Mzgraciev: Marx is risen?

In the wildest of today's Conservative Easter effusions, Ross Douthat, Apostolic Nuncio to 42nd Street, opines that

IN the season of resurrection, it’s fitting that he’s with us once again — bearded, prophetic, moralistic, promising to exalt the humble and cast down the mighty from their thrones.
Yes, that’s right: Karl Marx is back from the dead.

I'd like to say I scooped Douthat on this one, but truth is it's not really news except the bodily resurrection part, and I totally missed the lede anyway, which is about the French economist Thomas Piketty, whose newly translated Capital in the Twenty-First Century is causing [jump]
some major waves for its suggestion that a major part of Marx's theoretical framework is right, and that a generally ineluctable increase in class inequality, as capitalists accumulate capital and workers don't, is an inherent property of capitalism-as-we-know-it; that we are not only continuing the Gilded Age where we left off around the time of the First World War but rebuilding a landed hereditary aristocracy, helplessly, because we can't summon the political will to restore progressive taxation. (See Krugman's enthusiastic response at the New York Review.)

So Jared Bernstein was wondering just the other day when the conservatives would start the freakout:

It’s been interesting to see the lack of response from the right, though I’m sure it’s coming.

And lo and behold, here it is!

Piketty’s dark vision relies, in part, on economic models I am unqualified to assess. But [I know a guy who knows a guy, and he says] Piketty’s data seems to understate the income gains enjoyed by most Americans over the last two generations. These gains have not been as impressive as during the post-World War II years, but they do exist...

The guy in question is Scott Winship, and his point is that Piketty and his associate Emmanuel Saez are doing it wrong, because they are taking their data on Americans from tax return records showing that the income of the bottom 90% dropped from 1979 to 2012 by more than $3000, when they should have used US census data showing that the income of the bottom 80% rose almost $3500.

This argument fails (I'm unqualified too, but I know how to read social science) because:

(1) The difference between the tax data and the Census Bureau data is according to Winship that

most public transfer income is omitted from tax returns. That includes not just means-tested programs for poor families and unemployment benefits, but Social Security. Many retirees in the Piketty-Saez data have tiny incomes because their main source of sustenance is rendered invisible in the data. The Census Bureau.... also excludes non-taxable capital gains (such as those accruing to middle-class households when they sell a home), employer benefits (like health insurance), and other sources of non-taxable income

but none of this is relevant to capital formation, which is what the argument is about, not how much you have to spend. If you think of the Census numbers in terms of quintiles (actually: rose well over $50,000 for the top fifth, $11,000 for the next, about $2500 for the third, a bit over $300 for the fourth, and sunk a bit over $300 for those at the bottom) you can see that the gains were not money that could have been invested to create wealth (selling a house is converting real wealth into cash to pay for, for example, housing), could be canceled out by product substitution (from Starbucks to plane travel), and didn't pay for increases in housing and medical costs (not part of the core inflation calculation). Only the top fifth gained money they could use for something other than survival-in-their-class, to become wealthier and build an estate to leave their children.

(2) Anyway all the Piketty and Saez data is from tax receipts, which is what makes it possible, as Krugman explains, for their argument to make such an extraordinary sweep, from the early Roman Empire to the present. Most census bureaus over the past 2000 years haven't reported incomes but tax collections, as we know, are everywhere. If Piketty and Saez were to suddenly switch for one country for a period of 33 years to a different approach, they'd be comparing apples, as it were, to cardboard supermarket tomatoes, and wrecking the quality of the sample.

Douthat, though, is not going to check this out; he's more than happy to accept that we're all doing fine:

Even if the income and wealth distributions look more Victorian, that is, the 99 percent may still be doing well enough to be wary of any political movement that seems too radical, too utopian, too inclined to rock the boat.

And then the problem can be, you know, more spiritual:

our system’s greatest problem might not be the fact that it lets the rich claim more money than everyone else. Rather, it might be that both capitalism and the welfare state tend to weaken forms of solidarity that give meaning to life for many people, while offering nothing but money in their place.
Which is to say that while the Marxist revival is interesting enough, to become more relevant it needs to become a little more ... reactionary.

Which means Piketty (who is very clear, by the way, that he is not a Marxist, as Douthat cheerfully acknowledges up top before turning him into Marxist Enemy no. 1 as he writes on) should do exactly what? Urge the very rich to spend more time visiting the sick and attending church services so their inequality will be less of a burden to them? Or just sorry, wrong savior—Karl, get back in your grave!

Image via Trigger101.