Dean Baker's Blog, page 220

U.K. Non-Financial Sector to Become More Internationally Competitive According to Bankers' Group

The NYT devoted an article to a report put out by the British Bankers' Association that claimed that new regulations were making the British industry less competitive internationally. This is presented as being a serious problem that should concern people.

In fact, people who believe in free trade should not care any more about the possibility that the U.K. will lose jobs in finance to foreign competition than if it loses jobs in textile manufacturing to foreign competition. The standard free...

Good NPR Piece on the Tariffs that Will be Allowed Under the TPP: Currency Management

The Planet Money team had a nice segment pointing on the Trans-Pacific Partnership (TPP). The piece pointed out that the TPP has no enforceable language on currency management.

While the deal is ostensibly about eliminating tariffs and other trade barriers, controlling currency values can be an effective way to impose barriers to trade. If a country intervenes in currency markets to lower the value of its currency by 10 percent it has an impact that is comparable to imposing a 10 percent tari...

Simplifying the Tax Code

Josh Barro had a very nice discussion of the issues involved in simplifying the income tax code, as proposed by most of the Republican presidential candidates. He concludes with a discussion of what would probably the greatest simplification for most taxpayers: have the I.R.S. prepare returns that could be corrected by taxpayers if they thought there was an error.

This is now done in some European countries, such as Denmark and Spain. As Barro explains, it could also be done here, for people...

Beating the Press with Timothy Egan

When a columnist uses your blog name in his title, he has to expect a response, right? Egan is unhappy about attacks on reporters and reporting from both the left and right. I am not going to particularly defend the targets of Egan’s criticism, but I will say that people have very good reason to be angry at the media. And here I am referring to elite outlets like the NYT, Washington Post, National Public Radio, not the small town journalists working at “poverty-level wages” who Egan grabs as...

Hillary Clinton Does NOT Support a Financial Transactions Tax

I mention this because some of the reporting on this topic might have misled some people. For example, the NYT recently told readers:

"All three candidates [Clinton, O'Malley, and Sanders] support a financial transaction tax to limit high-frequency trading." [emphasis in original]

While Clinton has proposed a tax on high frequency trading, which is almost certainly unworkable, the other two candidates have actually proposed financial transactions taxes. The taxes they have proposed would ra...

Thomas Friedman Hurts Himself Again Playing With Economics

Thomas Friedman, who once said that Germany would demand Greeks work like Germans as a condition of bailout funds (Greeks now work many more hours on average), allowed his column to stray into economics again today. Not surprisingly, he gets some of the big things wrong.

He starts by going after Donald Trump. While Trump has said many things on economic issues that bear little relationship to reality, Friedman attacks him on one that does. Friedman recounts an interview in which Trump said th...

NYT Debate Fact Check on Currency Manipulation: Donald Trump Wins

The NYT deciding to take on Donald Trump's assertion that the Trans-Pacific Partnership (TPP) is a bad deal for the United States because it doesn't have any provisions on currency manipulation, henceforth referred to as "management." ("Manipulation" implies something that is hidden. Most of the countries who have been candidate "manipulators" have an explicit policy of targeting the exchange rate of their currency against the dollar and buy large amounts of U.S. government bonds to keep the...

India's Greenhouse Gas Emissions and Secular Stagnation

Eduardo Porter had a good piece in the NYT today about how India's development needs are likely to lead to a massive increase in its greenhouse gas emissions over the next two decades. This is an interesting issue to think about in the context of secular stagnation.

The problem of secular stagnation is that the United States and other wealthy countries are not creating enough demand to fully employ their labor forces. A great way to increase demand in the U.S. economy would be to pay India to...

Demographics and Productivity

News reports continue to obsess over the idea that China and other countries might run out of people if they don't increase their birth rates. The implication is that countries won't have enough people to do the necessary work to support a larger population of retirees. (It's worth noting that many of these same people worry about robots taking all the jobs. If it's not obvious that these concerns are 180 degrees opposite then think about it until it is.) Anyhow, the NYT had an article that r...

Dangerous Thoughts on Alternative to Government Granted Patent Monopolies on Drugs

I was impressed to see the strong reaction to my blog post comparing the productivity of the research done by the Drugs for Neglected Diseases Initiative (DNDI) and research by the pharmaceutical industry supported by patent monopolies. Commentators here and elsewhere insisted that such comparisons were “idiocy” and possibly even dangerous. Many insisted that my explicit assertion that this was not an apples to apples comparison was inadequate, even though I noted important differences in the...