Dean Baker's Blog, page 213

George Will Gets It Wrong: Issue Is Freedom of Contract, not Free Association

Conservatives have been very effective in turning the logic of many issues on their head. For example, when they push for stronger and longer patent and copyright protections in trade agreements like the Trans-Pacific Partnership, they refer to these monopolies as "free trade." In the same vein, George Will is pushing the conservative line that there is an issue of fundamental rights in the Supreme Court case deciding whether public sector workers can be required to pay representation fees. &...

Credit Rating Agencies Still Suffer from Conflict of Interest

Gretchen Morgenson had a good piece in the NYT this morning on a new report from the Securities and Exchange Commission (SEC) showing that the credit rating agencies still suffer from the same sort of conflict of interest problems that helped stoke the housing bubble. The basic problem is that the issuer of the security that is being rated picks the credit rating agency. This gives the credit rating agency an incentive to give them a good rating, otherwise they risk not being called back for...

The Democratic Party Stands for Truth, Justice, and the American Way

Nope, I haven't taken up political advertising, although the idea of getting millions for doing nothing does sound appealing. Actually, the matter at hand is the NYT appears to be doing some political advertising on behalf of the Republicans. The NYT ran a piece on the splits within the Republican Party where it told readers:

"The issues animating grass-roots voters — opposition to immigration, worries about wages and discomfort with America’s fast-changing demographics — are diverging from a...

The Big Short: A Tale of Fools and Crooks

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...

Is $19,000 a Year an Adequate Retirement Income?

While economic debates can often get into complex questions of theory or statistical methods, many hang on more simple issues, like the right adjective. We got a great example of one such debate in a Wall Street journal column by Andrew Biggs, an economist at the American Enterprise Institute and former Deputy Commissioner of the Social Security Administration under President George W. Bush. 

Biggs looks at some recent evidence, most notably a new study from the Congressional Budget Offi...

Robert Samuelson Is Confused: Pew Study Confirms Middle Class Stagnation

Robert Samuelson used his column today to tout a Pew study that recycled well-known Census data showing stagnating family incomes over the last four decades. Unfortunately, Samuelson thought the results showed the opposite, telling readers:

"But the study convincingly rebuts the notion that the living standards of most Americans had stagnated for many decades. Pew calculated household incomes, adjusted for inflation, all along the economic spectrum and found that, until the early 2000s, most...

The Wall Street Journal, the Federal Reserve Board, and the Presidential Candidates

The Wall Street Journal devoted an article to the presidential candidates economic plans and their potential to affect growth and to help the middle class. Remarkably, the piece never once mentions the Federal Reserve Board and its current plans to raise interest rates in order to slow growth.

The Fed's plans should be front and center in any discussion of efforts to boost growth either through tax cuts or additional spending, since if the Fed believes that such plans will simply lead to more...

The Myth of the Corporate Income Tax as Double Taxation

Noam Scheiber had a good discussion yesterday in the NYT of recent changes in tax shares. The piece commits one major sin when it discusses the desire to lower the tax rate on capital income as stemming from a desire to reduce "double taxation." The logic of this argument is that profits are taxed at the corporate level, so when they are taxed again at the individual level when they are paid out as dividends or lead to capital gains, this amounts to "double taxation."

The problem with this lo...

NYT Invents a "Surprisingly Quick" Economic Recovery for Spain

Rewrites of history can pop up in the strangest places. This one appears in an obituary for Edward Hugh, an economist who became somewhat famous for his pessimistic blogposts about the prospects for the euro zone. Towards the end, the piece tells readers:

"On occasion his prognostications were overly pessimistic, and Spain’s surprisingly quick economic recovery was an event that he, along with many others, did not foresee."

This one should have left readers scratching their heads. Spain did n...

No Happy New Year at the Washington Post: Harold Meyerson Gets the Boot

The Washington Post opinion pages is not a place most people go for original thought, even if they do provide much material for Beat the Press. One major exception to the uniformity and unoriginality that have marked the section for decades was Harold Meyerson's column. Meyerson has been writing a weekly column for the Post for the last thirteen years. He was told by opinion page editor Fred Hiatt that his contract would not be renewed for 2016.

According to Meyerson, Hiatt gave as his reason...