Sleazy Stats: CNN and the 2000-year-old lie

I was burning a few calories on the elliptical machine today when a CNN feature threw me for a loop. The anchor and his two guests were carrying on about how Obama was wrong in his State of the Union address when he called for a "fair shot" at success for all Americans.
The first problem was that the gentlemen were all on the same, pro-capitalist side of the issue. So much for balanced reporting. But beyond that, the argument was based on the mistaken idea that fairness is equivalent to economic equality. This is such a mush-brained idea that I as surprised grown-ups were actually having it. Put it in terms of Monopoly, and even a 5-year-old can understand what these analysts could not: fairness means playing by the rules and making sure the Banker doesn't slip wads of cash to his friends. It doesn't mean that everyone should win the game!

The guests then went on to discuss average income over the last 2000 years. The chart at the right is similar to theirs, which extended back to the year 1. There was not much change in the curve: between 1AD and 1500AD, GDP was stuck around $500.

The CNN guests then went on to extol the benefits of industrialization and capitalism. Without doubt, it's pretty clear that somewhere around 1800, income started to increase, and since 1950 or so, it has increased exponentially. Makes sense, since James Watt perfected his steam engine -- which tremendously boosted productivity -- around 1776.

But the analysts went a step over the edge by claiming that capitalism, the engine that drove this increase in average wage, was wonderful even though it did not have the goal of being fair or equal in the way it treated workers. Take that, Comrade Obama!

Now I am not a statistician, though I understand the concepts well enough. Seems to me that telling me the average income for a period does not tell me much about the income distribution. It could be that everyone has the same income. Or that incomes are distributed in a bell curve around the average. Or (ominously!) that there are a few hyper-wealthy individuals and a ton of desperately poor ones.

You don't have to be a historian to know that there were periods of history -- the majority of them, in fact -- when the few enjoyed a standard of living far beyond that of the rest of the population. Consider the Caesars and the rural peasant farmers; medieval kings and their impoverished serfs; 18th-century French aristocrats and breadless peasants; Southern plantation owners and their slaves. In fact, the only time periods when income distribution was more or less equal was the US and its Allies between World War II and about 1980. Since then, there has been enormous political pressure that has increased the share of the economic pie enjoyed by the wealthy, with a simultaneous pressure to remove or reduce government support for the poor.

Talk about class warfare and redistribution of wealth!

But our CNN talking heads ignored all of this. Average wealth, on the rise since 1800, is all they cared about, and 'proved' their point that inequality was a good thing. I take massive exception to this, and only point to the shocking disparities in our own country: 50 million -- every 6th person -- without health insurance; 1 out of 7, or 46 million Americans under the poverty line; 650,000 homeless Americans.

Surely, a capitalist economy that delivers stupendous wealth to the few can do so without so enormous injury to a sizable slice of its population. And surely, the smart people at CNN can do better than to diminish the impact of an economic system with proven and systemic faults.