Dean Baker's Blog, page 136

Low Inflation: Should We Worry?

Binyamin Appelbaum had an interesting discussion of inflation in the NYT yesterday. As he notes, it has been below the Fed's target throughout the recovery and, contrary to expectations, it has been falling in recent months. This suggests that the economy could be operating at a higher level of output with more employment. That would put more upward pressure on wages and lead to somewhat higher inflation. That suggests that the Fed may have been wrong in its recent interest rates hikes which...

Robert Samuelson Doesn't Think Diagnosing Diseases and Treatment Affect Outcomes: Shilling for Republicans and the Rich

You know the person who commits murder and the dead person really are both victims in Robert Samuelson land. His latest column on health care shows his great expertise in obscuring everything he touches to say it's all just so complicated.

He tells readers:

"Still, there’s no moral high ground. Some Democrats have wrongly accused Obamacare opponents of murder. This is over-the-top rhetoric that discourages honest debate. It’s also inconsistent with research. Kaiser reviewed 108 studies of th...

The Washington Post's War on Disability Programs Continues

The Washington Post has devoted enormous resources to trying to convince its readers that the federal government's disability programs are in crisis. And it has no qualms about misrepresenting the data to make its case.

Today we got a great example in a question and answer session in reference to its latest major feature piece. In answer to the question, "what's the problem?" it tells readers:

"The program for disabled workers, which Congress had to rescue from insolvency in 2015, is estimate...

WaPo Columnist Thomas Heath Would Have Recommended Buying Into Nasdaq at 4,000 in 2000

Thomas Heath used his column to give readers some incredibly bad investment advice. The piece titled, "a first lesson on the stock market: don't run from a good sale," told readers that the recent dip in the market makes this a good time to buy stock. This makes no sense.

Whether or not it is a good time to buy stocks depends on the price of stock relative to the fundamentals of the market. This means current price to earnings ratios and the prospect for future earnings growth. Current price...

The Which Way Is Up Problem In Economics: Arthur Brooks Is Worried About Running Out of People

I know we all share that fear every time we are in a huge traffic jam or face a forever long line at the grocery store. This fear appears at the end of an Arthur Brooks column berating a country that just elected Donald Trump for being unwilling to take risks. (Okay, it was a foolish risk, but you can't argue it wasn't a risk.)

Brooks tells us that the reluctance to take risks:

"Family formation, perhaps the ultimate personal leap of faith, looks to be another victim of this imprudent hesita...

The Protectionists Are Running Wild: Pharmaceutical Industry Lobbying Expenditures Soar

Everyone who has been through an intro econ class knows how bad a 20 percent tariff on steel or clothes is, so naturally all economists are outrages by patent monopolies for prescription drugs, which are the equivalent of patents of thousands of percent. Okay, that's not true, economists seem to only get upset about the tariffs on steel and clothes.

Nonetheless the textbooks are right, patents monopolies lead to massive corruption. The NYT has a good on their increased lobbying efforts...

Washington Post Shoots for Pulitzer in Fake News With Reporting on Disability

The Washington Post has been running a multi-part series on the country's disability programs. The premise, as stated in the most recent installment, is that we are seeing:

"...decades-long surge in the nation’s disability rolls."

The formula then involves profiling one or more families who depend on disability payments from the government instead of work for their primary source of income. Usually, the profiles show family members to be reluctant to work and to have drug problems and other...

Encouraging Waste: Trashing the Consumer Financial Protection Bureau

Catherine Rampell has a nice pointing out how Republican efforts to block suits against companies that abuse their customers effectively deny customers the opportunity to use the legal system when they are wronged. The argument is well-taken but it doesn't go far enough. Donald Trump and the Republicans are also encouraging waste that will be a drag on economic growth,

The point here is simple, although it always gets lost in the discussion. Good economists assume that people are motiv...

NYT Gets a Bit Giddy Over Tax Reform

Most economists would probably agree that a tax reform that cleaned up loopholes could provide a boost to growth. Most would probably also agree that the 1986 tax reform was more good than bad in this respect. (Lowering the top individual tax rate to 28 percent would fall in the "bad" category for many of us.) But it is unlikely that many would endorse the claim in James B. Stewart's column that after the tax reform:

"The economy (and the stock market) soared."

This one is clearly wrong. Gr...

Trump is Not Proposing to "Let Obamacare Fail" He is Proposing to Strangle It

It would have been useful if the NYT had clarified the strategy being proposed by President Trump and Republicans in this piece headlined "'let Obamacare fail,' Trump says as G.O.P. health bill collapses." There is no reason to think that Obamacare as written into law with the Affordable Care Act would fail. The exchanges are actually working pretty well in the states with Democratic governors committed to making the law work. The problem of insurers dropping out of the exchanges leaving no c...