Dean Baker's Blog, page 160

Severance Pay: Protecting Workers in a Dynamic or Not So Dynamic Economy

It's often said that the economy is too simple for economists to understand it. Neil Irwin gave us evidence to support this assertion in a NYT column today. The piece both raises the question of whether the economy is too dynamic, or not dynamic enough, and what we can do to protect workers if it is too dynamic.

On the first question, we really don't have to debate much. We have good measure of the economy's dynamism, it's called "productivity growth." Productivity growth measures the increas...

There Actually Is Evidence on Whether Businesses Can Get Credit

One of the central themes in the Republican drive to repeal Dodd-Frank is the claim that it has made it difficult for businesses to get credit. This assertion is often given the he said/she said treatment, as in this Washington Post piece today. (Actually, it's often just given the he said treatment, where the assertion is accepted as fact, with the question being whether a reduction in business credit is worth making the banking industry safer.)

There is actually evidence that we can look to...

Trump and Republicans Want to Give Bankers More Incentive to Rip Off Consumers

According to the Wall Street Journal, Donald Trump and the Republicans in Congress are looking to get rid of the Dodd-Frank financial reform bill and to repeal the fiduciary rule which requires financial advisers to give advice that is in the best interest of their clients. Without this rule, many financial advisers would give advice to clients suggesting they invest in products which may not be good for them, but pay the advisers a high commission.

While the fiduciary rule and the consumer p...

Trump Is Not the First President to Support a Lower Valued Dollar

The discussion of the Trump administration's view of the value of the dollar by Neil Irwin is somewhat confused. Irwin wrongly asserts that Treasury secretarys have always argued for a strong dollar:

"If you asked the Treasury secretary his view of the dollar, the answer would be equally rote: 'A strong dollar is in the interest of the United States.'"

This is not true. There have been many occasions in the past when Treasury secretaries have quite openly worked to bring down the value of t...

Donald Trump Wants Taxpayers to Subsidize His Payoffs to Politicians

During his presidential campaign Donald Trump frequently talked about how he used campaign contributions as payoffs to advance his business interests. He boasted that if you give politicians money they have to do what you want. In an apparent effort to further advance his business interests Donald Trump is pushing a plan that would allow him to get taxpayer subsidies for these payoffs.

He proposed a plan that would overturn current law, so that tax exempt churched could get directly involved...

The Bureau of Labor Statistics Hasn't Heard About Automation

While intellectual types are writing all sorts of grand treatises on how automation is going to take all the jobs and leave most people unemployed, the folks at the Bureau of Labor Statistics who actually collect the data haven't gotten the message. They released data today on productivity growth (this is the measure of the rate at which automation is reducing the need for labor) for the 4th quarter of 2016. 

The data showed that productivity grew at a 1.3 percent annual rate in the 4th...

Democratic Party Policies Actually Hurt the Working Class

Thomas Edsall has an interesting piece on the turn to right-wing populists in the United States and elsewhere in recent years. While he connects the turn to the right to economic hardship for the working class, he leaves out an important part of the story. The economic hardship for the working class was actually to a large extent the result of policies supported by the Democratic Party in the United States and social democratic parties across Europe.

In the United States, the Democratic Party...

Hey, Can We All Agree on Ending Protectionism for Doctors and Dentists?

The response to Donald Trump's ban on Muslim immigrants has been reassuring. Millions have people have acted in various ways to express their opposition to this blatant act of bigotry. But as part of this story, we are being told that immigrants everywhere and always benefit all workers.

Far be it from me to criticize this great wisdom, which we can find in this Wonkblog post by Christopher Ingraham. So let's pretend that the people making this assertion have a shred of integrity. How about g...

Potential Savings on Medicare Part D from Lower Drug Prices

Four years ago, we calculated the potential savings to the federal and state governments, as well as beneficiaries, from lower drug prices. In the paper, Reducing Waste with an Efficient Medicare Drug Benefit, we compared how much people in the United States paid for drugs with payments in other wealthy countries. We then calculated how much the federal and state governments, as well as beneficiaries, would save on the Medicare prescription drug benefit if we paid the same amount for drugs as...

Unemployment Is Low and Wages are Soaring (not quite)

The Fed raised interest rates last month because they said the economy was getting close to full employment and they were worried about accelerating inflation. The data do not provide much support for this concern.

Last week the Commerce Department reported that the core personal consumption expenditure deflator rose at just a 1.3 percent annual rate in the fourth quarter. This is well below the 2.0 percent average rate targeted by the Fed.

This morning the Bureau of Labor Statistics reported...