This sounds strange, but household income figures can mislead. Higher per capita income can decrease household income.  As economist Thomas Sowell notes, “Increased real income per person enables more people to live in their own separate dwelling units, instead of with parents, roommates, or strangers in a rooming house.”

Per capita income statistics aren’t perfect, either. The city or county could pass more zoning laws that inflate housing prices. These exclude poor people, and hence per capita income increases.

If you want to more accurately compare 1999 with 2009 incomes, look at income mobility, which compares the same flesh-and-blood people each time. For example, the Tax Foundation reports that “nearly 60 percent of households in the bottom income quintile in 1999 were in a higher quintile in 2007.”

But income mobility doesn’t tell the whole story either, as it neglects the value of employee benefits. “Health insurance costs relative to payroll increased 34 percent between 1996 and 2005,” write economists from the RAND Corporation.

A version of this article was printed in the Daily Camera on October 2, 2010.

Thanks to Linda Gorman for the link to the RAND study.

For further reading, I recommend Thomas Sowell’s article “Income Confusion.” He discusses the issue in dept, including income inequality, in his book Economic Facts and Fallacies.

A stock market gaining in confidence shot higher for a second straight session Monday as investors bet that President-elect Barack Obama’s plans to increase infrastructure spending will help lift the economy back to health. The major market indexes jumped more than 3 percent, and the Dow Jones industrials’ nearly 300 point advance gave the blue chips their highest close in a month.

Obama’s plan calls for the largest U.S. public works spending program since the creation of the interstate highway system a half-century ago. That could bolster the economy by putting thousands of people to work building schools and other construction projects.

His weekend announcement gave a lift to a range of companies, from machinery makers to materials producers. Alcoa Inc., the world’s third-largest aluminum producer, surged 18 percent on the news; while heavy-equipment maker Caterpillar Inc. jumped 11 percent.

From what I can tell, the only support for the claim is a quote by someone in the financial sector:

I think people recognize that the government is going to throw everything that they can at this market, everything they can at the economy to make it work,” said James Cox, managing partner at Harris Financial Group.

This says nothing.  Where’s the evidence that Obama’s “weekend announcement gave a lift to a range of companies”?  I am not saying that it did not, but where’s the evidence?  Did they do a survey of people who bought stock today?  Did they collect any information?

Worse, the AP story says Obama’s policies “could bolster the economy.”  But what about mentioning the possible negative results of Obama’s policies, as the New York Times mentions?  (For more on this, see here.)

Even when a survey of journalists shows that they do lean left relative to the rest of the country, this is no excuse for not substantiating claims.

On a lighter note, check out this screenshot from Yahoo!, which shows an image of pork next to the article about Obama’s proposal economic policies.