Dean Baker's Blog, page 101

We Win Trade War! China Goes Generic Big Time

Donald Trump has proved the skeptics wrong, it seems that the American people stand to be big winners as a result of his trade war. The Chinese government announced a major initiative to promote the manufacture and use of generic drugs.

The reason this is potentially a big deal for the United States is that it could mean that China intends to push the envelope in replacing drugs protected by government-granted patent monopolies with drugs sold at free market prices. While the TRIPS provisions...

Economics Lessons for Thomas Friedman: Putin Brought Russia Out of Poverty

As a long-term columnist at the NYT, Thomas Friedman apparently never feels the need to know anything about the topics on which he writes. This explains his sarcastic speculation that Putin could be a CIA agent since he has done so much to hurt Russia.

For all his authoritarian tendencies, it is likely that most Russians think primarily about Putin's impact on the economy, just as is typically the case among voters in the United States. On that front, Putin has a very good record.

According t...

New York's Employer Side Payroll Tax Doesn't Require Workers to Take Pay Cuts

Jeff Stein's Wonkblog piece might have misled readers about the complexity of New York's new employer-side payroll tax as a workaround for Republican tax bill's limit on the deduction for state and local taxes. The piece told readers:

"'Employers can’t just slash salaries willy-nilly, even if there’s a good argument for it being to the employees’ benefit,' wrote Jared Walczak of the Tax Foundation, a right-leaning think tank. 'It might be an option for small groups of highly-compensated empl...

Roger Lowenstein, F**k Your Stock Portfolio

I realize it would be too much to ask that people who write on economics for major news outlets have any clue about how the economy works. I say that seriously; I have been commenting on economic reporting for more than two decades. Being a writer on economics is not like being a custodian or bus driver where you have to meet certain standards. The right family or friends can get you the job and there is virtually no risk of losing it as a result of inadequate performance.

But Roger Lowenstei...

Post Misleads Readers: Ending Trump's Conflicts of Interest Would be Fun and Easy

A Washington Post article on the possibility that Donald Trump will have to disclose his finances may have misled readers. The piece told readers:

"Company officials argue it would have been impractical to untangle and sell all of Trump’s real estate holdings, and that doing so might have created additional conflicts of interest."

It neglected to point out that this assertion by Trump's employees is a lie. It is easy to design schemes under which Trump could disassociate himself from his busi...

Will Interest Payments Take Up the Entire Federal Budget?

Greg Ip gave us another rendition of this old scare story in a Wall Street Journal column. The argument is that the interest paid on US government debt will soon impose an enormous burden on the federal government, choking off spending on important government programs.

The key part of this story is that interest rates will jump at some point in the not too distant future. While this is in fact what the Congressional Budget Office predicts, it is also what it has been predicting even since the...

NYT Columnist Says No Big Deal If Trade Causes 1 Million Doctors and Dentists to Lose Their Jobs

After all, the economy generates 200,000 jobs a month on net (more than five million gross), so what difference could it make if one million doctors and dentists were displaced through trade. If the idea that losing one million very high paying jobs wouldn't be any big deal seems strange to you, then you don't really understand how economists talk about trade.

Of course, the actual column, by Donald Boudreaux, an economics professor at George Mason University, wasn't talking about doctors and...

Why Would Anyone Assume the United States Has An Interest in Stronger Patent and Copyright Enforcement?

This theme appears endlessly in news articles and columns criticizing Donald Trump's tariffs. It really makes zero sense. It is easy to see that Pfizer and Microsoft benefit from having China honor their patents and copyrights, but how exactly are the rest of us supposed to benefit from paying more money for prescription drugs and software?

It would be nice if the people writing this stuff could take a moment to think about what they are writing. Some of us don't think it is a good idea for a...

Trump Administration Takes Anti-trust Action to Protect Uber

That was not a typo. The Justice Department and Federal Trade Commission intervened on Uber's side in a case involving a regulation passed by Seattle's city council which would allow Uber drivers to negotiate collectively. The issue is that Uber insists its drivers are independent contractors, not employees. This means that they don't have the rights guaranteed by employees under the National Labor Relations Act to bargain collectively with their employer.

Seattle's city council sought to wor...

Migrant Labor Is Not What Distinguishes China from Other Developing Countries

The NYT had a strange column today carrying the headline, "The orphans of China's economic miracle." The piece talks about the tens of millions of children who were left behind in the countryside when their parents left to find better paying jobs elsewhere in the country.

The reason why the column is strange is that it might leave readers with the impression that China is an exception among developing countries in having large numbers of migrant workers who leave their children behind in the...