6.2 percent of your income goes to war?

Andrew Sullivan links to this Foreign Policy analysis:

A new report, "Hidden Costs of the Iraq War," by the Democratic staff of Congress's Joint Economic Committee, estimates that the costs of the war in Iraq and Afghanistan from 2002 through 2008 will total $1.6 trillion. That includes "hidden costs," such as the amount of interest on money borrowed to pay for the war, the cost of long-term health care for veterans, and how much disruptions to the oil markets are costing. It's twice the amount that the Bush administration has requested.

How much of that burden is being borne by U.S. taxpayers? According to the report, the cost averages out to $20,900 for every family of four. Using a very rough formula, let's take the current median household income of $48,201 and multiply it by the seven years covered in the report for a total of $337,407. Then take that $20,900 of war costs per household and divide it by that $337,407.

Yeah...it's a little convenient that it doesn't take account of the fact that we have (A) a progressive tax system and (B) a lot of very rich people. Add the two together, and the top half of taxpayers pay 97 percent of taxes. So by the time you hit that median household, there isn't much to pay, so this estimate is way off.

A better way to start is to look at the mean, rather than median, household income. That's $60,528. Multiply by seven and divide $20,900 into it, and you get about 5 percent of all income would go toward the war if we were to pay all the future costs, like veteran health care, right now (still a lot).

But of course, the upper half of taxpayers take care of almost all of it (they're still "taxpayers," but the post tries to make it sound like everyday families are really feeling the financial crunch). Imagine two households, one representing the upper half of taxpayers, the other the lower half. Their total income is $120,528 (two times the mean), and their total payment toward the war is $41,800. The upper half will pay 97 percent of the payment, or $40,546. The remaining $1,254 is the average payment of the lower half of taxpayers. The exact amount paid will scale based on tax bracket -- the very poorest don't pay taxes, or even get back more than they pay -- but for the average Joe, the total won't come close to 6.2 percent, or even 5 percent.

So once you strip away the populist rhetoric ("borne by U.S. taxpayers," using the median household income), the point boils down to "this war costs the rich a lot." Not quite as strong a point as " 6.2 percent of your income."

Is Paul Krugman stupid?

The Wall Street Journal makes the point that:

The Treasury study examined a huge sample of 96,700 income tax returns from 1996 and 2005 for Americans over the age of 25. The study tracks what happened to these tax filers over this 10-year period. One of the notable, and reassuring, findings is that nearly 58% of filers who were in the poorest income group in 1996 had moved into a higher income category by 2005. Nearly 25% jumped into the middle or upper-middle income groups, and 5.3% made it all the way to the highest quintile.

Of those in the second lowest income quintile, nearly 50% moved into the middle quintile or higher, and only 17% moved down. This is a stunning show of upward mobility, meaning that more than half of all lower-income Americans in 1996 had moved up the income scale in only 10 years.

In other words, sure there's tons of inequality. But the people creating the inequality -- the rich and the poor -- are often the very same people, only at different points in their lives. If you start out poor, odds are you'll gain skills, work experience, reputation and seniority, and you'll make more money eventually.

To which our supergenius economist responds (citing his own column from more than a decade ago):

Imagine an economy in which in any given year half of the families earn $100,000 and the other half earn $200,000. And imagine also that this economy fits the blender model, so that a family that starts in the bottom half has a 50 percent chance of being in the top half ten years later, and conversely.

Now do the WSJ calculation. Families that start in the bottom half begin with $100,000; ten years later, on average they have $150,000, so they gain 50 percent. Families that start in the top half begin with $200,000; ten years later, on average they also have $150,000, so they lose 33 percent.

But has the distribution of income gotten more equal? No: it is unchanged. All that we see is the familiar statistical phenomenon of "regression toward the mean." Essentially, the initially rich have nowhere to go but down, the initially poor nowhere to go but up. So if the income distribution were stable, any income mobility would inevitably produce the WSJ result; and it is not surprising that we still get it even when income inequality is rising.

Am I missing the revelation here? The WSJ didn't say that the income distribution was changing or staying the same, or that inequality was falling. It said that, whatever the distribution is, people cycle through it over time -- when inequality rises, it basically means that people are a little richer and/or a little poorer at some point in their lives, not that some consistent group ("the rich," "the poor") get better or worse off.

New piece up at the Spectator

Here it is. It's an abortion-policy piece suggesting that Giuliani or Romney should propose an adoption subsidy.

Basic idea:

--Both candidates say they want to reduce abortions and increase adoptions, even if abortion remains legal. However, their policies for doing so show little promise.

--Instead, they should set up a program that pays women for giving healthy babies up for adoption.

Modern racism article up at Doublethink

Doublethink has a rather extensive piece of mine about modern racism. It draws on numerous social science findings.

Main points:

--Modern white people do have negative opinions of minorities, and they act on them.

--This is wrong, though the actions are not always irrational.

--This doesn't make liberal social policy the best solution.

The piece doesn't directly address genetic cognitive differences between races, but it dovetails nicely with this important New York Times piece. In the spirit of their science reporter, Nicholas Wade (who didn't write it), it takes the notion seriously and grapples with it.

Assuming the worst happens in 10 to 15 years, and we discover that different races have higher or lower concentrations of IQ genes, I think a few concepts from my article could come into play.

For one, it's important to know the difference between statistical trends and individual attributes -- someone of one race might be more likely to have a low IQ than someone of another, but that doesn't mean he does. Likewise, it's important to differentiate "rational" and "moral." It may make sense for a business to concentrate on recruiting members of a certain race (say they're more likely to have the required skills), but that doesn't make it right to ignore people of other races who are qualified.

In addition, such a finding on racial IQ differences would demolish all sorts of concerns about the "achievement gap." The current assumption is that the gap is caused only by environmental factors, and if we improve the schools and end poverty it'll go away. Hopefully, though, people won't over-interpret scientific findings to say that the entire gap is genetic -- bad schools, illegitimacy, etc., most certainly contribute.

I'll be with you shortly

Over at Slate, Tim Harford has a pretty interesting piece about how, at coffee shops, women tend to wait 20 seconds longer for their drinks. The trend persists even when controlling for the complexity of the beverage. An all-male wait staff means a longer delay, and with an all-female staff the gap just about disappears. He attributes the phenomenon to mindless discrimination.

What he doesn't mention, though, is the tip factor: Isn't it possible that men tip men better than women tip men? If that's the case, men wait on men faster because the 20 seconds has a bigger payoff on a male customer. I don't think this is necessarily the answer (if so, I would think the discrepancy would be even bigger when the wait staff is female, because sometimes guys leave big tips for cute waitresses), but it's a rather important variable that needs controlling.