How Confirmation Bias Shapes the Debate Over Income Inequality
Confirmation bias is a weird and powerful thing. Two people can look at the exact same information and come to two opposite conclusions. Take, for example, the economic fact that tax revenue has averaged less than 19 percent of GDP for the last few decades. Republicans and Democrats both acknowledge this number to be true. But what does it mean? Everybody thinks they know.
Conservatives know that if government revenue won't reliably be more than 19 percent, the only solution is to cut spending. Liberals know that revenue would easily exceed 19 percent, except we keep cutting taxes every few years. Opposite sides are finding evidence for their opposite positions in same piece of data. Remarkable? Not really. It's just confirmation bias.
I like to call these sort of numbers "Rorschach Statistics" because they reveal so much about the prejudices of the reader. Under this paragraph, I've got a great Rorschach Statistic. Actually, it's a Rorschach Chart. It tracks income growth for the poorest 20% to the richest 5% between 1979 and 2007 with a few different measures.
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