Recently there has been some discussion about cross-sectional studies and whether they commit the fallacy of composition. Sumner criticizes a post by Krugman arguing that they do.
http://diaryofarepublicanhater.blogspot.com/2011/11/krugman-vs-sumner-and-fallacy-of.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
http://www.themoneyillusion.com/?p=11961&cpage=1#comment-107725
One comment on The Money Illusion got me thinking. John Thacker in agreement with Sumner wrote:
"If you tax A, B, and C to give to A, determining that A is relatively better off than B and C afterwards doesn’t prove that A, B, and C as a whole are better off."
Now if this is meant to prove a fallacy of composition it is inconclusive. Yesterday OWS after getting pushed out of Zucotti Park stormed Wall Street, attempting to shut it down. What was interesting was this morning I was at the Long Island Railroad Station here in Baldwin, Ny. I was reading a piece about the OWS attempt in today's Newsday.
I noticed that neither the New York Times or the Wall Street Journal had headlines about in on the front page. Yet there were two women next to me who are clearly successful businesswomen who work in Manhattan. They were discussing the problems of mobility they had yesterday. One of them mentioned her friend whose boss told her not to bother coming in to work today. The OWS protesters had attempted to stop the opening bell from being rung on the NYSE.
Now to Thacker's point that you can't assume that raising the taxes of A and B for C's benefit will benefit A, B, and C as a whole. You can't assume that it will but you don't know that it won't. There are scenarios that it will. Occupy Wall Street is a perfect example as how it could.
What if A and B are both from the top 1 percent of income earners and C is one of the OWS protesters? Wouldn't accepting a small tax increase benefit A and B to avoid further disruption?
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