Here is a purchasing power chart showing Reagan\u2019s tax cuts did not flow down in actual purchasing power.<\/p>\n
http:\/\/www.advisorperspectives.com\/images\/content_image\/data\/f1\/f1bddfd60a7085c654daea1353d98626.gif<\/p><\/blockquote>\n
I\u2019ve pointed out much what follows to the individual via a reply in those same comments.\u00a0 Since there was no response or acknowledgement, my working assumption is that he actually believes what he said above.<\/p>\n
I bring this up here because it’s indicative of a common behavior of those on the political Left.\u00a0 Often, they don\u2019t know a damn thing about the subject about which they\u2019re pontificating.\u00a0 They merely parrot whatever blatant bullsh!t or \u201cbuzzword du jour\u201d their superiors in the\u00a0\u00a0\u00a0\u00a0\u00a0 And while doing so, some of them act like arrogant, insufferable, “superior” a-holes, looking down their noses at everyone else.\u00a0 In reality, virtually all of them they have little if any reason to think they’re superior, and no justification whatsoever for acting arrogant.<\/p>\n So I\u2019ll use this case as an example \u2013 and I’ll explain how the chart above is being misused to support a specious\u00a0 claim, either out of ignorance or by design.\u00a0 I\u2019ll let you decide which it was.<\/p>\n Here\u2019s the figure in question.\u00a0 Remember, it was supposed to prove the Reagan-era tax cuts “didn’t work”.<\/p>\n <\/p>\n <\/p>\n The claim is that the above chart is a \u201cpurchasing power chart showing Reagan\u2019s tax cuts did not flow down in actual purchasing power.\u201d\u00a0 That claim about the Reagan era tax cuts \u2013 like many made by those on the Left \u2013 is specious, but that’s not the issue here.\u00a0 The issue is that the chart doesn’t support the claim whatsoever.<\/p>\n There are multiple problems with trying to use the chart above for that purpose.\u00a0 In fact, it fails to do so so badly that one wonders if the person making the claim was joking, was ignorant, or was trying to \u201cpull a fast one\u201d.<\/p>\n First<\/span>:\u00a0 the chart above doesn\u2019t address the Reagan era tax cuts<\/em>.\u00a0 They\u2019re not depicted on the chart in any way \u2013 so the chart is silent about them.\u00a0 It neither supports nor undercuts any claims about the Reagan era tax cuts.<\/p>\n Therefore, claiming that the chart above \u201cshows the Reagan tax cuts didn\u2019t work\u201d (or words to that effect) is, to be charitable, simply not accurate<\/span>.\u00a0 To be less kind:\u00a0 it\u2019s evidence of either a gross error, gross ignorance, \u00a0or an attempt to deliberately mislead.\u00a0 Or maybe of an outright lie.<\/p>\n Second<\/span>:\u00a0 to anyone who has even a smattering of knowledge about finances and inflation the actual purpose of the chart is quite evident – and that purpose is unrelated to the Reagan era tax cuts<\/em>.\u00a0 Two terms on the chart make the chart’s purpose crystal clear:\u00a0 the terms \u201cnominal\u201d and \u201creal\u201d, used in the context of discussing money and time.<\/p>\n The upper line on the chart is \u201cnominal US median household income\u201d.\u00a0 In the context of money and time, the term \u201cnominal\u201d has only one reasonable meaning:\u00a0 \u201ccurrent year dollars\u201d.\u00a0 \u00a0That is, dollars that are NOT indexed for inflation.<\/p>\n However, anyone who’s not a bona fide<\/em> idiot knows that inflation reduces the purchasing power of money over time; a dollar in 1980 is simply not worth the same as a dollar today (in terms of purchasing power, a dollar in 1980 was worth substantially more).\u00a0 Therefore, to compare incomes from different years a correction for inflation is required.<\/p>\n Other than the chart\u2019s axes, the only other line on the chart is \u201creal US median household income\u201d.\u00a0 In the context of money and time, the term \u201creal\u201d means \u201cindexed for inflation\u201d; there isn\u2019t any other reasonable interpretation.\u00a0 In fact, the chart even specifies what measure was used to adjust for inflation to obtain real dollars, albeit not the source:\u00a0 CPI-U-RS.\u00a0 That is the emerging preferred index for correcting for data, and is generally regarded as an improvement over CPI-U.<\/p>\n The purpose of the chart is thus clear to anyone who (a) understands even the basics of finance and inflation, (b) actually read it, and (c) isn\u2019t wearing ideological blinders.\u00a0 It\u2019s intended to show the effect of inflation on actual purchasing power.\u00a0 It\u2019s not intended to show anything<\/em> else.<\/p>\n In particular, the chart is not intended<\/span> to say anything whatsoever about Reagan, taxes, or the effectiveness (or lack thereof) of Reagan-era tax cuts.\u00a0 Saying that it does is at best a truly foolish error, and at worst a deliberate falsehood.<\/p>\n The Left does things like that quite often \u2013 e.g., claims one thing, then uses invalid arguments, bad data, irrelevant examples, or outright lies to support their claims.\u00a0 They apparently do so hoping that no one will catch on and call them on it.\u00a0 Hell, I don\u2019t think many of them even have the background (or smarts) to realize they’re doing so.\u00a0 They\u2019re simply Polly Parrot, regurgitating the \u201cparty line\u201d they’ve been fed.\u00a0 That may or may not be the case here; decide for yourself.<\/p>\n Third<\/span>:\u00a0 the chart also illustrates a potential shortcoming in using data presented in graphical form.\u00a0 The chart above indeed compares different variables – but it does so using a scale that obscures relevant changes in one of the variables being plotted.\u00a0 For the intended purposes of the chart, that\u2019s not a \u201cbiggie\u201d; the scale used shows the discrepancy between nominal dollars and actual purchasing power, and the fact that the details present on the lower data plot aren’t apparent is irrelevant in that context.\u00a0 But the scale used indeed makes examining the data presented on the \u201creal US median household income\u201d line in detail impossible. There’s simply not enough definition on the lower line to see what’s going on.<\/p>\n That lack of definition issue also makes it impossible to use the above chart together with other data to assess the effectiveness of the Reagan-era tax cuts.\u00a0 That’s true because there’s so little definition for the line depicting real income that inferring the actual data point values with anything approaching accuracy is impossible; the necessary detail simply can\u2019t be seen in that chart.\u00a0 That’s a third reason why the chart can’t be used to say anything about the Reagan era tax cuts.<\/p>\n For comparison, here\u2019s virtually the same data (it continues for an additional year or two), presented alone, from a known source (US Census Bureau).\u00a0 It shows the detail obscured by the scale used on the other graph:<\/p>\n <\/p>\n Clearly, this second version does provide<\/span> enough information to allow visual analysis.\u00a0 Those details cannot be seen on the original chart.<\/p>\n I could probably go on, but this is likely enough to prove my point.\u00a0 Very obviously, claiming that the first chart proves the Reagan era tax cuts were ineffective is simply . . . ridiculous.\u00a0 It’s either a gross error, or it’s a deliberate lie.\u00a0 Take your pick.<\/p>\n . . .<\/strong><\/p>\n In the same comment that started this article, links were provided to charts prepared by that \u201cfountain of economic insight and analysis\u201d Mother Jones purporting to support other Leftist claims.\u00a0 Still other claims were made that are specious at best if not outright falsehoods.\u00a0 Those other charts and claims will be the subject of the next 2 articles in this series.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"Politboro<\/em><\/del>\u00a0\u00a0\u00a0\u00a0\u00a0 Progressive hierarchy give them.<\/p>\n![\"\"](\"http:\/\/www.advisorperspectives.com\/images\/content_image\/data\/f1\/f1bddfd60a7085c654daea1353d98626.gif\")
<\/p>\n![\"\"](\"https:\/\/www.azuse.cloud\/wp-content\/uploads\/2016\/09\/Image5a.png\")
<\/center>A larger version of the same image may be viewed here<\/a><\/em>.<\/p>\n