Dean Baker's Blog, page 120

Washington Post Says It Will Be Hard for Germany to Cut Back on Coal Use Because the Industry Accounts for 0.05 Percent of Employment

A front page Washington Post article on the continued use of coal in Germany, in spite of its impact on global warming, told readers that one of the reasons it is difficult to cut back on coal is the industry employs about 20,000 people. Since most readers are unlikely to have a clear idea of the size of Germany's labor force, it would have been helpful to point out that this comes to less than 0.05 percent of its workforce of 43.0 million.

This doesn't mean that job loss for these workers wo...

The Washington Post Now Seems to Believe that China and Other Countries Engage in "Predatory Economic Behavior"

That would appear to the implication of a complaint in a news story that:

"Trump also has spent time during the trip excusing predatory economic behavior of China and other countries and blaming past U.S. administrations for allowing the 'unfair' trade imbalances he railed against during the campaign."

This is an interesting departure from the position the Post had generally taken in both its news and editorial page in the past, which largely derided the view that our pattern of trade was i...

At the Washington Post They Have to Call TPP a "Free-Trade" Agreement

The Washington Post refuses to follow journalistic norms and maintain a separation between the news and editorial pages when it comes to the Trans-Pacific Partnership (TPP). Yet again the paper referred to the pact as a "free-trade" agreement.

Of course the deal is not a free trade pact. It does little, if anything, to remove the barriers that protect highly paid professionals like doctors from international competition. Also, a major focus of the pact is longer and stronger patent and copyri...

Imagining Tax Debate Was in the Real World: Suppose Productivity Growth Is Already Up

The main claim of proponents of the Republican tax bill is that lowering corporate taxes will lead to a surge in corporate investment. This is supposed to lead to more rapid productivity growth and therefore higher wages.

As those of us who are fond of data have pointed out, the world doesn't seem to work this way. There is very little relationship between after-tax profit rates and investment. In fact, the period of strongest investment was the lat 1970s and early 1980s when after-tax profit...

Taxes and Trade: When a Number Being "Big" Depends on the Issue

Paul Krugman had an interesting blog post today on the impact of the Republican proposal to cut the corporate income tax. While he rejected the growth claims of the Trump administration, he noted the projections of the Penn-Wharton model that the tax cuts would increase GDP between 0.3 to 0.8 percent by 2027. He described this increase as "basically an invisible effect against background noise." 

This is worth comparing with the projected gains from the Trans-Pacific Partnership (TPP). T...

Donald Trump Says He Has No Clue About Who Would be Helped by His Tax Plan

That is effectively what he said when according to the Washington Post he claimed that "he has spoken to his own accountant about the tax plan and that he would be a 'big loser' if the deal is approved as written." Of course, we don't know exactly what Mr. Trump's tax returns look like since he lied about releasing them once an audit was completed, but based on the one return that was made public, the plan looks like it was written to reduce his tax liability.

It reduces the tax rate for high...

David Brooks Thinks Congress is Filled With Philosophers, Not Politicians

It's amazing the stuff you can find in the NYT. Most of us learn at a fairly early age that the people who sit in Congress are politicians. They get there by appeasing powerful interest groups who give them the money and political support necessary to get and hold their seats. However, NYT columnist David Brooks seems to think that they get their seats as a result of their political philosophy.

In his column on the tax debate, titled "the clash of social visions," Brooks tell readers:

"The R...

David Brooks Thinks Congress is Filled by Philosophers, Not Politicians

It's amazing the stuff you can find in the NYT. Most of us learn at a fairly early age that the people who sit in Congress are politicians. They get there by appeasing powerful interest groups who give them the money and political support necessary to get and hold their seats. However, NYT columnist David Brooks seems to think that they get their seats as a result of their political philosophy.

In his column on the tax debate, titled "the clash of social visions," Brooks tell readers:

"The R...

Eliminating the Medical Expense Deduction: Teaching People Not to Get Sick

It's hard to know what is the most cynical part of a tax bill designed to give as much money as possible to Donald Trump and his family, but the elimination of the tax deduction for medical expenses has to rate pretty high on the list. The Post had a good piece on the issue, pointing out how the loss of this deduction will make life considerably more difficult for a couple dealing with early onset Alzheimer's disease.

This case is perhaps somewhat extreme, but it is the sort of situation in wh...

Even Fewer People Are Affected by the Plan to Limit Mortgage Interest Deduction Than the Post Reports

The Washington Post had a good piece pointing out the relatively small share of the population that would be hit by the cap of $500,000 on the amount of the principal for which interest is tax deductible, While it pointed out that a relatively small share of homes sell for a large enough amount to require a $500,000 mortgage and that the interest up to $500,000 will still be deductible, it neglected to point out that the principle dwindles over time so that even people who took out a mortgage...