The Myth of American Inequality: How Government Biases Policy Debate
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Review : Everything you know about income inequality, poverty, and other measures of economic well-being in America is wrong. In this provocative book, a former United States senator, eminent economist, and a former senior leader at the Bureau of Labor Statistics challenge the prevailing consensus that income inequality is a growing threat to American society. By taking readers on a deep dive into the way government measures economic well-being, they demonstrate that our official statistics dramatically overstate inequality. Getting the facts straight reveals that the key measures of well-being are greater than the official statistics of the country would lead us to believe. Income inequality is lower today than at any time in post- World War II America. The facts reveal a very different and better America than the one that is currently described by policy advocates across much of the political spectrum. The Myth of American Inequality provides clear and convincing evidence that the American Dream is alive and well. Read more
Review : The Myth of American Inequality The book is an informative read for both center right and center left individuals. However, I reduced the book’s evaluation by one star because: 1. The title, specifically “Myth,†is very misleading and may encourage liberals to ignore the information as fake news from the far right. The information provided does not disprove income inequality. Instead, the information provides a better understanding of the degree and sources of inequality and poverty. 2. The policy implications provided in the last chapter are mundane. Nothing is new in policy or implementation -- a characteristic all too common in political economic discussions. Better information is necessary but not sufficient for advancement. The first five chapters provide a more accurate accounting of earned and after-tax/transfer income and thus of poverty and of quintile income levels than provided by headline government reports. Since the conceptual errors in government’s reporting of income and poverty are well known by economists and the actual data corrections have been available for years, readers could infer that government reporting is intentionally incomplete. However, neither conservatives nor progressives will fully celebrate the better information. The adjusted earned and transfer/tax income data indicate that the level of U.S. poverty and the gaps between the incomes earned by the lowest two quintiles and the (middle class) third quintile have been dramatically reduced over time by government tax and transfer programs. This success, however, has two adverse residuals. First, those still remaining in poverty and thus deep in the lowest quintile may have personal problems not easily addressed by another expansion of government income support programs. Second, the narrow gaps between the lower two quintiles and the third quintile may be reducing the incentive for individuals to work their way up to the middle class. The progressive heroes, FDR and LBJ, both wanted individuals to be able to earn their livelihoods. Unfortunately, without these government tax and transfer programs, the poverty level based on earned income and the gaps between the earned incomes of the lowest quintiles and the middle class quintile would be dramatic and growing. Government programs that are supposed to develop human capital and thus put individuals on the earned income path to the middle class are failing. Although the revised data does not directly address the handout vs hand-up effect, readers could infer that government social support programs are more a handout than a hand-up. The revised data also indicates a significant decrease in the gap between the highest quintile and the middle quintile due to progressive tax effects. However, with the press focusing on the top 1, 0.1, 0.01, etc. percent of the income distribution, this adjusted data may not seem to liberals a sufficient movement toward greater income equality. In later chapters, the authors apply the revised data to adjust views regarding gender, race and ethnic differences, power couples, single mothers, income growth trends, and tax burdens. Again troubling issues are not totally dispelled, but exaggerations founded on incomplete data are.
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