Dean Baker's Blog, page 178

Speculation Matters More in the Price of Oil Than NPR Tells You

We have seen a number of sharp swings in oil prices over the last two decades. Clearly the underlying fundamentals of the market are the main factor in determining the price, but the fact that Wall Street-types spend tens of billions of dollars speculating on the stuff can also play a role.

NPR assured us otherwise in a Morning Edition segment today. They gave a comment from an economist who said the impact of speculation was essentially zero, effectively mocking all the folks who complained...

Contrary to What AP Tells You, Social Security Is NOT a Main Driver of the Country's Long-term Budget Problem

The NYT ran a short AP piece on Social Security and "why it matters." The piece wrongly told readers that Social Security is "a main driver of the government's long-term budget problems." This is not true. Under the law, Social Security can only spend money that is in its trust fund. If the trust fund is depleted then full benefits cannot be paid. The law would have to be changed to allow Social Security to spend money other than the funds designated for the program and in that way contribute...

If Men Don't Work Because of Video Games, What Explains Women Not Working?

As is widely known the Washington Post never misses an opportunity to blame the victims of policy for bad outcomes, rather than rich and powerful folks who design policy. We are treated to yet another example of this charade with the Post running a major article that claims that video games are a major reason that fewer young men are working today than 15 years ago.

The basic story is that many young men, particularly those with less education, have dropped out of the labor force in the last...

You Voted to Pay Wells Fargo CEO John Stumpf $19.5 Million

You don't remember casting that vote? Well, you didn't actually cast it, but if you have a 401(k) someone like Blackrock CEO Larry Fink cast the vote for you.

Most middle income people have 401(k)s for their retirement and most of this money is in mutual funds. These mutual funds have control over the proxy votes for the shares they hold. This means that funds like Blackrock, which has more than $5 trillion in assets, have enormous say over the distribution of income in this country. And, as...

Excellent NYT Reporting on Trump Energy Plan

The NYT did what we should expect newspapers to do when reporting on presidential campaigns, it told readers that Donald Trump's energy plans don't make any sense. In the first paragraph of a piece on a speech Donald Trump gave in Pittsburgh, the NYT told readers that his promise to increase production of both coal and natural gas is "impossible." This is of course true, since the fuels are substitutes. In fact, the main reason coal production has fallen sharply in the last five years has bee...

Shinzo Abe's Approval Rating Is at 60 Percent, Inconvenient Truth for Fareed Zakaria

Fareed Zakaria used his Washington Post to tell readers that there are no simple solutions, it's just too complicated. The point is that the gods have condemned us to suffer slow growth and rising inequality. In addition to making the absurd point that we should be worried because people are having fewer kids (just imagine, the robots will take all the jobs and we won't have any workers) Zakaria tells us that nothing seems to work.

"Facing these forces [globalization, an aging workfor...

Political Reporters as Frustrated Theater Critics

Paul Krugman used his column to berate reporters for not highlighting when candidates are lying. The basic point is that reporters are in a position to know that a candidate is saying something that is outright false, whereas the typical reader/viewer likely doesn't have the time to check the truth of a particular claim. Not doing this basic service encourages lying, since candidates will freely change positions and make claims that are not true if they know they will not pay a price for lyin...

Nashville Faces Shortage of Doctors, Won't Work for $30 an Hour

Nashville's public radio station complained that the construction companies simply can't find workers. This is in spite of the fact that they pay $12 an hour to start and that the pay could go as high as $22 an hour for the most experienced workers.

It is interesting that the radio station has decided that this is the pay construction workers should get even though the market seems to be saying that the pay should be higher. This raises the question of whether the station would complain about...

NYT Calls Protectionist Pact "Free Trade," Joins Obama's Push for the TPP

The Trans-Pacific Partnership (TPP) has little to do with free trade. The trade barriers between the United States and the other countries are already very low, with few exceptions. In fact, the United States already has trade deals with six of the eleven countries in the TPP. The TPP is primarily about installing a corporate friendly structure of regulation, as well as increasing protectionist barriers in the form of stronger and longer patent and copyright and related protections. (It doesn...

If Bill Gates Made His Seattle Area Estate Available for Low Cost Housing, It Would Make Seattle Housing More Affordable

I am waiting for the Washington Post to make this obvious point. (The same is probably true about wherever Post owner Jeff Bezos lives.) The reason we should expect this piece is that the paper ran a piece that effectively pronounced people who refuse to sell their houses to accommodate development as anti-social characters who are driving up housing costs for everyone else.

The claim is true. If people will make land available at a lower cost to developers then it will reduce the cost of bui...