Dean Baker's Blog, page 105

Down on the Farm: More Hysteria About Steel Tariffs

The selective free traders (people who support protectionism that benefits high income people, but oppose it when it can help ordinary workers) are pulling out all the stops in going after Trump's steel tariffs. Today, the NYT takes the show to rural America where it tells us how much agriculture can be hurt by a trade war.

We meet various farmers worried about the threat of a trade war and get a few random facts thrown in:

"Three out of every five rows of soybeans planted in the United State...

Washington Post Says Stronger Patent and Copyright Protections Are "Free-Trade"

Well, it is the era of Donald Trump in Washington, but this turning reality on its head pre-dated Trump. Anyhow, the Washington Post was in its full trade deal promotion mode when it announced the signing of the Trans-Pacific Partnership (TPP) by the other eleven countries who had been negotiating the pact with the United States.

The headline of the piece tells readers, "as Trump imposes tariffs, allies sign on to free-trade pact — without US" The first sentence proclaims:

"As the Trump admi...

When US Drug Companies Insist on Stronger Patent Related Protections Are They Really Trying to Counter China's Growing Economic Might In Asia?

That's the question NYT readers are asking after reading the lead sentence of an article on the signing of an agreement by the other eleven countries that had been part of the Trans-Pacific Partnership (TPP). The sentence tells readers:

"A trade pact originally conceived by the United States to counter China’s growing economic might in Asia now has a new target: President Trump’s embrace of protectionism."

If the point of the trade pact was to counter China's influence then it may not have...

Trade As a Percent of GDP: Deglobalization May Not Be All It Is Cracked Up to Be

Ruchir Shama had an NYT column warning about the risks of a trade war from the tariffs Trump is imposing on steel and aluminum imports. At one point the piece tells readers about rising protectionism across the world and says that as a result, "trade has yet to recover to its pre-crisis level."

The measure of trade the article gives is merchandise trade as a percent of world GDP. This measure is misleading since a major factor reducing this ratio is a fall in oil and other commodity prices. B...

Washington Post's Incredible Mind Readers Tell Us Trump's Real Reason for Screwing NY on Transit Project

Yes, I am on vacation, but I had to take a break from my vacation to call attention to the amazing act of mind reading in a Washington Post article on the Trump administration's effort to nix federal funding for a new transit tunnel between New York City and New Jersey. While the piece notes the possibility that Trump's opposition to the project may be an act of political vengeance directed at Senate Minority Leader Charles E. Schumer, it tells readers:

"But Trump and his aides have come to t...

I Am Out of Here!

I'm on vacation until Thursday, March 8. Remember, don't believe anything you read in the newspaper until then.

Economists Are Clueless on How Low Unemployment Can Fall Without Causing Spiraling Inflation

Neil Irwin wrote the piece I have been waiting for pretty much forever. He points out that economists estimates of the "non-accelerating inflation rate of unemployment (NAIRU)" have been repeatedly shown to be hugely wrong. In the 1990s, the accepted wisdom was that this number was close to 6.0 percent, with estimates falling on both sides of this number. Yet, the unemployment rate fell to 4.0 percent as a year-round average in 2000 without any noticeable uptick in the inflation rate.

More re...

Doesn't Anyone Care If the Trump Tax Cuts Are Working?

The Commerce Department released data on capital goods orders for January yesterday. As I noted, this is a hugely important early measure of the success of the Trump tax cuts. The ostensible rationale for the big cut in the corporate tax rate that was at the center of the tax cut is that it will lead to a flood of new investment.

Since the outlines of the tax cut had been known since September, businesses had plenty of time to plan how they would respond to lower tax rates. If lower rates rea...

Hey Folks, Looks Like Corporate America Hasn't Heard About the Trump Tax Cuts

News must travel slowly to corporate headquarters these days. How else can we explain the fact that corporate America isn't rushing out to invest in response to the big tax cut Congress voted them last year?

According to data released by the Commerce Department, orders for non-defense capital goods fell by 1.5 percent in January after dropping 0.4 percent in December. We get the same story even if we pull out volatile orders for aircraft: a drop of 0.2 percent in January after a fall of 0.6 p...

West Virginia School Teachers Get Less than One Fifth the Pay of an Average Doctor and the President Says They Need to be Armed on the Job

For those following such things, the strike by West Virginia school teachers, with an average annual pay of $45,700, is rather impressive. Yes, they want decent pay for themselves, but this is also about the quality of education for students in West Virginia.

We know that rich people think that teachers should be willing to educate children for nothing, but that is not the way the world works, at least in an economy where the government has not acted to ensure that unemployment is very high....