Dean Baker's Blog, page 218

Does Economics Work Differently in China Than the Rest of the World?

Most economists argue that the Fed's quantitative easing policy, in which it bought up more than $3 trillion in government bonds and mortgage backed securities, is still helping to keep interest rates down even though the Fed has stopped buying these assets. The argument is that by holding a large stock of bonds the Fed is keeping their price higher than would otherwise be the case. And higher bond price mean lower interest rates.

While economists generally accept this view that the holding o...

Andrew Biggs and the Missing Retirement Money

Andrew Biggs has a piece in Forbes arguing that the standard estimates of retirees income are flawed because they ignore payouts from defined contribution (DC) accounts like 401(k)s and IRAs. Biggs has a point. There is a fundamental asymmetry in the treatment of traditional defined benefit pensions, which send retirees a check every month, and defined contribution pensions from which retirees must make withdrawals. The checks are generally counted as income on our surveys, the withdrawals of...

Robert Samuelson Is Frustrated that He Has Not Been More Successful in Promoting Generational War to Distract People from the Money Taken by the Rich

I'm serious, here's how he begins his column (titled "Generational warfare, anyone?") this morning:

"An enduring puzzle of our politics is why there isn’t more generational conflict. By all rights, younger Americans should be resentful. Not only have they been tossed into the worst economy since the 1930s, but also there’s an informal consensus that the government, whatever else it does, should protect every cent of Social Security and Medicare benefits for the elderly. These priorities seem...

Robert Atkinson and the Washington Monthly's Straw Man About Progressives and Productivity

I am going to submit a piece to the Washington Monthly about how astronomers should support science. After reading Robert Atkinson's Washington Monthly piece on progressives and productivity, I'm convinced its editors would find its thesis compelling.

The Atkinson piece is more than a little annoying since it paints an imaginary image of progressives that exists only in Atkinson's head. Atkinson tells us that progressives should support productivity growth, after first going through some biza...

Publicly Funded Clinical Trials Would Disclose Data on Gender Differences

The Washington Post had an article on a new report from the Government Accountability Office which noted that most clinical trials don't report differences in outcome by gender. This could be another advantage of publicly funded clinical trials. The government could make a condition of financing that all the baseline characteristics of the participants in trials (e.g. gender, age, weight, etc.) be publicly disclosed along with the outcomes. This would allow other researchers and doctors to be...

To Rein College Costs How About Limiting Pay?

Steven Pearlstein has some useful ideas for limiting the rise in college costs, but he leaves an obvious item off the list. How about a hard cap on the pay of university presidents and other high level university employees?

The president of the United States gets $400,000 a year. That seems like a reasonable target. (This would be a hard cap, including all bonuses, deferred comp, etc. There is no reason to waste time with a cap that can be easily evaded.)

This would not be an interference wit...

The Washington Post Continues to Push for Higher Unemployment

The Washington Post, which has in the past expressed outrage over items like auto workers getting paid $28 an hour and people receiving disability benefits, is again pursuing its drive for higher unemployment. The context is an editorial denouncing former Secretary of State Hillary Clinton's "pander" to middle class voters.

The specific issue is Clinton's promise to increase government spending in various areas while ruling out a tax increase on families earning less than $250,000 a year. The...

Randomization In Testing Charter School Effectiveness (see correction)

Susan Dynarski had an interesting piece in the NYT on the relative effectiveness of charter schools in inner city and suburban neighborhoods. She reported on the findings from her own work, as well as others, that charter schools tend to result in higher achievement levels for inner city children, but had no effect on outcomes for children in suburban areas.

While this finding is interesting, it is important to note an important limitation to much of the research that has been done. Dynarski...

Cry for Argentina?

The election of the conservative candidate to the presidency in Argentina has been cause for celebration in mainstream Washington, as typified by this Washington Post editorial. I won't claim to know which candidate offered the better path for the country going forward, but we should not let the Washington Post types rewrite the past. 

The governments led by the Kirchners have much to show for their twelve years in power. Nestor Kirchner took power in May of 2003, just as Argentina was b...

Driving Is Safer Than They Tell You

I'm a big fan of mass transit, bikes, and walking, but bad numbers are not the way to get people out of their cars. Someone came up with the statistic that the rate of traffic fatalties is 1.07 deaths per million vehicle miles traveled. Then, the NYT, ABC, NBC, Bloomberg, and AP all picked up this number.

Think about that one for a moment. The average car is driven roughly 10,000 miles a year. If you have 20 friends who are regular drivers, these news outlets want you to believe that one will...