1973), one sees an overwhelming picture of radically growing inequality. And one might correctly suspect even from these data that the pattern continued inside the top quintile, i.e., that the top 5 and the top 1 percent did better still.
When Armey (with his Ph.D. in economics) wrote this passage, he must have had the same table in front of him that I am looking at now. He must therefore have known that he was, strictly speaking, lying when he described his data as being what happened during the “eighties,” and could not have failed to notice that, even at the end of his carefully selected period, incomes were fare more unequal than they had been in the seventies. In other words, the passage is a deliberate attempt to mislead the reader.
Percentage Income Change by Income Bracket for the Periods 1979–1983 and 1973–1989.
Income Bracket
1979–1983
1973–1989
Lowest quintile
-14.2
-3.6
Second lowest
-8.1
3.1
Middle
-6.2
9.0
Second highest
-2.9
14.8
Highest
-1.4
26.0
It gets even better. Armey cites a study that shows that there is huge income mobility in America. The message here is simple: Don’t worry that some people find gold and some don’t—next year you may be the winner. He gives numbers saying that fewer than 15 percent of the “folks” who were in the bottom quintile in 1979 were still there in 1988. He then asserts that it was more likely that someone would move from the bottom quintile to the top than he would stay in place. Again, he doesn’t cite the source, but these are familiar numbers. They come from a botched 1992 Bush administration study, a study that was immediately ridiculed and that its authors would just as soon forget.
This is why: The study tracked a number of people who had paid income taxes in each of the years from 1979 to 1988. Since only about half the working population actually paid taxes over the entire period, this meant that the study was already biased toward tracking the relatively successful. And these earners were then compared to the population at large . So the study showed that in 1979, 28 percent of this studied population was in the bottom 20 percent of the whole population; by 1988 that figure was only 7 percent.
This means, Armey asserts, that someone in the lowest quintile would be more likely to move to the highest than stay in place. Put kindly, it’s a silly argument. For subjects of the study who moved from the bottom to the top, the typical age in 1979 was only 22. “This isn’t your classic income mobility,” Kevin Murphy of the University of Chicago remarked at the time. “This is the guy who works in the college bookstore and has a real job by the time he is in his early thirties.”
In reality, moves from the bottom to the top quintile are extremely rare; a typical estimate is that only about 3 percent of families who are in the bottom 20 percent in one year will be in the top 20 percent a decade later. About half will still be in the bottom quintile. And even those 3 percent that move aren’t necessarily Horatio Alger stories. The top quintile includes everyone from a $60,000 a year regional manager to Warren Buffett.
Armey is no fool. He cannot be unaware that he is fudging his numbers. Possibly he regards a small fib as justifiable in the service of a higher truth. Or possibly he has managed to achieve a state of doublethink, in which the distinction between what is politically convenient to believe and the objective facts no longer exists. The end result is the same: His book is an effort to obscure the stark realities of growing inequality.
And that is no surprise. After all, the success of free-market conservatives in seizing the mantle of populism in America, despite the growing gap between the
When Armey (with his Ph.D. in economics) wrote this passage, he must have had the same table in front of him that I am looking at now. He must therefore have known that he was, strictly speaking, lying when he described his data as being what happened during the “eighties,” and could not have failed to notice that, even at the end of his carefully selected period, incomes were fare more unequal than they had been in the seventies. In other words, the passage is a deliberate attempt to mislead the reader.
Percentage Income Change by Income Bracket for the Periods 1979–1983 and 1973–1989.
Income Bracket
1979–1983
1973–1989
Lowest quintile
-14.2
-3.6
Second lowest
-8.1
3.1
Middle
-6.2
9.0
Second highest
-2.9
14.8
Highest
-1.4
26.0
It gets even better. Armey cites a study that shows that there is huge income mobility in America. The message here is simple: Don’t worry that some people find gold and some don’t—next year you may be the winner. He gives numbers saying that fewer than 15 percent of the “folks” who were in the bottom quintile in 1979 were still there in 1988. He then asserts that it was more likely that someone would move from the bottom quintile to the top than he would stay in place. Again, he doesn’t cite the source, but these are familiar numbers. They come from a botched 1992 Bush administration study, a study that was immediately ridiculed and that its authors would just as soon forget.
This is why: The study tracked a number of people who had paid income taxes in each of the years from 1979 to 1988. Since only about half the working population actually paid taxes over the entire period, this meant that the study was already biased toward tracking the relatively successful. And these earners were then compared to the population at large . So the study showed that in 1979, 28 percent of this studied population was in the bottom 20 percent of the whole population; by 1988 that figure was only 7 percent.
This means, Armey asserts, that someone in the lowest quintile would be more likely to move to the highest than stay in place. Put kindly, it’s a silly argument. For subjects of the study who moved from the bottom to the top, the typical age in 1979 was only 22. “This isn’t your classic income mobility,” Kevin Murphy of the University of Chicago remarked at the time. “This is the guy who works in the college bookstore and has a real job by the time he is in his early thirties.”
In reality, moves from the bottom to the top quintile are extremely rare; a typical estimate is that only about 3 percent of families who are in the bottom 20 percent in one year will be in the top 20 percent a decade later. About half will still be in the bottom quintile. And even those 3 percent that move aren’t necessarily Horatio Alger stories. The top quintile includes everyone from a $60,000 a year regional manager to Warren Buffett.
Armey is no fool. He cannot be unaware that he is fudging his numbers. Possibly he regards a small fib as justifiable in the service of a higher truth. Or possibly he has managed to achieve a state of doublethink, in which the distinction between what is politically convenient to believe and the objective facts no longer exists. The end result is the same: His book is an effort to obscure the stark realities of growing inequality.
And that is no surprise. After all, the success of free-market conservatives in seizing the mantle of populism in America, despite the growing gap between the
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