: it is "co-authored" by Julian Simon and Stephen Moore--although I cannot believe that Julian Simon had much to do with the manuscript. It is a very, very bad book.

It is a not very bad book because its thesis is wrong--I agree with the thesis, which is that in almost every respect things are a lot better today than they were 100 years ago. It is a very bad book because I cannot trust a word, a paragraph in it. Every time I read a sentence, everty time I read a page, I have to step back and think, "Is this yet another place where Stephen Moore is trying to make me into a fool?"

Last year I opened it at random, and found myself on pages 58-59:

Pages 58-59: Moore is telling us the extent of economic growth over the past century. He tells us that total GDP is "the broadest measure of a nation's overall economic performance" and that it has multiplied more than twentyfold over the past century. But is total GDP a good measure of overall economic performance? No. A country where population quadrupled and living standards halved would see its total GDP double. A much better measure of total economic performance is GDP per capita, which tells us much, much more about living standards and productivity levels. GDP per capita has multiplied more than sixfold over the century: economic growth has been very impressive. But, Moore seems to think, why tell my readers about the more than sixfold amplification of the right measure of prosperity when I can tell them about the more than twentyfold amplification of another (but wrong) measure?

Pages 60-61: nothing wrong here...

Pages 62-63: Very strange. There is a "graph" of median family income year-by-year since 1947. But the graph plots no median family income series I have ever seen before. Certainly it is not the case that the years 1989-1994 are the only years since 1947 in which median family income has declined...

Pages 64-65: Oh, this is an absolute beauty! "The Millionaire Next Door... less than 5000 Americans, or less than 0.1 percent of households, were millionaires in 1900.... Today there are almost 8 million millionaire households in the United States [or 7.7% of households." The problem is that a dollar back in 1900 had about 20 times the purchasing power of a dollar today. If you want to answer the question "How many people today are as wealthy as a 1900-millionaire?" you need to look at the people today with wealth more than $20 million--about 0.4% of households.

Now it's not that Moore is confused about the statistics: he knows the difference between nominal dollar amounts and inflation-adjusted real income and wealth figures as well as I do. It's just that he would rather give you the (phony) number that an American today is 77 times more likely than an American in 1900 to be a "millionaire" than the (real) number that an American today is 5 times more likely than an American in 1900 to have the purchasing power of a 1900-era-millionaire. He wants to confuse you: to leave you with a false and exaggerated picture of the pace of economic growth.

Note that in all four of these cases starting on pages 58-59 the basic point Moore wants to make is true: America is much richer and there are many more millionaires now than in 1900, median family income has risen steeply over time, the U.S. edge over other countries in productivity has grown, and American economic growth in the twentieth century has been amazing and remarkable. He can tell his story, and he can tell it straight and strong, without resorting to false, erroneous, or misleading calculations at all. But only one of the four examples headlines the right numbers. Moore simply cannot resist painting the lily, cannot resist making things "clearer than truth," regards as a victory each casual reader whom he can make think that economic growth has been even faster than it has been. The result is that I cannot believe--and you should not believe--a single word he writes without carefully, carefully checking it.

Comments