Dean Baker's Blog, page 183

Contrary to WaPo Headline, the NY Fed Did Not Find Employers Are Cutting Jobs Because of Obamacare

In his Washington Post business section column Gene Marks made a classic journalistic mistake: he reported what people claim to be the case as fact. Specifically, he reported that employers are curtailing hiring and increasing part-time employment in response to Obamacare. In fact, the basis for this assertion is a survey of 200 business executives by the New York district Federal Reserve Bank.

There are two basic problems here. The business executives may be inclined to say they are cutting...

Charles Lane and the WaPo Sleaze Bernie Sanders

People don't expect to see honest debate on economic issues on the opinion pages of the Washington Post, which is why it is not surprising to find a from Charles Lane trashing Bernie Sanders and his wife for buying a $575,000 vacation home in Vermont. While Lane indicates that he thinks it is okay that they buy this home, he thinks it somehow contradicts Sanders' self-described socialism. At best, this claim shows how utterly ignorant Lane is of what Sanders said throughout his campaig...

Steve Pearlstein Gets the Robot Story Right, Mostly

Steve Pearlstein used a Washington Post column to correct an earlier scare story about robots taking all the jobs by fellow columnist David Ignatius. Pearlstein gets the story mostly right. If robots reduce the need for labor then someone will have additional money to spend. Either workers will get higher wages or prices of the goods produced by robots will fall, allowing people to buy more stuff. Most likely it will be some combination, but there is no basis for assuming that there will no d...

Mind Reading at Politico on the TPP

President Obama is working hard to push the Trans-Pacific Partnership (TPP), going around the country promoting the pact. He must want Congress to approve it before he leaves office.

That much would be obvious to anyone. But Politico uses its incredible mind reading ability to go a step further. It tells us:

"Obama has been unwilling to abandon a deal that he regards as central to his legacy."

The rest of us might be able to know that Obama says that he regards the TPP central to his legacy...

The Risk of Imagining Capitalism to Be Unfettered

The NYT's Dealbook section ran an interesting column on the "risks of unfettered capitalism" by St. John University Law Professor Jeff Sovern. The piece lists a number of abuses by corporations, including Volkswagen's diesel scandal, Vioxx, and predatory lending. While Sovern is right in arguing for the need to rein in these abuses, it's questionable whether this is an issue of "unfettered" capitalism.

In the case of Volkswagen, they deliberately lied to their customers about the product they...

The Success of Abenomics

This short piece on Japan's GDP growth reminded me that I wanted to post a graph showing the rise in Japan's employment rate under Abe. Here's the basic picture showing the employment to population ratio (EPOP) for people between the ages of 16 and 64 since 2000.

 

As can seen, Japan's EPOP fell following the 2001 recession. It had made up lost ground by 2005 and continued to rise until 2007. It stagnated for roughly two years and then rose somewhat before starting to drop again in 2011...

Intro Econ and Why the Recovery Is Weak

Robert Samuelson used his column this week to note my friend Josh Biven's piece on the reason for the weak recovery. Biven puts the blame on insufficient government spending, noting that government spending per capita has been much weaker in this recovery than in prior recoveries. Samuelson says Biven could be right but then argues that maybe there is another explanation.

Samuelson offers the possibility that higher government spending in past downturns may have been the result of more rapid...

As Productivity Growth Falls to New Lows, David Ignatius Warns Us of Dangers of Rapid Productivity Growth

Yes folks, this is yet another example of the which way is up problem in economics, which seems to badly afflict the Washington Post opinion pages. It's the old story of someone being told that its incredibly hot and humid outside and then rushing to put on hat, gloves, and an extra sweater.

The Labor Department released new data on productivity growth this week showing that in the second quarter of 2016 productivity actually fell for the third consecutive quarter. While this decline is likel...

India's Corrupt Pharmaceutical Market: The Fruits of the Protectionism Advocated by Free Traders

The NYT had an interesting piece on the pharmaceutical market in India, which just began recognizing patent monopolies on drugs a decade ago. Corruption and abusive sales practices of the sort described in the piece are exactly what economic theory predicts when tariffs of several hundred or several thousand percent are imposed in a market. While "free traders" like to ignore the harm from patent monopolies that raise the price of the protected items by these amounts, the market does not care...

Bill and Hillary Clinton Were Richer than the NYT Might Lead You to Believe

The NYT had an interesting piece charting the career paths of Bill and Hillary Clinton, and the extent to which they may have had financial concerns earlier in their lives. Unfortunately the piece does not adjust for inflation, so it may have misled readers about how well off the Clinton's actually were. 

For example, the piece tells readers that after Bill Clinton lost his re-election bid in 1980:

"The Clintons had stretched their finances to afford the $112,000 home, which was down the...