Michael Reagan Fails To Read Footnote, Gets It All Wrong

Blog ››› ››› ALBERT KLEINE

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Conservative author Michael Reagan displayed a complete ignorance of government statistics and inflation, falsely claiming that median income during the Reagan administration was twice the current rate. He did so by using an inflation-adjusted figure -- and adjusting for inflation again.

In a September 18 Newsmax.com post titled "Obama's Median Income Half of Reagan's," Reagan discussed the latest Census report on income, poverty, and health insurance coverage, which showed median income for 2012 was $51,017. Reagan used this figure to criticize President Obama's economic policy, claiming that this number represented half the median income in 1989 after adjusting for inflation:

But that figure understates the magnitude of the Obama administration's economic failure. When we account for inflation during those 23 years the disparity is shocking. Using the handy calculator at westegg.com, we find that simply allowing for inflation, with no economic growth, the median household income would have to be $94,234 to equal what Americans were earning under my father, the man [MSNBC host Ed] Schultz slanders as "Mr. Trickle-Down Economics."

But if Reagan had taken the time to examine the first footnote in the Census report, he would have realized that the figures for median income have already been adjusted for inflation:

All income values are adjusted to reflect 2012 dollars. The adjustment is based on  percentage changes in prices between 2012 and  earlier years and is computed by dividing the annual average Consumer Price Index Research Series (CPI-U-RS) for 2012 by the annual average for earlier years.

While real median income in 2012 is in fact slightly below the 1989 value, Reagan completely ignored the effects of the recent catastrophic recession and the fact that after years of decline, the figure is finally reversing that trend. 

Posted In
Economy, Jobs, Wages, & Unemployment
Network/Outlet
NewsMax.com
Person
Michael Reagan
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