Dean Baker's Blog, page 145

Charles Lane Uses 100th Anniversary of JFK's Birth to Push Policy of Selective Protectionism

Washington Post columnist Charles Lane is a devout proponent of the policy of selective protectionism. Under this policy, which is called "free trade" for marketing purposes, the wages of U.S. manufacturing workers and non-college educated workers more generally are pushed down by placing them in direct competition with low paid workers in the developing world.

By contrast, highly paid professionals like doctors and dentists, are able to achieve gains in wages by keeping in place the barriers...

Solution to China Debt Problem: Swapping Debt for Equity

The NYT left this off the list of possible solutions in an artice on China's rapidly growing private sector debt. The basic story is a simple one. Creditors are given an equity stake in a company in exchange for reducing or eliminating the company's debt liability. In a rapidly growing economy like China's, there is no obvious reason this can not be done on a large-scale, thereby radically reducing debt liabilities.

Washington Post Says Trump Seeks to Further Enrich Family, Friends, and Fellow Developers With Infrastructure Privatization Plan

Nope, that is not what the Washington Post said, instead it insisted to readers that the opposite is the case. The first sentence of a front page article on the Trump administration's infrastructure plans told readers:

"The Trump administration, determined to overhaul and modernize the nation’s infrastructure, is drafting plans to privatize some public assets such as airports, bridges, highway rest stops and other facilities, according to top officials and advisers."

I guess this is another...

Scaring Kids About the Debt: Yes, There are Good Paying Jobs for People Without Skills

The New York Times ran a column by Maya MacGuineas, the president of the Peter Peterson-backed Committee for a Responsible Federal Budget. The piece begins with the ominous announcement:

"President Trump entered office facing the worst ratio of debt to gross domestic product of any new president in American history except Harry Truman — an onerous 77 percent."

It could have also begun with the announcement that the ratio of debt service (interest on the debt, net of payments from the Federa...

Who Would Eliminate the Federal Government First, Donald Trump or Paul Ryan?

Paul Ryan won widespread applause from the Peter Peterson-types some years back for proposing a budget that would virtually eliminate the federal government by 2050, excepting Medicare, Medicaid, Social Security, and the military. According to the Congressional Budget Office's analysis of the Ryan budget (done under Speaker Ryan's supervision), spending on everything other Social Security, Medicare, and Medicaid would be reduced to 3.5 percent of GDP in 2050. With military spending likely run...

NYT Says Trump Budget "Seeks" to be Balanced

A major and frequent sin of reporting is to tell readers the intentions of politicians. This is bad reporting because the reporter does not know the intentions of politicians, they know what the politicians say and do. When a news story tells its audience that a politician "wants," "believes," or is "concerned" it is making an assertion that the reporter cannot possibly know to be true. The reporter is effectively assuring their audience that what the politician claims as their motive is in f...

Steven Pearlstein Says the Washington Post Can't Find Someone Who Understands Economics to Write About Economic Issues

Yes, it's yet another example of the skills shortage. In the middle of his review of a new book by Mervyn King, the former head of the Bank of England, Steven Pearlstein tells readers:

"If you are like me, just thinking about the constant interplay among trade flows, investment flows, savings rates, exchange rates, inflation, interest rates and asset prices makes your head hurt. Perhaps that’s because it’s never exactly clear what is cause and what is effect, or whether the effect is up or do...

Texas Legislature Wants Convicted Felons to Be Able To Drive Ubers (see Major Correction)

If anyone thought that Republicans believed in local rule or protecting the public from criminals, the Texas legislature is working hard to correct this misunderstanding. It just passed a new law that prohibits Texas' cities from imposing requirements on taxi services like Uber or Lyft.

The law was passed in response to a measure by Austin that required that drivers for Uber and other services undergo a background check that included fingerprints. Uber and Lyft claimed that they were too inco...

Texas Legislature Wants Convicted Felons to Be Able To Drive Ubers

If anyone thought that Republicans believed in local rule or protecting the public from criminals, the Texas legislature is working hard to correct this misunderstanding. It just passed a new law that prohibits Texas' cities from imposing requirements on taxi services like Uber or Lyft.

The law was passed in response to a measure by Austin that required that drivers for Uber and other services undergo a background check that included fingerprints. Uber and Lyft claimed that they were too inco...

The Labor Market Isn't Paying Attention to Economists: Employment for College Grads Down

It is so annoying when the economy refuses to listen to what the economists say it should be doing. In this case, it seems to be ignoring the insistence that new jobs require more education and typically a college degree.

The problem is that in the last four years the employment to population ratio has actually been rising for people with just a high school degree while it is has fallen slightly for people with college degrees.

Source: Bureau of Labor Statistics.

Since January of 2013 the em...