Dean Baker's Blog, page 216

Hillary Clinton, Bernie Sanders, and Cracking Down on Wall Street

The New Yorker ran a rather confused piece by Gary Sernovitz, a managing director at the investment firm Lime Rock Partners, on whether Bernie Sanders or Hillary Clinton would be more effective in reining in Wall Street. The piece assures us that Secretary Clinton has a better understanding of Wall Street and that her plan would be more effective in cracking down on the industry. The piece is bizarre both because it essentially dismisses the concern with too big to fail banks and completely i...

People Phase in and Out of Kentucky Kynect

The NYT had an article reporting on the fact that the vast majority of people in Kentucky want the state to leave in place its expansion of the state's Medicaid program under the Affordable Care Act (ACA), even though it just elected a governor who is strongly opposed to the ACA. The piece notes that 425,000 people in the state (just under 10 percent of the population) have signed up for Medicaid, then adds "by contrast, only 89,000 people have bought private coverage through Kynect, the stat...

Krugman on Portugal and the Migration Death Spiral

Paul Krugman comments that Portugal can be a situation where its aging population, combined with a large outflow of younger people due to high unemployment, can lead to an ever worsening financial situation where fewer workers are left to support a larger debt and non-working population. (Note, the key factor here is the migration, not the aging.)

That pretty well describes the picture with Puerto Rico, with a large segment of its working age population moving to the mainland United States, l...

Politicians Don't Also Say What They Think # 56,780: The TPP

Why is it so hard for reporters to simply tell us what people say instead of what they think? I'm sure many of these reporters are very insightful, but the reality is they do not know what people think, it is just their speculation.

Therefore, when a Washington Post article on the prospects in Congress for the Trans-Pacific Partnership (TPP) told readers:

"Obama has said the pact is central to his economic agenda, but it is also viewed inside the administration as an important foreign policy...

The Obama Administration Pledges to Increase Aid to Developing Countries for Climate Change by 0.01 Percent of the Budget

The Washington Post had an article on a commitment by Secretary of State John Kerry that the United States would double its aid to developing countries for dealing with climate change from $400 million annually to $800 million by 2020. Those who are worried about the tax increases needed to pay for this aid may be interested in learning that the additional commitment comes to a bit less than 0.009 percent of the $4.7 trillion the government is projected to spend in 2020.

Matt O'Brien Takes Obama to Task on Fed Appointees

Matt O'Brien used his column this morning to take Obama to task for failing to fill vacant postions on the Fed's board of governors. I agree with O'Brien with one major exception.

O'Brien refers to the Taper Tantrum in the summer of 2013, when mortgage and other long-term interest rates soared after Chair Ben Bernanke indicated the Fed would soon begin to taper its quantitative easing program. He sees the market reaction as partly a result of the composition of the Fed's board of governors, w...

CalPERS and Private Equity: A Second Opinion

Guest Blog
by Eileen Appelbaum and Rosemary Batt
Co-authors of Private Equity at Work: When Wall Street Manages Main Street

The usually perceptive Deal Professor, Steven Davidoff Solomon has swallowed CalPERS’ staff’s spin on the more than $3.4 billion the California public employees’ pension fund has paid to private equity firms in performance fees (so-called carried interest) hook, line and sinker. In Private Equity Fees Are Sky-High, Yes, but Look at Those Returns, Davidoff Solomon accepts...

It Doesn't Seem Hard to Get Good Help: The JOLTS Data

Yesterday the Labor Department released October data from its monthly Job Openings and Labor Turnover Survey (JOLTS). The release got surprisingly little attention in the media.

While there were no big surprises, it does not paint a picture of a robust labor market. The number of job opening was down 150,000 from the September level and was almost 300,000 below the peak hit in July. That is not necessarily a big deal; the monthly data are erratic and a monthly change of this size could just b...

Strange Cases for Fed Rate Hikes: The Poor Savers Story

By Dean Baker and David Rosnick

 

Over the last seven years there has been a steady drumbeat of complaints from people who are upset by the Fed’s zero interest rate policy. We first heard that it was going to lead to hyperinflation. Then we were told that low interest rates would fuel asset bubbles. More recently a rate hike has become a matter of the Fed’s credibility.

One of the most persistent complaints is that the zero interest rate policy is unfair to small savers. The argument is...

The Revolving Door with the Banks and "Reform" of Fannie and Freddie

Gretchen Morgensen has an excellent piece in the NYT reporting on the revolving door between Wall Street banks and the Obama administration and the lobbying effort to dismantle Fannie Mae and Freddie Mac. These banks hope to be able to take over the business of the two mortgage giants with a system under which the government would guarantee 90 percent of the value of the mortgage backed securities they issued. While the piece does a very good job detailing the financial connections of the ind...