Thursday, July 12, 2012

Wall Street Opinion Section Reaches Previous Unattainable Level of Hilarity – Columnist Matthew Schoenfeld Uses Michael Jordan’s Salary with Chicago Bulls to Promote the Benefits of the 1%

Apparently This is Serious Commentary or Scraping the Bottom of the Barrel or Both

A great source of amusement in American economic and political writings is the extent to which those who support the tremendous inequalilty in the American income structure are willing to put forth silliness and nonsense.  In fact, just when everyone thinks the arguments cannot get any funnier, a new one comes along.  This time it is in the WSJ and Matthew Schoenfeld uses Michael Jordan’s pay to support huge inequality.

imageAnd that brings us to Michael Jordan, who starred for the Chicago Bulls from 1984 to 1998. In 1986, the Bulls' median player salary was $300,000. The team's lowest-paid player made $135,000, and its highest-paid player made $806,000. The team's Gini coefficient was 0.36. But Jordan's superstardom increased the team's popularity and revenues, and by 1998 salaries looked different. The median income was $2.3 million, the lowest was $500,000, and the highest (Jordan's) was $33 million. The Gini coefficient had nearly doubled, to 0.67.

Jordan's salary of $33 million consumed over half the payroll, but everyone was better off. The median player in 1998 made more than seven times what the median player made in 1986, while the income of the lowest-paid player in 1998 quadrupled that of his 1986 peer.

See the argument is that by allowing Mr. Jordon to take over half the payroll, what was left over was so great that everyone else became wealthy.  Which is true, for professional basketball.  In fact, if the average American could have an income of $2.3 million in real dollars there would be very little opposition to billionaires where the top income group takes almost half of national income. 

Unfortunately, in the real world, not the world Mr. Schoenfeld inhabits, the average person does not make $2.3 million.  And the lowest paid Americans do not make $500,000, they barely make enough to sustain themselves and their families.  No that can’t be right, as Mr. Schoenfeld tells us once more how well off the poor are in this nation.

Quality of life, in other words, increased 40 times more in 220 years of American history than it had globally over two millennia. In 2012, a typical American in the bottom fifth of the income distribution has a far higher quality of life—and life expectancy—than the average member of the top 1% in 1790.

And not only are they well off, they have the wonders of modern living!

In 1992, only 20% of American families below the poverty line had a dishwasher—50% had air conditioning and 60% owned a microwave. When the Census Bureau last surveyed these figures in 2005, those figures were 37%, 79% and 91%, respectively. Critics who minimize the importance of these conveniences likely have never had to do without them.

Yes, those so-called critics who minimize the importance of those things are not cited, but then this is the WSJ, citation is not necessary.  However The Dismal Political Economist does volunteer work at a thrift store that re-sells donated items to raise money for its cause.  Air conditioning units sell for $40.00, a good dishwasher for $95.00 and a microwave for about $10.00.  That’s one way how low income people can afford these items.(Another was is rent-to-own stores and credit arrangements that typically charge 20%, 30% or more, but that's another post).

So yes Mr. Schoenfeld, in the real world we have hundreds of men and women who have a net worth in the billions trying to deny health care support, education, and other vital services to people trying to support a family on $20,000 a year or less.  Not exactly what the lowest paid player on the Chicago Bulls is doing is it.

Finally, the WSJ notes that the author is

Mr. Schoenfeld is a recent graduate of Harvard Law School.

Leading everyone to wonder just what those people at Harvard are doing for admission standards these days.  Looks like nothing.


  1. Totally agree with your views. I found Mr. Schoenfeld's argument to be intellectually lazy and his examples to be irrelevant to a discussion of income inequality.

    I wrote a critique of his Op-Ed and would love to hear your comments

  2. Schoenfeld says income equality is not a good per se. But inequality is a good per se, as it makes "everyone better off."

    This is perhaps the greatest example yet of the WSJ's Bizarro World approach to life.

  3. Suraz

    Read you commentary, very good


    Bizarro World is the right term, maybe they are not in the same universe as we are.

  4. Unfortunately they have successfully made our universe much more like theirs.