First of all that’s a heckuva wide range. Second, if the fall is to the top of the range that “economist expect,” it would be far less severe than from 2000 to 2002, when the stock market also swooned. The top 1 percent’s share of total income dropped from 21.5 percent to 16.9 percent then, a 21 percent decline. If the 2007 number, 23.5 percent, drops to the higher end of the “expected” 15 percent to 19 percent range, it would be even less than that 21 percent previous drop—and it’s guesswork anyway. (UPDATE: See editor’s note below.)

Besides, the earlier drop was hardly permanent. Why should this one be? Readers would have benefited from some context.

Unmentioned in the Journal (See editor’s note below) is the fact that at the very top, the top tenth of one percent, incomes and income shares tend to rise and fall with the stock market. The best-off 0.1 percent of taxpayers had a whopping 12.8 percent of all income in 2007 (the best off 0.01 percent—14,988 families—had 6 percent), up from 10.9 percent in 2000, the end of the previous economic expansion, and more than the income share of the entire bottom half of taxpayers, according to IRS data not cited in either newspaper.

Given the severe drop in the stock market since 2007, and the other economic losses, the rich may fare worse than in the last recession. If, however, enough bets were placed on falling asset prices, then the losses would be mitigated and there might even be gains, at least among the top hundredth of one percent. The fact is we do not know, we can only speculate.

But why speculate? Why not instead do what newspapers are supposed to do: report the data we have, instead of largely ignoring them?


Editor’s Note added 9/11/09 at 3:43 p.m.:
Due to an editing error, in the paragraph (starting, “First of all that’s a heckuva wide range”) comparing drops in the rich’s share of total income after stock market crashes, an earlier version mistakenly compared the rich’s actual average income in one period to its average income
share in the other. That’s now fixed to compare income shares in both periods.

Also, an earlier version of the story said neither the Times nor the Journal mentioned the correlation of rich people’s incomes to the stock market. In fact, the Times did mention it, including here:


One of the starkest patterns in the data on inequality is the extent to which the incomes of the very rich are tied to the stock market. They have risen most rapidly during the biggest bull markets: in the 1920s and the 20 years starting in 1987.

Also, while we say both papers left out significant information, and they did, particularly about the recent and stunning decline in non-rich people’s actual incomes, the Times did include a graphic with useful information about their shrinking income share compared to the rich.

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David Cay Johnston covers fiscal and budget matters for CJR’s United States Project. He is a reporter with 46 years of experience, including 13 at The New York Times; a columnist for Tax Analysts; teaches tax and regulatory law at Syracuse University Law School; and is president of Investigative Reporters & Editors (IRE). Follow him on Twitter @DavidCayJ.