Dean Baker's Blog, page 131

Politico Announces Intention to Help Trump and Republicans Pass Big Tax Cut for the Rich

Reporters in principle have the ability to get behind the assertions of politicians to tell readers whether they are true or not. Unlike most news readers, they are supposed to have the time and necessary expertise to assess claims being made.

This is why it is striking that Politico reported on the strategy of Trump and Republicans to present their tax cut plan as a populist measure for the middle class as though they were reviewing a play at the theater. While the specifics of the Trump/Rep...

Vietnam Pushes to Remove Protectionist Provisions from the TPP

The 11 countries left in the Trans-Pacific Partnership following the withdrawal of the United States are still looking to finalize the deal. One of the changes they are considering, now that the U.S. has left, is to eliminate rules that would require countries to strengthen patent related protections for prescription drugs. These protections could hugely raise the price of prescription drugs. Patents and related protections can often be equivalent to tariffs of several thousand percent on the...

Houston, Bangladesh, and Global Warming

We are seeing many terrible pictures from Houston as a result of Hurricane Harvey. People with young children and pets are wading through high water in the hope of being rescued by boat or helicopter. Elderly people in nursing homes are sitting in waist high water waiting to be rescued. It's a pretty horrible story.

One thing we can feel good about is that because the United States is a wealthy country, we do have large numbers of boats and helicopters and trained rescue workers able to assis...

Supporters of Trade Deals, Like George Will and the Washington Post, Think They Have to Lie to Make Their Case

Someone who had no knowledge of trade deals like NAFTA and the TPP would be justified in thinking they must be really bad news since their supporters have to make up obviously absurd claims to push their position. George Will is on the job this morning in his Washington Post column.

"Mark Perry of the American Enterprise Institute says that in the past 20 years the inflation-adjusted value of U.S. manufacturing output has increased 40 percent even though — actually, partly because — U.S...

The Fed's 2 Percent Inflation Target Is An Average, Not a Ceiling

This point is worth mentioning in the context of a comment by Esther L. George, president of the Federal Reserve Bank of Kansas City, to CNBC yesterday. Ms. George said:

"While we haven’t hit 2 percent, I’m reminded that 2 percent is a target over the long term, and in the context of a growing economy, of jobs being added, I don’t think it’s an issue that we should be particularly concerned about unless we see something change."

Actually, the Fed's stated policy is that 2 percent is a targe...

Washington Post Goes Pinocchio Happy Over NAFTA

I appreciate the work that Glenn Kessler does as the writer of Washington Post's Fact Checker column. It's a difficult job. I don't always agree with his assessments, but I think he tries to be fair in his analysis. For this reason I was disappointed to see him max out with four Pinocchios over Donald Trump's trade representative Robert Lighthizer saying that NAFTA led to a government certified loss of 700,000 jobs.

According to Kessler, the basis for this figure is the 757,000 petitions for...

Wage Growth and Demographics: One More Time

I messed up earlier this week in discussing the possible impact of demographic changes in the composition of the labor force on the rate of wage growth, but this is an important issue that we should be able to think about clearly. The question is whether the slow pace of wage growth in the last year or two can be explained to any substantial degree by changes in the mix of workers, specifically lower paid younger workers taking the place of relatively higher paid workers who are retiring.

The...

News for Donald Trump and Washington Post: Friends of Coal Companies Are Not Necessarily Friends of Coal Miners

As history fans everywhere know, the owners of coal mines have not always been the best friends of the miners who work for them. This is why so many miners ended up dead when they tried to do things like form unions.

For this reason it was somewhat jarring to read in a Washington Post article reporting on the Trump administration's decision to end funding for a study on the health effects of mountaintop mining:

"But Trump has declared himself a friend of coal miners and coal mining companies....

Using Protectionism to Try to Keep China Down

There is a recurring theme in public discussions, seemingly embraced by everyone from Steve Bannon to columnists at the New York Times and Washington Post, that we should use protectionist measures to try to keep China from overtaking the U.S. as the world’s leading economic power. This effort is both incredibly wrongheaded and doomed to failure.

In terms of it being wrongheaded, the people doing the China bashing don’t even understand that they are being protectionist. Heather Long tells rea...

An Explanation for Weak Wage Growth That Fails the Simple Logic Test (See Correction)

When workers are doing badly you can always count on a large number of economists to come forward with ways to argue it really ain't so. For example, we have heard endless stories about how our price indices hugely overstate inflation — we're actually way better off than we think we are. Or, they point to the growth in non-wage benefits. One problem with that story is that non-wage benefits have been shrinking as a share of total compensation in recent years, not growing, but whatever.

One re...