What we don't know about the economy could hurt us. Many of the suggested remedies to problems that don't exist may leave us worse off.More careful analysis of data is provided in an Alan Reynolds article in the WSJ which Don Luskin posts and comments on here:
At last... Alan Reynolds' long-awaited blast against all the hype from the Left and the Right about so-called "income inquality," and the myth that the "top 1%" have suddenly started making all the money in this country. ... This is the best. I totally bow down before Alan Reynolds.
As many others have done, Virginia's Democratic Senator-elect Jim Webb recently complained on this page of an "ever-widening divide" in America, claiming "the top 1% now takes in an astounding 16% of national income, up from 8% in 1980." Those same figures have been repeatedly echoed in all major newspapers, including this one. Yet the statement is clearly false. The top 1% of households never received anything remotely approaching 16% of personal income (national income includes corporate profits). The top 1% of tax returns accounted for 10.6% of personal income in 2004. But that number too is problematic.
The incessantly repeated claim that income inequality has widened dramatically over the past 20 years is founded entirely on these seriously flawed and greatly misunderstood estimates of the top 1%'s alleged share of something-or-other.
The politically correct yet factually incorrect claim that the top 1% earns 16% of personal income appears to fill a psychological rather than logical need. Some economists seem ready and willing to supply whatever is demanded. And there is an endless political demand for those able to fabricate problems for which higher taxes are, of course, the preferred solution. In Washington higher taxes are always the solution; only the problems change.
Read the whole article - well worth it!