Dean Baker's Blog, page 203

Neil Irwin on Donald Trump’s Trade Scorecard

Neil Irwin takes issue with Donald Trump using the trade surplus between countries as a scorecard on trade. He is largely right with a couple of important qualifications.

Irwin notes that a country with a trade surplus should see its currency rise against the dollar if it doesn’t reinvest the money in dollar assets. He then comments that if it does reinvest the money in dollar assets, whether or not it benefits the United States depends on what the money is used for. As Irwin points out, in t...

George Will Blames Social Security for Today's Soaring Interest Rates and Hyperinflation

I know that no one reads the Washington Post's opinion pages for their insights on economic issues, but can't we hope for at least some connection with reality. In his column today warning that productivity growth is likely to be weak forever more, George Will told readers:

"America’s entitlement state is buckling beneath the pressure of an aging population retiring into Social Security and Medicare during chronically slow economic growth."

The entitlement state is "buckling." If we tried to...

Dan Balz Libels Paul Ryan

Dan Balz of Speaker of the House Paul Ryan's writing and work in politics in an analysis that contrasts Ryan's "conservative, problem-solving party" with "a Cruz-style radical anti-government party content with blowing things up as they now stand." If Balz had paid any attention to the budgets that Paul Ryan eagerly touted as head of the House Budget Committee he would know that there is no one who has a better claim to being "anti-government" and "blowing things up...

Prescription Drugs and the Trans-Pacific Partnership: Big Pharma Hit by Skills Shortage

According to a Foreign Affairs piece by Council on Foreign Relations Fellow Thomas Bollyky, the major pharmaceutical companies are being run by people who don’t know what they are doing. While they have devoted a large amount of time and resources to putting strong language on patent and related protections in U.S. trade agreements, including the recently concluded Trans-Pacific Partnership (TPP), Bollyky claims that these deals really don’t have much impact on drug prices in the partner coun...

Washington Post Goes Ballistic on Trump and Tariffs

Everyone knows that reasonable people are supposed to hate protectionism, that is of course it's for doctors and lawyers, who lack the skills necessary to compete in the world economy (or drug patents). But that shouldn't mean that an ostensibly serious newspaper (I'm feeling generous today) gets to say whatever it wants to trash the policy.

Today we have the spectacle of the Washington Post telling us that Donald Trump's plan to impose 45 percent tariffs on imports from China coupled with hi...

AP Wants Us to Be Worried that Workers are Making Back Ground Lost During the Recession

Seriously, that is what they said, more or less. An AP news article on the latest revision to fourth quarter GDP data told readers:

"Friday’s report also contained a potentially worrisome sign — a weak first estimate of corporate profits. It showed that pretax profits fell 7.8 percent in the fourth quarter after a 1.6 percent drop in the third quarter. Fourth quarter profits were also down 11.5 percent from a year earlier — the steepest annual drop since 30.8 percent plunge in the fourth quar...

Workers Regain Part of Recession Losses, as Wage Share Rises

The wage share of GDP has recovered close to half of the ground lost in the downturn. Combining economy-wide wages and corporate profits, the wage share fell by 3.6 percentage points between 2007 and 2012. The data for 2015 show that the wage share has increased by 1.6 percentage points since its trough in 2012. This indicates that a tighter labor market is now allowing workers to achieve some gains at the expense of corporate profits.

This means a huge amount for Federal Reserve Board policy...

In Addition to Concerns on Unemployment and Pollution, China is Also Running Out of People

That's what readers would learn from reading this NYT piece on a Chinese scientist living in exile in Wisconsin, Yi Fuxian, who has been a critic of China's family planning policies. According to the piece, Dr. Yi has warned that China will see a rapid decline in population which will prevent its economy from ever surpassing the United States.

It is not clear what metric Dr. Yi would be using. Presumably he means in GDP, but he is already too late for his warning, since according to the I.M.F...

"Free Trade" Instead of "Trade": Unnecessary Verbosity in the NYT

Is there an editor at the NYT who insists that reporters arbitrarily throw in unneeded and inaccurate adjectives to make their articles longer? An article on President Obama's trip to Argentina twice referred to the Free Trade Area of the Americas as a "free-trade" agreement. Most of the deal was about putting in place a common regulatory structure, not trade. It also increased some forms of protectionism in the forms of stronger and longer patents and copyright protection. The piece could ha...

Magical Thinking: Sanders, Clinton, and the Federal Reserve Board

Arthur Brooks, the President of the American Enterprise Institute and a regular New York Times columnist told readers that he doesn't have access to the Internet. This admission came in the context of a published exchange with Gail Collins, another New York Times columnist.

This fact was revealed in the context of a discussion of the Republican presidential candidates' proposals to have large tax cuts and then make up the lost revenue from waste, fraud, and abuse. Brooks acknowledged this was...