— I did not specifically challenge Mr. Krugman’s particular position in the articles referenced by Cecil. I merely pointed out the body of evidence that challenges Mr. Krugman’s writings (questioning of labor statistics, growth in economy).
Read: Some disagree with Mr. Krugman, but I will not discuss any specific examples. (Fair enough, actually: it is surely valid to point to a source of dissenting views.) Still, I might like to see a single substantive and non-trivial example of a Krugman argument shown to be “demonstrably false”. (Great Debates would be an appropriate forum for this.) Oh, and welcome to the boards, cindelicato! 
edct:
— For one, During the Gilded Age, even through the 1920s, the impact of all government agencies on the total US economy was minimal compared to today. In the US, federal, state and local taxes often do take more than 50% of income of the well-off.
True, when considering the distribution of economic welfare, after-tax income is the appropriate measure. I tried to get a handle on that in my calculation above. Note, though, that 2 taxes I did not consider --state taxes and social security taxes-- are regressive, in that they tax a higher share of lower incomes than higher incomes. For info on the regressivity of state taxes, see http://www.itepnet.org/whopays.htm .
— Two, income and worth are two different things. You may recall a couple of Brooklyn professors who together never made more than about $100,000 a year, but had invested in Berkshire Hathaway in the 1950s and left an estate of over $900 MILLION!
Yes, and many people win the lottery.
More substantively, inequality in wealth vastly exceeds inequality in income. Surveys of wealth by necessity cannot capture the rise of the plutocrats, but they do give an interesting snapshop of the overall population. Those interested in the wealth figures should look at “A Rolling Tide: Changes in the Distribution of Wealth in the U.S., 1989-2001”, by Arthur B. Kennickell, March 2003, which admittedly I have not read.
— The third point I’d like to make is that some surveys look at the “thousand richest” or “Top 1% or 5% of income earners” and assume that it is a static group of people. While it is true that some people are always making gobs of money, some of the people on the list hit it big one year, and 5 years later are stock boys at Piggly Wiggly. Does the name MC Hammer mean anything to you? He may be an extreme example, but he is certainly not alone; just look at a list of the top athletes and entertainers from 20 years ago and today.
I am sensing a pattern here. With all due respect to edct there is a distinction between anecdotes and data.
Whether US income mobility is high enough to render a single snapshot of the income distribution irrelevant is an empirical matter. Luckily, this issue has been examined by Krugman, among others.
Now it’s true that when you look at individuals, there will be a fair number of 21 year olds who work through college, then get a real job when they’re in their thirties. But that’s not what we think about when we think of income mobility. When whole families are considered however, US income mobility is shown to be modest. From Krugman (1998):
“In reality, moves from the bottom to the top quintile are extremely rare; a typical estimate is that only about 3 percent of families who are in the bottom 20 percent in one year will be in the top 20 percent a decade later. About half will still be in the bottom quintile. And even those 3 percent that move aren’t necessarily Horatio Alger stories. The top quintile includes everyone from a $60,000 a year regional manager to Warren Buffett.”
Finally , the claim that Krugman has not considered conservative arguments against taking income distribution data seriously is false: he explored them in detail in his book, Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations.