Phil Magness has a new paper detailing the many problems with Thomas Piketty’s data. Here’s the abstract of that paper:
The Law and Political Economy (LPE) movement frames itself as a legal retort to a “crisis” of rising inequality in the United States, and calls for corrective policy interventions through novel and heavily progressive forms of taxation. These proposals, in turn, are based upon the empirical claims of economist Thomas Piketty. I show that Piketty’s measurements tend to exaggerate the rise of inequality from the 1980s to the present due to uncorrected errors and dubious assumptions in his data construction. The LPE literature, in turn, has neglected to account for the many problems in Piketty’s data when enlisting it for prescriptive political ends.
The courts keep slapping down Biden Administration lawbreaking, not that the Harris or Trump campaigns seem to notice. An Eighth Circuit Court of Appeals panel on Friday blocked President Biden’s SAVE student loan forgiveness plan and rapped the Administration for canceling debt in defiance of a lower-court order.
The Administration rolled out the SAVE plan last summer after the Supreme Court blocked its gambit to cancel $10,000 to $20,000 for each borrower. The new plans cap monthly payments at 5% of discretionary income—defined as exceeding 225% of the poverty level—and cancel remaining balances after 10 to 20 years. Borrowers don’t have to pay accrued interest.
A lower court in June blocked the Administration from discharging debt for borrowers in these SAVE plans while letting other provisions take effect. But the Administration continued to forgive their debt by—get this—invoking authority to do so for borrowers in other repayment plans that were established by Congress. Talk about audacity.
Gov. Tim Walz was a covid tyrant. (HT Todd Zywicki)
[DBx: I say this as no fan of Trump, but it’s clear that today’s Democrats are just as contemptuous of the rule of law and liberal values as are Trump & Co.]
Gary Galles wisely counsels care when using economic graphs.
These are all industrial-policy projects pushed by Democrats. Yet make no mistake, Republican cronyism and industrial policy will look exactly the same: Most of the government handouts will go to well-connected companies that do not need them but are happy to receive them anyway, and the rest will go to projects that were not sound in the first place and will fail.
New Right Republicans routinely rail against capitalism and big companies. In some way, they are correct that these companies have been corrupted and that the American people are getting screwed in the process.
But let’s be clear: The guilty party here is the government and its ability to distribute money to private companies, not the market or capitalism. Without subsidies, tax credits, guaranteed loans, and other special privileges, companies would have to perform on their own and compete on a level playing field. They would spend less time in Washington asking for favors and more time trying to please their customers.
Arnold Kling wonders if “luxury beliefs” is a useful category.
George Will documents the government-induced economic decline of his home state of Illinois. A slice:
The indispensable Illinois Policy Institute, a think tank, documents that although Illinois spends almost $24,000 per pupil (up 97 percent since 2007), only 35 percent of pupils read at grade level (1.2 million do not), only 27 percent are proficient in math (1.4 million are not). In Decatur, 7 percent can read at grade level; in Peoria, 15 percent. In 67 schools, no child recently tested proficient in math; in 37, none were proficient in reading. Yet officials celebrate the state’s high (87.6 percent) graduation rate. The online publication Wirepoints reports that school administrators (18 superintendents made more than $300,000 in 2022) have increased 70 percent since 1998 while enrollments have declined about 100,000. No wonder Illinois ranks 40th among the states in social mobility measured by the likelihood of earning more than the previous generation.
