Insulated from the quandaries of business risk-taking, most journalists are naturally predisposed against the Republican tax reform. But now, in Thomas Piketty's new "World Inequality Report" on income inequality, media outlets have found another weapon with which to propel their biases.
CBS News says Piketty's report shows that "The lopsided fortunes of America's richest and poorest citizens are now on par with Russia's after three decades of rising income inequality."
Using Piketty's report as its baseline, The New Yorker's John Cassidy critiques tax reform and says that "Although the bill is officially called the Tax Cuts and Jobs Act of 2017, it could more accurately be labeled the Augmenting-Inequality Act of 2017." The New Yorker also says that "the United States is a good deal more unequal than Europe and China."
It's a pile of crap.
First off, the pursuit of happiness in Europe is significantly tougher than in the United States.
Second, U.S. average wages increased to $35,761 in 2016 and are improving across just about every demographic group. In contrast, the average Russian wage is around $8,000 a year, and the average Chinese wage around $10,300 (although it is probably significantly lower when accounting for China's rural poor and Beijing's fetish for statistical manipulation). This speaks to the obvious failing of Piketty's work and that of its media supplicants: the key to our better lives is not how much more the rich earn, but how much we earn on average.
As Margaret Thatcher eloquently rebuked a liberal politician, "He would rather the poor were poorer provided the rich were less rich." Thatcher was right and Piketty is wrong: the distinction of capitalism and the disgrace of socialism is their comparative ability to make more lives better.
Still, CBS was just getting started. Then came this gem of media objectivity:
The U.S.'s widening gap between the rich and poor is partly due to less progressive taxation, the World Inequality Report 2018 said, a finding that may spark additional debate about the current Republican tax reform effort, which critics say will reward the wealthy and corporations far more than the middle class or lower-income households.
Translate "may spark" with "we hope sparks," and "critics say" with "we say."
The central problem here is that while Piketty's socialist allegiances are self-evident, much of the media take them as gospel. Consider, for example, CBS' claim "that the transfer of public wealth to the private sector has left governments without the resources needed to invest enough in education, health and other measures to help counter inequality."
Yes, the report does say that. But does CBS also explain that conservatives take a different viewpoint on the social merits of increased government spending?
Not a chance.
Sorry, my rant isn't over.
In Quartz, Eshe Nelson takes on Piketty in the context of "Republican efforts on tax reform, which are focused on deep corporate tax cuts, and which the vast majority of economists believe will be costly and mostly help the rich."
It's a patent lie.
While the GOP bill retains too many loopholes such as pass-through exceptions, most economists actually believe that simplified, lower corporate taxes are critical in capital formation, increased investment and productivity, and eventually higher wages. Albeit signed by a predominantly conservative array of economists, a recent letter in support of the GOP corporate tax reforms highlights mainstream economic theory when it notes that:
Our colleagues from across the ideological spectrum - regardless of whether they ultimately support or oppose the current plan - recognize the record-setting rate at which the United States taxes job-creating businesses is, either significantly or entirely, a burden borne by the workers they employ. The question isn't whether American workers are hurt by our country's corporate tax rate - it's how badly. As such, the question isn't whether workers will be helped by a corporate tax rate reduction - it's how much.
This speaks to a broader issue with reporters referencing Piketty in relation to the tax bill: put simply, he ain't all that. We must remember here that Piketty's theories have been repeatedly deconstructed and his research proven biased by his socialist ideology. That alone should require caveats alongside reporting of his findings.
But if you need another example as to why the French economist should be judged more skeptically, consider this Piketty quote from a 2015 article for Le Monde: "Daesh - the Islamic State of Iraq and the Levant (ISIL) - is a direct consequence of the break-up of the Iraqi regime and more generally, of the collapse of the system of frontiers set up in the region in 1920."
In turn, news outlets might want to judge Piketty's always-sweeping assessments with a little more scrutiny.