Dean Baker's Blog, page 130

More Profitable Is Not the Same as More Productive

This is an important point that Neil Irwin slips up on in an otherwise excellent piece on the growing practice of outsourcing among major corporations. The piece contrasts the experience of Gail Evans, an African American woman working as a custodian for Eastman Kodak in the 1980s, with the experience of Marta Ramos, a Hispanic woman who is currently employed doing custodial work at Apple's headquarters. While the woman working at Kodak was actually an employee of Kodak, the woman working at...

Washington Post Performs Minding Reading Exercise on French President Emmanuel Macron

It must be great to be able to read people's minds. Most of us lack that ability, but thankfully the Washington Post was able to find a reporter who could tell us Emmanuel Macron's motives in moving to weaken France's labor laws in a way that give businesses more power and workers less. Those of us who lack mind reading ability might have thought that Macron was motivated by a desire to give businesses more power and workers less. After all, he is a wealthy person who made a fortune in invest...

The Secret of Manufacturing Job Growth Under Trump: Weak Productivity

Donald Trump can boast at least a little bit about the return of manufacturing jobs during his presidency. Employment in the sector is up by 125,000 since January. It's not exactly a boom, after all, we are still down by almost 1.3 million jobs from the pre-recession level and 4.8 million from where we were in 2000, but at least it is movement in a positive direction.

In an NYT Upshot piece, Neil Irwin sorts out the reasons for this modest uptick in manufacturing jobs. He points to a small in...

Ending the 401(k) Deduction: Cheap Tax Scheme by Republicans

Washington Post columnist Thomas Heath discussed a plan being considered by Republicans to end the tax deductibility of contributions to IRAs and 401(k)s. Under the proposal, the contributions would be subject to taxes, but all withdrawals would be tax free. This would in effect make all retirement accounts like Roth IRAs, which many people now contribute to voluntarily.

Incredibly, Heath did not make the obvious point, this change doesn't actually save the government any money, it just chang...

Donald Trump Pledges to Give 0.8 Percent of the Excess Cost of His Secret Service Protection to Harvey Victims

As a result of the fact that he vacations at Mar-a-Lago and his New Jersey golf club, demands protection for his adult children, and had his wife and youngest son stay in New York for the first five months of his presidency, Donald Trump has added $120 million to the annual cost of providing protection for the president compared with what a normal president would require. The New York Times reported that he pledged to contribute 0.8 percent of this amount ($1 million) to help the victims...

Donald Trump Pledges to GIve 0.8 Percent of the Excess Cost of His Secret Service Protection to Harvey Victims

As a result of the fact that he vacations at Mar-a-Lago and his New Jersey golf club, demands protection for his adult children, and had his wife and youngest son stay in New York for the first five months of his presidency, Donald Trump has added $120 million to the annual cost of providing protection for the president compared with what a normal president would require. The New York Times reported that he pledged to contribute 0.8 percent of this amount ($1 million) to help the victims of H...

Deficits and Patent Monopolies: A Lie Detector Test You Can Use at Home

One of the ways in which the government pays for things it wants done is to grant patent and copyright monopolies. This is not a statement about the merits of patents and copyrights as mechanisms for financing research and creative work; it is a definition. The government grants these monopolies to allow companies to charge prices that are far above the free market price as a reward for its past innovation or creative work.

In this way, patent or copyright monopoly can be thought as being lik...

As the Data Show, Higher Corporate Profits Mean Higher Investment (not)

Fans of economic policy are used to the old "night is day," "down is up," approach to economic policy. After all, much of the media are worried about robots taking all the jobs even as the data from the Bureau of Labor Statistics show that productivity growth (the rate at which robots are taking jobs) is at a record slow pace.

That's why it is hardly surprising to hear the argument being taken seriously that reducing corporate taxes will lead to more investment and thereby greater wage growth...

NYT Board Member Gets Appointed to Run Uber

I may have missed it, but the coverage of Dara Khosrowshahi's pick to be the CEO of Uber seemed to leave out the fact that he is a board member of the New York Times. This would seem to be a point worth mentioning in his profiles. It's also an item that we would especially expect to see in NYT pieces on Mr. Khosrowshahi.

Actually, We Can Have a Pretty Airtight Mechanism for Taxing Corporate Profits

The NYT had a piece on efforts to reduce loopholes to ensure the government actually collects in taxes something close to the targeted rate. The piece likely left readers with the belief that it was not possible to establish such a system.

Actually, it is not hard. If the government required companies to turn over a percentage of its stock in the form of non-voting shares, which are treated exactly like voting shares in terms of dividends and buybacks, it would be impossible for companies to...