Dean Baker's Blog, page 221

Are We In Danger of Running Out of People?

The NYT apparently thinks so, since it ran a front page piece on the difficulty of increasing birth rates in Europe, China, and elsewhere. Let's see, if we have a declining population that means fewer traffic jams, less crowded parks and beaches, and less pollution. Sounds like a crisis to me.

I know the "hard to get good help" crowd is worried about who is going to work as their servants, but for the foreseeable future it looks like we are facing a situation of inadequate demand in the econo...

Tyler Cowen on the Progressivity of Obamacare

Tyler Cowen had a piece in the NYT arguing that the mandates in Obamacare may be painful for many moderate-income people who don't qualify for subsidies and don't value the insurance. This is true, but it is also true of almost any policy that would be designed to help low- and moderate-income people.

First, the basic point is that the mandate requires people to buy insurance who might not have otherwise if the law didn't require it. If we give these people credit for acting rationally, they...

The Washington Post is Confused About Central Banks and Democracy

In an editorial railing against the Republican Congress for reducing the Fed's reserve fund (which is needed in case they forget how to print money), the Washington Post told readers:

"Central bank independence and fiscal transparency are attributes of a healthy democracy and have been throughout history. Many a banana republic, by contrast, has come to grief using its central bank to facilitate government deficit spending. Post-World War I Germany had a similar problem, if memory serves."

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The Fed and the Economy: What We Think and What We Want

As the debate over a Fed interest rate hike heats up, it is worth noting an important distinction between the types of issues being debated. On the one hand there is a debate over what is likely to happen in a scenario in which the Fed soon begins raising interest rates and one in which it does not. On the other hand there is debate over what we want to see happen.

The first question has to do with the likelihood that we will see more rapid wage growth and more rapid inflation if the Fed hold...

Another Battle in the War to Get the Losers in Class War to Blame Their Parents

Most young people today are having tough times economically. As we know, the main reason for this fact is that so much income has been redistributed upward over the last thirty five years. (Also, we have a cult of deficit reduction in which our leaders in Washington insist on keeping deficits small even when this means slowing growth and keeping people out of work.) Their parents are not doing notably better, with most approaching retirement with little to support them other than their Social...

The Rationale for High Drug Prices: Incredibly Inefficient Research

Insanely high drug prices have been in the news lately. We are regularly hearing about new miracle drugs like the Hepatitis C drug Sovaldi. Sovaldi comes with an $84,000 price tag for a 3-month course of treatment. Many of the new cancer drugs cost well over $100,000 for a year's dosage. And of course we had the case of Turing Pharmaceuticals, which raised the price of a Daraprim, an old but important anti-infection drug, by 5000 percent. 

These stories of extraordinarily high drug price...

Mitt Romney and Paul Ryan Did not Call for a Overhaul of Social Security in 2012 (see correction)

The Washington Post got recent history badly wrong in the third paragraph of its lead front page article when it told readers:

"Three years ago, GOP presidential nominee Mitt Romney and Ryan, his running mate, faced withering Democratic attacks after endorsing dramatic overhauls of Medicare and Social Security that proved unpopular."

Actually, Romney did not endorse an overhaul of Social Security in his 2012 campaign, although Ryan has long been on record as favoring privatization. Presumab...

TPP Has Enforcement Provisions for Drug Companies and Entertainment Industry, Not for Labor Rights or Currency Intervention

That might have been a better headline for a NYT piece on the Trans-Pacific Partnership. As the piece points out, the provisions on labor rights in Vietnam and currency interventions by governments, which have been widely touted by the Obama administration, are not actually enforceable under the terms of the TPP. There are other much less well-defined mechanisms. On the other hand, if Pfizer wants to argue that Australia is not respecting its patent rights or George Lucas wants to complain th...

Socialism in Denmark May Push Employment Rates Down to U.S. Levels, In 25 Years

The Washington Post decided to correct the positive image of Denmark that Senator Bernie Sanders and others have been giving it in recent months. It ran a piece telling readers:

"Why Denmark isn't the Utopian fantasy Bernie Sanders describes."

The piece is centered on an interview with Michael Booth, a food and travel writer who has spent a considerable period of time in the Scandinavian countries.

Much of the piece is focuses on the alleged economic problems of Denmark and the other Scandi...

The News Media Discover the CPS Undercounts Poor People, A Decade After CEPR

Hey, better late than never. It was good to see two columns reporting on new data indicating that the Current Population Survey (CPS), the main survey used to measure poverty rates, as well as employment and unemployment, seriously undercounts the number of poor people due to undercoverage in its sample. It's an important point and deserves attention.

We thought so too, which is why John Schmitt was writing about the issue almost a decade ago for CEPR. Schmitt noticed a large gap between empl...