Law Professors Fussin' and Fightin'

I just picked up on an apparently long-running academic feud between Todd Zywicki (law professor at George Mason University) and Elizabeth Warren (law professor at Harvard), mostly revolving around the fascinating topic of bankruptcy. For example, here's a Zywicki-coauthored op-ed where he deemed Congressional testimony by Prof Warren and another colleague to be "junk". You'll also, in the interest of equal time, want to check out Prof Warren's response, where she states that Zywicki "offers no work of his own: no data, no studies, no stories--nothing but the firm conclusion that he is right." You can check out a 2005 Zywicki-Warren spat over the effect of proposed bankruptcy legislation on child support payments here. And this just seems to be the tip of the Google iceberg. Fun!

Back on August 14, Prof Zywicki fired another shot in the ongoing skirmish in a WSJ op-ed. (It's behind the WSJ subscription wall right now, but you can get to it by asking the Google nicely and following the WSJ link.) It begins with a description of the impact of 2005's bankruptcy reform, but then goes on to discuss the more general issue of the alleged growing financial woes of the beleagured middle class. Which—surprise!—happens to be the topic of a 2003 book, The Two Income Trap: Why Middle Class Mothers and Fathers are Going Broke by Prof Warren and her daughter Amelia Tyagi. But waitaminnit, Prof Zywicki writes, there's a bit of a problem there:

In fact, using their own numbers, it is evident that they have overlooked the most important contributor to the purported household budget crunch -- taxes.
Could Warren and her daughter simply have spaced out when looking at taxes? Well, first they look at a typical 1970s situation:
The typical 1970s family is headed by a working father and a stay-at-home mother with two children. The father's income is $38,700, out of which came $5,310 in mortgage payments, $5,140 a year on car expenses, $1,030 on health insurance, and income taxes "which claim 24% of [the father's] income," leaving $17,834, or about $1,500 per month in "discretionary income" for all other expenses, such as food, clothing, utilities and savings.
Then they move to the 2000s:
The typical 2000s family has two working parents and a higher income of $67,800, an increase of 75% over the 1970s family. But their expenses have also risen: The mortgage payment increases to $9,000, the additional car raises the family obligation to $8,000, and more expensive health insurance premiums cost $1,650. A new expense of full-time daycare so the mother can work is estimated at $9,670. Mother's income bumps the family into a higher tax bracket, so that "the government takes 33% of the family's money." In the end, despite the dramatic increase in family income, the family is left with $17,045 in "discretionary income," less than the earlier generation.
You'll note that most of those numbers are carefully expressed in absolute dollar values (and they're adjusted for inflation). The mysterious exception is taxes, which is expressed as a percentage. But it's not hard for even a law prof to do the math and compare (as he puts it) "apples to apples":
In fact, for the typical 1970s family, paying 24% of its income in taxes works out to be $9,288. And for the 2000s family, paying 33% of its income is $22,374.

Although income only rose 75%, and expenditures for the mortgage, car and health insurance rose by even less than that, the tax bill increased by $13,086 -- a whopping 140% increase. The percentage of family income dedicated to health insurance, mortgage and automobiles actually declined between the two periods.

During this period, the figures used by Ms. Warren and Ms. Tyagi indicate that annual mortgage obligations increased by $3,690, automobile obligations by $2,860 and health insurance payments by $620 (a total increase of $7,170). Those increases are not trivial -- but they are swamped by the increase in tax obligations. To put this in perspective, the increase in tax obligations is over three times as large as the increase in the mortgage payments and almost double the increase in the mortgage and automobile payments combined. Even the new expenditure on child care is about a quarter less than the increase in taxes.

Overall, the typical family in the 2000s pays substantially more in taxes than the combined expenses of their mortgage, automobile and health insurance. And the change in the tax obligation between the two periods is substantially greater than the change in mortgage, automobile expenses and health-insurance costs combined.

Bottom line, which Prof Zywicki makes clear enough, but is too polite to say outright: Prof Warren and daughter slant their presentation to minimize any impression that big government might actually be a huge contributor to the typical family's financial problems.

You might want to keep this in mind for the campaign season, when politicians of various stripes will want to at least pretend to care about middle-class financial woes; ask them if they're supportive of bringing back middle-class tax rates to where they were only a few short decades ago.

[Equal time: You can read a longish article from Prof Warren and her daughter, excerpted from their book, here, which —surprise!—contains a small swipe at Prof Zywicki.]

Now if only this were a romantic comedy movie, Professors Zywicki and Warren would find themselves forced into close proximity for an extended period: cast away on a remote island, accidentally booked into the same Tuscan villa, or in the back seat of a minivan trekking through Kansas. After multiple amusing spats, love would bloom! (Unfortunately, if it were a modern Hollywood movie, the screenwriters would also probably have the Zywicki character be politically converted by the Warren character. So never mind.)

I should point out that I'm far more sympathetic to Zywicki than Warren. I looked at one of Prof Warren's Really Stupid Ideas here a couple months back. And in one of those links above, you'll find her advocating many others, most notably a proposal to drastically expand "public education" to cover—at taxpayer expense—two years of preschool and four years of college. Moan.

The Phony Campaign

2007-08-19 Update

Query StringHit CountChange
Since 8/15
"Hillary Clinton" phony372,000-19,000
"John Edwards" phony303,000-46,000
"John McCain" phony290,000-12,000
"Barack Obama" phony267,000-13,000
"Ron Paul" phony262,000-4,000
"Mitt Romney" phony240,000unchanged
"Fred Thompson" phony211,000+2,000
"Rudy Giuliani" phony181,000-5,000
"Dennis Kucinich" phony133,000+4,000
"Dave Burge" phony62+6

Many candidates leaked phoniness hits over the past four days. Especially disappointing is John Edwards, who continues to lose ground to the current leader, Hillary Clinton. He'll have to do something incredibly phony pretty soon to have a shot … oh, wait.


Last Modified 2014-12-01 9:51 AM EST

Simpsonized!

I succumbed to the temptation here.

[Simpsonized]


Last Modified 2012-10-17 3:42 PM EST