Dean Baker's Blog, page 177

Special Privileges for Donald Trump and Pass-Through Corporations

A NYT piece discussing the tax rules surrounding business losses like the $916 million loss taken by Donald Trump on his 1995 tax return left out an important aspect of the law. The piece points out that many small businesses are organized as "pass-through" corporations, which means that the profits, or losses in this case, are directly passed through to the owners to declare on their tax returns.

However, these corporations also have the important benefit of limited liability. This means tha...

NYT Pulls Out the Stops in Pushing NAFTA

The NYT is bending over backwards to promote the protectionist pattern of trade policies of recent presidents. Yes folks, it is protectionist even if they call them "free trade" deals. Patent and copyright protection are protectionism, even if your friends benefit from them. And when we spend an extra $100 billion a year on doctors, compared with pay in Canada and West European, because doctors who don't compete a U.S. residency program are not allowed to practice in the United States, that i...

NYT Gets Main Problem of Health Care Exchanges Wrong, Too Few Companies Have Dropped Insurance

The NYT had a major article on the problems of the health care exchanges established under the Affordable Care Act (ACA). The piece implied that the problem is that too many people are opting to go without insurance, even bringing up the silly old line about the lack of young healthy people. (The exchanges need healthy people, it doesn't matter if they are young. In fact, older healthy people are more profitable since they pay higher premiums.)

In fact, fewer people are going without insuranc...

Why Don't Directors Want to Clawback Pay from Corrupt CEOs?

Gretchen Morgenson had an interesting piece pointing out that it is rare that corporate boards ever clawback substantial sums from CEOs involved in illegal or inappropriate activity. (The immediate context is the clawback of some future performance pay from Wells Fargo CEO John Stumpf.) The issue, as Morgenson presents it, is that boards don't generally do clawbacks except where it is legally required.

The point is that boards do not want to do clawbacks. This raises the obvious question as t...

Washington Post Goes to Bat for Tobacco and Pharmaceutical Industry in the TPP

An reporting on Senate Majority leader Mitch McConnell's statement that he will not bring up the Trans-Pacific Partnership (TPP) in a lame duck session of Congress, the Post asserted:

"Some Republican lawmakers typically inclined to support trade deals have objected to some provisions in the TPP that could hurt tobacco and pharmaceutical companies."

Actually, there are no provisions in the deal as now written that "hurt" tobacco and pharmaceutical companies. The provisions in question...

NYT, Not Trump, Is Wrong About China's Currency

A headline of a NYT business section piece confidently told its readers that "China manipulates its currency, but not in the way Trump claims." The gist of the argument is that China has recently sold off some of its foreign exchange reserves in order to raise the value of its currency. It goes on to assert that because the inflow of foreign investment into China has slowed, its currency should fall if left to market forces.

Actually, China still holds well over $4 trillion in foreign reserve...

Economists Keep Getting It Wrong Because the Media Cover Up Their Mistakes

Most workers suffer serious consequences when they mess up on their jobs. Custodians get fired if the toilet is not clean. Dishwashers lose their job when they break too many dishes, but not all workers are held accountable for the quality of their work.

At the top of the list of people who need not be competent to keep their job are economists. Unlike workers in most occupations, when large groups of economists mess up they can count on the media covering up their mistakes and insisting it w...

Economists Keep Getting It Wrong Because the Media Coverup Their Mistakes

Most workers suffer serious consequences when they mess up on their jobs. Custodians get fired if the toilet is not clean. Dishwashers lose their job when they break too many dishes, but not all workers are held accountable for the quality of their work.

At the top of the list of people who need not be competent to keep their job are economists. Unlike workers in most occupations, when large groups of economists mess up they can count on the media covering up their mistakes and insisting it w...

The Sky Is Falling! Growth in World Trade Is Slowing

The establishment types are pulling out all the stops in trying to resuscitate the Trans-Pacific Partnership. Hence we get a report from the OECD on the declining growth rate of world trade and a front page article highlighting the report in the Washington Post.

I haven't read the report carefully, but it is worth making two quick points. First, trade has grown rapidly as share of world GDP from 1970 to the 2008 crash. (Interestingly, the world economy was growing more rapidly in the 1960s wh...

NYT Editorial In News Section for TPP Short on Substance

When the issue is trade deals, like the Trans-Pacific Partnership (TPP), the New York Times throws out its usual journalistic standards to push its pro-trade deal agenda. Therefore it is not surprising to see a story in the news section that was essentially a misleading advertisement for these trade deals.  

The headline tells readers that Donald Trump's comments on trade in the Monday night debate lacked accuracy. The second paragraph adds:

"His aggressiveness may have been offset some...