Gilded Rage

Recently, The Economist published an unusually astute review of Paul Krugman’s The Conscience of a Liberal. Krugman offered a surprisingly unconvincing reply, which was pretty thoroughly demolished by The Economist‘s Free Exchange blog. I think it’s precisely because no one questions Krugman’s richly deserved reputation as one of the great economists of his generation that he was so careless and even disdainful. But the funniest part is that Krugman relied, somewhat bizarrely, on the hyperbolic words of journalist Robert Frank, the author of Richistan and the man behind the Wall Street Journal‘s Wealth Report blog. Because Frank was painting in broad strokes in order to produce an entertaining book, he talked about the rich as though they lived in a parallel country, “evidence” that Krugman, who dismisses detailed studies on consumption, considers dispositive.

Here’s the thing: Robert Frank seems to agree with The Economist.

We can all marvel at or complain about the mansions, Jaguars, jets and clothing of the rich. Yet most Americans live material lives equal to or better than the rich of yesteryear. Despite the best efforts of luxury marketers to convince us that driving a Jaguar is 10 times better than driving a Hyundai, or that flying Netjets is 100 times better than flying Jet Blue, the differences are tiny compared to those who can’t afford to fly or drive at all.

So along with incomes and net worth, we should all add consumption to our accepted measures of inequality — even if it’s not popular in certain political circles.

My guess is that Krugman will now dismiss Frank, his source, as an extremist hack.