Dean Baker's Blog, page 212

Mike Bloomberg’s Billionaire Blackmail

According to a piece [sorry, no link] in Politico this morning, former New York City mayor and multi-billionaire Michael Bloomberg is considering running for president. The piece said that he would probably only enter the race if Bernie Sanders wins the Democratic nomination or if Hillary Clinton hangs on to win the nomination, but “is significantly weakened by Sanders and lurches hard to the left.”

This is the sort of story that people might think was a whacky conspiracy theory dreamed up by...

Robert Samuelson and the Great Stock Crash of 2015

Robert Samuelson wades into the turf on the explanations for the recent worldwide stock plunge in his column today. Most of what he says is actually pretty reasonable, but the framing doesn’t make much sense.

He starts the piece by citing the view of several forecasters that the drop in worldwide markets does not indicate a recession is imminent. But then he tells readers:

“But there is a less reassuring interpretation: The global stock sell-off may reflect gloomy prospects for ‘emerging-market...

Lower Oil Prices Aren’t All Bad

World financial markets appear to be in a panic, partly over events in China, and partly over the plunge in oil prices. I will claim no expertise on the former, although people I respect who do write on China seem to think the country is not facing an economic meltdown.

This leaves lower oil prices as the main source of worry. There are some bad stories with lower oil prices. Developing countries that are heavily dependent on oil exports will be badly hit. Also, much of the debt issued by ene...

Paul Krugman, Bernie Sanders, and Medicare for All

Paul Krugman weighs in this morning on the debate between Bernie Sanders and Hillary Clinton as to whether we should be trying to get universal Medicare or whether the best route forward is to try to extend and improve the Affordable Care Act. Krugman comes down clearly on the side of Hillary Clinton, arguing that it is implausible that we could get the sort of political force necessary to implement a universal Medicare system.

Getting universal Medicare would require overcoming opposition n...

Paul Krugman, Bernie Sanders and Medicare for All

Paul Krugman weighs in this morning on the debate between Bernie Sanders and Hillary Clinton as to whether we should be trying to get universal Medicare or whether the best route forward is to try to extend and improve the Affordable Care Act. Krugman comes down clearly on the side of Hillary Clinton, arguing that it is implausible that we could get the sort of political force necessary to implement a universal Medicare system.

Getting universal Medicare would require overcoming opposition not...

Quick Thoughts on Productivity

Robert Samuelson used his column this week to present the argument in Robert Gordon's new book on productivity. The central part of the story is that we are likely to see slow growth in the years and decades ahead because the period of rapid productivity growth is behind us.

There are two main points worth making on this argument. First, we need only be concerned about the limits imposed by productivity if we are at full employment. If we have millions of people who are not working primarily...

Some Serious Confusion on Stocks and the Economy from Steven Pearlstein

I usually find Steven Pearlstein's Washington Post columns interesting and well thought out, not so today. The problem begins with the headline (possibly not his), which tells us "the bear market may have already begin."

I'm not in the business of giving people advice about stock investing, but as a practical matter, I would feel much more comfortable buying into the market today, after it has given up roughly ten percent of its value, than I would have when it was near its peak. In effect t...

Does a Program at the Post Add "Free" to Any Mention of "Trade?"

That's what millions are asking after seeing a discussion of a wage insurance program proposed by President Obama which included the line:

"Wage insurance has also been proposed as a way to ease concerns about free trade and the disruptive effects of technological change."

Does the word "free" add anything substantive to this sentence? It does tell readers that we are supposed to like the trade that is displacing workers, but presumably there is nothing in the wage insurance proposal that wil...

WaPo Does Another OMG! Editorial on Social Security and Medicare

Yes, it's a beautiful Sunday morning in our nation's capital (not quite) and the Washington Post is again urging cuts to Social Security and Medicare. The headline tells it all, "A nation that is getting older -- fast."

The editorial lays out the case:

"The implication [of an aging population] is clear: A larger, older cohort will depend on a smaller, working-age cohort. Payroll taxes fund Social Security and Medicare; yet the Congressional Budget Office forecast last year that the ratio of w...

The Big Short: A Tale of Greed, Corruption, and Stupidity

I saw the movie last night. It’s a great flick. If anyone doubted that it was possible to make a humorous entertaining film about credit default swaps and collaterized debt obligations, the Big Short is the definitive answer to the question. But now let’s get to the substance.

Not surprisingly, the movie is prompting another round of revisionist accounts of the housing bubble. If you had not already guessed, the movie’s account is one in which the Wall Street boys ran wild and ended up drowni...