A correspondent directs me to the following bizarre comment by the Economist, starring Megan McArdle, on the latest atrocity from the Wall Street Journal.
If you recall, the atrocity was this "Laffer curve":
which we talked about here.
Here's Megan:
Outlandish | Free exchange | Economist.com: The Wall Street Journal is wrong; their line is not the only, or even the obvious, one to draw through noisy data, even without omitting Norway...
Megan is trying to take a middle position between Mark Thoma's sensible criticism and Donald Luskin's idiotic defense of the clown show that is the Journal editorial page.
I see three misrepresentations by the Economist here:
- The WSJ line is not "draw[n] through noisy data." It is drawn above noisy data.
- To say that the WSJ line is "not... the obvious" one to draw implies that there might be some non-obvious reason to draw it. There isn't.
- The claim that the WSJ line is "not the only... one to draw" is a statement that it is one of the lines that one might draw with some justification. It isn't.
All I can say is:
Questo misero modo/ tegnon l'anime triste di coloro/ che visser sanza 'nfamia e sanza lodo./ Mischiate sono a quel cattivo coro/ de li angeli che non furon ribelli/ né fur fedeli a Dio, ma per sé fuoro./ Caccianli i ciel per non esser men belli,/ né lo profondo inferno li riceve...
This is indeed the behavior of the banner-chasers of Dante's Inferno: those who did not have the morals to be worthy of heaven but also lacked the guts to sin enough to be worthy of hell, and who were thus rejected by both.
One more point, with respect to "omitting Norway": Personally I see no need to omit Norway. I do see a need to plot the Norway point on the graph correctly. The revenues plotted on the vertical scale include oil excise taxes levied on corporations. The tax rates plotted on the horizontal scale do not--hence the Norway "tax rate" of 28% rather than the correct 52%. Move Norway out to its proper position--with the same tax concept on both axes--and everything is fine.
