The LA Times' poor reporting on the rich

The Los Angeles Times asks rich people how much money it takes to be “rich” -- and, unsurprisingly, concludes “It all depends on who you ask.” But it doesn't -- not in any meaningful way. And that's just one of several ways the Times article muddies the debate over tax cuts for the rich rather than clarifying it.

The Times begins the way articles like this always seem to begin: By pointing out that it's more expensive to live in Manhattan, New York than in Manhattan, Kansas:

In Manhattan, a monthly parking space goes for $550. A magician for a children's party asks $650 an hour. (A rookie will take $400.) The nanny gets $600 a week. Breakfast for four at a corner diner is $40; a dog walker is $10,000 a year; a plumber who makes emergency calls won't lift the toilet lid for less than $250.

Not mentioned: You don't need a car in Manhattan. It's probably pretty expensive to install and maintain a backyard ice-skating rink in Key West, too, but it isn't exactly a necessity, and isn't a particularly good proxy for cost of living.

Next, the LA Times quotes a Manhattanite with a household income of $310,000 who doesn't feel rich: “I know, I know I shouldn't whine, but in New York unless you're a millionaire you don't feel rich. We feel middle-class.”

To its credit, the Times pointed out the couple is not, in fact, middle-class: “Really, they're not. They're among the 2.5% of Americans — couples who annually earn more than $250,000 and individuals who earn $200,000-plus — whom the Obama administration and the Democrats have considered wealthy enough to pay higher taxes starting next month.” Unfortunately, the paper then went right back to pretending that making a quarter of a million dollars in New York is like driving a school bus in Wichita:

Certainly, many citizens of this expensive city, run by a billionaire mayor, could make a case for taxpayers in the lower end of the higher-income bracket continuing to get tax relief.

Not mentioned: Those at the lower end of the higher-income bracket (and even those at the high end of the higher-income bracket) would “continue to get tax relief” even if the Bush tax cuts for the wealthiest Americans are allowed to expire. That's how America's graduated income tax system works: That Manhattan couple making $310,000 per year would continue to enjoy “tax relief” on the first $250,000 of their income. Also, “tax relief” is a loaded bit of anti-tax rhetoric that probably shouldn't be used by neutral journalists in a straight news article.

The Times then quotes its wealthy Manhattanite complaining that the $310,000 she and her husband make each year has to cover mortgage payments and college funds and private tutors, as though a Manhattan condominium is something other than an incredibly valuable asset. Rich people, the article seems to suggest, shouldn't be considered rich if they spend their large salaries on the kinds of things rich people have. Or if there's someone else who is richer -- which is a rather limited definition of “rich.”

The 45-year-old Manhattanite is then quoted complaining “The 310K we live on in Manhattan is like the 70K” her parents “raised me and my brother on in Queens.” Maybe -- but $70,000 a year was a lot of money in the 1970s, in Queens or elsewhere. In 1975, only five percent of households had income of at least $32,000. The Los Angeles Times did not point this out.

The Times then endorses the wealthy Manhattanite's claim that she is not wealthy, asserting “When it comes to evaluating where she stands in the pecking order among her deep-pocketed neighbors, she ”is probably as good a judge as academics or politicians."

Nonsense. The median household income in Manhattan is less than $70,000 -- less than one-quarter of $310,000. If she considers herself “middle class,” the Times' subject is most certainly not a good judge of where she stands among her neighbors. But that isn't really her fault: It isn't her job to accurately assess her economic well-being vis-a-vis that of her fellow Americans, and to put it in context for Los Angeles Times readers. That's the Los Angeles Times' job, and it failed badly.

The Times' article suffers from three basic problems news reports like this always seem to suffer from:

1) It dramatically overestimates the extent to which a $250,000 income is typical in high-income cities. The fact is, that kind of income is quite atypical even in Manhattan and Beverly Hills.

2) It suggests that whether people feel rich is more important than whether they are rich. This may be true if we're assessing, say, personal happiness -- but it doesn't make much sense from a tax policy standpoint.

3) It makes no effort to identify rational bounds between the wealthy, the middle class, and the poor. The middle class is called that for a reason: It's between two other classes. Well, if someone in the top two percent of the country in income qualifies as middle class, does that suggest that someone in the bottom two percent in income is also a member of that class? The bottom two percent of households make less than about $2,500 a year. That's some valuable context that helps illustrate just how small the number of households making at least $250,000 a year is -- and how far those households are from the “middle.” And yet the Times article, typical of its genre, purports to address the boundary between the middle class and the wealthy without even touching on overall income distribution.