Dean Baker's Blog, page 157

Morning Edition Tells Listeners That Huge Tax Cuts for the Middle Class is a Long-Standing Goal for Republicans in Congress

That would be news for Republicans in Congress. The vast majority of the tax cuts they are pushing would go to the richest ten percent of the population, with close to half going to the richest one percent. It is very misleading to describe them as proponents of a big middle-class tax cut.

It's Hard to Get Good Help: Danish Edition

The NYT wants us to mourn the plight of business people in Denmark. As the headline tells readers, "Danish companies seek to hire, but everyone is working." The article then gives the assessment of several business owners and managers, as well as the director of labor market policy at the Confederation of Danish Industry, that the country simply doesn't have enough workers.

They all explain that they can't find workers with the skills they need and that this is causing them to lose business,...

Republican Congress Wants to Tax Small Savers to Benefit Wall Street

The Washington Post left a very important fact out of an article on Republican efforts to ban voluntary state sponsored retirement plans. The Republicans are trying to make such plans impractical by reversing a Labor Department ruling that exempted employers with workers contributing to the plans from being subject to ERISA provisions. The basis for the Labor Department ruling is that the employers are simply mailing in a check on a worker's behalf, not running a plan.

The Republicans in Cong...

News for NYT: Donald Trump and Paul Ryan are Not Political Philosophers

Apparently the paper is confused on this issue since it headlined a front page piece on the budget, "Trump budget sets up clash over ideology within G.O.P." The article lays out this case in the fourth paragraph:

"He [Trump] also set up a battle for control of Republican Party ideology with House Speaker Paul D. Ryan, who for years has staked his policy-making reputation on the argument that taming the budget deficit without tax increases would require that Congress change, and cut, the prog...

North Carolina May Start Indexing Its Pension Funds: Mass Unemployment for Investment Fund Managers?

One of the candidates for Treasurer in North Carolina is proposing to the dump the investment advisors, private equity fund managers and hedge managers who all control a portion of the state's $100 billion public pension funds. Instead he proposes to do simple indexing of the pension fund assets. The lower costs could raise returns by as much as 1.0 percentage point a year.

This is huge money for the state. It is also huge money for Wall Street. That 1.0 percent comes to $1 billion a year of...

Government "Bias" Towards Requiring Comprehensive Health Insurance Is to Make the Healthy Subsidize the Less Healthy

It might have been helpful if the Post made this point in a piece reporting on Republican efforts to replace the Affordable Care Act (ACA). The piece noted an article by National Economic Council aide Brian ­Blase, written before he joined the administration, that referred to the "need to reduce government bias towards comprehensive coverage."

This bias is hardly an accidental. The vast majority of people are relatively healthy with low medical expenditure. These people would be well-serv...

Donald Trump Wants to Cut the Environmental Protection Agency by at Least 25 Percent, but You Would Know That From Reading the NYT

The NYT had a front page article reporting on Donald Trump's plan to increase military spending and to make cuts in other areas to cover the costs. The piece told readers:

"Mr. Trump will demand a budget with tens of billions of dollars in reductions to the Environmental Protection Agency and State Department, according to four senior administration officials with direct knowledge of the plan. Social safety net programs, aside from the big entitlement programs for retirees, would also be hit...

David Brooks Says Construction Contractors Don't Believe in Market Economics

Yes, that is what he told readers in his column. In a column arguing for the need for more immigrants he referred to a figure from the National Association of Home Builders, that there are 200,000 unfilled construction jobs in the United States. Brooks then tells readers:

"Employers have apparently decided raising wages won’t work.

"Adjusting for inflation, wages are roughly where they were [before the crash], at about $27 an hour on average in a place like Colorado. Instead, employers have h...

If Inadequate Skills Is Preventing People from Being Hired in Manufacturing, It's Among the CEOs

The Associated Press ran a story, picked up by the PBS Newshour, that told readers:

"factory jobs exist, CEOs tell Trump, skills don't."

The piece presents complaints from a number of CEOs of manufacturing companies that they can't find the workers with the necessary skills. The piece does note the argument that the way to get more skilled workers is to offer higher pay, but then reports:

"some data supports the CEOs’ concerns about the shortage of qualified applicants. Government figures sho...

The Plunge In Labor Force Participation: Why Were Economists So Stupid a Decade Ago?

Neil Irwin has a good piece this morning discussing the evidence on the economy's growth potential. As he points out, the key question is how much slack remains in the economy. The key issue in this debate is the extent to which we can expect employment to rise.

Most of the debate deals with the extent to which we can expect more people to enter the labor market. The current 4.8 percent unemployment rate is reasonably low by any measure. While it can go somewhat lower, that will not allow for...