Many thanks — the next question is, I suppose, is the sentence clearer with “intercompare” than it would be with “compare”.

I *think* so, but would love to hear how others read it.

best,

Jim

It’s not in the OED, but it is in some other dictionaries, e.g. Random House’s 2010 dictionary, as a “related form” of “compare” to be used when the verb has an object.

]]>Downpuppy,

Many thanks for noting the sleight of hand, I had simply missed it.

Let me paraphrase Ms McArdle:

“As for me, I don’t know which is worse: the notion that Mr. Zywiki understood what he was doing, or the notion that he didn’t.”

Best,

Jim

Jim, you missed the pea in the hand. Zywiki said:

“Although income only rose 75%, and expenditures for the mortgage, car and health insurance rose by even less than that, the tax bill increased by $13,086 — a whopping 140% increase. The percentage of family income dedicated to health insurance, mortgage and automobiles actually declined between the two periods”

by specifying 3 expenses, he can ignore the $9700 daycare bill. It’s not that he didn’t calculate – its that he hid the result.

]]>Thanks for both of these comments Jim. Sure you don’t want to start blogging?

]]>Note that the right way to use percentages — using the same base (gross income) to express all percentages you wish to compare — is exactly what Warren did, and Zywki did not.

Also, I suspect that “intercompare” is new usage, as it’s not in the OED. Thoughts? Am I making this up?

Best,

Jim Bales

First, he performs the calculation that Ms McArdle finds daunting, and gets the taxes for the two cases in constant (inflation-adjusted) dollars. He then calculates that the tax burden on our hypothetical family increases by 140% (from $9.3k to $22.4k) and asserts that the non-discretionary post-tax expenses increase by “less than [75%]” (Zywiki is wrong in his assertion — see below).

Because the taxes went up by a larger percentage than the discretionary post-tax expenses, he claims that “[Taxes are] the most important contributor to the purported household budget crunch.”

But Mr. Zywiki had earlier insisted that “to conduct an “apples to apples” comparison of all expenses” required working in dollars, not percentages. So:

Between 1970 and 2000

– Non-discretionary expenses increased by $16,840 (from $11,480 to $28,320)

– Taxes increased by $13,086 (from $9,288 to $22,374)

In other words, Ms McArdle believes that Warren cannot “use data consistently” because **Ms McArdle believes that an increase of $13,086 is more important than an increase of $16.840!**

But, it is even worse than that. Mr. Zywiki did not calculate the percentage increase in the non-discretionary expenses, so I will do that for him here.

($28,320 – 11,480)/11,480 x 100% = 147%

Note that:

1) The percentage increase in non-discretionary expenses is 147%, not the “less than [75%]” Zymiki asserted.

2) The percentage increase in non-discretionary expenses is *greater* than the percentage increase in taxes, unlike Zymiki asserted.

(FWIW, Zywiki does better than McArdle here, in that her last big error was a factor of 10, while his is more like a factor of 2.)

In other words, even by Zywiki’s standards, **the increase in non-discretionary expenses was more important than the increase in taxes** (although not by much).

Shorter Zywiki: “Elizabeth Warren is wrong because I didn’t bother to do the math.”

Shorter McArdle: “Elizabeth Warren is unfit to be a regulator because Tod Zywiki didn’t bother to do the math.”

Shorter Jim Bales: “Warren was right. McArdle and Zywiki were wrong. Nothing new here.”

[ASIDE]

This shows how one must be careful in comparing percentages that use different bases. What happened was the following.

Taxes went up from *24% to 33% of gross income*

Non-discretionary expenses went from 3*0% to 42% of gross income*

Discretionary funds went down from *46% to 25% of gross income*

Notice that this approach, **using the same base (gross income) to express all percentages you wish to intercompare,** avoids the confusion that tripped up Mr. Zywiki and Ms McArdle.

And that is why we feel poorer than our parents. Compared to them, we are working harder in the work place *and* spending less time with our kids. Yet they got to spend 46 cents of each dollar that Dad earned, where as *we** only get to spend 25 cents of each dollar that we jointly earn with our spouse. That **feels* like being poorer.

Best,

Jim Bales