Dean Baker's Blog, page 175

Bloomberg's Halloween Special: Scaring Kids About National Debt

Bloomberg decided to get into the Halloween spirit by warning our kids about the national debt. The piece is headlined "a child born today comes into the world with more debt than you." Bloomberg was going to headline the piece, "kids worried that universe is closer to destruction than when parents were born," but they decided it would be too scary.

The highlight of the piece is a graph showing the rise in the amount of debt per person over the last three and half decades along with the money...

Does Hillary Clinton Know About CBO and Vice Versa

The reason for asking is that the Congressional Budget Office (CBO) has recently put out some very pessimistic projections for Social Security. These projections got some attention from the media because they were considerably more pessimistic than the projections from the Social Security Trustees, implying a somewhat larger gap between projected benefit payments and projected revenue.

While most of the attention was on the differences in the program's finances, what actually would mean more...

Wall Street Journal Mourns the Growing Efficiency of the Banking Industry

Most sectors within manufacturing have seen serious downsizing and restructuring over the last four decades. Many have gone bankrupt. Much of this story was not pretty for the workers directly affected. Many lost the only good-paying jobs they ever held. Some also lost pensions and health care benefits.

Nonetheless, the conventional wisdom among economists was that this process was good. It was associated with growing efficiency in the manufacturing sector as the least productive firms went o...

Thomas Friedman Calls for Weaker Patent and Copyright Protection and Subjecting Our Doctors to Foreign Competition

That's right, Friedman is actually supporting measures that would help to reverse the upward redistribution of the last four decades. In his column today Friedman identifies himself as a citizen "who believes that America needs a healthy center-right party that offers more market-based solutions to problems; keeps the pressure on for deregulation, freer trade and smaller government."

Of course reducing the length and strength of patent and copyright monopolies would be a big step towards free...

Trump and Trade: He’s Not All Wrong

Given his history of promoting racism, xenophobia, sexism and his recently exposed boasts about sexual assaults, not many people want to be associated with Donald Trump. However, that doesn’t mean everything that comes out of his mouth is wrong.

In the debate on Sunday Donald Trump made a comment to the effect that because of Nafta and other trade deals, “we lost our jobs.” The NYT was quick to say this was wrong.

“We didn’t.

“Employment in the United States has increased steadily over the l...

The Washington Post-Peter Peterson Austerity Tax

By Dean Baker and Lara Merling

There have been several efforts by the media and various organizations funded by the Peter G. Peterson Foundation to highlight projected shortfalls in the Social Security trust fund in the context of the presidential campaign. They have argued that candidates should be proposing plans to deal with these shortfalls and in particular that these plans should include cuts to Social Security. Implicitly, or sometimes explicitly, they have argued that the projected ta...

NYT Runs Major Article on Four Pensioners Allegedly Mistreated by Calpers

The NYT had its second major article in less than a month on the alleged mistreatment of a small public pension fund by the California Public Employee Retirement System (Calpers). The focus of this piece is the bill that the small California town of Loyalton faces from terminating its pension plan for four retirees and converting to a 401(k) system. According to the piece, the city council apparently did not understand the information Calpers gave it on termination costs when it voted in 2012...

Having the World's Reserve Currency Does Not Mean the U.S. Has to Run Huge Trade Deficits

We can always count on Robert Samuelson to give us some economic misinformation on Monday morning and he didn't let us down this week. In a very balanced column (yes, many tons of sarcasm here) decrying the economic proposals of both Donald Trump and Hillary Clinton he told readers:

"The United States runs chronic trade deficits because the dollar serves as the main global currency. This raises its exchange rate, putting U.S. manufacturers at a disadvantage."

This is wrong at just about every...

When It Comes to Unemployment, Pundits Are Less In Touch With Reality Than Donald Trump

The line that large numbers of people are out of work or seeing declining wages due to the wonders of new technology is really popular among pundits and elite types. If technology is the culprit then we can all wring our hands and say how unfortunate it is that we have these losers, but it means that the folks on top are not to blame. After all, we aren't going to blame the Steve Jobs or Elon Musks of the world for their great innovations.

For this reason it is understandable that news outlet...

The Value of the Pound Is Not a Measure of the Success or Failure of Brexit

The Brexit vote was a case where the elites were clearly aligned against the UK leaving the European Union. While they had many good arguments on their side, and much of what the pro-Brexit crew was saying was nonsense, some of the elite gloating now also falls into the nonsense category.

In particular, the fall in the British pound is being taken as evidence that Brexit was a mistake. Actually, this is not really evidence of anything. The pound had become seriously over-valued in recent year...