Tim Worstall argues:
Now I assume that the argument over inequality is really about how much people have, yes? So it’s consumption inequality, if anything, that we should be worrying about … So, in attacking a Fox News guy Judd makes a schoolboy howler. He doesn’t even get the name of the chart right, which is The ratio of the wealthiest 1% to median wealth in the United States. Repeat after me. Wealth is a stock, income a flow. Leftoid economics, don’tcha just love it?
Tim – you are right that Judd made a bit of an error here but income inequality has increased. While it is true that measured consumption inequality has not increased as dramatically, if you follow my links in the post you referred to, you’d see why I disagree with your premise that it is measured consumption inequality that we should refer to.
But I also owe Movie Guy – who had an excellent comment over at Mark Thoma’s blog, a little evidence (beyond those papers that Tim should go read). In 1974, the Gini coefficient was 0.395. By 2005, it had increased to 0.469. Now perhaps Mr. Cavuto has no idea what the Gini coefficient means, so let’s also report the shares of income of the highest quintile and the lowest quintile. In 1974, the lowest quintile of the population received 4.3% of the nation’s income. In 2005, their share was only 3.4%. In 1974, the highest quintile of the population received 43.5% of the nation’s income. In 2005, their share was 50.4%. Now if Neil wishes to check this or find other fun facts, he can check with the Census Bureau.