Dean Baker's Blog, page 126

Promoting the TPP as an Anti-China Pact: The Flavor of the Month

In elite circles you are supposed to be for anything called a "free trade" agreement, otherwise, people will call you names. And names really hurt highly educated people. This is why most highly educated people supported the Trans-Pacific Partnership (TPP), even though they had no clue what was in it. As NYT columnist Thomas Friedman famously said:

"I was speaking out in Minnesota — my hometown, in fact — and a guy stood up in the audience, said, 'Mr. Friedman, is there any free trade agreem...

Washington Post's Entry in Contest for "Worst Headline of 2017"

Dana Milbank had a column in the paper with the headline, "Is it really ethical to expect Tom Price to fly coach?" (The title is slightly different in the online edition.) The problem with this title is that the issue is not whether Price should fly coach or first class, the issue is his use of private jets for government travel.

People reading the piece would learn this fact, but of course, a large percent of readers will only see the headline. (Since this is a Dana Milbank column, that is l...

Tax Cuts for "Pass-Through" Businesses are Cuts for Rich People, Not Businesses

There has been much bizarre reporting on the Republican proposal for a big cut in taxes on income from pass-through businesses. The proposal would have a top tax rate on the income from pass-through businesses at 25 percent. This is routinely reported as a cut in taxes on businesses.

This makes zero sense as any fan of English and logic should be able to see right away. The tax cut is on income from "pass-through" businesses, as in businesses that don't pay taxes. The tax break is for the ind...

Republicans Propose Tax Cut Plan to Give More Money to Wealthy Contributors

You won't see that headline even though it is a very plausible explanation of their actions. The reason is that newspapers will say that we can't know the motives of politicians. 

That is a good practice for newspapers to follow, but unfortunately they don't. During the tax debate there have already been any number of stories that have told that us that Republicans "believe" that their tax cuts will boost growth or that they are proposing tax cuts "in order to" revitalize the economy. Fo...

The Fed's Two Percent Inflation Target Is an Average, not a Ceiling

This is an important point that was left out of a NYT piece discussing Janet Yellen plans for the Federal Reserve Board's interest rate policy. The piece gave Yellen's comment that it would be bad policy to wait until inflation was at 2.0 percent before more aggressively raising interest rates.

While Yellen may have been using shorthand, as she has repeatedly pointed out, the Fed views the 2.0 percent average inflation as a target. The 2.0 percent figure is not viewed as a ceiling. This means...

Thomas Friedman Comes Out Against Patent Monopolies!

Well, sort of, at least you can say that if the NYT columnist had any idea of what he was talking about. Friedman filled his column today with typical Friedmanesque nonsense, which included this paragraph:

"We’re going through a change in the 'climate' of globalization — going from an interconnected world to an interdependent one, from a world of walls where you build your wealth by hoarding the most resources to a world of webs where you build your wealth by having the most connections to th...

Republicans and Budget Deficits: They Don't Care

My friend and occasional co-author, Jared Bernstein, had a piece in the NYT saying that Republicans don't care about budget deficits. The evidence certainly supports that view. As Jared points out, they repeatedly push through large tax cuts that come with no offsetting cuts in spending. As fans of arithmetic everywhere know, if you spend the same amount (sometimes they increase spending, by appropriating more money for things like prisons, walls, and the military), and take in less money, th...

NYT Columnist Can't Even Conceive of a Free Market in Prescription Drugs

The debate over prescription drug pricing is a great testament to how deeply propaganda can affect people's thinkings. The NYT had a piece on lowering prescription drug prices by Jay Hancock, a reporter for Kaiser News Service.

Hancock runs through a range of mechanisms that the government can pursue to make drug prices lower. Incredibly, he never mentions what would almost certainly be the most simple route: stop making drugs expensive with patent monopolies.

Drugs are almost invariably chea...

Washington Post Says Republicans Believe in the Tooth Fairy and That Tax Cuts Will Spur Growth

I have a hot tip for Washington Post reporters: politicians aren't always honest. As a result when they say they believe something, it doesn't mean they really believe it.

This means that the Washington Post likely misled its readers in a discussion of Republican tax cut proposals when it told them:

"Republicans believe the corporate rate cut and other incentives will stimulate economic growth, offsetting the revenue loss."

The reality that the Washington Post's reporters have no clue what th...

Drug Patents and the Government Debt: Written So Even an Economist Can Understand

With the Republicans promising big tax cuts for their wealthy backers, we are again hearing talk about the budget deficit and national debt. Needless to say, most is pretty badly confused.

At the most basic level, insofar as there is a burden of the debt, it is the interest payments on the debt. This is the amount of money that the government has to cough up each year to pay bondholders as opposed to using for other purposes.

While the debt is high relative to GDP, interest on the debt is act...