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June 10, 2007


Summers' testimony is considerably more cogent than Leonhardt. Summers says that in order to return the income distribution to that which existed in 1979 would have required a transfer payment of $664 billion from the top 1% of households to the bottom 80%. To put that in Leonhardt terms, it's as if every one of the one million households in the top 1% would write a check for $664,000 every year to be sent to the bottom 80% of households.

That ignores, of course, the possibility that in absolute terms, the bottom 80% of households is living better now than it did in 1979. Summers' focus, and Leonhardt's, is entirely on share of national income. In other words, I don't care how much better I'm doing than I did before, it galls the hell out of me that there's someone over on the other side of town who's doing even better. It's a political and economic philosophy based on envy, a staple of the class warfare that populists love to trot out whenever possible.

It's worth asking why Leonhardt chose such a distorted and inapt analogy. Is this Yale-educated mathematician and weekly economics column writer for the Times a fool, or is he a knave?

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