Dean Baker's Blog, page 149

Public Sector Workers Can't Be Fired at Will: Missing Point in Bill Ending Mandatory Overtime Pay

A Washington Post article on a bill passed by the House, which would allow employers to give workers time-and-a-half credit for overtime hours, instead of time-and-a-half pay, likely misled many readers on the substance of the bill. The very first sentence told readers the bill:

"...would allow private-sector employees to exchange overtime pay for 'compensatory time' off."

This is not true. The bill does not give the employee the right to say they would prefer compensatory time for wor...

The Congressional Progressive Caucus Budget: A Different Path Forward

The Congressional Progressive Caucus released its annual budget today (full plan here). If past patterns hold, it will likely be ignored by the media. Of course the budget is not about to be adopted by Congress and signed by the president, but as a path forward it certainly is no less realistic than the various budgets put forward in past years by now Speaker Paul Ryan. These budgets effectively called for the elimination of the whole federal government except the military, Medicare, Medicaid...

Inflation Falls Further Below the Fed's Target: Why Raise Rates?

Both the overall and core deflators for personal consumption expenditures (PCE) fell in March. This brought the change in the core PCE deflator over the last year down to 1.6 percent. The Fed officially targets a 2.0 percent as an average rate. This means that it wants inflation to occasionally be above 2.0 percent in order to average out the times when it is below 2.0 percent. That should mean that it would want to see the inflation rate accelerate slightly to meet this target.

The Fed is w...

Amazon's New Government Granted Monopoly

Amazon, which famously made itself into one of the world's largest retailers as a result of a massive government subsidy in the form of an exemption from the requirement to collect state sales taxes, is again looking for the government's help. The NYT reported that Amazon has taken out a patent on custom clothing ordering over the Internet.

It's not clear what rights Amazon intends to secure with this patent. If it means to secure the very specific process outlined in the NYT, then it probabl...

Trumpian Opposition to the Trump Tax Cuts

Steven Rattner went full Trump in his criticisms of Donald Trump's tax cut plans in a NYT column this morning. Essentially, Rattner blamed the 1981-82 recession on Reagan's tax cuts. The piece tells readers:

"For its part, the Reagan tax cut increased the budget deficit, helping elevate interest rates over 20 percent, which in turn contributed to the double-dip recession that ensued. The stock market fell by more than 20 percent."

This hugely misrepresents the situation in 1981. Inflation had...

Washington Post Has Trouble Getting Good Help: Failed Headline on Trump ACA Repeal Plan

For some reason the Washington Post has trouble just telling us what Donald Trump says and does. It instead feels the need to go beyond this to make all sorts of inferences that are not supported by evidence.

Tonight we are told in a headline that, "Trump guarantees protection for those with preexisting medical conditions — but it’s unclear how." This should have been written "Trump says he guarantees protection for those with preexisting medical conditions — but it’s unclear how."

Someone r...

Front Page WaPo Story Says Trump Designs Tax Cut to Enrich Family and Friends

No the Post would never try to read the president's mind to make Trump look bad. Instead it read Trump's mind to make him look good. The second paragraph of the lead article told readers:

"With an eye toward keeping his core promise of creating jobs and ramping up economic growth, Trump has fixated on tax reform as the next undertaking of his administration — an opportunity for him to land a first major legislative victory after repeated failures to pass a health-care package."

Hmmm, so the P...

Contrary to What You Read in the WaPo, Weather Actually Sped Growth in First Quarter

The Washington Post's article on first quarter GDP growth wrongly told readers that unusually warm weather slowed GDP growth in the first quarter. The rationale was that this lead to a decline in the use of electricity and heating compared with a normal winter, which meant less output. While I noted this fact in my own write-up of the GDP report, the drop in energy usage was more than offset by an increase in construction that was made possible by the mild weather.

Residency and non-residency...

More on Free Trade in Doctors: Response to Simon Lester

Simon Lester took the time to write a thoughtful response to my often repeated complaint that we don't have free trade in doctors. The gist of his response is that trade liberalization usually results from the other party demanding more access to U.S. markets. In the case of doctors, we don't generally have foreign countries demanding that we make it easier for their doctors to practice in the United States, therefore there is little pressure to have liberalization.

A friend asked for my resp...

The Trump Tax Cuts and the Which Way Is Up Problem in Economics

Much of the response to the tax cutting plans of Donald Trump shows us yet another illustration of the "which way is up?" problem in economics. The point is that economists can't even seem to agree on the most basic issues about the economy and the problems we now face.

I usually use the "which way is up?" problem to refer to the people who warn us about robots taking all the jobs. This is a theme that gets lots of air time in the media and is supposed to have us all very worried. There are t...