Class War in America: the Book |
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This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 License. Feel free to download this material for personal, not-for-profit, use. If you duplicate it for others, attribute it to Charles M. Kelly, and with a link to this site. Print copies are still available at Amazon and Barnes & Noble, and used copies are widely available on the internet. 10. How
Conservatives Lie with Statistics Regardless
of political ideology, the never-ending columnists and talking heads
always seem to find data from impeccable sources to support their
positions. With the constant
barrage of arguments and statistics cascading upon the American public, no
wonder people are cynical. Since claim and counter-claim on a given issue
appear to be a toss-up, how can anybody judge one way or
another? Therein
lies the great harm that well-financed propagandists do to our ability to
solve national problems. When they deliberately distort the reality of
what is happening in our society, many voters conclude that it is
fruitless to make the effort to find out who is telling the truth and, as
a result, drop out of the political process. As
people disengage from the political process, right-wing conservatives fill
the vacuum and get their favored politicians elected. It’s a vicious
cycle. With more conservatives in Congress, they are better able to
further propagandize and confuse the public. Conservatives
also get vital help from well-financed think tanks like the American
Enterprise Institute, the Heritage Foundation, the Free Congress
Foundation, Empower America, the Hudson Institute, and a host of others.
In addition, popular conservatives like Rush Limbaugh, Oliver North, and
George Will breathe new life into the same old clichés that periodically
have gotten us into trouble throughout our history: wealth trickles down,
higher taxes on our richest citizens cause joblessness, wealth is not a
zero-sum game, government regulations destroy the free market, unions are
bad for workers—and on and on. Just
as the tobacco industry delayed the public’s appreciation of the known
dangers of tobacco for decades, financial conservatives are doing all they
can to delay the public’s appreciation of the disastrous effects of the
past 20 years of ClintoReaganomics. The
Distorted Statistics of ClintoReaganomics Understandably,
most right-wing propagandists masquerade as journalists-with-principles
and they can be found in virtually all the mainstream media. To
demonstrate that fringe-element conservatives have infiltrated so-called
moderate publications, this discussion will begin with Marc Levinson’s Newsweek article headlined “Hey,
You’re Doing Great.”1 He
made a Herculean effort to demonstrate to the public that the 1980s were
great for most people, and contended that middle-class Americans were
doing better than they think. He claimed that “Three out of five Americans
are in households that many experts consider middle class.” But then he
offered the most preposterous definition of “middle class” that one is apt
to find. To
begin with, he defined middle class as those who were making between
$25,000 and $100,000, which amounted to 53.8% of households. That
certainly would be close to the percentage one would expect to represent
the middle of any statistical distribution. Problem
is, that definition starts above
the bottom 40.3% of Americans whose household income was under
$25,000. And it says that persons would have had to make over $100,000—and
be in the top 5.8% of households—to be above middle class. To give his
contentions the aura of credibility, he pointed out that the basic data
(but not the definition of
middle class) came from the U.S. Census Bureau. Levinson’s
“many experts”—and their tortured definition of middle class—could have
come only from the paid hacks at one of America’s right-wing think tanks.
As soon as the U.S. Census Bureau releases such data, these unscrupulous
mercenaries find ways to redefine them to fit their own political
objectives. So,
to Levinson and his right-wing friends, the middle class extends from above the bottom 40.3% of
Americans and up to the top
5.8%. With this one quick twist of a definition, they thus eliminated the
top half of the bottom 40% of Americans from the middle-class category.
With these perversions of data, the statistics for the “average” American
look a lot better than the raw data from the Census Bureau would suggest.
Incredibly,
Levinson’s definition of “upper middle class” was from the top 12.5% of
Americans to the top 5.8%, or from $75,000 to $100,000. This, at a time
when the median income for all Americans was just
$35,000. Like
the above, the most effective propaganda spins are the absurd conclusions
based on accurate data. For another example, consider John Weicher,
right-wing propagandist for the Hudson Institute, who demonstrated how to
use accurate statistics to support misleading conclusions. Under the head
“Getting Richer (At Different Rates),” Weicher admitted that the rich got
richer when Reagan was president, but …so
did the middle class and the poor, to about the same
extent.… The surveys (by Federal
Reserve Board) show, first of all, a huge increase in the total real
wealth of American households (from 1983 to 1989)—to $16.8 trillion in
1989 from $12.7 trillion in 1983. The wealth of the average household rose
by about 20%, to $181,000 from $151,000…. Average wealth increased for
every type of household except one—single women with
children.… (Table: Married couples with
children saw their income go up 33%, from $132,100 to $175,100 between
1983 to 1989. Single women with children saw income decline from $36,200
to $32,200.) Did
the rich get richer and the poor get poorer during the Reagan years? No, or at least not much, if at
all. The distribution of
wealth hardly changed.2 As
soon as unfavorable news (growing income disparity) hits the media,
conservative think tanks start damage control—and suddenly, remarkably
creative analyses appear in conservative financial publications. This is
how you distort data effectively, while telling a literal
truth: §
Use
a reputable source: The Federal Reserve Board, the Labor Department or the
Census Bureau. §
Distract
the reader with some very favorable news that has nothing to do with the
premise: rising average income
based on the total income of all
persons. §
Make
your conclusions more believable by citing the exception—the lowered
median income of single mothers with children (understandably,
irresponsible people of low morals). §
Analyze
data in a way that has nothing to do with how the income was distributed
between the rich and poor in
each category. Sure, average income increased in the categories of total
wealth, income of married people, and income of single people—but most of the increase came at the
top of the distribution in each category, while income at the bottom of
each category decreased or remained the same. Michael
Novak, right-wing hatchet man for the American Enterprise Institute, also
demonstrated how conservatives can creatively report statistics. He asked
the question, “Middle-class ‘meltdown’?,” and made the erroneous
contention that “The simplest way to test the thesis that the middle class
declined in the 1980s is to check what happened to median
income.”3 Novak
used Census Bureau data to claim that …real
incomes of every class of Americans went up during the
1980s.… As Reagan took over in 1981,
the median income for American households was $26,251, as measured by the
Census Bureau in 1989 inflation-adjusted dollars. By the same measure, the
median income in 1989 was $2,655 higher, or
$28,906.… Each of the four lowest
fifth (of families) showed higher income in 1988 than in 1980. The top
limit of the lowest fifth jumped (in constant 1988 dollars) from $14,767
to $15,102; of the second lowest, from $24,966 to $26,182; of the third,
from $35,361 to $38,500; and of the fourth, from $49,580 to
$55,906.4 Although
a median statistic tells you what happened at the exact middle of a
category, it tells you absolutely nothing about what happened at each end.
The shrinking of the middle
class consisted of the middle-class-rich getting richer, and the
middle-class-poor getting poorer—with the median increasing slightly.
Novak’s data are not only irrelevant, they totally distort the reality of
the issue being discussed. Notice
that Novak then selected the rising top limit of each distribution to
expand his point. In each category, the bottom limit undoubtedly remained
the same or went down, but we can’t tell because Novak chose to keep that
data to himself. Also
note that the increase in income for the highest of our lowest paid workers
“jumped” only $335. That’s just
a bit more than 2% over an eight-year
period! On
the other hand, the increase for the next-to-the-top income category, from
$49,580 to $55,906, was a much more substantial $6,326, almost 13%. Novak
chose not to report the change in incomes of the top fifth of income
earners—the real champions in the earnings race. Now, why would he do
that? As everyone now knows, that increase was very impressive
indeed. The
Reality of ClintoReaganomic Statistics In
1994, Business Week compared
the incomes of rich and poor in a way that actually added to our
understanding of the economics of the ’80s. The article, “Inequality,”
demonstrated how income inequality becomes obvious when you actually
compare top earners with bottom earners, instead of just looking at
distorted averages or medians: …import
competition and the decline of unions have left families in the bottom
quarter—whose breadwinners often dropped out or stopped after high school
and earn less than $22,000—stranded in low-wage
limbo. This
has led to the widest rich-poor gap since the Census Bureau began keeping
track in 1947: Top-fifth families now rake in 44.6% of U.S. income, vs.
4.4% for the bottom fifth. As recently as 1980, the top got 41.6%, the
bottom 5.1%. Even as a good education has
become the litmus test in the job market, moreover, the widening wage
chasm has made it harder for lower-income people to get to college. Kids from the top quarter have had
no problem: 76% earn bachelor’s degrees today, vs. 31% in 1980. But less than 4% of those in
bottom-quarter families now finish college, vs. 6% then.5 By
the time of this article, the growing disparity in income and wealth
between rich and poor had become an obvious and accepted reality. Prior to
that, and all during the 1980s, conservative commentators did everything
they could to delay this understanding by the American
public: §
Although
inequality began expanding in the late 1970s, it exploded in the 1980s, and it has been
expanding ever since. §
Again,
a conservative financial publication cited unmanaged world trade and the
decline of unions as major causes of the income decline of American
workers. §
The
rich-poor gap has been growing and is the biggest since the Census Bureau
began keeping track of it. This was an unvarnished, no smoke, no mirrors,
presentation of Census Bureau data. §
Between
1980 and 1992, the number of children in the top quarter who got
bachelor’s degrees more than doubled, from 31% to 76%. In the bottom quarter, the number
went down by a third from 6% to 4%. This is a truly meaningful way to
compare the effects of income disparity between top and
bottom. Three
years after the Business Week
article, there were some indications that the growing economy might still
cause wages to go up. Indeed, for an almost optimistic report in 1997,
look at how The Wall Street
Journal described its interpretation of “how the economic expansion is
indeed filtering down to the average consumer’s pocketbook.” Under the
upbeat headline “Household Income Rose Again in 1996,” the subhead told
the real story: “Poverty Rate, Income Inequality Were About the Same.” Its
understated conclusion put things into proper perspective, as far as the
working poor and the middle class were concerned: The
Census Bureau’s annual poverty and income report also showed that the
number of Americans living in poverty last year was about the same as in
1995 and that income inequality didn’t shift for the better.… So why
didn’t the poverty rate improve, despite the increase in median earnings?
Because the wealthiest Americans grabbed most of the income gains. Average
income for the poorest 20% of the population slid 1.8% in 1996, while
average earnings for the wealthiest 20% climbed
2.2%.… Indeed, Americans didn’t
divide the fruits of prosperity any better last year than in 1995. The
wealthiest 20% of Americans were raking in nearly half of all household
income, about the same as in 1995. That is nowhere near sharing the pot
equally, but it is better than in previous years, when the rich grabbed
increasingly larger shares at the expense of the poor and middle
class.6 This
headline and subhead demonstrate the chronic two-faced nature of
conservative economics: average incomes keep going up, but, surprise,
poverty and income inequality stay the same or get
worse: §
The
nature of the statistics that financial conservatives like to brag about
continued from the late 1970s to 1997: Median incomes kept going up.
§
But
there was no change in income inequality. §
In
fact, as of 1997, the poorest 20% were worse off than for the year
before—by 1.8%—again. §
Talk
about “redistribution of wealth.” Usually it’s Republicans complaining
that Democrats want to transfer wealth from rich to poor. Obviously, that
hasn’t been a problem for the past 25 years, in which the rich have been
grabbing wealth from the poor and middle class. Two
years later, in September, 1999, the trend was continuing. Business Week asked the question,
“The economy is booming, profits are soaring—so why isn’t everyone riding
high?” Under the head, “The Prosperity Gap,” it distinguished between the
“new economy” and the “old economy”: If
you stay at a job in an Old Economy industry, you are destined to become
relatively poorer and poorer in a richer and richer society…. Compared
with 1988, real wages are down by 4.5% in Old Economy
industries…. Indeed, based on current
trends, the wage gap between New Economy and Old Economy workers seems
likely to widen for years to come…. The latest data show wage
increases actually decelerating across much of the economy, outside the
New Economy industries.7 Of
course, workers in the “Old Economy” industries are the ones described in
Part 1 of this book—the ones that conservatives sold out to investors.
Workers in the “New Economy” are in industries that are still growing and
that haven’t yet been hit by the kind of ruthless competition that has
been forced on Old Economy workers. (But their day is coming.)
Business
Week
wasn’t covering any new ground here, except to update the income and
wealth disparity problem, and to clarify the segments of the society that
are most affected. Similar articles were being published regularly in the
mainstream press. When
articles like this come out, it triggers an automatic response from the
right-wing cranks in charge of damage control. Edwin Rubenstein (research
director of the Hudson Institute) was remarkably open about his desire to
reduce any feelings of guilt in the readers of Forbes. In his article,
“Inequality,” he went through incredible gyrations to demonstrate that it
really wasn’t a problem that anyone should feel guilty
about: There
it was in the Oct. 1 Wall Street
Journal: A chart demonstrating that income inequality has been rising
in the U.S. The chart said that the highest quintile (which it defined as
a fifth of the population) commands 49.2% of the nation’s household
income, compared with 3.6% for the lowest quintile…. Taken raw, the income
statistics could certainly induce guilt among readers of the Journal or of Forbes, since they tend to fall in
the high-quintile group….8 Rubenstein went on to make the most absurd
rationalizations about why “the raw income numbers exaggerate
inequality”:
These
selective interpretations of facts are literally true, but they are used
to confuse the issue of income disparity—to the point where the readers of
Forbes can feel justified in
dismissing more down-to-earth interpretations of contradictory facts.
Again,
outright lies are relatively rare in our most respected mainstream
conservative publications. It’s the deliberate misinterpretation of
reality that is the culprit. This is why the public needs to be forewarned
that Republicans always try to cut the funding of our best sources of
objective financial information, under the pretense of “getting government
out of our lives.” In
1996, Scientific American
alerted the American public that the Republican Congress wanted our
government to be, as the headline stated, “Flying
Blind”: In
an era when Congress may ask schoolchildren to skip lunch to help balance
the budget, it sounds eminently reasonable that bureaucrats at arcane
federal agencies such as the Bureau of Economic Analysis (BEA) or the
Bureau of Labor Statistics (BLS) should share in the general
pain. The same logic might lead a
skipper trying to lighten an overburdened ship in the middle of the ocean
to jettison sextant, chronometer and compass. Economists worry that,
without social science data to measure their effects there may be no way
to tell whether the various policy experiments now being enacted are
succeeding or failing. The status of U.S. economic
statistics is already “precarious,” says Alan B. Krueger of Princeton
University. He notes that the BLS has reduced the size of its statistical
samples (thus compromising accuracy) and dropped many kinds of data
entirely. Even such seemingly basic information as manufacturing
turnover—the rate at which people quit factory jobs and companies hire
replacements—is no longer available.… If proposed House and Senate
budget cuts go through, international price, wage and productivity
comparisons will have to be scrapped, forcing U.S. policymakers to rely on
dead reckoning when they try to compare domestic workers with their
European or Asian counterparts.9 The
Bureau of Economic Analysis and the Bureau of Labor Statistics are two of
our best sources of objective, comprehensive in-formation about what is
going on in our economy. So why do the Republicans in Congress want to cut
their funding? Simple.
Less accurate economic and labor data would cut the workload of
conservative think tanks. They wouldn’t have to go through such
hypocritical gyrations to explain away the bad news about the failures of
their economic experiments on working Americans. For
example, “manufacturing turnover,” and “international price, wage and
productivity comparisons,” among other basic data, are embarrassing and
hard to explain away for those who claim that the rising economic tide
will lift all boats. When
“dead reckoning” is all the public has to go on, the highly financed
marketing of special interest distortions-of-reality holds sway over
unavailable facts and common sense. And when money is more persuasive than
reason, conservative think tanks and their politicians win more
elections. Now, check out how
Republicans can be exceptionally creative when they talk about
taxes. Now go to:
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