Dean Baker's Blog, page 205

Trade Lessons for Thomas Friedman

Thomas Friedman once again stumbled into trade policy, telling us that the Trans-Pacific Partnership (TPP) is exactly the sort of trade deal that tough negotiator Donald Trump would have gotten. Unfortunately, he gets some of the big things badly wrong.

First, he would have us believe that the TPP is a really good deal for the U.S. because the tariffs that we eliminate on imports are mostly small, whereas the tariffs other countries will eliminate on our exports are in some cases very large....

Contrary to What Centrist Democrats Claim, "Globalization" Did Go According to Script

The Washington Post had a piece on the latest efforts by centrist Democrats to counter the rise of the progressive wing of the party. It tells readers:

"Many of them pushed in the 1990s, under President Bill Clinton, to expand global trade and deregulate the financial sector. They now concede those efforts did not go according to script, particularly for middle-class workers, but they are not calling for a full rewrite in response."

Actually, increasing inequality was an entirely predictabl...

Bernie Sanders Health Care Plan Could Save the Country $20 Trillion

The Washington Post ran a major piece pointing out some of the difficulties involved in shifting over to a universal Medicare system as advocated by Senator Bernie Sanders. While the piece notes many of the problems, it never mentions that the United States pays hugely more per person for its health care with little obvious benefit in terms of outcomes. As a result, there would be enormous potential savings from switching to a universal Medicare-type system.

For example, according to the OECD...

Washington Post's Steven Pearlstein Warns That If Bernie Sanders Is Elected Americans Will Have to Accept Higher Employment Rates

Actually that is not quite what Pearlstein said. The billionaire-owned Post, which has largely turned itself in recent weeks into a Bernie Sanders attack organ, apparently wanted yet another hit piece. Pearlstein in fact told readers that if the country elected Senator Sanders, and he was able to implement his policies to make the United States more like Scandinavia, then we would have to get used to a higher unemployment rate (twice). 

While the unemployment rates in these countries are...

Why Don't Globalization and Technology Lead to a Collapse in Unionization in Canada?

Paul Krugman has agreed to use his blog this week as a jumping off point for great CEPR papers of the past (yes, I'm kidding), but he gives us a great segue into an old paper on unionization rates in Canada with his latest blogpost. In his post Krugman makes the simple point that if inevitable forces like globalization and technology were responsible for the decline in unionization rates in the United States then we should expect to see a comparable decline in Canada. After all, Canada's econ...

Cheap Fun with World Bank, Paul Krugman, and NAFTA

Paul Krugman had a blogpost this morning that included a simple chart showing that Mexico's per capita GDP has actually diverged from U.S. per capita GDP in the years since NAFTA. This is not supposed to happen, our econ textbooks tell us that poor countries are supposed to grow more rapidly than rich countries and this should have been especially true with Mexico post-NAFTA.

There should not be anything particularly controversial about Krugman's post, after all it comes directly from World B...

E.J Dionne Is Far Too Generous, “Moderate Progressives” Were Promoting Inequality

E.J. Dionne used his column to argue that it is not just the establishment Republicans who are facing a crisis because of the rise of Donald Trump. He argues that the establishment Democrats also face a crisis:

“Its ideology was rooted in a belief that capitalism would deliver the economic goods and could be balanced by a ‘competent public sector, providing services of quality to the citizen and social protection for those who are vulnerable.’”

This is far too generous an account. The Clin...

Arthur Burns Can’t Get the Blame for the 1970s Inflation

A Washington Post piece on the Fed and the presidential elections told readers:

“A strong economy tends to boost the party currently in power, which is why President Nixon installed confidante Arthur Burns as head of the Fed in 1970, urging him to keep interest rates low to stoke the job market. The result was a decade of runaway inflation that was tamed only by a painful recession.”

This is a very strong and implausible claim. The inflation in the 1970s was fueled in large part by two huge r...

Educating the Washington Post on the Way Washington Works

In recent weeks the Washington Post has virtually transformed itself into a Bernie Sanders attack platform, filling both its news and opinion pages with critical pieces. For this reason it was not surprising to see its lead editorial today criticizing Senator Sanders for not supporting an auto bailout because it was attached to funding for the Wall Street bailout. 

First, it worth once again correcting its misstatements about the Wall Street bailout. The piece tells readers:

"In Septemb...

Is Donald Trump’s Protectionism New?

That is what Binyamin Appelbaum argued in a Upshot column with the headline, “on trade, Donald Trump breaks with 200 years of economic orthodoxy.” The piece points to Trump’s rhetoric in which he claims that other countries are taking advantage of the United States because they are running large trade surpluses with us.

It then turns to an old speech from Milton Friedman saying the opposite is true:

“'Economists have spoken with almost one voice for some 200 years,’ the economist Milton Fri...