Dean Baker's Blog, page 198

It's Actually Not Hard to Distinguish Between Quantitative Easing and Currency Management

A NYT article on Donald Trump's threats to impose high tariffs on Chinese imports discussed the possibility that Trump might seek rules that addressed policies aimed at currency management. The piece included the strange assertion that:

"A central problem is defining currency manipulation in a way that excludes the United States — in particular, the Federal Reserve’s post-recession stimulus campaign, which had the effect of weakening the dollar much in the same way that other countries do to...

Life Is Tough for the Post, the Voters Reject Its Call for Cutting Social Security and Medicare In the Name of Democracy

Washington Post editorial writer Charles Lane appeared to be throwing in the towel on the Post's dream of cutting Social Security and Medicare in a column headlined, "Entitlement Reform, RIP." The piece recounts a sad story whereby the bulk of currently scheduled federal spending is already committed to entitlement programs like Social Security, Medicare, and Medicaid:

"Seventy-five percent of planned federal spending between now and the end of the next two presidential terms is mandatory: So...

The EU Grew at a 2.4 Percent Annual Rate in the First Quarter

My guess is that many people reading this NYT article on Europe's GDP growth will think that its 0.6 percent rate was only slighly better than the anemic 0.5 percent rate the U.S. had just reported for the first quarter. Actually, it is a lot better, because the the European Union (EU) rate is a quarterly growth rate, while the U.S. rate is an annualized growth rate. If the EU growth rate were also annualized, it would be approximately 2.4 percent.

In Europe and many other parts of the world...

Reason #4 For Weak Productivity Growth: Labor Is Cheap

Neil Irwin noted the incredibly weak productivity growth of the last six years and then considered three possible explanations. Unfortunately he left out what may be the plausible one: labor is cheap.

The high unemployment of the last seven years has left many people desperate for work. As a result, they are willing to work for very low wages. If businesses can get people at very low wages, they don't mind having them do relatively low productivity tasks. For example, Walmart will have large...

Andrew Ross Sorkin's Confused Assessment of President Obama's Political Legacy

Andrew Ross Sorkin presented a confused account of the state of the economy and economic policy under President Obama. The account repeats many self-serving comments from Obama without comment and offers little useful context to readers.

The confusion starts early when he reports Obama's complaint that he doesn't get sufficient credit for the economy's strength, pointing out:

"His economy has certainly come further than most people recognize. The private sector has added jobs for 73 consecut...

Note to Pundits: Patents Are Walls

Sorry couldn't resist, but the lecture on why we should not care about manufacturing jobs from Eduardo Porter brought it out in me. Porter makes many valid points. Manufacturing has been declining as a share of total employment in the United States for half a century. The same is happening almost everywhere else in the world. And, he's right that the main cause has been productivity growth.

But that doesn't change the fact that the huge explosion in the trade deficit in the decade following 1...

The Question Is Not "Free Trade" and Globalization, It Is Free Trade and Globalization Designed to Screw Workers

Why are none of the "free trade" members of Congress pushing to change the regulations that require doctors go through a U.S. residency program to be able to practice medicine in the United States. Obviously they are all protectionist Neanderthals.

Will the media ever stop the ridiculous charade of pretending that the path of globalization that we are on is somehow and natural and that it is the outcome of a "free" market? Are longer and stronger patent and copyright monopolies the results of...

The Washington Post Says Doctors Without Borders Is Silly to Worry About the Impact of the TPP on Drug Prices

The humanitarian group, Doctors Without Borders, along with many other NGOs involved in providing health care to people in the developing world, have come out in opposition to the Trans-Pacific Partnership (TPP) over concerns that the deal will make it more difficult to provide drugs to people in the developing world. Their argument is that it will raise drug prices by making patent protection stronger and longer and by making it more difficult for countries to scale back protections that the...

Argentina Did Not Invent the Term "Vulture Fund"

The NYT had an account of the negotiations that led an agreement where holders of defaulted debt received billions of dollars in payments from the Argentine government. It made a point of contrasting the attitude of the new government, which was elected last fall, with the prior government, which it tells readers had referred to the debt holders as "vultures."

In fact, this is not pejorative term invented by the prior Argentine government, it is actually the self-definition of these funds. Th...

Lesson for Robert Samuelson on Gender Pay Gap: Discrimination Affects Choice of Occupation

Robert Samuelson had what he think is good news, the pay gap in hourly wages between men and women is just 8.0 percent once we control for occupations and experience, not the more widely cited 21 percent. Samuelson tells us that it is a mistake to throw around this 21 percent figure since it doesn't include proper adjustments. While Samuelson is correct that the 21 percent figure does not include all the controls that we would like to see, it is wrong to claim, as Samuelson is implicitly clai...