Coming back to the Cox and Alm Cox article in the NYT, whose basic argument was that poor people spend 50% as much as rich people in America. Everyone’s good. Don’t worry. Be happy.
I don’t know why it took me so long to realize this, and I’m utterly at a loss as to why better-equipped souls like Paul Krugman didn’t realize it instantly. (He questions the quality of the underlying data when there’s an elephant in the room?) Cox and Alm do, after all, point out the fundamental failing of their whole analysis:
While some of these families are mired in poverty, many (the exact proportion is unclear) are headed by retirees and those temporarily between jobs, and thus their low income total doesn’t accurately reflect their long-term financial status.
Tens of millions of retirees–and the presumably gigantic gap between their collective (non)earnings and spendings–have to be a huge factor. And, uh…students? Who are being supported by well- or at least better-off parents who are nevertheless not part of the "household"?
The sticky issue of "life stages" (my children earn nothing, but the little hoodlums sure seem to consume a lot) is basic to the most freshman-level macro-equity analysis. Why aren’t people who know better pointing this out?
Absent this "unclear" information, the whole Cox and Alm thing seems to tell us exactly…nothing.