Great editorial today from New York Times' columnist David Brooks:

A Reality-based Economy
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Some highlights:

Quote:If you’ve paid attention to the presidential campaign, you’ve heard the neopopulist story line. C.E.O.’s are seeing their incomes skyrocket while the middle class gets squeezed. The tides of globalization work against average Americans while most of the benefits go to the top 1 percent.

This story is not entirely wrong, but it is incredibly simple-minded. To believe it, you have to suppress a whole string of complicating facts...

...after a lag, average wages are rising sharply. Real average wages rose by 2 percent in 2006, the second fastest rise in 30 years...

...according to the Congressional Budget Office, earnings for the poorest fifth of Americans are also on the increase. As Ron Haskins of the Brookings Institution noted recently in The Washington Post, between 1991 and 2005, “the bottom fifth increased its earnings by 80 percent, compared with around 50 percent for the highest-income group and around 20 percent for each of the other three groups...”

...recent rises in inequality have less to do with the grinding unfairness of globalization than with the reality that the market increasingly rewards education and hard work.

A few years ago, the rewards for people earning college degrees seemed to flatten out. But more recent data from the Bureau of Labor Statistics suggests that the education premium is again on the rise...

...inequality is also rising in part because people up the income scale work longer hours. In 1965, less educated Americans and more educated Americans worked the same number of hours a week. But today, many highly educated people work like dogs while those down the income scale have seen their leisure time increase by a phenomenal 14 hours a week...

...it’s not at all clear that the big winners in this economy are self-dealing corporate greedheads who are bilking shareholders. A study by Steven N. Kaplan and Joshua Rauh finds that it’s not corporate honchos who are filling up the ranks of the filthy rich. It’s hedge fund managers. Or, as Kaplan and Rauh put it, “the top 25 hedge fund managers combined appear to have earned more than all 500 S.&P. 500 C.E.O.’s combined.” The hedge fund guys are profiting not because there’s been a shift in social norms favoring the megarich. It’s just that a few superstars are now handling so much capital...

...we’re in the middle of one of the greatest economic eras ever. Global poverty has declined at astounding rates. Globalization boosts each American household’s income by about $10,000 a year. The U.S. economy, despite all the bad-mouthing, is chugging along. Thanks to all the growth, tax revenues are at 18.8 percent of G.D.P., higher than the historical average. The deficit is down to about 1.5 percent of G.D.P., below the historical average...

How dare annoying things like facts get in the way of the socialist/populist agenda!