Ep. 289 Gene Epstein Takes Bob to the Woodshed Over Dubious Wage Data
Gene Epstein is disappointed in Bob’s kid-glove treatment of Oren Cass’ critique of American capitalism, and explains some of the problems with the data that Oren relied upon to make his case.
Mentioned in the Episode and Other Links of Interest:
- The YouTube version of this interview.
- Oren Cass’ controversial interview on BMS ep. 283.
- Oren Cass debates Cato scholar at Soho Foum on government intervention in manufacturing.
- Main website for Gene Epstein’s Soho Forum.
- Help support the Bob Murphy Show.
About the author, Robert
Christian and economist, Chief Economist at infineo, and Senior Fellow with the Mises Institute.
Epstein’s words artfully spin the listener away from one damning observation:
-> The share of economic reward to working class has plummeted.
Let’s consider the Federal Minimum wage which represents *de-facto* the lower bound to compensation for fulltime employment (regardless of libertarian rejection of it as a policy tool):
Lower wage bound 1979: $2.90
Lower wage bound 2021: $7.25
Lower wage bound 2021: $40.72, adjusted by M2 money supply growth.
How about the median net worth of US Citizens?
Median net worth 1979: $75,143
Median net worth 2020: $121,411
Median net worth 2020: $1,055,008, adjusted by M2 money supply growth.
These data is not garbage. These are unassailable.
Without the heist, all other things held equal, the median net worth of Americans would be over a million dollars today.
Thankfully us students of scripture know that justice will be served one day, and it won’t be by ‘policy’ or economists.
Hey, Bob.
In case you’re interested, you missed a swear word at around 57:00 & 1:31:25.
Yeah I think there were 3 that slipped through, sorry about that, we will do better next time.
Gene’s assertions about the CPI are absurd. How can he claim on the one hand that smart phones prove that the true inflation rate is less than reported but then explain the increased prevalence of two-income households by saying “well duh we have fancy smartphones now!”
Peter Schiff has gone through several goods that have not significantly changed over time at all (eggs, magazines, etc) and has shown that the CPI numbers are CLEARLY understated for these goods. If you think tech CPI numbers are overstated, that’s not an argument that the whole CPI is overstated. You need to compare the alleged overstatement (that Gene admittedly can’t actually measure) with the demonstrated understatement that Peter Schiff HAS measured.
Thanks Dave, do you have a link to an example of Peter doing this?
Here’s what I could find with a cursory search.
https://www.youtube.com/watch?v=pwI3Nya5L9g
Peter Schiff on magazine prices and CPI (January 2013):
https://www.mic.com/articles/22679/peter-schiff-explains-why-stats-from-bls-are-bs
https://www.youtube.com/watch?v=pwI3Nya5L9g
As usual, you let the guest take all the rope he wanted. And, as usual, he used it well. Good show, Bob
I was confused by what Gene said as well. By the end of the podcast, I was starting to think that inflation has been overblown….and not nearly as impactful as I’d thought. It seems like this just can’t be true. I do see his point that particular summary stats (like the CPI) might be messed up….given sudden changes in the technology/etc. Glad that the BLS does publish the other price index stat. Gene was definitely in an aggressive mood for the interview. I’ve never heard him like that before….
contraepstein- Isn’t the relevant metric, economic mobility? I don’t have any figures but I recall a few articles saying the working class is shrinking because those in it are getting richer (which seems like an ideal situation), not poorer.