NY Times gets it wrong. . . Again

Courtesy of California Board of Equalization memeber Bill Leonard

One popular canard tossed out by economists of a certain political stripe is that middle America has fared very poorly over the last four years. In support of this idea, The New York Times reported that the recession years of 2001 and 2002 were the only two-year period in which American incomes declined. The Times cited IRS data as the source that Americans' income dropped an average of 5.7 percent in 2001 and 2002.

Well, Donald Luskin, an economist who contributes to National Review Online, took apart the numbers cited in the article and found something quite interesting. The decline cited by the Times was caused almost exclusively by a decline in earnings by those making over $100,000 a year. The overwhelming majority of American households actually saw their incomes rise during this period.

Here are the figures:

Average Change in Income Per Taxpayer 2000 to 2002 (New York Times/IRS)

$1 to $25,000 -- INCREASE of 1.3%
$25 to $50,000 - no change
$50 to $$75,000 - INCREASE of .2%
$75 to $100,000 - INCREASE of .1%
$100 to $200,000 - decrease of .1%
$200 to $500,000 - decrease of .1%
$500 to $1 mil - decrease of .8%
$1 mil to $2 mil - decrease of 1.2%
$2 mil to $5mil - decrease of 1.5%
$5 mil to $10 mil - decrease of 5%
$10 mil or more - decrease of 22%
All incomes (average) - decrease of 5.7%

Obviously, the richer you were in the last recession, the more you suffered. Luskin points out a better headline would have been, "The Rich Get Poorer, and the Poor Get Richer."