Dean Baker's Blog, page 194

Another Robots Are Coming Story

The Washington Post has an article telling readers that a former McDonald's CEO is warning that a $15 minimum wage will lead to widespread use of robots at fast food restaurants. The piece goes on to warn about the danger that robots pose to jobs more generally:

"Robotics and artificial intelligence are hot areas in the technology sector, and the World Economic Forum estimated earlier this year that their rise would cause a net loss of 5.1 million jobs over the next five years.

"Some experts...

Contrary to What You Read in the WaPo, Financial Transactions Taxes Will Save Most Investors Money

In an article that reports on plans by a new coalition to challenge the financial industry, the Washington Post implied that the financial transaction tax (FTT) supported by the coalition would hurt ordinary investors. The piece told readers:

"The proposed so-called transaction tax has already raised concerns among some on Wall Street. Such a tax would also effect pension funds or other large investors who sometimes trade thousands of stocks a day, they say.

"'While some politicians claim th...

NYT Says Abe "Marketing Slogan" in Japan Creates Equivalent of 6.4 Million Jobs in the U.S.

The NYT apparently wants its readers to believe that the economic policies put in place by Shinzo Abe, Japan's prime minister, have been a failure. In an article on G-7 summit meeting it quoted Kenneth S. Courtis, chairman of Starfort Holdings and a former Asia vice chairman at Goldman Sachs Group Inc., as saying that Abe's policies are "viewed mainly as a 'marketing slogan.'" According to Courtis:

"Japan needs to 'take a blowtorch' to regulations and red tape that discourage competition."

...

The Trump Supporters in Econ Departments and Central Banks Everywhere

Eduardo Porter used his NYT column this week to remind us that we have seen people like Donald Trump before and it didn't turn out well. Porter is of course right, but it is worth carrying the argument a bit further.

Hitler came to power following the devastating peace terms that the allies imposed on Germany following World War I. This lead to first the hyper-inflation that we will continue to hear about until the end of time, and then austerity and high unemployment that was the immediate e...

If the TPP Makes Vietnam and Malaysia Pay Much More for Prescription Drugs, Will It Really Boost an Alliance Against China?

It is a question that goes unasked in a NYT piece that touted the Trans-Pacific Partnership (TPP) as providing the glue for an alliance of the U.S. and East Asian countries against China. While the deal will increase trade between the member countries in some areas, a major thrust of the deal is to increase patent and copyright protections. These increased protections will raise prices in many areas, most importantly prescription drugs. 

If the TPP results in some of the poorer countries...

Paul Krugman and the Bubbles

Paul Krugman used his column this morning to point out how strong the economy was in the 1990s and how the low unemployment in the second half of the decade allowed for strong wage and income gains at the middle and bottom end of the income distribution. This is all very much on the mark. However, he also distinguished the impact of the stock bubble from the housing bubble by saying that the collapse of the latter had more serious consequences because of the growth of private debt.

There are...

In Contrast to Bernie Sanders, the Washington Post Promises Real Protectionism

The Washington Post's lead editorial is a pitch to defend the "liberal international order." The piece notes the rise of right-wing populist movements in much of the world and includes a swipe at Bernie Sanders "false promise of trade protectionism." Incredibly the editorial goes on to give a pitch for the Trans-Pacific Partnership (TPP) which it describes as a "free-trade agreement."

Of course, the TPP is not a "free-trade" agreement. The reductions in trade barriers provided for in the pact...

In Contrast to Bernie Sanders the Washington Post Promises Real Protectionism

The Washington Post's lead editorial is a pitch to defend the "liberal international order." The piece notes the rise of right-wing populist movements in much of the world and includes a swipe at Bernie Sanders "false promise of trade protectionism." Incredibly the editorial goes on to give a pitch for the Trans-Pacific Partnership (TPP) which it describes as a "free-trade agreement."

Of course the TPP is not a "free-trade" agreement. The reductions in trade barriers provided for in the pact...

Trump and Trade: Better Wages Offset the Cost of Higher Priced TVs

The NYT had a piece assessing which of Donald Trump's promises he would be able to keep if he got in the White House. When discussing trade the piece implied that most workers would be hurt by his efforts to reduce the trade deficit since it would mean higher prices for a wide range of imports. This is faulty logic.

To see the point, suppose that our "free trade" deals had been focused on subjecting doctors, dentists, lawyers, and other highly paid professionals to international competition i...

Saving Clintonism? How About an Honest Discussion?

David Shribman wants to tell us how to "save Clintonism." In doing so he seriously misrepresents the issues at hand.

He tells readers:

"The 42nd president left the White House with high approval ratings after serving during years of economic growth. Many liberals felt bruised, even betrayed — there were some high-profile repudiations of the president, especially when he signed a welfare overhaul in 1996 that set time limits on benefits. But no one doubted that he had given new life to the pa...