Dean Baker's Blog, page 125

Bernie Sanders, Wealth, and the Washington Post Fact Checker

Earlier this week the Washington Post Fact Checker gave three Pinocchios to Bernie Sanders for saying that the world's six richest people had more wealth than the bottom half. Several people contacted me to complain about the piece. I had originally intended to let it pass because I actually agree with many of the criticisms, but on second thought, this piece applies a level of scrutiny that it never does to claims of other politicians or its own editorial page.

First, I'll make a few quick p...

Tax Subsidies and U.S. Oil Production

A Washington Post article on government subsidies for oil and gas production might have misled readers on the importance of these subsidies for global warming. The article focuses on the finding of a new report that almost half of projected new production in the U.S. would not be profitable without various tax and other subsidies. This finding has less importance for global warming that the piece implies.

First, it applies to future, not current production. Once a well has been dug, it is gen...

Roger Cohen's Lecture to Catalan's Populists Suffers from Bad Arithmetic

Roger Cohen showed us yet again that it seems our children isn't learning when it comes to basic arithmetic skills. He used his NYT column to lecture the people of Catalan on their bad manners in seeking to become independent of Spain over the objections of both the national government and the European Union.

"The Catalan lurch is of its time. Yes, it’s about Catalan self-determination. But it’s also of a piece with the anti-establishment, anti-elitist, disruption-at-any-cost upheavals that...

Paul Krugman Won't Give Paul Ryan Credit for Wanting to Eliminate the Federal Government

Paul Krugman again went after Paul Ryan for the lack of specifics in his proposals for eliminating the national debt. As he reminds us, centrist commentators widely praised these proposals at the time as serious budget plans.

While Krugman is absolutely right on the tax side (Ryan says that he will offset lower tax rates by eliminating unspecified tax loopholes), he should give Ryan credit for what he actually proposes on the spending side. As I have pointed out elsewhere, Ryan has essentiall...

The Decline of the Center Left: No Happy Face for the Financial Industry

The NYT had an interesting piece by Sheri Berman on the decline of the center-left in Europe. It points to the sharp drop in the support for social democratic parties across the continent, with many parties that used to lead government barely getting above 20 percent of the vote. Voters apparently see little reason to support these parties. A similar story could be told about the center-left in the United States, although the money they command may allow them to still control the Democratic P...

If Uber Leaves Due to Regulations, More Competent Companies Will Take Its Place

A NYT article on the debate in Europe over regulating Uber and other "gig economy" companies raised the possibility that Uber may stop doing business in the United Kingdom if it was required to treat its workers as empoyees:

"If the ruling is upheld [that Uber workers are employees], it could hit the business model on which Uber, Deliveroo and similar online platforms rely. That may mean a major recalibration of the gig economy, or it may drive companies out of those countries which choose to...

Economics 101 for Bret Stephens

We know the NYT has to practice affirmative action for conservative columnists, otherwise they would never have any on their opinion pages, but they might have gone too far with Bret Stephens. The guy apparently know literally nothing about the economy and is so ignorant he doesn't even know how little he knows.

In his latest column he touts the good economic news under Donald Trump:

"The Dow keeps hitting record highs, and the economy is finally growing above the 3 percent mark."

This is mea...

Republicans Condemn Their Leadership for Lack of Details in Tax Plan

This is in effect what they did when they criticized an analysis of the proposal by the non-partisan Tax Policy Center. A NYT article on the analysis, which showed the plan would lead to massive tax breaks for the wealthy and a large increase in the deficit, referred to the Republican response:

"Republicans quickly dismissed the analysis, saying the tax cut framework needs detail before it can be accurately assessed. A nine-page proposal for a tax overhaul, announced by Mr. Trump and Republic...

We Really Don't Have to Worry About Fairness for Pass-Through Businesses

Neil Irwin seems to get a bit lost in his concerns about treating owners of pass-through businesses fairly. His NYT Upshot column argues that there is a problem where we are left a choice between large-scale evasion, treating them unfairly, and micro-monitoring their behavior. The story is actually far simpler than he presents it.

The basic story is that the tax rate on a pass-through business is zero. The business itself pays no taxes, all its income is passed on to its owner(s) to be taxed...

Inflation Falls Yet Again

The Fed has been raising interest rates for the last 21 months with the idea that it wanted to slow growth in order to prevent inflation. It has now begun the process of selling off assets, which will also have the effect of raising interest rates and slowing growth.

While the need to slow growth is premised on the fear that inflation will rise to a higher than the desired rate, the data refuse to cooperate. The Bureau of Economic Analysis released data for the personal consumption expenditur...