The complete data on inequality changes in the US are in and it's a very different picture than the one retailed by Piketty and Saenz

P and S ignored everything but cash compensation reported on income tax returns.  Health insurance, pension contributions, Social Security, Medicare, Medicaid, Food Stamps, the first 500,000 of a house sale were simply deemed to not be relevant.  Needless to say, when you adjust for all the factors, including tax law changes and whatnot the 'catastrophic' picture disappears.  This article summarizes what the Study found.

And now, thanks to a new study in the Southern Economic Journal, we know what the picture looks like when the missing data are filled in. Economists Philip Armour and Richard V. Burkhauser of Cornell University and Jeff Larrimore of Congress’s Joint Committee on Taxation expanded the Piketty-Saez income measure using census data to account for all public and private in-kind benefits, taxes, Social Security payments and household size.

The result is dramatic. The bottom quintile of Americans experienced a 31% increase in income from 1979 to 2007 instead of a 33% decline that is found using a Piketty-Saez market-income measure alone. The income of the second quintile, often referred to as the working class, rose by 32%, not 0.7%. The income of the middle quintile, America’s middle class, increased by 37%, not 2.2%.

Read the whole thing.  It is a good illustration of what agenda driven academic 'research' does to distort the public debate.  What Piketty and Saenz produced was so wrong and was known to be so wrong by anyone who looked at it for a minute that it is tantamount to fraud.  Either by P and S or by the legion of people who checked their skepticism at the door and rapturously welcomed a data outcome that aligned with what they wanted to believe.

It's a helluva way to run a a critical policy debate.