The Economy

Dave Henderson at TCS takes a look at economist Alan Reynold's thorough debunking of the "shrinking middle class" myth perpetuated by the Paul Krgumans of the world. Reynold's new book Income and Wealth tackles this and other myths, like the fact that famly income has been shrinking over the last three decades.

These claims often rely on curious definitions, like utilizing "tax units" as opposed to families, or holding income level definitions static (middle class = incomes of S35-50K, ignoring the effects of growing prosperity over time) in order to distort the data sets to achieve these pundits dubious pre-conceived claims. As Reynolds puts it:

"Such a fixed definition ensures that the proportion of households in the middle group must decline with a rise in general prosperity, because rising prosperity causes a rising percentage of families to earn more than $50,000." (emphasis his)

In other words, the number of people inside these income levels dropped because more families were earning incomes OVER the high end of the bracket, $50k. But of course, that isn't stated, just that the people in the middle brackets dropped. Disingenuous at best, blatantly misleading at worst, and almost certainly done on purpose to score some political point.