Grasping Reality by Brad DeLong

Noah Smith does the dirty work and takes out the intellectual garbage:

Noahpinion: Scott Winship fails to show that Alan Krueger is a liar: Ever since Council of Economic Advisors chair Alan Krueger gave a speech on inequality, conservative media have been hard at work trying to debunk his claims. Increasingly, the go-to numbers guy on the right is Scott Winship of the Brookings Institute, who has written a series of articles at the National Review. Several of these articles have recently been linked and praised by Tyler Cowen.

Cowen's most effusive accolades were reserved for this piece, about which Cowen says "The post is excellent throughout and it contains many more points of interest." So I thought I'd take a look…. What I found, disappointingly, was a mix of insults, value judgments masquerading as refutations, dubious logic and concern trolling. So I thought I'd do my usual thing...go through the piece point by point, so readers can see why I reached the conclusions I reached...

Warning: This gets long.

Winship writes:

[T]he more Obama can make the election about big-picture economic issues like inequality and mobility, the less flack he will take…. I have a fair amount of sympathy for much of President Obama’s agenda... But I am exasperated by the Administration’s casual claim that opportunity in the U.S. for the typical American is on the decline….

As you  can see, the concern-trolling has already begun: "I support Obama and care about inequality...I'm just pissed about his lack of empirical rigor! Oh, and also he's just trying to scare Americans and distract them from our real problems for his selfish political gain. But no really, I'm just a dispassionately concerned data guy!"

But then the real kicker comes in this line:

The latest attempts to justify this claim [of reduced opportunity], in Krueger’s speech, have crossed the line from ill-supported to deceitful.

Oh, so Krueger is a liar, is he???

I say that if you are going to call a respected economist a liar, you had better have some pretty damn good evidence to back that up. Let's see if Winship has the goods…. Winship paints a picture of an America that is becoming more unequal only because a rising tide is lifting some boats faster than others. That may have been an accurate picture in the 80s, but it has not been accurate for over a decade.

Next, Winship takes on the much-talked about "Great Gatsby curve," which shows a cross-country correlation between income inequality and intergenerational mobility. The first thing he does is to cast doubt on the cross-country data, citing several ways in which these might be mismeasured. These complaints are certainly valid, but do they refute Krueger's point... or reinforce it? I hereby outsource my argument to Justin Wolfers….

Basically, Winship has a bunch of complaints about how the data are constructed — and many are valid...It’s a standard play from the wonk-fight playbook: throw lots of mud at the data, and hope that this leads people to mistrust the conclusions that follow. Here’s the thing: his criticisms actually strengthen the original finding. Think about it. Imagine how strong the “true” relationship must be if it shows up even when using only rough proxies for the “true” levels of inequality and immobility. In light of Winship’s criticisms, the high correlation in this chart is all the more remarkable. If his gripes are correct, then graph understates the correlation between inequality and mobility... [If] the data are a pretty poor proxy for what’s really happening... there’s actually a very strong link that’s being disguised by imperfect data.

So if the relationship between inequality and immobility holds across multiple data specifications, then Winship's "critique" is just proving Krueger's point. But maybe the Obama administration just cherry-picked the one data specification that seemed to show a relationship? Ah, but no. In his next paragraph, Winship writes:

Admittedly, all of the charts like this that researchers have created show a relationship between inequality and immobility.

So Winship's argument is: "Any way you slice it, the data seem to support Krueger. But those data are noisy! Therefore Krueger is a liar!" 

Refutation FAIL….

Winship concludes his article with some more concern-trolling:

[The Obama administration is] needlessly scaring the middle class into doubting their own security... So the president’s strategy is likely to hinder recovery from the Great Recession. In fact, there is reason to believe that Americans are more generous when they feel they are doing well than when they feel they are at risk, in which case the Administration’s strategy is doubly counterproductive if it wants to help the bottom.

Yeah, yeah. "Obama is slaughtering the economy with his socialist rhetoric, but really I'm only complaining because I care so much about helping the poor and disadvantaged."

Gotcha.

But OK, let's back up. Winship called Alan Krueger "deceitful"! And nowhere in this article do I see anything even remotely resembling convincing evidence that this is true; instead I see a mix of value judgments and fallacious arguments….

If I were Tyler Cowen, I would not have lavished such unqualified, effusive praise on this article.