Dean Baker's Blog, page 134

France's Malaise Doesn't Keep from Employing a Larger Share of Prime Age Workers than U.S.

It's standard practice in news stories to refer to France's economy as a basket case. The NYT went this route in an article on President Emmanuel Macron's efforts to rewrite the country's labor laws.

The article refer's Macron's efforts to "revitalize" the French economy and then tells readers:

"The code is regarded by many as the wellspring of the country’s malaise and the chief obstacle to generating jobs, leaving the country with an unemployment rate that hovers persistently around 10 perc...

Fake News? Newspapers Keep Saying Things that are Not True on Automation

Okay, this is getting beyond ridiculous. Productivity growth, especially in manufacturing, is at a record slow (as in not fast) pace. This is not secret information. The data are published every quarter by the Bureau of Labor Statistics. You can even find a nice graph in my previous post. Yet, in spite of the fact that all the evidence shows that workers are not losing jobs due to automation, or at least at a much slower pace than in prior decades, the Washington Post still tells us:

"Yet man...

Manufacturing Workers are Right to Worry More About Outsourcing than Robots

The big difference between outsourcing and robots is that the former is happening and the latter isn't. Productivity growth (a.k.a. robots) has been very slow in recent years. It has averaged less than 1.0 percent over the last seven years and has sometimes been negative.

By contrast, many firms are looking to outsource jobs, both domestically and internationally, on an ongoing basis. For this reason, when the NYT told readers in a story on the jobs report and the economy:

"Perhaps even more...

Reconciling the Dow and the Dollar

Landon Thomas Jr. had a NYT piece noting the peculiar divergence between the stock market, which has risen sharply since Donald Trump's election and the dollar which has fallen. The article claims this is peculiar since both tend to move in the same direction, rising in a strong economy and falling in a weak economy.

Actually, this is not really true. There have been many long periods where they have gone in opposite directions. For example, the dollar peaked in the mid-80s and then fell thro...

Reforming the Tax Code: It's More Complicated and Simpler than They Say

Eduardo Porter had an interesting piece discussing the prospects for tax reform in the NYT. While the piece correctly highlights some of the absurdities of the U.S. tax system, it may have given readers a wrong impression in some areas.

For example, it notes that income-related taxes are a far higher share of the tax burden in the U.S. than in other wealthy countries. It argues that this is bad because income taxes tend to be more of a drag on growth than taxes on consumption.

While there is...

Amazon, Robots, and the Fed

The NYT had an article on Amazon's job fairs which were set up to recruit workers for 50,000 new jobs nationwide. At the end of the piece, the article discusses concerns that robots may soon replace the jobs that Amazon is now hiring for in its warehouses:

"Amazon is more aggressively using robots to help make the operations inside its warehouses more efficient. For now, the company said machines are not replacing people. Instead, they mostly move large shelves of merchandise to stations whe...

Lessons from the Trump Administration: Policy Not Technology Redistributes Upward

It's popular among economists and policy types to wisely note that technology is leading the rich to get richer. Many of them consider this unfortunate, but hey, should be Luddites and try to stop technology.

This is of course silly propaganda, but it passed for sophisticated thinking in policy circles. It is not technology, but our policy around it, like patent and copyright protection, that redistributes income upward. We got yet another lesson along these lines in a NYT article reporting t...

Beat the Press: Is It Time for a Name Change?

Given the hostility that President Trump and his followers have directed towards the media, several people have suggested a name change for my blog. While I understand and sympathize with the idea of not promoting violence toward the media, I don’t think BTP has contributed to this sort of hostility.

First, there are different meanings of the word “beat,” and I did intend to play off these differences in choosing the name. There is “beat” as in the sense of the Chicago Cubs beat the Cleveland...

Mankiw Gives Tired Dogma on Health Care: Left Wants Big Government

Greg Mankiw had a short NYT piece outlining the problems in providing health care. While some of what he said was reasonable, he ended with the tired cliche:

"The best way to navigate the problems of the health care marketplace is hotly debated. The political left wants a stronger government role, and the political right wants regulation to be less heavy-handed."

This is not at all true. The right tends to want stronger and longer patent and related protections for prescription drugs and me...

Amazon's Stock Price and Counterfeit Money

Since several people have asked me why I bothered to write about Amazon's stock price possibly being overvalued, let me get out the sledge hammer and hit people over the head with the issue.

Let's imagine this week the god of Wall Street comes down and announces that Amazon's proper valuation is half of its current level. (This is a hypothetical, not my target price for the stock.) Since the god of Wall Street is never wrong, we would expect that Amazon's stock price would quickly plunge, eli...