According to the Fed's Survey of Consumer Finances (see table 1), the mean net worth of American families whose head is aged 65-74 has grown from 471.9 thousands of 2010 dollars in 1989 to 848.4 thousands in 2010 - a 2.8% annualized growth over 21 years. This is the fasted pace amongst all age groups in the survey and must be compared to a mere 0,65% for the average American family. Should we conclude from this that the group of elderlies has benefited from a higher return on capital that the rest of the population? Does that mean that the rate of return on capital is positively related to capital owners' initial age? May we extrapolate that trend to infer that, in a few decade, these people or their heirs will hold all of America's capital? Lastly, should we impose a punitive tax on elderlies' wealth to avoid that?

Quite obviously, the answers to these questions are - by order of appearance: no, no, no and no.

Simply, the youngest of all these people aged 65-74 in 1989 - assuming he hasn't passed away - was 86 in 2010. By 1999, all of these people were either dead of in the 75+ age group: we are comparing the net worth of two completely different groups of people. As a consequence, it doesn't tell us anything about the rate of growth their capital has experienced, it doesn't mean by any way that the elderlies benefits (or even have benefited) from higher returns than younger people and therefore any extrapolation (or political decision) based on these figures is plain bullshit.

Proof: it happens that most Americans aged 65-74 in 2010 were in the 45-54 age group in 1989. Using the same (elementary) logic we may build four vintages that presumably consist of the same people and measure how their mean wealth has evolved over time. Here are the results: the less-than-35 of 1989 (45-54 in 2010 [1]), have experienced a 9.9% annualized growth, the 35-44 (55-64) had 6.2%, the 45-64 (65-74) gained 2.9% and the net worth of the 55-64 in 1989 (75+ [2]) only grew by 1.3%. That is, the elderly we meant to tax today because they were making too much money from their capital basically experienced the lowest returns.

So this kind of reasoning is completely meaningless. It's just like if you were compering the average size of NBA players in 1989 and 2010, finding that it grew more than the average size of the U.S. population and concluding the taller one is, the faster he grows. It's stupid.

Now think about Piketty's claims.

As a matter of fact, the mean wealth of the x% wealthiest as grown faster than the mean wealth of the whole population. That's true. I don't even need to find data and compute anything to confirm that for any small values of x (say below 10%), the x% today is richer than the x% one, two, three or four decades ago. This happens because the overwhelming majority of people living on that planet actually got richer over [...]