MTM 14

I've been pointing out since the early 2010s that Thomas Piketty, Emmanuel Saez, and Gabriel Zucman have a bad habit of biasing their data construction to fit their politics. Whenever they make a suspect call in how to handle stats, it ends up showing that inequality is on the rise. They almost never go in the other direction. The errors are non-random and almost invariably reinforce their political claims about rising income and wealth concentration since 1980. Piketty did this throughout his book Capital in the 21st Century. Piketty and Saez did this throughout their famous 2003 paper on inequality in the US. Piketty, Saez, and Zucman Saez and Zucman did this in their Distributional National Accounts paper that Auten and Splinter dissected. Saez and Zucman did this in their 2019 book on tax incidence and inequality. Saez and Zucman did this in their flurry of "studies" and white papers to support Elizabeth Warren's wealth tax proposal, California Prop 40, a new wealth tax in France, and dozens of other similar examples. A new AI report (linked below) audited 138 papers by Saez and Zucman. It found thousands of errors, 194 of which were serious. A whopping 97% of the serious errors went in the same direction: they showed inequality rising faster or made it higher. But there's a bigger scandal at play here. Despite these clear biases, Piketty, Saez, and Zucman have enjoyed a stream of praise and prestige within the economics profession. They get expedited and friendly reviews in top econ journals even though a more serious peer review should have caught many of these errors (the Quarterly Journal of Economics is a recurring offender in this regard). Journals regularly give them a pass after the errors in their old work come to light - they're never expected to correct any of it, and just keep on using it as if nothing changed. Their non-peer reviewed data claims are also treated as gospel by major media outlets such as the New York Times and the Washington Post. And they get showered with prizes - Saez and Zucman are both Clark Medal winners from the AEA, and Zucman got his prize in 2023 after evidence of major data shenanigans in his work came to light in 2019. Until now, those of us who have been trying to correct the record have had to wade through the PSZ trio's cluttered, disorganized, and often non-transparent replication packages (almost all of which are convoluted piles of Excel spreadsheets) to find the problems. I did a line-by-line replication of Piketty and Saez's entire 2003 US income inequality series to use one example, and found it was riddled with errors - almost every single one of which biased their results in favor of their political story. We had the means to catch this stuff as it was happening, but the economics profession failed to do its job. And it failed precisely because its elite ranks wanted to believe the Piketty-Saez-Zucman story for political reasons.