Washblog

There is a kind of stupidity that only the over-educated can engage in. One needs much education, sometimes, to create the proper misdirection from common sense. I read the University of Chicago paper to which the Freakonomics blog post links and with whose conclusions it agrees.

It is asinine.

It is, indeed, that peculiar brand of high-intellect idiocy to which I refer.

In this paper we relax a standard assumption underlying the calculation of conventional price indexes - that rich and poor consume a common basket of goods- and re-examine the evidence on official measures of inequality.

That's really all you need. The authors begin their inquiry with the novel observation that poor people tend to "prefer" a "basket of goods" full of cheap stuff from Wal-Mart, whereas rich people tend to "prefer" more vintage champagne, Maseratis and beach houses.

And in case you're thinking "nobody could swallow that premise" let me quote the Mr. Levitt of the Times: "China is able to produce clothes, electronics, and trinkets incredibly cheaply. Poor people spend more of their income on these sorts of things and less on fancy cars, expensive wine, etc."

Hook, line and sinker, apparently.

The authors make the "point" that cheap Chinese (and other) goods have gotten more plentiful, widely available and cheaper throughout America and that this has created almost a deflationary trend in non-durable goods. This phenomenon has only been observed in every business and economic periodical, web site and blog - ever. But the authors go on to note a serendipitous occurrence: This cheapening of goods came (miraculously) just in time for American working people's wages to go down and the price of luxury goods - and the profit-based incomes of those who buy them, of course - to go up.

Hmm, what an interesting coincidence.

Seriously, how stupid do you have to be in order to get a job writing for the New York Times these days?

Oh, I see, Levitt went to the University of Chicago, too.