[Pen-l] Fudging Data to Prove Markets Are Fair

[michael perelman <michael@xxxxxxxxxxxxxxxxx>]

In The Confiscation of American Prosperity, I looked at the career of 
Martin Feldstein, until recently longtime director of the National 
Bureau of Economic Research, chief economic advisor during the Reagan 
administration, and inveterate foe of Social Security.

In the recent issue of the NBER digest, you can read a short discussion 
of Martin Feldstein's "proof" that wages have kept pace with productivity.

http://www.nber.org/digest/oct08/w13953.html

In case you do not want to purchase the article, you can read an earlier 
version here

http://www.aeaweb.org/annual_mtg_papers/2008/2008_111.pdf

The result is a display of incredible virtuosity. By selecting the 
appropriate deflators [a measure of inflation], including benefits as 
part of wages, and comparing wages with National Income rather than the 
Gross Domestic Product, voila, Feldstein manages to get a relatively 
constant wage share of national income.

more at
http://michaelperelman.wordpress.com/2008/10/28/fudging-data-to-prove-markets-are-fair/

--
Michael Perelman
Economics Department
California State University
Chico, CA
95929

530 898 5321
fax 530 898 5901
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