Freakonomics Oops
Freakonomics is one of my favorite blogs, but I have a nit to pick with their math on inequality between the rich and poor in the US:
Their argument could hardly be simpler. How rich you are depends on two things: how much money you have, and how much the stuff you want to buy costs. If your income doubles, but the prices of the things you consume also double, then you are no better off.
Not quite. If you take home $5000 a month and spend $4000, your net savings per month is $1000. If you take home $10000 a month and spend $8000, your net savings per month is $2000. Their math only works if the cost of everything doubles and your $2000 per month is effectively $1000 due to inflation.