Conventional wisdom tells us that: (1) the vast majority of US households have experienced no increase in real income for more than a quarter century; (2) real wages have been stagnant for that same period; (3) low-wage burger-flippers have replaced high-paid factory jobs; (4) only the top one percent or ten percent have benefited significantly from rising productivity or asset prices; and (5) the once-robust middle class has been shrinking.
Just about everybody treats those assertions as if they are facts. That includes politicians on both sides, talking-head partisans, economics correspondents, and columnists—many with undisguised or thinly-veiled political agendas. They are supposed to be the experts, and the masses (like me) have to trust them; after all, our busy lives permit us only a limited amount of time for paying attention to politicians and the press. When the experts are nearly unanimous, that’s a good signal that the five conventional wisdom assertions have to be true . . . isn’t it?
That brings us to the big surprise, which Alan Reynolds sums up clearly and concisely: “Not one of those statements is even remotely close to being true.”
This book (Income and Wealth, by Alan Reynolds) is one of the best debunkings of conventional wisdom I’ve come across in a decade. It is a step-by-step dismantling of conventional wisdom about income and wealth distribution. Alan Reynolds does it methodically, one point at a time—using direct quotes from people who make those assertions, clear logic explaining what’s wrong or misleading about those assertions, and facts and figures from easily-checkable references to official, government-published sources (such as the Statistical Abstract of the United States, the Bureau of Economic Analysis, and the Bureau of Labor Statistics).
Why, then, do so many people seem to accept the false conventional wisdom without question? I have a guess: Each of us likes to think the person we heard it from must have done their homework; otherwise they wouldn’t be talking like that. Let’s face it, assumptions like that save us a lot of work. In this case, however, I now realize that, by trusting conventional wisdom, I was being too lazy—and I strongly suspect that most of our country’s so-called “economics correspondents” are guilty of the same thing I was.
I am thankful that Alan Reynolds is one who actually did the homework on this subject, then wrote a book laying out his findings. His attitude is one we should all adopt: “I accept nothing as an article of faith. I want to hear the logic and see the evidence. And you should demand nothing less. In the absence of logic and evidence, you should not give a hoot about my opinion. Reality is not a matter of opinion.”
And I’ll steal one more passage from his book:
“No matter what one thinks ought to be done about taxes, spending, unions, immigration, minimum wage laws, and so on, the first thing that needs to be done is to get the facts right. If that happens, there will still be plenty of room for lively debates about all sorts of public policies. And they will be honest debates.”
This book will always be within an arm’s reach of my workstation. I highly recommend it, especially to anyone thinking about writing on the subject of income or wealth “distribution” in the United States of America.
Get this book, and get ready for a big surprise.
End note: This is the book review I promised a while back. I also posted it to Amazon.com, and so far, Alan's new book is averaging five stars.