Jonathan Chait — Republican Harvard Economist Writes Terrible Defense of the One Percent

Gregory Mankiw plays a small but important role in the political ecology: an accomplished Harvard professor who validates Republican economic policies. It’s almost impossible to find empirical support for debt-financed tax cuts, but when George W. Bush proposed them, Mankiw and his Harvard pedigree were there to reassure that they were “fiscally responsible” and would surely lead to higher growth. The failure of these reassurances to come true has not prompted Mankiw to reassess his thinking. That’s because the fundamental basis for his beliefs about such matters has nothing to do with economics. Mankiw believes rich people deserve to keep their money, regardless of economic consequences.

Now, many conservatives share this belief, but since it is unpopular, they instead argue that higher taxes on the rich hurt the non-rich. Mankiw, to his enormous credit, does not conceal his agenda. He lays his agenda on the table in the form of a paper, “Defending the One Percent,” explicating his beliefs. In so doing, Mankiw — perhaps admirably, or at least bravely — ventures completely outside his area of expertise, economics, into moral philosophy. The result is — well, there’s no other way to put it. It’s an embarrassing piece of ignorant tripe.

New York Magazine
Republican Harvard Economist Writes Terrible Defense of the One Percent
Jonathan Chait

Professor Mankiw is at least up front about his conservative rationale: "Some people are better than others" and therefore deserve more. That they have more is sufficient proof that they are better than those that have less. Yeah, he actually uses this as the basis of his argument.

Miles Corak — Income Inequality, Equality of Opportunity, and Intergenerational Mobility

The summer issue of the Journal of Economic Perspectives will feature a collection of articles on inequality and the top 1%, some of which are now being circulated by the authors.

The paper by Tony Atkinson and his coauthors, “The top 1 percent in international and historical perspective,” is available in this post, and Greg Mankiw has posted a copy of his paper, “Defending the One Percent“, on his blog.

My contribution to the collection is based on the notion that the inequality literature has paid little attention to the intergenerational consequences of increasing top income shares, and it can be read as a counterpoint to Mankiw’s piece, or at least to his claim that inequality of opportunity is not a reason to worry about the top 1%.

Here is the close to final draft: Income Inequality, Equality of Opportunity, and Intergenerational Mobility. But if you just want a quick read, an excerpt from the conclusion follows. Either way, feedback is—as always—welcomed.

Economics for Public Policy
Income Inequality, Equality of Opportunity, and Intergenerational Mobility
Miles Corak | Professor of Public and International Affairs, University of Ottawa
(h/t Paul Krugman at The Conscience of a Liberal)

“Laws and government may be considered in every case as a combination of the rich to oppress the poor and preserve for themselves the inequality of the goods which would otherwise be soon destroyed by the attacks of the poor, who if not hindered by the government would soon reduce the others to an equality with themselves by open violence”
—Adam Smith, Lectures On Jurisprudence, 1762-3; iv, 21-2, p. 208

This is what democracy is supposed to correct according to the myth. However, reading the Founding Fathers leads to the opposite viewpoint, which is why the US and other "liberal democracies" are actually republics. The result for the most part has been continuation of inequality due to the power and class structure. While some conventional economists are finally willing to talk about inequality, almost none of them are willing yet to talk about power.

Dean Baker — The Bigger Problem With Mankiw's Plan to Give Everything to the One Percent

No, Professor Mankiw, it wasn't "the market."

CEPR
The Bigger Problem With Mankiw's Plan to Give Everything to the One Percent

Dean Baker | Co-Director

This article just skims the surface of the interaction of different part of the economy in creating wealth, non-financial and financial. In a modern economy, government co-ordinate R&D for dual military and domestic use of technological innovation, and private industry is the major beneficiary of wealth thereby created without bearing any of the cost or being required to contribute from profits beyond ordinary taxation. The Internet began as a military project, for instance, as did the interstate highway system that replaced rail as the principle form of transportation, with enormous implications for industry and commerce.

Examples like this abound. The hand of government is is everything, if only based on the public education that trains the workforce as the foundation of economic society. The notion that entrepreneurs are entirely responsible for their success and should therefore be rewarded as such in nonsense.

Bill Mitchell – It is hard to defend the 1 per cent by claiming their contribution added value

Mitchell responds to Mankiw's apologetic for the "job creators" — after a short comment on Japan.

Bill Mitchell – billy blog
It is hard to defend the 1 per cent by claiming their contribution added value

Bill Mitchell

See also Lars Syll, Suggestion for Mankiw’s reading list

Mankiw "defends" himself against an Internet firestorm.

Gred Mankiw's Blog
In Defense of Me
Gregory K. Mankiw | Professor of Economics and Chairman of the Economics Department at Harvard University
(h/t Ramanan)

Simon Wren-Lewis — Giving Economics a Bad Name

Prof. Wren-Lewis reflects on Kevin Hassett, Glenn Hubbard, Gregory Mankiw, and John Taylor, "The Romney Program for Economic Recovery, Growth, and Jobs"

This is sad, because it tells us as much about economics as an academic discipline as it does about the individuals concerned. In the past I have imagined something similar happening in physics. It actually stretches the imagination to do so, but if it did, the academics concerned would immediately lose their academic reputation. The credibility of their work would be questioned. Responding to evidence rather than ignoring it is what distinguishes real science from pseudo science, and doctors from snake oil salesmen.

Ouch — way beyond smack down.

mainly macro
Giving Economics a Bad Name
Simon Wren-Lewis | Professor of Economics, Oxford University