Megan McArdle is Always Wrong™: Occupy Wall St./Income Inequality division

I have neither the patience nor the time to wade through the divine Ms. MM’s effusion on the class snobbery at the heart of the Occupy Wall St. movement. (Via Edoroso)

It’s the usual McArdle — self regarding (I was a crappy student who went into the punditing racket because I loved it! And I’m better than you because of that!*); chock full of unsourced or supported claims that, as ever with this writer, are too-good-to-check;** and, frankly too wearisome a barge-load of flabby writing to want to wallow in long enough to do the full fisking that it probably deserves.

So to keep it short (as long as you ignore the footnotes)…let’s just look at one exemplary bit of McArdle drawing on her deep knowledge of the data making sh*t up:

Similarly, in the 1990s, when I worked with a lot of mostly blue-collar and first-generation college grads (with a fair sprinkling of Ivy Leaguers, to be sure), I didn’t hear nearly so much about the rich and how greedy they were–even though in the late 1990s, income inequality was almost certainly worse than it is right now.

That would be this income inequality.  Here is a handy chart:

My 53 year old eyes may not be all that acute, but from where I squint at the screen, it sure looks like the share of US income going to the top one percent is higher now than it was in the late nineties.  If you want to see the data in tabular form, mouse on over here.

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In other words — income inequality was piss poor in the 1990s, but it is in fact worse now.

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Which means, as ever, recall the Levenson corollary to DeLong’s law:

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1.  Megan McArdle is always wrong.

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2.  If your analysis leads you to conclude Megan McArdle is right, refer to rule 1.

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*Really.  In her own words:

“here’s the difference between me and the outraged lower-upper-middle-class: I chose it.  I decided to have terrible grades and major in English, and then job hop in New York before settling down as an IT consultant. “

**Here’s McCardle on the profile of the archetypal OWS supporter, and the thought process that led him/her to camp out in a manner calculated to offend his/her betters:

Probably they should not have sunk tens of thousands of dollars into acquiring a BFA.¹  But these mistakes didn’t usually used to be crippling.  They were a drag, as you paid off those huge student loans with your tiny little income…²

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Unfortunately their choices became utterly, horrifyingly disastrous just at the moment when we had a terrible financial crisis that spiked our unemployment rate up to 10%.  We can argue about exactly who is at fault and to what extent, and how much longer our public sector spending would have been sustainable without the financial crisis.   But whether or not you think their reaction is empirically correct, it certainly isn’t surprising.  To them it looks like a bunch of greedy, stupid bankers stole the jobs that they were entitled to. [Italics added.]

Well, isn’t that special.

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Actually, it’s the usual McArdle switcheroo, a bit of clumsy rhetorical sleight of hand she hopes you won’t notice.  It’s not that the bankers — who are demonstrably greedy and stupid (as in, catastrophic failures at the core jobs of managing risk and allocating capital) — hold jobs that might go to others.  It is that their greed and incapacity destroyed the financial underpinnings of the rest of the economy, so that jobs the US used to create at fairly robust levels no longer appear.  IOW, the OWS critique of the finance crowd is that what they did screwed the rest of us — and that critique is correct, however much Mean Girl in Chief McArdle wants to distract us with the idea that the greedy old Social Security and Medicare receipients and the stimulus in response to the bankster-led crisis is actually the problem.  We’ll argue later about who to blame, she says, but for now let’s not fall prey to childish insults to the poor banking sectors.

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Working this out is really not that hard — unless one is trying to make sure that no one actually pays attention to what happens and who is to blame when a handful of the most richly compensated members of a society f*ck up their one job, whilst looting the till.  But reality is a stubborn thing, and the greed and incompetence of the bankers is by now well documented, including,  for just one example, this pretty blunt piece from the archives of McArdle’s own employer.

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         ¹Number of bachelors degrees awarded in the US in 2008-9: 1,601,368.  Number of such degrees in the fine arts: 89,140 (classified in these statistics as visual and performing arts, but matching the profile of the BFA degree).  Whatever else they are, (talented and monomaniacal, sez one married to a holder of an MFA), fine-arts graduates are unlikely to dominate the revolution, just on the numbers.

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McArdle’s sneer at the arts is even sillier, in fact, when you actually look at the difference between a BFA and a BA.  The BFA curriculum, which typically demands studio and/or practice courses as well as more traditional classroom inquiry is classified as a professional rather than a liberal arts curriculum.  The folks who sign up for a painting BFA know they want to paint, and have some idea (usually a pretty good one) as to what that means — and they have an understanding of the working life they will enter.

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McArdle might have been rhetorically better off dissing her own chosen undergraduate field of English literature — except that there are plenty of people who actually understand what a literature degree is supposed to do, which is not to guarantee an income, but to give you intellectual resources you can apply in the professional setting of your choice.  But imagining that people she disdains might actually have an autonomous inner life is beyond her vapid inability to grasp the fact that the world is not simply what she thinks it ought to be.

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          ²The data here are a bit more complicated than they might at first appear — but a simplified picture is still a pretty good indicator of what’s going on.  And that would be that it’s not that students a generation ago made the same mistakes but were bailed out by the Bush casino economy.

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In this study that looked at the period from 1993 to 2006, you see both an increase in the amount of debt and a shift in the mix of students graduating with high debt loads, with the debt burden in constant dollars rising sharply over those years for every quartile in the study.  All of which is to say that it isn’t that recent grads somehow made the same mistake their elders did and got burned; actual changes in the way the US invests in and builds human capital left them more vulnerable than their predecessors.

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Image: Anonymous,  Kitchen Interior with the Parable of the Rich Man and the Poor Lazarus, c. 1610

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Tags: Income Inequality, McArdle, Occupy Wall Street

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