We hear a lot of talk about the disappearing middle class. Sometimes this jabber goes so far as to posit that normal folks — say, the “99 percent” — haven’t really experienced any progress since the ’60 or ’70s.
So blame the rich. And their government.
It’s not an implausible case. Wealthy interests do rent politicians at extravagant rates, changing policy in their favor.
But as economist Russ Roberts and Cornell University’s Richard Burkhauser discussed recently, sloppy statistics feed the hand-wringing over middle-class decline. Considering government transfer payments from rich to poor and plotting income by household rather than individually, the basic “stagnation” thesis doesn’t pass the “smell test.”
For the real stink, however, consult the Internet memes, particularly this goofy contention:
In the 1950s and 1960s when the top tax rate was 70-92%, we laid the interstate system, built the Internet, put a man on the moon, defeated Communism, our education system was the envy of the world, our middle class thriving, our economy unparalleled. You want that back? Raise taxes on the rich.
Forget the obvious nonsense (ARPANET was the Internet only in ovo; Communism collapsed in the ’80s), and concentrate on the main points, as Tom Woods has done: tax evasion was rampant back in the alleged “good ol’ days”; public schools have doubled in per capita spending since then, and not improved; and the stagflationary ’70s followed the booming ’60s, almost certainly as a consequence of the policies being touted, here.
Selective memories help in constructing just-so policy “proofs.” The middle class has received some big hits, I grant you. Still, we’ve seen progress, too.
This is Common Sense. I’m Paul Jacob.