David Frum's Weird Attack on Larry Kudlow

David Frum's Attach - Wages

The growth rate of 11% is NET of inflation. As the article noted, the actual rate is probably greater because inflation is overstated by the methods the government uses to measure it. If we took out the artificial, government induced, inflation in housing, the income growth rate would be greater still.

The people I see who have the most trouble (like me) are folks who didn't start preparing and working for their future till their mid to late 20s (or later). It takes years to build a life, so they are in difficult straights of their own making.

Kids, of course, who grow up in very difficult neighborhoods with screwed up families have a rough time moving forward. But that is a problem government has never been able to solve. If you want to make a difference, i think the best way is to get your hands dirty by being involved in a specific life or two over an extended period of time. It can be personally expensive (in money and emotion), involves years of commitment (no weekend warriors here), won't bring public recognition, and won't "save the world". But it might make a huge difference in the life of some individuals.

Mike of TX @ Oct 15, 2008 14:15:50 PM

Kudlow is dangerous

The tax cuts would have been fine if the size of the government didn't grow exponentially. What happened to the Goldilock's summer rally? Kudlow always talks about what a big supply-sider he is, but he supports all the Keyensian government intervention. He is such a flip flopper with interest rates. First, "cut, cut, cut". Then "do anything to strengthen the dollar". Now, "cut, cut, cut". The "drill, drill, drill" rhetoric is ridiculous. That was not the reason the price of oil came down. It was mainly due to decrease global demand, and the unwinding of hedge funds. Believe it or not, domestic drilling is not going to increase much. He can stick his mustard seeds up Milton Friedman's bung. Sure there is going to be a recovery. Not for a quite awhile, though. I agree with him that the corporate tax rate needs to be cut, but geez, can't we get spending under control first, (i.e., leave Iraq and not invade Iran as McCain would do - it's good thing he's not going to be elected). Kudlow is a grumpy old social conservative (think Bible Belt redneck). Get with the times Kudlow, and start focusing on what really drives long term economic prosperity.

Tim of MO @ Oct 15, 2008 13:29:39 PM

Kudlow is dangerous

The tax cuts would have been fine if the size of the government didn't grow exponentially. What happened to the Goldilock's summer rally? Kudlow always talks about what a big supply-sider he is, but he supports all the Keyensian government intervention. He is such a flip flopper with interest rates. First, "cut, cut, cut". Then "do anything to strengthen the dollar". Now, "cut, cut, cut". The "drill, drill, drill" rhetoric is ridiculous. That was not the reason the price of oil came down. It was mainly due to decrease global demand, and the unwinding of hedge funds. Believe it or not, domestic drilling is not going to increase much. He can stick his mustard seeds up Milton Friedman's bunghole. Sure there is going to be a recovery. Not for a quite awhile, though. I agree with him that the corporate tax rate needs to be cut, but geez, can't we get spending under control first, (i.e., leave Iraq and not invade Iran as McCain would do - it's good thing he's not going to be elected). Kudlow is a grumpy old social conservative (think Bible Belt redneck). Get with the times Kudlow, and start focusing on what really drives long term economic prosperity.

Tim of MO @ Oct 15, 2008 13:27:24 PM

Demographics

Also, are the data on average incomes and income inequality that everyone is using adjusted for the shift in the demographics of the US population toward a rising proportion of Americans who are retired and living on fixed incomes?

Bud Morten of CT @ Oct 15, 2008 12:58:13 PM

In response to MSF of NY, "What you're saying is that if a computer program allows me to do 2% more work than I used to do then I should get a 2% increase in my wages?" The answer is yes. This same factor is literally in effect for CEO, VP and upper level management compensation. The average CEO is now capable of multi-tasking with the advent of technology, thereby increasing his/her output of information to supposedly grow the company. The average worker should be afforded that same proficiency standard in regard to their income.

Mark of AL @ Oct 15, 2008 12:55:00 PM

Re: wages

We have annual wage growth of 1.4% with worker productivity averaging 2% per year. What is wrong with that? Your assumption that something is wrong relies on the idea that it is the workers themselves that are doing 2% more work. Nonsense. Worker productivity is driven by technology. What you're saying is that if a computer program allows me to do 2% more work than I used to do then I should get a 2% increase in my wages?

MSF of NY @ Oct 15, 2008 12:46:13 PM

Income

I work for a big multinational corporation that is giving raise of about 2.5% over 8 years. I am sure this raise is typical for many big companies. If your property taxes/rent goes up by 2% every year; How Frum is wrong? May be wall street executives got 20% raises and 30% bonuses, but average worker did not see his or her income (or 401K) grow in last eight years.

alhad sathe of NJ @ Oct 15, 2008 12:27:54 PM

Correction

Two typos in my comment above: The sentence should have read:

If we grant you your 1% haircut on that rate, worker's real wages have increased 0.3% per year.

Sorry.

Bill of NJ @ Oct 15, 2008 12:17:45 PM