What Does it Take? . . .
. . . to become an economics commentator for National Review Online? Apparently, a sketchy command of the subject matter. Larry Kudlow offers a "footnote to today's strong jobs support". Excellent. In particular, he promises "some new factoids to sink your teeth into concerning all the nonsense about wage inequality — a subject that the brilliant Washington economist Alan Reynolds has debunked voluminously." Ah, yes, that Alan Reynolds. Also note that one can hardly debunk a subject. Nor is Reynolds' paper especially voluminous. Even better, though, the factoids Kudlow presents are . . . irrelevant to the question of wage inequality. He writes:
At $16.76, average hourly earnings are nearly 20 percent above year 2000 levels, and 44 percent above the $11.65 level in the fifth year of the Papa Bush/Clinton business expansion cycle.This is the fifth year of the GWB cycle.
Ah, yes, the old nominal figures gambit. But wait!
Even in inflation adjusted terms, real average hourly earnings are slightly higher than the 2000 peak, and nine percent above the 1995 fifth year average level.
In short, the critics are right! Median wage growth has been anemic. Or, as Kudlow triumphantly puts it, "real average hourly earnings are slightly higher than the 2000 peak. That's very poor performance. Meanwhile, high-end incomes have increased quite a bit. That's growing inequality!
NRO needs a higher caliber of hack. Alan Reynolds at least knows what he's trying to "prove."