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Chomsky: economic ignoramus

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Nathan Folkert

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Oct 10, 2000, 3:00:00 AM10/10/00
to
> Howlers 3, and 4. "... real wages and benefits are expected to continue
> their steady decline."
>
> Two howlers in just 11 words! Brilliant stuff! Let's take them singly.
> First, 'real wages' have not 'steadily declined' on ANY measure. The
> nearest one can come to Chomsky's witless claim is the series known as
> average hourly earnings (non-agriculture), set out in the _Economic
> Report to the President_, op cit. This shows a figure in constant
> dollars of 7.78 in 1980 and 7.80 in 1999. So just on this very narrow
> measure, which appears to be what Chomsky has in mind, the real wage
> has REMAINED CONSTANT, not 'steadily declined'. Chomsky's claim is a
> HOWLER.

Really, Oliver, how do you do it? You have a keen eye for such details.
I'm surprised that the entire newsgroup, in awe of your astonishing mental
prowess, has not unanimously chosen to rename itself alt.fan.oliver-kamm.

The only slight qualm I have about your analysis, Oliver, is that Chomsky
published Power and Prospects in 1996, not in 1999. Browsing through
labor department wage statistics, one sees indeed that the wages in 1980
were around 7.78 and that the wages in 1999 were around 7.80. Wages in
1996, when his book was published, however, seem to be right around a
thirty year low of around 7.40, though, which would suggest that perhaps
it's not Chomsky who has got his fundamental logical and arithmetic
premises mistaken.

If you're having trouble figuring out why 1996 came before 1999, and what
significance that might have in analyzing facts about 1996 with data from
1999, I suggest you refer to your kitten Fluffy, or to your neighborhood
5-year old.

Now, please, Oliver, stop your trolling. No one is interested in going
out and getting copies of old Chomsky books to determine whether or not
your alleged "howlers" have anything to do with the context you put them
in.

Nate

PS - no, the Nobel Foundation does not consider the Bank of Sweden prize
to be a real Nobel Prize. They do not refer to it as the Nobel Prize in
Economics. They refer to it as the Bank of Sweden in Economic Sciences in
Memory of Alfred Nobel. We had this discussion already.


ogkamm

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Oct 11, 2000, 5:58:00 AM10/11/00
to
Exciting news! After a long, exhaustive and exhausting search, I believe
I've found the most comprehensively ignorant, clueless, stupid, vacuous,
risible and fatuous remark that even Chomsky has written. It comes from
perhaps the crowning achievement in his worthless and crank
contributions to political economy, _Powers and Prospects_, page 129.
Brace yourself: here it comes:

"After four straight years of double-digit profit growth, profits - now
at a 45-year high - are expected to continue their 'stunning' growth,
while real wages and benefits are expected to continue their steady
decline."

Hahahahahahahahahahahahahahahahahahahaha. Where does one start with
something as downright dumb, as thick as four short planks nailed to a
refectory table, as this? Well, let's have a go: I counted four
separate, crashing howlers in a single sentence.

Howler 1: I can assure the innumerate professor that corporate profits
are at considerably more than a 45-year high. They are actually at an
ALL-TIME high, of $846.1 billion (corporate profits with inventory
valuation and capital consumption adjustment, 1998 figure, from the
Council of Economic Advisers' _Economic Report to the President, 2000_,
table B88, page 401), because - duh - corporate profits are a function
of price and volume, and are thus always stated in nominal terms. OF
COURSE a nominal price index with downwardly sticky wages will rise over
time: a child of five could have told him that. It's about as surprising
as putting my six-year-old against the door post, measuring her height,
and then remarking in wonderment that she's at a six-year high. That's
what's SUPPOSED to happen, dimmo.

Howler 2: Chomsky says 'profits' are showing 'double-digit profit
growth'. Taken literally, this means that profits, in the form of
retained earnings or paid-out dividends, are growing at least 10% a
year. Huh? Ever tried to find a bank account where inflation is in low
single-digits but where your rate of interest is in double digits? If
you have, then you're as economically clueless as Chomsky, and so likely
to be feeble-minded enough to take this spectacularly witless statement
seriously.

There again, it's possible that Chomsky actually meant to say merely
that profits were rising by at least 10% a year, but lacks the economic
awareness to see that that is a different statement from the one he has
actually written. Or maybe the Professor of Linguistics just can't write
English. I'm afraid neither would surprise me.

Howlers 3, and 4. "... real wages and benefits are expected to continue
their steady decline."

Two howlers in just 11 words! Brilliant stuff! Let's take them singly.
First, 'real wages' have not 'steadily declined' on ANY measure. The
nearest one can come to Chomsky's witless claim is the series known as
average hourly earnings (non-agriculture), set out in the _Economic
Report to the President_, op cit. This shows a figure in constant
dollars of 7.78 in 1980 and 7.80 in 1999. So just on this very narrow
measure, which appears to be what Chomsky has in mind, the real wage
has REMAINED CONSTANT, not 'steadily declined'. Chomsky's claim is a
HOWLER.

But that's not even what Chomsky says. He actually makes the fatuous and
innumerate claim that 'real wages and [sic!] benefits' have seen 'steady
decline'. So he is clearly claiming that total compensation has fallen
in real terms. Ladies and gentlemen, witness howler no. 4! As I
explained in an earlier posting, the structure of labour compensation in
the US has changed radically in the last 30 years: a far greater
proportion is paid in the form of benefits, such as non-contributory
pension contributions. So let's turn to the table in the Economic Report
detailing total compensation, which comprises wages & salaries plus
benefits and is expressed as an index. (The benefits are defined
strictly as *employer* costs for *employee* benefits: these aren't costs
borne by the workers.) And wadd'ya know? Chomsky is talking unmitigated,
clueless baloney: from 1980 to December 1999, the index went from 64.8
to 144.6.

Given that Chomsky groupies on this list have already demonstrated an
inability to do simple arithmetic, I'll do them the favour of giving
them an annual compound growth rate for these data: it's pretty much
exactly 5%. That's not far short of growth in personal disposable income
in the same period of 5.4%, showing that, yes, the workers have been
enjoying the fruits of prosperity generated by the stupendous
performance of the US economy. At the same time, annual compound growth
in the consumer price index was 3.8%.

Still care to claim that 'real wages and benefits' have seen 'steady
decline', Professor? Or would you instead care to demonstrate some
rudimentary capability to understand elementary statistics, and the
requirements of reputable social scientific analysis? It would be the
first time in your life, but now is the time to start.

I now predict from the Professor's monied undergraduate admirers
responses ranging from embarrassed and stupified silence, through
indignant tears, to the usual red-faced semi-literate abuse. But facts
remain facts, I'm afraid. And Chomsky remains an ignorant, innumerate
crank.

Oliver Kamm

Nathan Folkert

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Oct 11, 2000, 3:00:00 AM10/11/00
to
On Thu, 12 Oct 2000, ogkamm wrote:

> Hahahahahahahahahaha. Here's another cretin who doesn't know the
> difference between real wages and nominal wages! You'll find that
> 'wages' in 1995 were substantially higher than wages in 1980, if you
> try reading the table properly, old bean. Ever heard of 'inflation'?
> And ever wondered why national income statistics are quoted in both
> constant and current dollars?

Yes, I have heard of inflation and am entirely aware of the difference
between real and nominal wages. That is why the statistics which I cited
(which are apparently the same or very closely related to the statistics
you cited) were measured in constant 1982 dollars.

> Not to kick a man when he's down (but, hell, why not?), but you remain
> blitheringly oblivious of what Chomsky actually SAID.

I wasn't responding to Chomsky; I was responding to you, Oliver. The
wages I cited were of course in constant 1982 dollars, and were, of
course, consistent with the data you presented, in which you stated that
Chomsky was incorrect in saying that wages (real wages, of course) were
declining in 1996, arguing instead that they were at most "remaining
constant" in 1999. The important point, of course, is that wages were
declining up to 1996 (in constant 1982 dollars), and in fact were near a
thirty year low, declining (fairly steadily) from a high of about 8.55 in
1972. Since 1996, real wages have increased at their fastest rate since,
I think, 1956. However, this growth occurred *after* 1996, so could
hardly be considered by Chomsky or by anyone in or before 1996. Do you
understand this, Oliver?

What you have done is chosen two points on a graph that happen to roughly
correlate, but you leave out the data between and around these two points,
and then use this to claim that there has been no change in these values
in the timeframe discussed. Moreover, you have chosen a time outside of
the possible temporal domain of discussion in 1996 to refute a fact about
1996, which is simply idiotic.

Here are the DoL statistics for Average Hourly earnings in the private
sector in constant 1982 dollars since 1964:

National Employment, Hours, and Earnings
1964 7.33
1965 7.52
1966 7.62
1967 7.72
1968 7.89
1969 7.98
1970 8.03
1971 8.21
1972 8.53
1973 8.55 <- Local maximum
1974 8.28
1975 8.12
1976 8.24
1977 8.36
1978 8.40
1979 8.17
1980 7.78 <- Kamm's starting point
1981 7.69
1982 7.68
1983 7.79
1984 7.80
1985 7.77
1986 7.81
1987 7.73
1988 7.69
1989 7.64
1990 7.52
1991 7.45
1992 7.41
1993 7.39
1994 7.40
1995 7.39
1996 7.43 <- Chomsky publishes Powers and Prospects
1997 7.55
1998 7.75
1999 7.86 <- Kamm's ending point

> He SAID that 'real wages and benefits are expected to continue their
> steady decline'. That statement is a flat-out howler. Real wages and
> benefits have consistently grown in real terms. That's a fact; it's
> there in the data.

The data you presented for wages gave two points on a graph, without any
indication of any "consistent" change between those two points at all, and
when you examine the data for more points, you see that this is an
outright lie -- wages were declining in the majority of the years between
1980 and 1996, and had dropped by 35 cents an hour since 1980 or $1.12
since 1973 (hey, money-sheltered Oliver, do you know how much that works
out to over the course of a year for your average worker in constant 1982
dollars? How much is that in the contemporary 1996 dollars?). Between
1996 and 1999, wages increased by 43 cents per hour, but this occurred
*after* Chomsky published Powers and Prospects, Oliver.

> Chomsky, being sheltered by money and tenure, clearly doesn't know how
> workers are actually paid.

Perhaps, perhaps not. It's pretty clear, however, that you either don't
know or are deliberately lying about how workers are actually paid. I
personally think there are stronger reasons to suspect the latter.

> I cited in addition the narrowest possible
> statistic on compensation - one that ignores a large and increasing
> proportion of worker compensation - to show that 'steady decline' does
> not describe the trajectory of the time-series at all.

And, when you look at more data points, we see that 'steady decline' does
describe the trajectory of the time-series in 1996, and that you were
either profoundly ignorant or consciously lying about what the data
actually say, because 'remaining constant' (your characterization of
wages) is entirely incorrect.

> Random
> fluctuations around a central value would be the best description,
> even on the data in the mid-90s.

No -- random fluctuations around a central value (being the local minimum)
would be the best description ONLY for the data in the mid 90's (not
"even" for that data), whereas prior to that it was in relatively steady
decline since the late 70's.

> I would try advising you to learn some economics, but that would be
> redundant if you don't try learning some simple arithmetic first.
> D'oh!

> Nathan Folkert wrote:
>
> > > Howlers 3, and 4. "... real wages and benefits are expected to continue
> > > their steady decline."
> > >
> > > Two howlers in just 11 words! Brilliant stuff! Let's take them singly.
> > > First, 'real wages' have not 'steadily declined' on ANY measure. The
> > > nearest one can come to Chomsky's witless claim is the series known as
> > > average hourly earnings (non-agriculture), set out in the _Economic
> > > Report to the President_, op cit. This shows a figure in constant
> > > dollars of 7.78 in 1980 and 7.80 in 1999. So just on this very narrow
> > > measure, which appears to be what Chomsky has in mind, the real wage
> > > has REMAINED CONSTANT, not 'steadily declined'. Chomsky's claim is a
> > > HOWLER.
> >

> > Really, Oliver, how do you do it? You have a keen eye for such details.
> > I'm surprised that the entire newsgroup, in awe of your astonishing mental
> > prowess, has not unanimously chosen to rename itself alt.fan.oliver-kamm.
> >
> > The only slight qualm I have about your analysis, Oliver, is that Chomsky
> > published Power and Prospects in 1996, not in 1999. Browsing through
> > labor department wage statistics, one sees indeed that the wages in 1980
> > were around 7.78 and that the wages in 1999 were around 7.80. Wages in
> > 1996, when his book was published, however, seem to be right around a
> > thirty year low of around 7.40, though, which would suggest that perhaps
> > it's not Chomsky who has got his fundamental logical and arithmetic
> > premises mistaken.
> >
> >

> > PS - no, the Nobel Foundation does not consider the Bank of Sweden prize
> > to be a real Nobel Prize. They do not refer to it as the Nobel Prize in
> > Economics. They refer to it as the Bank of Sweden in Economic Sciences in
> > Memory of Alfred Nobel. We had this discussion already.
>

> What a cretin. You'd wonder why, in that case, the Nobel Prize in
> Economics is awarded simultaneously, and at the same event, as the
> Nobel Prize in Medicine.

The Nobel foundation refers to the Bank of Sweden prize as "not a real
Nobel prize", and when they refer to it by name, they refer to it as the
Bank of Sweden Prize or the Memorial Nobel, and not as the Nobel Prize in
Economics. But we've been over this, Oliver. If you insist that it's a
Nobel Prize, then you're simply factually incorrect.

> But I'm afraid an economic ignoramus like this undergraduate is
> unlikely to progress beyond this point, so I'll leave him to it.

Nate


Nathan Folkert

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Oct 11, 2000, 3:00:00 AM10/11/00
to
On Thu, 12 Oct 2000, ogkamm wrote:

> Hahahahahahahahahaha. This monied undergraduate appears to have
> difficulty with English as well as economics. Chomsky said that real
> wages and benefits had steadily declined. That is ignorant garbage.
> Notice that the undergraduate neatly (actually hilariously clumsily)
> evades this devastating fact and displays his own rather original
> ignorance.
>
> Ever heard of the Boskin Commission, sonny? Know what it measured? Try
> going away and researching it before you waste this ng's time in
> future with inanities like this.

I was wondering if you would bring this up, Oliver. Let's suppose for the
sake of argument that the report by the Boskin Commission were correct;
tell me, in what year and what month was the Boskin Commission's report
published?

Nate


ogkamm

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Oct 12, 2000, 6:23:29 AM10/12/00
to
Hahahahahahahahahaha. Here's another cretin who doesn't know the difference
between real wages and nominal wages! You'll find that 'wages' in 1995 were
substantially higher than wages in 1980, if you try reading the table
properly, old bean. Ever heard of 'inflation'? And ever wondered why national
income statistics are quoted in both constant and current dollars?

Not to kick a man when he's down (but, hell, why not?), but you remain
blitheringly oblivious of what Chomsky actually SAID. He SAID that 'real wages
and benefits are expected to continue their steady decline'. That statement is


a flat-out howler. Real wages and benefits have consistently grown in real

terms. That's a fact; it's there in the data. Chomsky, being sheltered by
money and tenure, clearly doesn't know how workers are actually paid. I cited


in addition the narrowest possible statistic on compensation - one that
ignores a large and increasing proportion of worker compensation - to show
that 'steady decline' does not describe the trajectory of the time-series at

all. Random fluctuations around a central value would be the best description,
even on the data in the mid-90s. I would try advising you to learn some


economics, but that would be redundant if you don't try learning some simple
arithmetic first. D'oh!

Nathan Folkert wrote:

> > Howlers 3, and 4. "... real wages and benefits are expected to continue
> > their steady decline."
> >
> > Two howlers in just 11 words! Brilliant stuff! Let's take them singly.
> > First, 'real wages' have not 'steadily declined' on ANY measure. The
> > nearest one can come to Chomsky's witless claim is the series known as
> > average hourly earnings (non-agriculture), set out in the _Economic
> > Report to the President_, op cit. This shows a figure in constant
> > dollars of 7.78 in 1980 and 7.80 in 1999. So just on this very narrow
> > measure, which appears to be what Chomsky has in mind, the real wage
> > has REMAINED CONSTANT, not 'steadily declined'. Chomsky's claim is a
> > HOWLER.
>

> Really, Oliver, how do you do it? You have a keen eye for such details.
> I'm surprised that the entire newsgroup, in awe of your astonishing mental
> prowess, has not unanimously chosen to rename itself alt.fan.oliver-kamm.
>
> The only slight qualm I have about your analysis, Oliver, is that Chomsky
> published Power and Prospects in 1996, not in 1999. Browsing through
> labor department wage statistics, one sees indeed that the wages in 1980
> were around 7.78 and that the wages in 1999 were around 7.80. Wages in
> 1996, when his book was published, however, seem to be right around a
> thirty year low of around 7.40, though, which would suggest that perhaps
> it's not Chomsky who has got his fundamental logical and arithmetic
> premises mistaken.
>
>
> PS - no, the Nobel Foundation does not consider the Bank of Sweden prize
> to be a real Nobel Prize. They do not refer to it as the Nobel Prize in
> Economics. They refer to it as the Bank of Sweden in Economic Sciences in
> Memory of Alfred Nobel. We had this discussion already.

What a cretin. You'd wonder why, in that case, the Nobel Prize in Economics is
awarded simultaneously, and at the same event, as the Nobel Prize in Medicine.

ogkamm

unread,
Oct 12, 2000, 8:47:11 AM10/12/00
to
Hahahahahahahahahaha. This monied undergraduate appears to have difficulty with
English as well as economics. Chomsky said that real wages and benefits had

steadily declined. That is ignorant garbage. Notice that the undergraduate neatly
(actually hilariously clumsily) evades this devastating fact and displays his own
rather original ignorance.

Ever heard of the Boskin Commission, sonny? Know what it measured? Try going away
and researching it before you waste this ng's time in future with inanities like
this.

Oliver Kamm

unread,
Oct 12, 2000, 2:55:32 PM10/12/00
to
Here we go again. The undergraduate adopts the characteristic undergraduate
pose: he runs away rather than deal with brute facts. Chomsky said that real
wages and benefits had fallen steadily. Real wages and benefits had in fact
risen steadily. That is true, incidentally, with an adjusted or an unadjusted
CPI as a deflator.

CHOMSKY WAS WRONG. HIS CLAIM WAS A HOWLER. HE IS AN ECONOMIC IGNORAMUS.

Attentive readers, and even inattentive ones, will note that the young
gentleman fondly imagines that no one will have noticed that he's trying
desperately to obscure this devastating fact, by the expedient of pretending
it hasn't been pointed out.

For the information of this youngster, I will humour by him by pointing to
where he can find the advice and perspectives of the Boskin Commission: the
Senate Advisory Committee to Study the Consumer Price Index, _Toward a More
Accurate Measure of the Cost of Living: Final Report to the Senate Finance
Committee_, 4 December 1996.

If the young gentleman tried investigating some genuine economic scholarship
and policy analysis instead of the ignorant and erroneous sloganising of a
totalitarian way out of his depth, N.Chomsky, he'd educate himself and save
the rest of us a lot of time.

Oliver Kamm

Nathan Folkert wrote:

> On Thu, 12 Oct 2000, ogkamm wrote:
>
> > Hahahahahahahahahaha. This monied undergraduate appears to have
> > difficulty with English as well as economics. Chomsky said that real
> > wages and benefits had steadily declined. That is ignorant garbage.
> > Notice that the undergraduate neatly (actually hilariously clumsily)
> > evades this devastating fact and displays his own rather original
> > ignorance.
> >
> > Ever heard of the Boskin Commission, sonny? Know what it measured? Try
> > going away and researching it before you waste this ng's time in
> > future with inanities like this.
>

Nathan Folkert

unread,
Oct 12, 2000, 3:00:00 AM10/12/00
to
On Thu, 12 Oct 2000, Oliver Kamm wrote:

> Here we go again. The undergraduate adopts the characteristic undergraduate
> pose: he runs away rather than deal with brute facts. Chomsky said that real
> wages and benefits had fallen steadily. Real wages and benefits had in fact
> risen steadily. That is true, incidentally, with an adjusted or an unadjusted
> CPI as a deflator.

No, it's not true with an unadjusted CPI as a deflator. Real wages PLUS
benefits had perhaps risen steadily, but not real wages AND benefits --
regardless, you made the claim that real wages had "remained constant" or
perhaps "fluctuated randomly" around some value, which is incorrect with
an unadjusted CPI. I'm not responding to Chomsky, I'm responding to you,
so it is YOUR claims to which I respond.

> CHOMSKY WAS WRONG. HIS CLAIM WAS A HOWLER. HE IS AN ECONOMIC IGNORAMUS.
>
> Attentive readers, and even inattentive ones, will note that the young
> gentleman fondly imagines that no one will have noticed that he's trying
> desperately to obscure this devastating fact, by the expedient of pretending
> it hasn't been pointed out.

This neither interests me nor has any bearing on my current criticism. I
do not refer to Chomsky as a resource for economic science. Whether he is
or is not an "economic ignoramus" can be sorted out by others who have
more interest in the matter than I do. I am not writing newsgroup posts
to Chomsky, but rather to Oliver Kamm, and Oliver Kamm has not as of yet
justified citing 1999 data to respond to a book published in 1996.

> For the information of this youngster, I will humour by him by pointing to
> where he can find the advice and perspectives of the Boskin Commission: the
> Senate Advisory Committee to Study the Consumer Price Index, _Toward a More
> Accurate Measure of the Cost of Living: Final Report to the Senate Finance
> Committee_, 4 December 1996.

Yes, Oliver, I'm aware of when the report was released. I've read it
already. I just wanted to make sure that you were aware of the date on
which it was published, so that we can make some progress toward you
understanding your errors. Now, tell me, when was Chomsky's book _Powers
and Prospects_ published? I'll do this work for you: it was published in
1996. Now, given that Powers and Prospects was published in 1996, and the
Boskin Commission report was released at the end of 1996, please try to
justify how the information contained in that report concerning the CPI
could possibly have any bearing on an analysis of the Bureau of Labour
Statistics data available at the time that quite clearly showed that wages
adjusted for inflation by the CPI had declined steadily since the 1970's?

> If the young gentleman tried investigating some genuine economic scholarship
> and policy analysis instead of the ignorant and erroneous sloganising of a
> totalitarian way out of his depth, N.Chomsky, he'd educate himself and save
> the rest of us a lot of time.
>
> Oliver Kamm

Nate


Adam Bayliss

unread,
Oct 12, 2000, 3:00:00 AM10/12/00
to
All this talk about real wages and income motivated me to dig up some
numbers from the ignoramuses in the Census Bureau and Businessweek.
Here are some pertinent links showing the growth of the income gap as
well as an article citing the decline in real wages for the lower 3/4 of
the American population.

http://www.businessweek.com/1997/35/b3542001.htm

http://www.census.gov/hhes/income/histinc/h02.html

Adam

Stephen Denney

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Oct 12, 2000, 3:00:00 AM10/12/00
to

Nathan Folkert <nfol...@stanford.edu> wrote (to Oliver Kamm):


>
> PS - no, the Nobel Foundation does not consider the Bank of Sweden prize
> to be a real Nobel Prize. They do not refer to it as the Nobel Prize in
> Economics. They refer to it as the Bank of Sweden in Economic Sciences in
> Memory of Alfred Nobel. We had this discussion already.

They also refer to it as the Nobel Memorial Prize in Economic Sciences.
- Steve Denney

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