Back when I wrote “The Rich, the Right, and the Facts” for The American Prospect in September 1992, I was trying to get two ideas across: The middle-class society of the postwar era was unraveling, and the right was lying about it.
It was a very straightforward exercise. My favorite ﬁgure was the graph showing how the postwar “picket fence” chart of widely shared growth had turned into a “staircase” of rising income inequality. And all I needed was a bit of elementary statistical analysis to demonstrate the falsity of the various obfuscations the right was offering.
Economist-bashing has long been a popular pastime among intellectuals right and left. Economists themselves, however, are not supposed to bash back. So when I decided to break that rule, I fully expected retribution. Surprisingly, until now all of the really personal attacks on me have come from the right, from the likes of Alan Reynolds and Judy Shelton (it will be news to them that I bear a special animus toward the left). But something like Robert Kuttner's essay in the September-October issue of The American Prospect ["Peddling Krugman"] was bound to appear sooner or later.
During the mid-1980s, economists became aware that something unexpected was happening to the distribution of income in the United States. After three decades during which the income distribution had remained relatively stable, wages and incomes rapidly became more unequal. Academic researchers soon began arguing vigorously about the causes of the growth in inequality: was it global competition, government policy, changing technology, or some other factor? What nobody, whatever his or her political stripe, questioned was the fact that there had been a dramatic change in income distribution.