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RWN Interview: Thomas Sowell On Economic Facts And Fallacies

Posted on April 11 2011 5:16 pm
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Thomas Sowell has just released Economic Facts and Fallacies: Second Edition . I read the first edition, thought it was outstanding, and would highly recommend it. I was also pleased to have the opportunity to interview Thomas Sowell about the Second Edition of the book. What follows is the slightly edited transcript of our conversation. Enjoy!

A lot of people say that income has stagnated for most Americans over the last 40 years. Talk about that a little bit; is that true?

No, it’s not true. It shows what you can do by playing games with statistics. It’s not true that income stagnated. People who argue that way almost invariably cite the household statistics or family income statistics when in fact the income per person, even in real terms eliminating inflation, has been rising very substantially over the years.

The problem is that households and families are getting smaller and smaller so that today if there is a family where, for example, there are two people working and in the past there were three people working, now the two people are making what the three people used to make. Then they say, “Well, you see, income has stagnated.”  No, income has gone up by 50 percent.

We also hear a lot about income inequality these days. There is a wide disparity between the rich in this country and everyone else and that’s presented as evidence the system is not fair, that it’s bad for the poor and the middle class, and that we need to tax the rich a lot more. True?

No. One of the sad things that happens is that people look at numbers and they translate the numbers into a concept that has no relationship to those numbers.

Being rich and being poor are thought of as classes of people who endure over time. In reality the great income inequality is between people of different ages. People in their 50′s make a lot more money than people in their 20′s. But that’s not a class because anyone who lives a normal lifetime is going to be in his 20′s at some point and in his 50′s at a later point. I see all this stuff about wealth even moreso than income and, yes, most people under the age of 15 don’t really have any wealth and there are millions of them, but that is not a class issue. That’s an age situation and most of the people who have no income and are under 15 are being supported by other people. So there are all kinds of numbers that are seized upon to be forced into some kind of a pattern, a pattern that bears no relationship to reality.

Now, poverty is commonly believed to be a root cause of crime and even terrorism. How much truth is there to that?

Continue reading at Right Wing News.

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