Dean Baker's Blog, page 161

Repealing Dodd-Frank and Flat Earthism in the Republican Party

The New York Times ran a piece discussing in detail Republican efforts to repeal the financial reform bill passed under President Obama. The piece includes a quote from Representative Jeb Hensarling, the chairman of the House Financial Services Committee:

“Republicans on the Financial Services Committee are eager to work with the president and his administration to unclog the arteries of our financial system so the lifeblood of capital can flow more freely and create jobs.”

It would have be...

David Leonhardt Says the Future of the Free World Depends on Longer Copyrights for Mickey Mouse

That's not exactly what he said but pretty damn close. Since you get thrown out of elite circles if you question the merits of the Trans-Pacific Partnership (TPP), the members are doubling down. They are insisting that terrible things will happen now that the TPP is dead.

David Leonhardt picked up the mantle in his NYT column today telling readers to counteract China, the countries of the region supported the TPP. He says they were:

"...willing to adopt American-style rules on intellectual p...

Painful Nonsense on Trade

It really is amazing how much effort elite types expend denying that trade has cost us manufacturing jobs. The latest entry is from Robert Samuelson who tells us that it isn't true that manufacturing jobs have been lost to trade. Samuelson's main source on this Brad DeLong, who is actually a very good economist and surely knows better.

Samuelson tells readers:

"Contrary to popular opinion, trade is not a major cause of job loss. It’s true that U.S. manufacturing has suffered a dramatic long-t...

What Happened to Automation and Robots: WaPo Tells of Labor Shortage in Japan

Wow, things just keep getting worse. Automation is taking all the jobs, and the aging of the population means we won't have any workers. Yes, these are completely contradictory concerns, but no one ever said that our policy elite had a clue. (No, I'm not talking about Donald Trump's gang here.)

Anyhow, the Washington Post had a front page story telling us how older people are now working at retirement homes in Japan as a result of the aging of its population. The piece includes this great li...

Washington Post Pushed Fear on Corporate Tax Reform

The headline warned readers that the Republican's proposal for reforming the corporate income tax is coming for your toys, literally:

"Trump-era tax reform could come for your toys."

Okay, we get it. The Washington Post doesn't like the tax reform and is not content to keep its views to the opinion pages. (This article ran at the top of the Sunday business section.)

The basic story is almost Trumpian in its unreality. The tax reform includes a border adjustment tax on imports. This is similar...

Paul Krugman and the Republican Corporate Income Tax Proposal

The current corporate income tax is a massive cesspool. There are so many routes for avoidance that it is almost becoming voluntary. This matters not only because we don't get the revenue we should from the tax, but also because it has created a massive tax avoidance industry.

The tax avoidance industry is a big deal. This is an industry that contributes nothing to the economy. It involves people designing clever tricks to allow corporations to avoid paying their share of taxes.

The tax avoid...

The Economic Efficiency Argument for the Consumer Financial Protection Bureau

A Washington Post article on the future of the Consumer Financial Protection Bureau (CFPB) contrasted the arguments of supporters, that the CFPB has protected consumers from unethical practices from the industry, with arguments by opponents that it has hurt lending. (These arguments are false, small businesses report they have little trouble getting credit.) The discussion left out the economic efficiency story for the CFPB.

The basic story is that if it's possible to make lots of money by us...

The Clinton-Trump Vote and the Socioeconomic Progress of the White Working Class

By Dean Baker and Sarah Rawlins

Since the presidential election, there has been an ongoing debate about the extent to which support for Donald Trump by white, working-class voters was driven by racism, xenophobia, and misogyny, as opposed to economic hardships and insecurity. An aspect of this debate that is worth considering is that the size of the white working class (defined here as non-college educated) is itself dependent on the socioeconomic progress of this group.

Specifically, as the...

Reuters Strange Math on XL Pipeline

A Reuters piece carried by the New York Times told readers:

"If built, TransCanada’s Keystone XL from Alberta to Nebraska would yield about $2.4 billion (C$3.2 billion) a year for Canada, split between government revenues, shareholder profits and re-investment into the still-recovering Canadian oil patch, according to a Conference Board of Canada research note prepared for Reuters on Thursday.

"That’s because the 800,000 barrels-per-day (bdp) line would provide cheaper shipping and a new out...

A Trade War Everyone Can Win

Donald Trump has indicated that he might slap high tariffs on imports from Mexico as a way to make the country pay for his border wall. While it's not clear this makes sense, since U.S. consumers would bear the bulk of the burden from this tax, it would certainly reduce imports from Mexico. It would also would violate NAFTA and WTO rules, thereby opening the door to a trade war with Mexico and possibly other countries.

Many have seen this as taking us down a road to ever higher tariffs, leadi...