Greg Mankiw Loves the One Percent, Doesn’t Know Why

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DWF15-565162Photo: LARRY DOWNING/Corbis

Sometimes, after considered reflection, you reconsider something you wrote quickly. Yesterday I published a piece calling Harvard economist and Republican adviser Greg Mankiw’s paper “Defending the One Percent” an “embarrassing piece of ignorant tripe.” In the cool light of day, I now see that I treated Mankiw’s argument far too generously. Matt Steinglass, Josh Barro and Zack Beauchamp, among many others, not only identify a wide range of massive, crippling errors of fact and logic in Mankiw’s essay, they identify completely different errors of fact and logic than the ones I noticed. Now I am filled with regret — I could have done more. I could have done so much more!

Fortunately, Mankiw is giving me that chance.

After first announcing he would not respond to his critics, Mankiw decided to reply to a small riposte from Paul Krugman. The context here is that Mankiw is arguing that something very close to full equality of opportunity exists in the United States right now, and America’s lack of intergenerational mobility simply reflects the fact that smart, hardworking parents pass those traits genetically on to their children. Krugman noted (as did I) that more affluent parents spend far more than poor children do on “enrichment expenditures” — “books, computers, high-quality child care, summer camps, private schooling, and other things that promote the capabilities of their children.”

Mankiw’s response is that this enrichment spending is all wasted. How does he know? Because he is a parent himself, and Krugman isn’t:

I am a parent of three, and as far as I know, Paul does not have any children.  So I have probably spent a lot more on this category than he has.  And I can report that much of it is consumption, not investment.

Really — high-quality child care, private schools, camps — it’s all just for fun? And you know this because you’re a parent? Because I’m also a parent, and the parents I know believe otherwise. In any case — and it’s hard to believe that I am pointing this out to a Harvard professor in the social sciences — the impression of a single person based on their authority as a parent doesn’t have to be the final word.

There is, in fact, an enormous amount of research on this very question. And the findings overwhelmingly suggest that nonschool enrichment matters an enormous amount. A huge portion of the achievement gap between poor and nonpoor children is attributable to summer vacation. Yes, camp! Summer is when the poor children, lacking the high-quality options more fortunate kids get, fall way behind. Middle-income children lose, on average, one month of academic achievement during the summer months, where low-income children lose three months.

Mankiw really doesn’t know what he’s talking about here. He’s a brilliant economist, but he’s exposing a moral sensibility based on pseudo-facts and illogic. The more he tries to justify his intuitive affinity for economic privilege, the more he exposes himself.