Thomas Piketty is enjoying his moment in the sun. The French economist who has spent his career studying income inequality, recently published “Capital in the Twenty-First Century.” The book rose to the top of the Amazon best-seller list on April 22.
CBSNews.com said it got there “thanks to rave reviews and positive word of mouth.” “Beyond that, however, the book has something else going for it: ‘Capital’ has hit a nerve with Americans with its message about income inequality,” CBS’s Aimee Picchi continued.
But it seems more likely that it struck a nerve with liberal media and left-wing economists. Roughly 80,000 copies have been sold, according to The New Republic. That’s quite a few book sales for a nearly 700-page economics tome, but not even enough for everyone in Duluth, Minn., (population 86,211) to get a copy. That’s also only a tiny sliver of the more than 313 million people living in the U.S.
Rave reviews came from far-left websites like Alternet and Vox, and was heralded by New York Times columnist Paul Krugman. But national media outlets also devoted coverage to the economist, often without any criticism whatsoever. CBS “Evening News” even bought into Piketty’s viewpoint. CBS Business Analyst Jill Schlessinger said on April 27, “We’ve heard a lot about income inequality over the past five or six years. But what Piketty is talking about is wealth inequality. He’s saying that we are in a situation that could be setting up for dynastic wealth, meaning family to family. If you are not born rich, you aren’t going to be rich. This is bad news for the middle class.”
That CBS report acknowledged that his proposal for a global wealth tax was “fairly radical,” but failed to mention his recommendation of an 80 percent top tier income tax.
The New York Times heaped praise on the far-left Frenchman. Left-wing economist and columnist Paul Krugman of The New York Times said in The New York Review of Books it was a “magnificent, sweeping meditation on inequality.”
Piketty “has written a truly superb book,” according to Krugman who mentioned the author or his book in three op-eds this year, and promoted his earlier work on inequality as “the gold standard” in six other op-eds since 2002.
But his influence showed even on the news pages. The Washington Post called the book a “runaway hit” and claimed it “clearly touched a nerve.” On April 23, the Times wrote about the U.S. middle class no longer the richest middle class in the world.
The Times wrote that, “The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups over time. They suggest that most American families are paying a steep price for high and rising inequality.” But it is important to note that analysis included direct government payments like tax credits.
Governments like Canada and in Europe took “more aggressive steps to raise the take-home pay of low-and middle income households by redistributing income,” that made them rank higher than the U.S., according to the Times.
Piketty’s Political Influence
It’s clear Piketty’s arguments about the threat of income inequality are having an impact, and not just on the adoring press. As he’s been touring the U.S. he’s given talks at liberal think tanks in Washington, D.C. in addition to meetings with Obama’s Council of Economic Advisers and the United Nations.
Washington Post’s She the People blog covered Piketty’s April 15 speech in D.C. while accepting his views. Joann Weiner wrote, “How bad is income inequality? Pretty bad.” She wrote from the assumption that inequality is inherently bad and said, ““It may seem obvious to some that 1 percent shouldn’t receive more than 20 percent of the nation’s income ...”
That blog also revealed that Betsey Stevenson, one of Obama’s Council of Economic Advisers, said, “Society gains more by increasing the income of those at the bottom of the economic ladder than it loses by taking away income from those at the top of the economic ladder.”
On April 19, the Times also reported the “rock star treatment” Piketty was was getting. That article said the economist visited “the American halls of power” that included meeting with Treasury Secretary Lew and lecturing at the International Monetary Fund.
The Times’ Jennifer Schuessler also wrote that “not all those [Piketty] readers are economists.” She quoted Julia Ott, an assistant professor of the history of capitalism at the New School, who claimed, “Six years after the financial crisis, ‘people are looking for a Bible of sorts.”
Yet, in another story, the Times practically contradicted itself by trying to make Piketty sound like a political moderate, rather than the far-left winger he is. Vox, the new project from liberal Ezra Klein, published an interview with Piketty and pointed out that Americans perceive him as farther left than he views himself, because in France the suggestion of an 80 percent income tax “is not necessarily radical there.”
“National Review and The Nation rarely agree on much, but both the right-wing and the left-wing magazines have reviewed Piketty as part of a revival of Marxist thinking,” Matthew Yglesias wrote for Vox.
Yet, the Times’ London Bureau Chief Steven Erlanger’s April 20 article about Piketty’s book downplayed both his political influence and radical ideas. Erlanger wrote that “Mr. Piketty, father of three daughters -- 11, 13 and 16 -- is no revolutionary. He is a member of no political party, and says he never served as an economic adviser to any politician. He calls himself a pragmatist, who simply follows the data.”
That same article only said Piketty favors “a progressive global tax on real wealth (minus debt), with the proceeds not handed to inefficient governments but redistributed to those with less capital.” There was no mention of his promotion of an 80 percent income tax in that story, or about his meetings with the Treasury Secretary or Obama’s Council of Economic Advisers.
Media Ignore Critics, But Rebuttals Abound
From CBS “Evening News” to Washington Post blogs, many of the reports and articles about Piketty’s blog failed to mention criticism of his assumptions or proposals.
But many economists have had their criticism of Piketty’s new book published on their own. The Heritage Foundation’s chief economist wrote an Investor’s Business Daily op-ed on April 24 about “Piketty’s Path to Economic Ruin.”
Moore summed up Piketty’s theme as “We need to suspend capitalism in order to save it” and said that essentially, the economist wants the U.S. “to be more like ... well, France, actually.”
“Piketty could also profit from a history lesson. We have had high tax rates of 70% and 80% in the U.S., and they didn’t create the days of wine and roses for the middle class. When the tax rate hit 90% in the early 1960s, it was President Kennedy who argued for cutting the rates to grow the economy,” Moore wrote.
Daniel Schuchman, a New York fund manager, wrote in the Wall Street Journal about many of the problems with Piketty’s new book. One of them was the typical liberal assumption that “the economy is static and zero-sum; if the income of one population group increases, another one must necessarily have been impoverished.”
Schuchman also noted that Piketty’s call for 80 percent tax rates was not to generate tax revenue, but to “put an end to such incomes.”
University of Maryland professor and economist Peter Morici also criticized Piketty’s arguments on FoxNews.com. He described Piketty’s book as an“apocalyptic vision of capitalism in the tradition of Malthus, Ricardo, and Marx.”
“To American workers and a middle class besieged by stagnant wages and rising taxes, it provides justification for the dangerous elixir of confiscatory taxes on the wealthy hustled by liberal pundits and politicians,” Morici warned.
Morici called outsize salaries of top managers, athletes and celebrities problems, but warned it would be “a fool’s errand to try to solve those kinds of problems by simply taxing high incomes and wealth.” Rather, he argued for proper regulation and concluded: “it’s a failure of democratic governments to act responsibly, not the shortcomings of capitalism that is failing America’s workers and middle class.”