More whining about income inequality

Income Gap Is Widening, Data Shows - New York Times:

"Others argued that public policies had played a role in the shift. Robert Greenstein, executive director of the Center on Budget and Policy Priorities, an advocacy group for the poor, said that the data understates the widening disparity between the top 1 percent and the rest of the country.

"He said that in addition to rising incomes and reduced taxes, the equation should take into account cuts in fringe benefits to workers and in government services that middle-class and poor Americans rely on more than the affluent. These include health care, child care and education spending."

Of course, the advocates for more government meddling in the economy like Mr. Greenstein are anxious to bolster their case any way they can, even if it is less than fully accurate.

Assuming it were true that "health care, child care and education spending" were falling (if so, I hadn't noticed), how would you factor that in - subtract the dollar value of reductions in services consumed from the income figures for each income cohort? But how could that be appropriate when we don't include the dollar value of the services they do consume?

This study is based on IRS income data and doesn't even take account of welfare services consumed exclusively by those with the lowest incomes. Poorer persons and younger persons (the two tend to overlap substantially) produce more children so they consume more than their pro rata share of child care and education spending. (You might discount this for the poor quality of those government services, but that is a whole other can of worms.) This effect is magnified by the tendency of upper income persons who do have children to employ nurses, nannies, and governesses, and send their children to private schools. The rich are also not significant consumers of government-funded health care services.

As usual, a close inspection shows that what we get from the left by way of argument is less than meets the eye.