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If We Want a Better Blogosphere, Forbes Should Hire Better Bloggers

[ 69 ] June 16, 2012 |

Adam Ozimek says something really stupid:

Amidst this conversation, host of PBS’s Democracy Now!, Amy Goodman, repeated a highly misleading talking point, contributing. It’s a claim you’ve probably seen it a hundred times before, that the wealth of the six Waltons, who own Walmart, is greater than the wealth of the bottom 30%. It sounds astounding, and it is a true fact. But it is also highly misleading. The fact is meant to tell you something problematic about the Waltons’ wealth, but in actuality it tells you almost nothing about their wealth. This is clear if you consider that Amy Goodman herself almost certainly has more wealth than the bottom 30% of households. In fact everyone on the Up With Chris Hayes panel probably has more wealth than the bottom 30%.

For a full debunking of this claim see Tim Worstall or Felix Salmon, but what you mostly need to know is that almost 25% of household have zero or negative wealth. So anyone with any positive wealth has more than them. Around 37% of households have $12,000 or less in total wealth, so it seems fairly likely that Amy Goodman is worth more than the bottom 30%. This fact is entirely about the wealth at the bottom tail of the distribution, not the top tail. As the story is told by Goodman and others it implies that the opposite is true. This may not be a lie, or a literally false claim, but it is completely misleading and decreases rather than increases understanding.

If Amy Goodman wants the media to be better and less post-truth she should start by doing a better job herself. In this moment she contributed to the problem.

Ozimek continues his seemingly life-long project of obfuscating poverty and actual human suffering behind adherence to his version of the field of economics. There are obviously many ways to measure wealth. Total wealth might be one way, where you do have a lot of Americans with negative assets. And I guess you can then equate the Walton heirs with Amy Goodman and then say that leftists saying bad things about the media are full of it. Or you could measure wealth by earned income from salary, investments, etc., which would note that the Waltons have more money than god, or, more specifically, than the bottom 30% of the population. To note this would suggest that there was a problem with extreme wealth in the midst of growing poverty, but Ozimek has no problem with this. A far greater crime is Amy Goodman saying the media doesn’t tell the truth about poverty. And in Ozimek’s case, she’s right.

Another Ozimek greatest hit was saying that Mark Bittman fell into “self-parody” when he blamed restaurant corporations for paying their workers terrible wages, no sick days, vacation pay, etc. Asking “why should the bill falls on employers,” Ozimek uses the same semantic outrage as against Goodman, challenging his definition of the word “sustainability” rather than discuss Bittman’s points.

And then there’s my very favorite recent Ozimek piece where he makes fun of Chris Bertram for suggesting that unions could help prevent sexual harassment of immigrants at work, instead pointing to what really gives workers protection: “a competitive labor market.” Ah yes, the problems of agricultural labor is because the government has too big a role in regulating it!!!

Comments (69)

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  1. Davis X. Machina says:

    Ozimek continues his seemingly life-long project of obfuscating poverty and actual human suffering behind adherence to his version of the field of economics.

    In high school, in Chemistry class, you know he drew all of his curves first, and then plotted his observations, because it made for a neater lab report, and higher grades, that way. Why ever would one stop, if it turns out the rest of life is basically high school?

    • Furious Jorge says:

      Why ever would one stop, if it turns out the rest of life is basically high school?

      And for a great many professional bloggers, it is. Or at least they often act like it is.

  2. Hovde says:

    Yes, since a while bunch of recent Harvard grads have a negative net worth, because of student loan debt, I guess everyone is really in the same boat after all!

  3. Alex says:

    Also, Goodman doesn’t work for PBS.

  4. shah8 says:

    This is very odd…

    There is a difference between 25% and 30%. 5% of the US population is what, low twenties of millions of people? If each of them had a dollar, that’s, well, that’s like 20 million bucks. Now, considering that it takes wealth, in terms of things that hold wealth, like houses, we can assume that most of that 5% have at least $5k in assets. There is no way Amy Goodman has a net worth more than all of the bottom 30%. There are relatively few people who could be said to even approach barebones–more than 50 million in assets.

    What Ozirnek is trying to do here is deliberately confuse the fact that Amy Goodman is not a begger or a drone, with the concept that she isn’t much different than the Waltons after all. Uhhhh…

    Now, I don’t think I’ll be doing any good to point that out. Articles like this are fundamentally about encouraging elite solidarity along a certain social pole. We can squawk at this stupidity all we want, but Ozirnek ain’t talking to the likes of us.

    • John says:

      It’s households, not individuals, so 5% is about 6 million households. So, yeah, Amy Goodman most likely does not have more wealth than the bottom 30%.

    • R. Porrofatto says:

      Even using households, it’s a ridiculous and embarrassing comment for a writer published in a financial magazine, and it would be even more ridiculous if he were correct. If the net worth of an obscure lefty journalist was actually greater than the aggregate wealth of the entire bottom 30% of all U.S. households, how on earth is that any kind of argument against the fact of enormous inequality?

      Besides, the 6 Waltons are collectively worth $100 billion, so I don’t think Ms. Goodman’s comment is the least bit misleading, and if anything it’s Ozirnek who’s trying to distract and mislead.

  5. djw says:

    My longstanding policy of never, ever directing my web browser to forbes.com appears to have been vindicated once again.

  6. John says:

    I don’t understand why this particular remark by Ozimek is coming in for vilification. The “30% have less than the Waltons” statistic is exactly the kind of meaningless statistic that people shouldn’t be using to make an argument. Wealth is more unevenly distributed than income, and a huge percentage of people, pretty much inevitably, will always have no net wealth or negative net wealth. Of course six incredibly wealthy people will have more net wealth than some large percentage of the population comprising the least wealthy – that’s just basically how wealth works.

    I don’t see how Ozimek is making any kind of argument here in favor of income inequality. He’s just saying that this isn’t a very good statistic, and it isn’t a very good statistic. It certainly doesn’t say anything about poverty, since plenty of people who are not living in poverty have no net wealth. Erik also seems to show that he doesn’t know what wealth is, since he seems to think that it makes sense to measure wealth by annual income, which is not what wealth is at all.

    • Hogan says:

      Of course six incredibly wealthy people will have more net wealth than some large percentage of the population comprising the least wealthy – that’s just basically how wealth works.

      So it’s like gravity? Nothing anyone can do about it?

      • Erik Loomis says:

        I guess it’s just Natural Law!

      • John says:

        I suppose you could institute some kind of system where all wealth is confiscated by the state.

        But in any kind of system that allows private wealth, that wealth is going to be heavily concentrated in the hands of rich people. That is, in fact, what it means to be a rich person. And if we’re concerned about income inequality, we should be talking about that, not about wealth.

        • Holden Pattern says:

          Really, so it’s inevitable? A law of nature that THIS level of inequality will always happen? That a few people will inherit so much wealth that they will be able to effectively run the country, and a quarter of the population is living in debt peonage?

          You can’t imagine a society in which there is significant private wealth that doesn’t look like what is being described here?

          What in the what now? Either you’re sadly deficient in imagination or you’re shilling.

          Also, too, you can’t talk about income inequality without talking about wealth inequality and vice versa (the interdependencies in the real world ought to be so obvious that nobody would ever say otherwise), so I have no idea why you’re raising this objection.

        • Hogan says:

          I suppose you could institute some kind of system where all wealth is confiscated by the state.

          Yes, or you could institute a system where everyone is killed at birth and eventually there would be no economic activity of any kind. I’m surprised you didn’t suggest that, since you’re so clearly interested in serioous discussion.

        • Jestak says:

          I suppose you could institute some kind of system where all wealth is confiscated by the state.

          If you weren’t prone to hyperbole, you might also note that there are many far more realistic policies that could address massive wealth inequalities–a Swiss-style wealth tax comes to mind. You could also note that the fact that some degree of inequality of wealth is inevitable does not imply that the current level should be tolerated. It is, in fact, logically consistent to both recognize that wealth cannot be perfectly equal, and to advocate a more equal distribution.

    • Erik Loomis says:

      The problem with Ozimek is that he clearly thinks the greater outrage is the questionable use of statistics instead of massive income inequality.

    • Barry Freed says:

      I think it’s a fantastic statistic because it starkly contrasts just how much money a mere handful of the super rich have compared to how many tens and tens of millions of Americans have who make up the bottom 30%. Astonishing.

      • Hogan says:

        Also, the example of the Waltons shows how very little many of the superrich have done to earn their superrichness. Bill Gates at least had a product and the ruthlessness and marketing savvy to make us use it. What did this generation of Sam’s Kids ever accomplish, other than outliving their old man?

      • John says:

        It’s a bad statistic because it is just as accurate to say that my parents have more wealth than the least wealthy 25% of American households put together. My dad is a retired civil servant and my mom is an artist/writer who’s basically never earned a regular salary, and they inherited some money from my grandfather. Does the fact that they have more wealth than the bottom 25% of Americans tell us anything about income inequality?

        • Hogan says:

          The statistic is derived from the 2007 Survey of Consumer Finance and the 2007 Forbes 400, as teased out by Sylvia Allegretto. It’s entirely possible that before the housing crash that was a roughly correct number, and that the percentage of national wealth held by the Waltons has gone up considerably since then. Which would mean that the problem with Goodman citing that statistic is that it understates the problem. But I don’t think that’s what Ozimek was getting at.

        • Rob says:

          The fact that you think it doesn’t says more about you.

        • Furious Jorge says:

          You did note that Goodman said the bottom 30%, not 25%?

          That extra five percent is a lot of people.

  7. cpinva says:

    you could do this, but you would be wrong:

    Or you could measure wealth by earned income from salary, investments, etc., which would note that the Waltons have more money than god, or, more specifically, than the bottom 30% of the population.

    wealth and earnings are two different, yet related, things. wealth refers to the balance sheet (assets-liabilities = equity (net worth, or wealth)). earnings refers to the income statement (revenues – expenses = net income (earnings)). earnings contributes to wealth, by virtue of aquired assets, reduced liabilities, etc. of course, if your revenues = expenses, your net earnings = -0-, so your ending balance sheet should equal your beginning balance sheet.

    i throw this in not to be a smartass (which i am), but to expose a constant source of confusion to the masses, who aren’t cpa’s or financial analysts. terms have specific meanings, using them interchangeably merely creates unnecessary confusion, making it that much easier for right wing propagandists to convince someone making $25k a year, that increasing taxes on those with taxable income of $250k a year or more somehow hurts the lower/middle-class. and we wouldn’t want to contribute to that, now would we?

    where wealth really comes into play is: 1. the power it gives you to make legislation to your liking., and 2. by eliminating the estate tax, being able to pass that wealth to your heirs, so they can make legislation to their liking.

  8. David M. Nieporent says:

    Ozimek continues his seemingly life-long project of obfuscating poverty and actual human suffering behind adherence to his version of the field of economics.

    Loomis: The Jenny McCarthy of economics.

  9. I fail to see how Ozimek actually debunked anything. The point that 25% of households have negative net worth and the next 5% has very little net worth is incredibly important in and of itself, and the Walton family’s net worth being $102 billion (or 1,324,645 times the median net worth of American households) is not diminished as a fact of importance in this discussion.

    • John says:

      Is there any kind of society where a significant portion of people don’t have negative net worth? I’d think that’d be pretty close to inevitable.

      And using the Waltons as an example actually obscures the point that 25% of households have no net wealth, because it implies that only the very, very richest people have more net worth than the bottom 30%.

      • John says:

        What I mean in the first paragraph is that I would think it’s inevitable that the least wealthy however many percent of the population is going to basically have negative net wealth, and that I’m not sure that this says anything about our society as a whole.

        • IM says:

          why? It is easily imaginable to have a society where the poorest 25% of society have a positive, if low net worth.

          • DrDick says:

            Indeed, it is what I would consider a just society.

          • Greg says:

            That would imply a society without any system of credit, where people pay cash for houses and cars, and don’t start businesses until they’ve saved all the startup capital for themselves.

            However, it is kind of absurd to call people with negative net worth poorer than someone with zero net worth. Someone who lives in a studio apartment and lives paycheck to paycheck is going to have zero net worth, but won’t usually go lower, simply because they’re such a high credit risk that no one will lend them money. Someone who just took out a 30 year mortgage on a home is going to have negative net worth, but that doesn’t mean they’re poorer.

            • jefft452 says:

              “That would imply a society without any system of credit, where people pay cash for houses and cars, and don’t start businesses until they’ve saved all the startup capital for themselves.” … “Someone who just took out a 30 year mortgage on a home is going to have negative net worth”

              This is not a given
              Your net worth subtracts the money you owe on your mortgage, var loan, and business loan – but also adds the value of your house, car, and business
              No law of nature requires that that sum be negative

              Also too the bottom 25% aint the ones buying houses, new cars and starting business

  10. rea says:

    Asking “why should the bill falls on employers,”

    He actually asks why the bill for wages should fall on employers?

  11. JazzBumpa says:

    I stopped following the Modeled Behavior team when the went over to Forbes, though I rather like Karl Smith.

    I used to try to engage Ozimek, but totally gave up, ans stopped reading him quite some time ago. He is willfully obtuse, not particularly honest, and focuses on trivial items as if they were important.

    That is to say, he is a pretty typical libertarian, 21st century American style.

    So this is pretty much what you can expect from him.

    More’s the pity.
    JzB

  12. Corey says:

    He’s not trying to minimize the fact that 30% of the nation has zero or negative net worth; he is in fact making a bigger point of that than Goodman did. He’s saying that the mention of the Waltons is, again, meaningless bullshit designed to elicit an emotional response, not a logical one.

    Anyone in this thread who has a positive net worth is wealthier than the bottom 30%.

    • Holden Pattern says:

      Ah, now we see the REAL villainy! It’s the discourtesy of pointing out the disparities of massive inherited wealth vs. debt peonage, which might provoke some kind of emotional reaction in humans, like a visceral response of “that’s unjust”.

      Truly people who say these kind of things are among history’s greatest monsters.

      Boot-scrapings — they’re what’s for dinner!

      • Corey says:

        Do you have a positive net worth? If so, you’re as much of a beneficiary of injustice as the Waltons are, according to this meaningless nonsense statistic.

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