Month: May 2014

Piketty’s data deserve better analysis

Posted on by Carter Price

There was buzz across the economics blogosphere and twitterverse over the Memorial Day weekend and into the work week today about Chris Giles’ Friday afternoon Financial Times piece claiming that data errors in the best-selling “Capital in the 21st Century” invalidate author Thomas Piketty’s results on the relationship between economic growth and the concentration of wealth.

Giles’ claims attracted substantial attention in no small part because his attack strikes at the Paris School of Economics professor’s data, which have been nearly universally praised for thoroughness—even by critics who disagree with the conclusions that he draws from them. While it is clear that Giles spent some time looking over Piketty’s spreadsheets, he jumps to conclusions that are not supported by the points he raises.

Indeed, my examination of Giles’ analysis and the spreadsheets that Piketty provided to the public indicate that perhaps the key claim by Giles is erroneous. Giles bases his argument that there was not an increase in wealth concentration in the United Kingdom but rather a decrease on a single data point from a 2010 wealth survey in the UK. Because that survey did not exist in 2000, it cannot be directly compared to other time series data without harmonization. The entirety of the drop Giles claims is occurring can be explained by switching from one survey to another.

In contrast, Piketty went through the different surveys and sources to stitch together a coherent data set that is presumably free of these discontinuities. In order to do his comprehensive analysis of the change in wealth inequality over time, Piketty had to look at disparate data sources, harmonized them (so that he could compare apples to apples), and draw conclusions. Wealth is notoriously difficult to measure, which makes working with wealth data especially tricky. Piketty has been exceptionally transparent with the data sets used in his book (the data can be found here).

Giles uses the raw, non-harmonized wealth data to claim that wealth inequality in the United States has been flat and that it has been decreasing in the United Kingdom. Yet by combining these non-harmonized data sets, Giles is comparing apples to oranges. To say that this deviates from best data practices would be an understatement. In addition, as Piketty notes in his response to the article, recent work by Emmanuel Saez and Gabriel Zucman using better data and more sophisticated methods show an increase in wealth concentration in the United States. I am not aware of comparable analysis for the United Kingdom to confirm or refute those claims made by Giles.

Many of Giles’ other critiques highlight the difficult choices that economists must make when working with complicated data. Some of his points about data mistakes suggest that Piketty may need to update a few figures and data points in a second edition of his book. Just like many textbooks (and other publications such as the Financial Times) contain errata, so will this 700-page empirical work. Some of Giles’ points do require a more thorough response from Piketty than the one he has already given, especially Giles’ claim that Piketty sometimes cherry-picks his data. None, however, seem likely to ultimately undermine Piketty’s basic empirical insight—that across time, societies tend toward an ever-increasing consolidation of wealth in the hands of the few.

In this light, Giles’ critique of Piketty’s research jumps the shark when he compares it to the Reinhart and Rogoff spreadsheet scandal, where their widely-cited debt study was used to push fiscal austerity policies for debt-burdened economies was debunked when a graduate student got his hands on their spreadsheets and discovered that they had made a summation error that materially altered their conclusions.

Piketty may have made a few errors, and we certainly look forward to future work that corrects any errata and more deeply works through any questionable data decisions. He also did not always provide enough detail about his harmonization methods—his explanation for the wealth data can be found here on pages 56-62—so providing more details in the future would be wise. But the sum total of his work and that of others suggests that the basic insights that have made Piketty’s “Capital in the 21st Century” a phenomenon in economics are solid.

No piece of research is above reproach and, particularly given the volume of work in the book, this research will require extensive study for confirmation. That said, the critique by Giles has much less than meets the eye.

I’m not alone in drawing this conclusion after a careful look at Giles’ points and Piketty’s data. Some of the best analysis on this that I read over the long weekend includes:

  • Neil Irwin and Justin Wolfers at The Upshot both do great work putting the debate in context.
  • Mike Konczal also does a good job responding to the points individually.
  • For more, I also recommend looking at the Twitter dialogue between Gabriel Zucman (@gabriel_zucman) and Scott Winship (@swinshi) on Saturday.
  • Roosevelt Institute: In “The FT Gets Piketty’s Capital Argument Wrong,” the think tank notes that Giles writes, “The central theme of Prof Piketty’s work is that wealth inequalities are heading back up to levels last seen before the first world war.” The institute says “this is incorrect, or at least badly stated. Piketty’s central theme is not that inequality of the ownership of wealth is going to skyrocket.”
  • Washington Post: A piece in Wonkblog titled “Is Piketty’s ‘Capital’ full of mistakes?” starts with this—“The nine most terrifying words in the English language for a researcher are: You made spreadsheet errors like Reinhart and Rogoff did.”  Wonkblog then concludes that “this doesn’t seem to be a Reinhart and Rogoff situation. Their Excel errors really did change their conclusions. Piketty’s don’t.
  • Bloomberg: The wire service published a piece titled “Piketty Rejects ‘Ridiculous Allegations of Data Flaws,’” in which the wire service notes that Scott Winship, a fellow at the New York-based Manhattan Institute for Policy Research, said the newspaper’s allegations aren’t ‘significant for the fundamental question of whether Piketty’s thesis is right or not.’ Bloomberg also noted that James Hamilton, an economics professor at the University of California, San Diego, said there’s ‘abundant evidence’ of widening inequality ‘from a good many sources besides Piketty.’

 

Tax cuts for the kids

Posted on by Nick Bunker

A number of reform-minded conservatives gathered at the American Enterprise Institute last week to celebrate the publication of a new book, “Room to Grow.” The book is a collection of policy proposals from economists, policy analysts, and writers that attempt to alleviate many middle-class problems such as rising college costs, high unemployment, and healthcare costs while aligning with conservative priorities. One particularly interesting proposal is a call for “family friendly” tax reform from economist Robert Stein of the investment advisory firm First Trust Portfolios.

Stein’s proposals flows from the conservative desire to reduce tax rates, but with the recognition that groups outside of the top 1 percent might be a better target for tax cuts. The plan would give each family with a child a tax refund for each child. The idea already has credibility among conservatives with an earlier version of the plan adapted into legislation by Senator Mike Lee of Utah with the child rebate set at $2,500 per child.

Stein and Lee support the tax cut as a way to counteract the supposed disincentive to have children created by the payroll tax and retirement programs. But policy analysts and policy makers might want to get behind this idea broadly even if they don’t agree with this motivation. By focusing the tax cut on families that have children, the plan would help the development of future human capital.

A variety of factors, of course, determine how and how much parents invest in their children, but simply enabling them to spend more on them would help. Parents can spend a significant amount of money on what are called “enrichment expenditures” that include spending on books, high-quality child care, and summer camps. But the amount spent on these expenditures varies quite a bit by income position.

The average amount of expenditures on children by families in the bottom 20 percent grew by 12 percent from 1994-1995 to 2005-2006. Over that same time period, expenditures by those in the top 20 percent grew by 27 percent. A child tax credit could help boost expenditures on kids by families at the bottom.

Still, the Stein-Lee plan does have some serious problems. The tax refund is not refundable, meaning that families without tax liability, mostly low-income families, wouldn’t be able to receive the credit. The families that need the credit the most would be locked out. And in an effort to make the plan revenue neutral, Lee would reduce tax credits for those at the bottom of the income ladder, as Chuck Marr at the Center for Budget and Policy Priorities has pointed out, making the issue of access even worse for low-income families.

This conservative version of family friendly tax reform won’t become law anytime soon. Nor should it. But the recognition that increasing the disposable income of families is key to growth and mobility is certainly a welcome policy position from the right.

 

The aftermath of wage collusion in Silicon Valley

Posted on by Carter Price

The settlement is in—some of Silicon Valley’s biggest and most influential technology companies late last week agreed to pay $324.5 million to settle a class-action law suit brought by their employees alleging collusion to suppress their wages.  After an anti-trust investigation, the U.S. Department of Justice filed a complaint in September of 2010.  The companies eventually settled with the department and stopped the practice. The targeted workers and the companies involved agreed to settle last month, with the amount announced last week.

But will there be any repercussions from this long legal tangle between employers and employees in one of the leading industries in the country? A great series of stories on Pando Daily lay bare the alleged efforts of big tech companies (including Apple Inc., Intel Corp., and Google Inc.) for a secret “do not hire” cartel deterring these companies from hiring each other’s workers, which artificially suppressed their workers’ wages. In the mid-2000s there was a high demand for programmers and engineers, which pushed up their wages. To combat higher pay, Apple’s Steve Jobs and Google’s Eric Schmidt allegedly agreed to stop trying to hire each other’s workers, using their size to pressure other firms to join them.

Yet some conservative economists, among them George Mason University economics professor Tyler Cowen on his popular Marginal Revolution blog, argue this kind of cartel is not terribly important because some firms will cheat, causing the system to fall apart, while new workers will figure out that there is a cartel and go work somewhere else for more money. But this particular case of wage collusion lasted from 2005 to 2009 and took the Justice Department to solve this problem, not the market.

In fact, this series of cases fit in with the narrative of French economist Thomas Piketty and his book “Capital in the 21st Century.” Piketty describes some of the fundamental economic problems facing the developed world, emphasizing those related to earnings from work versus investment. Piketty’s conservative critics make much of the fact that the author targets the “supermanagers” of companies as culprits in the rise in income inequality in the developed economies, in particular the United States. On the editorial pages of The Wall Street Journal, for example, columnist Holman Jenkins argues that Piketty wants to pitchfork the idle rich but “somewhat disconsolately for his story, the U.S. has exhibited the wrong kind of income inequality, caused not by rising inheritances but soaring “labor earnings” of the managerial class, which he attributes to self-dealing by executives and boards. “

Piketty does discuss at length such self-dealing, mostly in order to note that labor earnings in the C-suite do not seem at all connected to any corresponding productively gains compared to these supermanagers’ steely-eyed focus on wages and productivity among their companies’ workforces. And now comes along a legal settlement in Silicon Valley that proves Piketty’s point in spades.

There are at least three concrete steps that can be taken to help combat future abuses. The first is to improve access to salary information. The Bureau of Labor Statistics provides some information about salary norms by occupation and location. More important are websites such as Glass Door that encourage people to share salary information. As participation increases, there will be less room for wage discrimination not just from executive to employees but also by sex, race, and ethnicity. Earlier this year, President Obama signed an executive order preventing federal contractors from discouraging workers from talking about pay. Legislation could expand this to protect all workers.

The second is to bring new analytic tools to investigating business collusion charges. Law enforcement and intelligence agencies have brought a wide array of new analytic tools to bear on problems of terrorism. White-collar crimes need the same rigor. The financial crisis was extraordinarily costly for not just the United States but the whole world, yet we spend only a miniscule fraction of the resources fighting business crimes as we do on national defense.

And third, policymakers could change the penalties to target the actual offenders, in this case, the colluding executives. Lawmakers could ensure that these rogue executives get stiff fines and even jail time. Firms can also act by using clawback provisions to recoup losses from fines. These actions would help deter future collusion.

In the aftermath of wage collusion in Silicon Valley, these suits and settlements highlight the need to modernize our systems to detect and deter such labor abuses, which are a problem for white collar workers, too.

Carter Price is a Senior Mathematician focusing on quantitative analysis of U.S. economic policy at the Washington Center for Equitable Growth.

Things to Read on the Morning of May 27, 2014

Posted on by Brad DeLong

Should-Reads:

  1. DougJ.: Their eyes were watching Jeb: “This [by Michael Barbaro] sounds eerily like some of the North Korean-style Dear Leader fan fiction Elisabeth Bumiller used to write about W in the [New York] Times…”

  2. Matthew Boesler and Aki Ito: Piketty Rejects ‘Ridiculous’ Allegations: “Thomas Piketty rejected allegations that data behind his best-selling book on inequality are flawed as fellow economists spoke up in his defense… called a Financial Times analysis of his statistics ‘just ridiculous’…. The newspaper’s economics editor, Chris Giles, wrote last week that figures underpinning the 696-page book contain unexplained statistical modifications, ‘cherry picking’ of sources and transcription errors…. Two of the book’s ‘central findings–that wealth inequality has begun to rise over the past 30 years and that the U.S. obviously has a more unequal distribution of wealth than Europe–no longer seem to hold’, according to Giles…”

  3. Thomas Mann: Politics Is More Broken Than Ever: Political Scientists Need to Admit It: “I’ve spent decades in Washington explaining and defending the American constitutional system in the face of what I considered to be uninformed and ill-considered attacks on Congress and our way of governing. I’ve also worked scrupulously to avoid any hint of partisan favoritism…. But I believe these times are strikingly different from the past, and the health and well-being of our democracy is properly a matter of great concern. We owe it to ourselves and our country to reconsider our priors and at least entertain the possibility that these concerns are justified–even if it’s uncomfortable to admit it…. Congress has ceased to operate as an effective legislative body…. The supposed promise of linking more tightly party and ideology was that it would offer more clarity and accountability for voters…. Austin Ranney… argued that more ideologically coherent, internally unified, and adversarial parties in the fashion of Westminster-style parliamentary democracy would be a disaster within the American constitutional system…. Republicans have become a radical insurgency–ideologically extreme, contemptuous of the inherited policy regime, scornful of compromise, unpersuaded by conventional understanding of facts, evidence, and science; and dismissive of the legitimacy of its political opposition. The evidence of this asymmetry is overwhelming.”

  4. Minxin Pei: Minxin Pei asks whether the Chinese Communist Party can rule for another quarter-century: “25 years ago the Chinese Communist Party (CCP) was nearly toppled by a nationwide pro-democracy movement. It was the late paramount leader Deng Xiaoping’s steely nerves and the tanks of the People’s Liberation Army… that enabled the regime, at the cost of several hundred civilian lives, to avoid collapse…. How has the CCP survived the last quarter-century, and can its rule endure for another 25 years?… Policy adjustments, clever tactics of manipulation, and a healthy dose of luck enabled the CCP to win the support it needed to retain power and suppress destabilizing forces…. Deng again managed to save the Party… an unprecedented wave of growth and development… granting Chinese citizens considerable personal freedoms…. Carefully orchestrated moves to promote Chinese nationalism and exploit xenophobia also helped. Even repression, the mainstay of the regime’s survival, was fine-tuned…. The post-1992 reforms coincided with a surge of globalization… the so-called demographic dividend…. The problem facing the CCP now is that most of the factors that enabled it to survive since Tiananmen either have already disappeared or are headed in that direction. Indeed, for all practical purposes, pro-market reforms are dead. A kleptocracy of government officials, their families, and well-connected businessmen has colonized the Chinese state and is intent on blocking any reforms that might threaten their privileged status…. Rampant corruption and rising inequality, together with obvious environmental decay, are causing ordinary Chinese–especially the middle class, which once had high hopes for reform–to become increasingly disillusioned…. That leaves only repression and nationalism in the CCP’s post-Tiananmen toolkit. And, indeed, both of them continue to play a central role in President Xi Jinping’s strategy for ensuring the Party’s survival.”

  5. Michael Hiltzik: Tim Geithner gets FDR very wrong (but so did Obama): “It’s necessary to correct an old canard repeated by former Treasury Secretary Timothy Geithner about Franklin Roosevelt’s behavior in the long interregnum between the 1932 election and his 1933 inauguration…. Geithner’s goal is to draw a distinction between FDR’s ostensibly shocking irresponsibility and President Obama’s ostensibly laudable behavior in going along with his predecessor’s economic crisis response…. The truth is that Hoover didn’t need FDR’s help–he just didn’t want to act on his own. It’s important to set the record straight, because Geithner’s version was ginned up by Hoover himself and is cherished by Hooverite conservatives, who still walk among us today…. A fuller discussion is in my book about the Roosevelt administration…”

Should Be Aware of:

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Morning Must-Read: Dylan Matthews: The Tuition is Too Damn High, Part II: Why college is still worth it

Posted on by Brad DeLong

Dylan Matthews (2013): The Tuition is Too Damn High, Part II: Why college is still worth it: “Perhaps the most persuasive skeptical case…

…is that while the average student still benefits from college, that doesn’t mean the marginal student does…. The best study I’ve seen on this comes from Seth Zimmerman, a PhD student at Yale. He compared the earnings of Florida students whose GPAs were just above and just below the Florida State University system’s cutoff. There’s a huge effect of being just above the cutoff (3.0, for most students), suggesting that students at the margin still gain substantially from college…. Work by Nobel laureate James Heckman and his colleagues backs this up…

Evening Must-Read: Erik Loomis: The Immigration Shut-Off of May 26, 1924

Posted on by Brad DeLong

Erik Loomis: This Day in Labor History: May 26, 1924: “On May 26, 1924, the doors of the United States closed to most immigrants…

…as President Calvin Coolidge signed the Immigration Act of 1924. The law set the yearly quota for a nation’s population to immigrate to the U.S. at 2% of its U.S. population in… 1890…. This law put an end to the immigrant flows to the U.S. that had provided the labor force for the nation’s stupendous industrial growth in the late nineteenth and early twentieth centuries. It also demonstrates the great discomfort many Americans had with the diversity that became a byproduct of the need for such an expanding labor force. Immigrants from southern and eastern Europe seemed to threaten American values for reasons outside their funny religions, peasant clothing, and garlic-eating ways. Most people came to the U.S. for the precise reason they do today: to make money for their families back home… many hoped to make money and then return… and many did that…. But some of these immigrants, even if they just wanted to work, also believed in the need for a better world…. The Jewish women leading the Uprising of the 20,000 against apparel company exploitation in 1909 and after the Triangle Fire in 1911 were the cheap labor the department stores and clothing designers wanted but they had radical tendencies of standing up for their rights that was definitely not what the capitalists wanted…. Individual acts like Russian Jewish immigrant Alexander Berkman trying (and failing in spectacular fashion) to assassinate plutocrat Henry Clay Frick after Homestead or the native-born but son of immigrants Leon Czoglosz killing President William McKinley was a sign of the very real violence…. The American Federation of Labor strongly supported all anti-immigration legislation despite being headed by an English immigrant by the name of Samuel Gompers…. The events of World War I changed the equation. The unfair equation of the IWW with pro-Kaiser sentiment… meant that immigrants were more suspect than ever and that everything about them needed watching…. Perhaps the most notable feature about the Immigration Act was setting the racial quotas to 1890 level. The quotas of immigrants from each country would be based upon their numbers in the United States according to the 1890 census. It meant that Germans, Irish, and English could still come over in relatively undiminished numbers…

Evening Must-Read: Room for Debate: Did the Bank Bailout Do Enough for the Country? No. It Did Not

Posted on by Brad DeLong

Room for Debate: Did the Bank Bailout Do Enough for the Country?:

AMIR SUFI, UNIVERSITY OF CHICAGO: Housing Crisis Was Overlooked: Letting bankruptcy judges write down mortgages and providing an ambitious mortgage refinancing plan would have reduced foreclosures.

LEE SACHS, FORMER COUNSELOR TO THE TREASURY SECRETARY: Our System Is Safer and More Stable: Radical reshaping should not be an objective for its own sake. Rescue efforts and reforms protected consumers, taxpayers and the flow of credit.

DEAN BAKER, CENTER FOR ECONOMIC AND POLICY RESEARCH: Better No Bailout, Than the One We Got: Banks weren’t forced to shrink and get boring. If they were allowed to fail, federal spending could have kept the economy afloat and led to recovery.

ANAT R. ADMATI, STANFORD UNIVERSITY: Too Much Debt and Not Enough Equity: Tougher requirements would have prevented banks from hiding their true losses, and loosened credit for businesses and individuals.

EDWARD HARRISON, CREDIT WRITEDOWNS: More Focus Is Needed on Deep Economic Flaws: Until we address stagnant income, high household debt, insufficient bank capital and excessive risk, another crisis may be inevitable.

GLENN HUBBARD, COLUMBIA UNIVERSITY: Too Narrow a Focus on Banks: There was little discussion of financial institutions other than banks and government institutions, which helped spread contagion.

Things to Read on the Evening of May 26, 2014

Posted on by Brad DeLong

Should-Reads:

  1. Echidne: The Day Of Retribution. On Elliot Rodger, the Butcher of Santa Barbara: “This post is about the slaughter carried out by Elliot Rodger in Santa Barbara. It is about violence, the hatred of women and the general hatred of humans. Consider carefully whether you wish to read it…”

  2. Jonathan Hopkins: Piketty Debunked? Not So Fast: “Piketty’s book was so universally lauded by such a chorus of great minds… that it was only a matter of time before someone pushed back…. Chris Giles in the FT takes issue with Piketty’s data on rising wealth inequality… struck by the marked difference between the wealth figures used by Piketty for the UK, and those published recently by the UK Office for National Statistics, which suggest much lower levels of inequality…. By adding the raw data from the UK Inland Revenue figures… and the ONS data… Giles… [claims] that the books ‘central findings… no longer seem to hold’. That’s quite a big claim. Is it true? Well, here I’ll just look at the data for the UK. There is a problem with [Giles’s] chart…. By throwing in new data that gives a lower figure in the same chart, the visual impact is of a different trend that is not really supported by the data…. The fair test of whether Piketty’s trend exists or not is to compare the IRS numbers with data for the earlier period. In fact those numbers track the trend of the Piketty series fairly closely, but with lower absolute values…”

  3. Dan Alpert: Why Tim Geithner Is Wrong About the TARP Bailouts: “Former U.S. Treasury Secretary Timothy Geithner muses over the bailout of the financial system during the 2008-09 financial crisis. He concludes not only that, however flawed, the Troubled Asset Relief Program (TARP) was a ‘best of all possible bailouts’, given the constraints of contemporary politics and law, but also that it has ultimately been justified by the fact that it has made money for the American government and taxpayer. Both of these conclusions are inaccurate. While the first no doubt will continue to be the subject of debate for many years to come, the second is nothing short of a weak apologia, featuring an incomplete assessment of the collateral damage of the bailouts, including the enormous costs to Americans that don’t appear directly on the government’s balance sheets…”

  4. Kevin O’Rourke: The Irish Economy: “The European election results are coming in, and in France they are catastrophic. There are two obvious points to be made which work in opposite directions. First, the vote for the FN and similar parties is an under-estimate of eurosceptic opinion, since these parties come with so much baggage that many voters who hate what Europe has become would never, ever dream of voting for them. And quite right too. Second, it may well be that these parties would have done less well if there had been national elections last weekend: voting for the EP is one thing, voting for national governments another. (But who really knows.) Expect many mainstream commentators to point out that the centre has held, that the EPP have won, that Juncker is the people’s choice for EC President, and all the rest of it. This strikes me as exactly the wrong response. My big worry this Monday morning is that Hollande and others (but I am mainly thinking of Hollande) will continue with their current economic strategy, which as far as I can see consists of crossing their fingers and hoping that something will turn up…”

Should Be Aware of:

And:

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Reviewing Lawrence H. Summers’s Review of Piketty III: The Rise of the Robots: Monday Focus: May 26, 2014

Posted on by Brad DeLong

Mark Thoma sends us to Larry Summers at Michael Tomasky’s Democracy Journal:

Lawrence H. Summers: The Inequality Puzzle “And there is the basic truth that technology and globalization…

…give greater scope to those with extraordinary entrepreneurial ability, luck, or managerial skill. Think about the contrast between George Eastman, who pioneered fundamental innovations in photography, and Steve Jobs…. Eastman Kodak Co. provided a foundation for a prosperous middle class in Rochester for generations, no comparable impact has been created by Jobs’s innovations….

Even where capital accumulation is concerned, I am not sure that Piketty’s theory emphasizes the right aspects. Looking to the future, my guess is that the main story… will be the devastating consequences of robots, 3-D printing, artificial intelligence, and the like for those who perform routine tasks. Already there are more American men on disability insurance than doing production work in manufacturing. And the trends are all in the wrong direction, particularly for the less skilled, as the capacity of capital embodying artificial intelligence to replace white-collar as well as blue-collar work will increase rapidly in the years ahead….

I looked at the first paragraph of this last Friday, so let me today focus on the second paragraph…

Continue reading “Reviewing Lawrence H. Summers’s Review of Piketty III: The Rise of the Robots: Monday Focus: May 26, 2014” →

Lunchtime Must-Read: Jérémie Cohen-Setton: The Piketty Data Controversy

Posted on by Brad DeLong

Jérémie Cohen-Setton: The Financial Times Attack on Thomas Piketty: “Matt O’Brien writes that [Chris] Giles identifies…

…simple transcription errors… 1908 instead of 1920…. They’re embarrassing, but they don’t change the big picture…. [Chris] Giles thinks Piketty should average European data by population, not by country…. And Giles isn’t sure why Piketty has put together some of his wealth data—which is sparse, and needs to be adjusted, if not constructed—the way that he has. But these aren’t errors. They’re questions….Ryan Avent writes that while some of the data and adjustments in the spreadsheets lack adequate documentation, Giles does not have the evidence to justify the implication that figures are drawn ‘from thin air’. Data fabrication is a serious charge to make, and I am surprised Mr Giles would allege it without clearer proof. Simon Wren-Lewis writes that the only issue of substance involves trends in the UK wealth income ratio, but of course an article headlined ‘Data sources on UK wealth income ratio differ’ would not have had the same punch. Justin Wolfers writes that while it’s quite natural for a journalist to emphasize the differences between his findings and those of a famous author, the most striking fact is how closely The F.T.’s analysis agrees with Mr. Piketty’s. Their preferred time series for the evolution of wealth inequality are remarkably similar…