Lil White Lies: I Dream of Gini

Lawyers’ Rules of Thumb(i.e., how my conservative counterpart works his blog):
If you can’t use the law (i.e., argue fallacies), use the facts
If you don’t have facts, use the law (i.e., argue fallacies)
If you have neither law (fallacies) nor the facts, pound on the table and create a distraction.

Here we have another sublimely bloviating multiple-infected specimen of misrepresenting the source along with the underlying argument of a PolitiFact (PF) ruling. My conservative counterpart takes aim at a statement made by ex-Florida-congressman Alan Grayson on MSNBC’s Rachel Maddow Show that there are “are only five countries in the entire planet that are more unequal than the United States in the distribution of our wealth.”

The first part of Bryan White’s argument is that PolitiFact’s Lou Jacobson (who else!) incorrectly attributed where Grayson said he got his information: a link provided in Wikipedia to a “peer-reviewed” paper published in The Economic Journal in 2010. He explains:

If the PolitiFact team had paid closer attention, they would have noticed that the numbers on which Grayson relies were not published in any peer-reviewed journal. The numbers Grayson used ultimately came from an appendix (Excel file) to a working paper that preceded the version published in The Economic Journal.

PolitiFact reports falsely in claiming that PolitiFact sourced its numbers to the linked "a peer-reviewed paper." Sift through the linked work from now until doomsday and you won't find "Namibia" mentioned at all nor any comprehensive list of Gini coefficients (identified by PolitiFact as the primary statistic used to identify inequality) for all the nations of the earth.

But if one reads the paper (paid closer attention!), one would find 25 countries listed,with the identical Gini Coefficients from the “unpublished” Appendix VI, in Table 7 on page 246 . The writers describe how they chose these 25 countries: “Note. Countries are listed according to the number of members of the global top wealth decile.” In other words, the writers made this the criteria for selecting countries from Appendix VI. In fact, Table 7 has the U.S. as Numero Uno in wealth disparity, as the four countries which exceed it are not there, although one of them, Switzerland, is mentioned on the previous page: “…Switzerland, whose distribution is based on hard data with good detail in the upper tail, has a Gini coefficient of 0.803 (Davies et al., 2009, Appendix VI) The US and Switzerland have Gini coefficients close to the global wealth Gini of 0.802.” And right there is the cross reference to “Davies et al., Appendix VI” which is cited frequently throughout the paper. James Davies is the first “academic” listed as the writer of the paper.

So, if Appendix VI wasn't published, what becomes of this? Does that make it incorrect?

If one looks at the working papers cited/linked in a bottom reference at Wikipedia, one can see it reads like the paper submitted to The Economic Journal. In other words, it’s virtually certain that Appendix VI served as the data source for Table 7. Actually, it WAS published, although not in The Economic Journal: it was at the NBER, National Bureau of Economic Research. I suppose only the reference was required for the table instead of appending it to what was published in The Economic Journal; but for all intents and purposes it was the foundation of the paper’s Table 7 and was the sole reliance for the Gini data presented . You can say it was partially published, but it can’t be said, as Bryan’s trying to claim, that it wasn’t published at all.

But as we all know, Bryan isn’t going to stop there. He sets his sights on Grayson’s underlying argument, which he says is about unemployment. Let’s take a better look at what Grayson said, or I should say, what Bryan left out of what he said in his post. The underlying arguments are highlighted:

Maddow: The "Occupy Wall Street" protests seem to be connecting with people despite a campaign on the right to portray them as scary. What do you think is resonating so much here?

GRAYSON: I think they have their eyes open and more and more people are seeing the scales fall from their eyes as well, because the "Occupy Wall Street" people are saying first there`s no accountability on Wall Street. They wrecked our economy.

Years ago, they took a healthy economy and they gave us 9 percent, 10 percent or more unemployment. And they destroyed 20 percent of our national wealth in the course of just 18 months from the middle of 2007, to the end of 2008, destroyed 20 percent of our national wealth accumulated over the course of two centuries. And nobody`s been prosecuted for it. Nobody`s been indicted. Nobody`s been convicted.

So, first, there`s no accountability. The second thing is that they`ve created a system that is enormously unequal. And the result of that is people are struggling to find a job to pay their bills, to pay their rent, to pay their credit card bills. ….

And the way that they enforce is the third gripe. The third gripe is Wall Street controls and dominates our political system. One party is a wholly owned subsidiary of Wall Street and the other caters to Wall Street all too much. So, people got into the situation right now where they feel that the system is completely unresponsive and they`re driven deeper and deeper into debt and misery.”

Bryan argues that it’s really about unemployment or income inequality, and because Jacobson doesn’t quite explain why the U.S.’s income Gini was “in the middle of the pack” or how it relates to the wealth inequality, it somehow makes Grayson’s underlying argument “spurious.” However, if Bryan had actually read The Economic Journal paper (paid closer attention!), he would have found some background on the income Gini :

“Table 7 gives wealth Gini coefficients for the larger countries and for the world as a whole. As mentioned earlier, wealth distribution is unambiguously more unequal than income distribution in all countries which allow comparison….(Page 244, 21 of the pdf)

Missing from Table 7, of course, are the worlds smaller countries, some of which are of special interest. (See Davies et al. (2009, Appendix VI) for details on all countries.) For example, some of the countries with very high wealth rankings have much less spectacular income rankings.” (Page 247, 24 of the pdf)

There’s another reference to Appendix VI (“for details on all countries”)! As you can see, the Economic Journal paper seems to be saying that there is no correlation or causation between degree of employment and wealth distribution, so making a case of Spain’s unemployment as it related to the Gini index was, as Bryan might call it out on others, a little bit of straw man thrown in as a distraction.

Bryan conflates income and wealth when he says in summary that “It's neither careful nor admirable to characterize income inequality measuring near the middle of the pack as "overwhelming" or "staggering," especially with such thin (if any) correlation to general prosperity.” Grayson made it clear he was talking about wealth, not income, as was noted in the PF piece. While he mentioned unemployment among the myriad of topics which could qualify as the underlying argument to the fact-checked statement, it was not the only underlying argument as Bryan would like you to believe. Jacobson did not need to waste his time going over all of the underlying argument possibilities. Occupy Wall Street is not just about unemployment, as Grayson argued: it’s about the lack of accountability, the destruction of wealth and the way our political system has been hijacked by corporations.

There’s also sources I presented on Facebook which neither Jeff nor Bryan responded to, showing the U.S. wealth Gini coefficient had been steadily increasing since 1980, that it increased twice as fast during the 80’s under Reagan than it did when Clinton was president. This was a response to Bryan’s comment: “Then there's the problem of the data referring to the year 2000--when we still had President Clinton if office. He was so great, wasn't he, Democrats?”

Between 1983 and 1989, the Gini coefficient for the distribution of wealth in the U.S. rose by 2.1 percent, indicating more inequality in the distribution of wealth. "Of more significance is the actual size of the Gini number for both income and wealth. In [1980 the Gini coefficient for money income in the U.S. was .4 (Osberg, p. 17)], in 1983, the Gini number for income distribution was .414; the number for wealth distribution was .777. By 1989 the Gini number for income distribution had risen to .428, and for wealth distribution to .793." Peterson, p. 111.)

Bryan might say I am making a “tu quoque” (“you too”) argument, but that’s the same argument he is making. I would also suspect the wealth Gini is probably even higher today by a greater percentage than it was for the period that Clinton was president. So yeah, Clinton was great because he slowed the Gini down even when there was a huge stock market run up.  Oh, and thank you George Bush.

Partner in crime Deff Jeff Dyberg emulated Bryan’s post across the Facebook message boards, asking “does it bother anybody how PF bungled this fact check?” No, Jeff. If he or Bryan had bothered to read that paper they would see that it was cross-referenced several times and that Appendix VI served as the supporting data (as published at the NBER) for the only Gini table in the report.   It's absurd to even suggest that Lou Jacobson and PolitiFact bungled the fact-check or have anything to be embarrassed about.