Dean Baker's Blog, page 153

Washington Post Goes After Disability Program: Working People Have Too Much Money

At a time of unprecedented inequality, the Washington Post is quick to seize on the country's real problems: a Social Security disability program that is too generous. The editorial was good enough not to get bogged down in phony arguments. It tells readers explicitly that rampant fraud is not a problem:

"Nor is the program’s growth the result of rampant fraud, as sometimes alleged; structural factors such as population aging explain much recent growth. Nevertheless, at a time of declining wo...

The Trade Deficit and Secular Stagnation

Justin Wolfers had a piece in the NYT today warning that we face a situation in which the Fed may often find itself facing the zero lower bound, where it is unable to stimulate the economy further by lowering the short-term federal funds rate that is directly under its control. Wolfers notes that this can mean that growth ends up being slower and unemployment higher than would otherwise be the case. He argues that it should be possible to counteract this weakness with more aggressive use of c...

Thoughts on Friday's Jobs Report

There was probably too much made out of the slowing in payroll employment growth in the March jobs numbers reported yesterday. This was likely driven in large part by the unusually good weather in January and February that brought a lot of spring hiring forward. However there were a couple of items that did not get the attention they deserve.

First, there is some limited evidence that wage growth is slowing. Typically the year over year change in the average hourly wage is reported. While the...

The "Free Traders" Don't Back Free Trade

It will be great when the NYT and other news outlets stop feeling the need to misrepresent the promoters of the standard trade agenda as "free traders" as they did in a news article discussing Donald Trump's latest actions on trade. In fact, these people are selective protectionists. 

While they are happy to reduce barriers that might protect manufacturing workers from competition with low-paid workers in the developing world, they are fine with the protectionist barriers that maintain t...

Fed Asset Holding and the Deficit: What's $900 Billion Between Friends?

There have been several news accounts in recent days of plans for the Federal Reserve Board to reduce the amount of assets on its balance sheets. It currently holds close to $4 trillion in assets as a result of the quantitative easing policies pursued to boost the economy in the years following the collapse of the housing bubble. It is now making plans to reduce these holdings.

One implication of this reduction in holdings would be a lower amount of money refunded to the Treasury each year. T...

Some Economists Say that Trump Seems to Understand the Trade Deficit Better than Some Economists

NPR had a somewhat confused piece on the trade deficit this morning that was headlined "Economists Say Trump Seems To Misunderstand Significance Of Trade Deficit." The piece basically tells listeners that Trump is mistaken for claiming the trade deficit is a problem.

To make this point, the piece quotes Peterson Institute economist Chad Brown:

"Trade isn't a zero-sum endeavor. It's win-win. And I think that's a different framework than he's used to dealing with - you know, coming from the wo...

Robert Atkinson Pushes Pro-Rich Protectionist Agenda in the Washington Post

The Washington Post is always open to plans for taking money from ordinary workers and giving it to the rich. For this reason it was not surprising to see a by Robert Atkinson, the head of the industry funded Information Technology and Innovation Foundation, advocating for more protectionism in the form of stronger and longer patent and copyright monopolies.

These monopolies, legacies from the medieval guild system, can raise the price of the protected items by one or two orders of magn...

International Trade Lessons for the New York Times

The New York Times told readers that Mexico is preparing to "play the corn card" in its negotiations with Donald Trump. The piece warns:

"Now corn has taken on a new role — as a powerful lever for Mexican officials in the run-up to talks over Nafta, the North American Free Trade Agreement.

"The reason: Much of the corn that Mexico consumes comes from the United States, making it America’s top agricultural export to its southern neighbor. And even though President Trump appears to be pulling b...

Uber and the Federal Reserve Board

The New York Times had an interesting piece that reported on the ways in which Uber uses techniques learned from behaviorial economics to get drivers to work longer hours than they might want. The article concludes by saying that with changes in the economy, many workers may have no choice but to rely on Uber jobs.

In this context, it is worth mentioning the Federal Reserve Board. The Federal Reserve Board has raised interest rates twice in the last four months because it is concerned that th...

Washington Post Column Argues Donald Trump Is Right: Growth Boom Is Imminent

Most people involved in economic policy debates have derided Donald Trump's claims that he would boost the U.S. growth rate from its recent 2.0 percent annual rate to 4.0 percent or even 3.0 percent. However the Washington Post featured a column today that insists such a pickup is imminent and derides policy types for not being prepared.

The article insists that we are about to see massive job displacement with robots and artificial intelligence radically reducing the need for human labor. If...