Dean Baker's Blog, page 100

The Real Risk from Trade War: Starbucks' Profits in China

I'm not kidding, that's what a column by Isaac Stone Fish in The Washington Post told us. We all know the list of complaints against China. They subsidize their exports of many products, costing US workers their jobs. They deliberately prop up the dollar against the yuan, making US goods and services less competitive. Our companies complain that China takes their intellectual property (doesn't bother me).

But Fish's Post column tells us the real problem is that Starbucks and other c...

Why the Government's $1 Trillion Deficit Is Not a Big Problem for You, but Rich People Complaining About It Might Be

The Washington Post is trying to scare people about budget deficits. Okay, that is not exactly news, it has been trying to scare people about deficits to justify cuts to Social Security and Medicare benefits and other programs for decades, but they are redoubling their efforts now. (In fairness, the Republican tax cut gave them more material.)

Heather Long gives us the classic story:

"The United States is able to run such high deficits because the U.S. Treasury turns around and sells U.S. de...

Doesn't Anyone Benefit from Lower Soybean Prices?

Many more of us are food consumers than farmers, yet somehow the prospect that a trade war with China will lead to lower prices for soybeans and other agricultural products is never reported as a positive development. Undoubtedly, the pain to farmers is much more important to them than the small benefit that many of us may see in the form of lower food prices, but reporters have felt it important to tell us about the small cost that many of us might see as a result of higher steel and aluminu...

Robert Samuelson Is Wrong Again: Teachers are Competing with Drug Companies and Doctors

Once again Robert Samuelson takes a big swing and misses in his Washington Post column today. He argues that schools in states like West Virginia, Kentucky, and Oklahoma are underfunded and unable to pay their teachers a decent wage because of the cost for caring for the elderly.

This is wrong for two obvious reasons. First, these are all low tax states. They could try something like raising taxes on higher income households. This is one way to get money.

The other problem is that a main reas...

Patent Monopolies: The Solution to the Coming Debt Crisis

I see that five former Democratic chairs of the Council of Economic Advisers warned of an impending debt crisis in a column in the Washington Post. They tell us that current and projected future levels of deficits and debts will soon send interest rates soaring, crashing the economy. While I am skeptical about the basic proposition for a number of reasons, perhaps most importantly Japan's persistently low interest and inflation rates, in spite of a debt to GDP ratio that is two and a half tim...

NYT News Section Goes Into Battle Against Trump Trade Wars: Warns of Higher Prices for Hip Replacements

Seriously, the NYT ran a piece with the headline, "why Trump's tariffs could raise the cost of a hip replacement." The point of the piece is that we now import a substantial amount of medical equipment and devices from China. This means that if we have to pay 25 percent more, then the price of these items in the United States will be higher. This means that operations like hip replacements that might require some equipment now purchased from China will cost more.

Okay, let's try to use some n...

Trumpcare Premiums Are Up 30 Percent

I guess "terrific" doesn't mean what it used to mean. According to the Washington Post, the average monthly before-subsidy premium for a plan purchased in the health care exchanges was $621, an increase of 30 percent from 2017. For some reason, this rise in premiums doesn't seem to be getting as much attention as the increase in premiums while President Obama was still in office.

Have a Flexible Savings Account? Don't Call Employer-Side Payroll Taxes Complicated

Last month New York Governor Andrew Cuomo signed into effect a law that created an optional employer-side payroll tax as a partial substitute for the state income tax. Since then the word in many news outlets is that the take-up is likely to be low, since the new tax is complicated.

This complexity line is especially being pushed by conservatives, as in this Newsday article, since the point of the tax is to develop a workaround for the limit on deductions for state and local income taxes (SAL...

We Interrupt This Blog to Bring You This Announcement

I am Dawn Niederhauser, CEPR’s Director of Development, and I am highjacking Beat the Press to make an important announcement. Many of you regular readers of Beat the Press may have received an email from me about this, but in case you missed the news, I am writing to let you know that there is a new way to support Dean and Beat the Press! 

As you may know, Dean stepped down as CEPR’s Co-Director in January so that he could devote more time to his writing. We are thrilled that he will co...

Disagreeing With Krugman: Is China Stealing Knowledge?

I would agree with pretty much all of Paul Krugman's criticisms of Donald Trump's trade war with China, but I would strongly disagree with one of his criticisms of China. He tells readers:

"In some ways, China really is a bad actor in the global economy. In particular, it has pretty much thumbed its nose at international rules on intellectual property rights, grabbing foreign technology without proper payment."

The issue here is who set the rules and what is proper payment.

The problem is tha...