Dean Baker's Blog, page 148

U.S. Economy Can't Even Match the "Sclerotic Statism" of France

The Washington Post has long pushed the view that a dollar (or euro) that is in the pocket of a middle class person is a dollar that should be in the pockets of the rich. (They are okay with crumbs for the poor.) In keeping with this position, in its lead editorial today the Post complained about the "sclerotic statism" of the French economy. It then called for increasing employment, "through reforms of the labor code, not by protectionism or restriction of immigration."

It is worth bringing...

Everything You Really Need to Know About Trade and the Corruption of Economics in 201 Words

The Washington Post featured a short explainer on trade deficits by Martin Feldstein, a Harvard Professor and head of the Council of Economic Advisers under President Reagan, and George Schultz, a former Secretary of Labor, Treasury, and State.

The piece told readers that we have trade deficits because the United States as a country consumes more than it produces. It added that the only way to reduce the trade deficit is by increasing domestic savings, for example by reducing the federal budg...

On Student Loans the Question Is Not Deregulation, It's Giving Money to the Financial Industry

Susan Dynarksi had a very good piece in the NYT Upshot section on several measures from the Trump administration which will allow the financial industry to collect larger fees from student loans. However the piece errs in describing the changes as being "deregulation." Rather these changes are ways in which the government is deliberately choosing not to enforce contracts in ways that increase corporate profits at the expense of student borrowers.

Suppose that the government announced that it...

NYT Says French Presidential Candidate Emmanuel Macron Wants to Spend Really Big Number on Stimulating Economy and Employing Young People

Actually the article told people that he wanted to spend 50 billion euros. Is that big for the French economy? Would it matter if it were over one year or ten years?

Apparently the NYT doesn't think so, since the article never tells people how long a period is covered by the proposal. For those who might care about such trivia, the proposal is for a five year period, putting it at roughly 10 billion euros a year. Since France's GDP is projected to average roughly 2.5 trillion euros annually o...

The U.S. Health Care System Is Structured by Interest Groups Not Ideas

Theresa Brown is far too generous to the U.S. health care system in her NYT column. She tells readers:

"Health care in the United States is more expensive because, unlike the systems in other countries, ours rests on the idea that profits and quality health care go hand in hand."

It is far too generous to say that any idea is behind the structure of the U.S. health care system. When the drug companies push for longer and stronger patent protection or doctors are trying to restrict competition...

Bret Stephens: The Arithmetic Challenged Climate Denier

In the era of Donald Trump, the New York Times apparently felt it was important to get a climate denier among its columnists. For this reason they hired Bret Stephens away from the Wall Street Journal. Apparently they could not find a climate denier who also understood arithmetic, since Mr. Stephens clearly falls short in this category.

Stephens uses his most recent column to tout mistakes made by those pushing for reductions in greenhouse gas emissions. He rightly seizes on biofuels, which a...

Dairy Farmer Says that Ending Dairy Subsidies is Not the Answer (Sorry, I Meant to Say GE and GE Subsidies)

The Washington Post has a major article on a speech by GE's chief executive Jeffrey Immelt in which he condemned efforts to fund the Export-Import Bank as "pathetic." The piece neglected to mention that GE is almost always one of the largest recipients of below market interest rate loans or guarantees from the Export-Import Bank.

The headline also reported Immelt's condemnation of "protectionism." It would have been worth pointing out that much of what GE sells in the United States is produce...

WaPo Columnist Charles Lane Discovers that Blue States Have Higher Income Taxes

Charles Lane, who made his reputation by misrepresenting studies on Social Security Disability in the Washington Post, has apparently just discovered that states that vote Democratic also have higher state income taxes. While most folks knew this, Lane acts like Donald Trump passing around maps of the Electoral College vote to reporters; he thinks he has discovered something new.

He gleefully suggests that the Republican propose a tax reform that will end the deductibility of state income tax...

Question for NYT on Republican Health Care Bill: How Much Is $8 Billion?

Yes, the NYT once again printed a really big number without any context to make it meaningful for readers. It told us in a headline of an article on efforts to craft a compromise between conservative and moderate members on a new health care bill, that the latest proposal adds $8 billion to cover the cost of providing care to less healthy people.

Is $8 billion a lot of money?

Well, one thing not answered in the article is the time period over which this $8 billion would be spent. Is this a on...

The Latest Assault on Science (and It's Not From Donald Trump)

I took part in the March for Science a couple of weeks ago. (Okay, economics is not really a science, but I get angry when my government tries to stifle scientists reporting their evidence on global warming.) Anyhow, the rally was filled with speeches about scientific ideals: open, disinterested, reproducible research. Unfortunately, real world science often doesn't live up to this agenda.

It looks like we are going to get a lesson later this month on how politics interferes with science at t...