Still The Worst Econ Pundit On Earth

Our old friend Jim Pethokoukis continues to try to take back the title for worst economics pundit out there.  Jim "Housing bottom in July 2008" Cramer has been quiet lately, Megan "Gastritis broke my calculator" McArdle has too, and in their absence Jimbo writes a piece so ridiculous at the AEI blog page that the New Republic disposes of him with one of Jon Cohn's interns, Matt O'Brien.

Pay no attention to soaring executive compensation, or Wall Street bonuses, or even to the latest CBO report on income distribution: skyrocketing income inequality the past few decades is just a “myth”—at least according to Jim Pethokoukis of the American Enterprise Institute. In a recent post on AEI’s Enterprise blog, Pethokoukis contends that the data liberals typically tout on inequality understates key factors like median income gains, discounts the effects of taxes and benefits, and ignores the differing inflation rates on goods that different income groups purchase. At first glance, Pethokoukis’s case sounds sober and reasonable enough. But according to the experts I interviewed, it suffers from the defect of having a tenuous relationship with reality.

Just how bad is the piece?  This bad:

Consider the research and writing of Robert Gordon, a professor of social sciences at Northwestern University. He’s has done pioneering work questioning the extent of the aforementioned gap between productivity and median wages—work that Pethokoukis misappropriates to claim that income gains have been shared “fairly equally.” Gordon found that the productivity gap may be about a tenth the size as what is commonly thought, but, as he told me, that doesn’t negate the story about runaway wealth at the top of the income distribution. “The evidence on the long-term increase of inequality within the bottom 99 percent is ambiguous and complex, but what stands out like a searchlight is the unprecedented and increasing inequality between the bottom 99 percent and the top 1 percent,” Gordon told me.

Ouch.

The larger problem of course is that Pethokoukis has any credibility at all.  Looks like I get to add this to the Hall of Shame list. Pethokoukis is just the econ pundit equivalent of Space Herpes, with his terrible ideas on Medicare, on corporate tax cuts, on Glass-Steagall, on the balanced budget amendment, and of course, his famous "N*gga Stole My Economy" theory when he's not busy fantasizing about a world with no stimulus.

Any wonder why he's now trying to "debunk" income inequality, and doing it for a right-wing think tank?  This guy is a joke.