Dean Baker's Blog, page 182

If Uber Succeeds in Monopolizing the Market Then Obama is Supposed to Regulate His Former Political Adviser

The Washington Post reported that Uber is deliberately trying to drive Lyft, its major competitor out of the market, by having temporarily low rates and subsidies to drivers. If the Post's reporting is accurate, and barriers to entry prevent new companies from effectively competing with Uber, then the company is engaging in classic anti-competitive tactics. This is the sort of activity that is supposed bring intervention from the Justice Department, since Uber will be charging higher prices i...

Kansas City Fed Bank President Esther George Has Been Wrong About Inflation for Years

The New York Times had a good piece about how the Federal Reserve Board is responding to protests of Fed policy and insufficient concern about unemployment by the group Fed Up. (CEPR is affiliated with the Fed Up campaign.) At one point the piece quotes Esther George, the president of the Kansas City Fed, as saying that she is sympathetic to concerns about unemployment, but that if the Fed is too slow in raising interest rates it can lead to inflation and asset bubbles.

It is worth noting tha...

Tennessee Republicans May Keep Residents from Getting Insurance on Exchanges: Are Congrats in Order?

One of the highest principles of the Republican Party is destroying Obamacare. It seems that the Republicans in Tennessee may be making a big step in that direction. According to the state's insurance commissioner, the health care exchange in the state is on the edge of collapse. The number of insurers taking part in the exchange is down to four and the fees they charge are soaring.

That's great news for people committed to keeping people in Tennessee from being able to get health care insura...

The Fed's Two Percent Inflation Target

Sebastian Mallaby had a in the WaPo on the Fed's 2.0 percent inflation target. Mallaby argues that the 2.0 percent target is arbitrary and makes the case that moving to a higher inflation target, as recently suggested by San Francisco bank president John Williams, would be desirable.

While Mallaby makes some good points, he also gets some items wrong. First, he notes the Fed's decision to ignore the growth of the housing bubble in the last decade. He said that they viewed the issue of...

David Ignatius Seems Confused About China and Indonesia

David Ignatius used his WaPo column to express his concern that Australia will opt to align itself more closely with China at the expense of its ties with the United States. In making the argument that other regional powers may provide an offset to China, Ignatius cites Indonesia, which he notes has seen its per capita income increase by 50 percent while China's economy is slowing.

While Indonesia's growth has been pretty good over this period, China's per capita GDP increased by 136 percent...

New York Times Reports Obama Administration and Congress Agree on Desirability of Campaign Contributions and Employment Opportunities from TPP Beneficiaries

Of course the NYT didn't actually say this, instead it told readers:

"the White House and congressional Republican leaders mostly agree on the economic benefits of trade."

Actually, unless the paper has mind readers on staff, its reporters are not in a position to know whether the White House and Republican leaders have the same views on the economic benefits of trade or if they even have views on the economic benefits of trade. It is entirely possible that they are pushing the Trans-Pacific...

Stanley Fischer Rewrites Fed Inflation Target, Prepares to Throw People Out of Work

That seems to be the story according to MarketWatch. It quotes Stanley Fischer the vice-chair of the Federal Reserve Board as saying, "We are close to our targets" for inflation and unemployment. Fischer adds, that the current 1.6 percent inflation rate shown by the core personal consumption expenditure (PCE) deflator is "is within hailing distance" of the Fed's 2.0 percent target.

Actually, this is not true. The 2.0 percent target was always identified as an average, not a ceiling. This mean...

Mexico's Growth in the Post-NAFTA Era: Defining "Boom" Downward

Ever since NAFTA passed in 1993, the media have been anxious to say how the pact has been a great boon to Mexico, even if its impact on the U.S. might not have been so great. Since Mexico's growth post-NAFTA has actually been pathetic (the gap in per capita income with the United States has increased), the praise has often involved ignoring the data or even just making things up.

The Washington Post gets first prize in the latter category, famously telling readers back in 2007 that NAFTA had...

The Washington Post's TPP Challenge

Those folks at the Washington Post are so much fun. Now that it looks like the Trans-Pacific Partnership (TPP) might fail, the Post challenges TPP critics, "if not the Trans-Pacific Partnership, then what?"

Let's see, the Obama administration had how many staffers working how many years to craft the TPP? And the critics working in their spare time should come up with the alternative?

Okay, but we'll accept that the critics are much smarter and more competent than the TPP team. I'll at least o...

Donald Trump and Coal Mining Jobs: How Far Back Does He Want to Take West Virginia?

That's what readers of a NYT article on support for Trump in West Virginia must be wondering. The piece told readers that Trump was promising to bring back the coal mining jobs to the state. While West Virgina used to have many more jobs in coal mining, that was decades ago.

 

Employment in coal mining had fallen from a peak of more than 130,000 in 1940 to just over 21,000 in 2000, roughly its current level. Employment did rise somewhat in the last decade, reaching 35,700 in December of...