Is It The Meritocracy, Stupid?

David Brooks has an op-ed today rebutting the "populist myths of economic inequality" that's just...wrong. It's not sneaky, or subtly misleading, or anything else. It's simply an incorrect recitation of the economic data meant to convince readers of things that aren't true. As Dean Baker points out in a must-read demolition, just about no economic statistic Brooks cites is actually correct. Where Brooks argues that "[w]ages and benefits have made up roughly the same share of G.D.P. for 50 years," that "roughly" conceals an actual 1.7 percent drop in the corporate sector (the only area where profits matter), which equals out to six percent of family income for the bottom 60 percent. And don't take Baker's word for it, as Harold Meyerson mentioned in a past column, "According to a report by Goldman Sachs economists, '"the most important contributor to higher profit margins over the past five years has been a decline in labor's share of national income."' I assume no one plans to accuse Goldman Sachs of leftwing hackery.

After running through a few more unconvincing distortions of economic data, Brooks settles into his usual conclusion: It's the meritocracy, stupid. "Across many nations, the market increasingly rewards people with high social and customer-service skills." Um, well, yes. But that doesn't explain why, as Brooks admits, the real inequality changes are happening in the top few percent. Is he honestly trying to argue that between 85 and 93 percent of income, you've got antisocial autistics with the creativity of a plank of wood, while between 93 and 100 percent, you've got a crew of artistic backslappers? And does any of that explain the exponential rise in CEO pay? Or why the incomes of college graduates are falling? Or why the median family's income fell by 2.9 percent between 2000 and 2004?

Baker destroys Brooks' other distortions with similar ease, so I highly suggest you take a look. I've a lot to say on Brooks' conclusion and his use of Lawrence Katz's research, but I want to think on it a bit more before I do. More later.