Dean Baker's Blog, page 165

Think of the Money Physicians' Families Would Save on Health Care Costs If We Ended Protectionism for Doctors

One positive item that is on the agenda of the Republican Congress is an overhaul of the corporate tax code. The basic plan is to hugely simplify the tax in a way that would eliminate almost all deductions, most importantly the deduction for interest payments.

I am big fan of this change because the tax shelter industry is both an enormous source of waste in the economy and major generator of inequality. In particular, the private equity (PE) industry is largely about tax arbitrage, with much...

Politico Is Mistaken, It Would Be Fun and Easy for Donald Trump to Divest

Politico badly misled readers this morning in an article that said Trump "can't simply divest from his businesses." The article cited a number of experts who explained how difficult and complicated it would be for Trump to sell off his various businesses, many of which have complex ownership arrangements, along with debts and other legal obligations.

While selling Trump's business enterprises in short order would be complicated, as I explained shortly after the election, this is not what is n...

Are Wage Costs Accelerating?

December's employment reported showed that the average hourly wage has risen by 2.9 percent over the last year. This was widely reported as evidence that wage growth was accelerating. While the pace of wage growth may have picked up somewhat in recent months, it is not necessarily the case that the pace of compensation growth has risen to the same extent.

In recent years the pace of benefit growth has been trailing the rate of wage growth, as employers cut back on the amount they pay for thei...

The Obama Jobs Record

Neil Irwin gave a reasonable assessment of the Obama administration's record on job creation and wage growth, but there is one item that could use clarification. He notes the decline in prime age male labor force participation, but then dismisses it as part of a long-term trend.

There are two points here that are worth noting. The participation rate of prime age women had been rising prior to the recessions in 2001 and 2008-09. In both cases it was projected to continue to rise. Economists ar...

Rural Folks Versus City Slickers

I see from the Twitterverse that this NYT column by Robert Leonard, on why rural voters don't like Democrats, touched some nerves. The main complaint stems from Leonard's comment that rural voters see themselves as subsidizing the big cities:

"In this view, blue counties are where most of our tax dollars are spent, and that’s where all of our laws are written and passed. To rural Americans, sometimes it seems our taxes mostly go to making city residents live better. We recognize that the trut...

Yes Folks, Trade Really Did Cost Manufacturing Jobs

Yet again the Washington Post tries to tell readers that trade has not been a major factor in the loss of manufacturing jobs in this century. It concluded an interesting piece on Ford's decision to cancel plans for a plant in Mexico by telling readers:

"The president-elect has argued that trade policy has quashed American livelihoods, encouraging businesses to seek cheaper labor in other countries. He has criticized Ford, General Motors and Carrier on Twitter for shuttling work south of the b...

NYT Reports Protectionists Will Continue to Exclude Foreign Doctors

This fact was implicit in a NYT piece that discussed the extent to which U.S. medical schools are expanding enrollments. The piece notes that the number of doctors in the United States is limited by the requirement that they complete a U.S. residency program. It doesn't give any indication that this protectionist restriction might be removed or weakened in the years ahead.

As a result of this protectionism, U.S. doctors earn on average more than twice as much as their counterparts in Germany,...

Can't We Kill the Deficit Hawk Industry?

Yes, I know Peter Peterson is a major source of employment in Washington and that the Washington Post editors and many pundits would have to look for substantive issues to talk about if they couldn't whine about the debt, but really it is time for these folks to grow up. The immediate provocation here is Steven Rattner's NYT column giving "2016 in Charts."

Most of the charts are actually quite interesting and useful, but then he ends the piece with a tirade about the prospects for the nationa...

The Auto Jobs Donald Trump "Saved" from Mexico Are There Because of Obama Climate Policy

Folks undoubtedly heard about Donald Trump's boast about getting Ford to keep jobs in the U.S. rather than investing in a new plant in Mexico. The decision seems to have more to do with Ford's product mix than anything that Trump did with his boast and bully strategy, but whatever. We're getting used to a guy that would take credit for the sun rising and gives us jobs that you can count on your fingers. (To be clear, I think it would be great if Donald Trump pushes policies that bring (or sav...

Fake News on Germany's Unemployment Rate at the NYT

Alright, that is not entirely fair, but when the NYT told readers that Germany's unemployment rate is 6.0 percent it seriously misled readers. The issue is that this figure refers to Germany's unemployment rate as calculated by Germany's government. This measure counts workers who are employed part-time, but want full-time jobs, as being unemployed. By contrast, the standard measure of the unemployment rate in the United States counts these workers as being employed.

This would be reasonable...