Dean Baker's Blog, page 226

Of Course Ben Bernanke Could Have Saved Lehman

Ben Bernanke just released his memoir which includes his account of the events around the financial crisis. According to Andrew Ross Sorkin, Bernanke claims the decision to not save Lehman in the fall of 2008 was not really a decision. Bernanke claims that the Fed did not have the ability to save Lehman. This is not true. Since the Fed has essentially a limitless ability to lend money, it surely could have provided enough loans at below market interest rates, for a long enough period of time,...

That Massive TPP

It is amazing how the elite media can be dragged along by their noses into accepting that the Trans-Pacific Partnership (TPP) can have a big impact on trade and growth. If I had a dollar for every time the deal was described as "massive" or that we were told what share of world trade will be covered by the TPP, I would be richer than Bill Gates. The reality is that the vast majority of the trade between the countries in the TPP is already covered by trade agreements as can be seen.

 &nb...

Washington Post Does Name Calling on the TPP

Naturally the paper had an editorial celebrating a deal on the Trans-Pacific Partnership (TPP). In it they referred to the TPP as a free-trade deal and denounced opponents for appealing to "protectionist sentiment." If we want to think about this one seriously, does the Post have any evidence whatsoever that the reduction in tariffs and other barriers in the TPP are economically larger than the increase in protectionist measures in the form of copyrights and patents? If so, it has never bothe...

More Legacy Making: The NYT Really Really Likes the TPP

Why does the NYT find it so hard to separate its news reporting from opinion when it comes to trade deals? Yet again, we are told that the Trans-Pacific Partnership (TPP) can be "legacy making" for President Obama. After all it is:

"drawing together countries representing two-fifths of the global economy, from Canada and Chile to Japan and Australia, into a web of common rules governing trans-Pacific commerce. It is the capstone both of his economic agenda to expand exports and of his foreign...

Donald Trump Says His Tax Cut Will Lead to 6% GDP Growth and President Obama Says TPP Will Boost Growth

A Washington Post article on the Trans-Pacific Partnership (TPP) referred to President Obama's assertion that the pact will boost growth. It would have been appropriate to point out that almost no economists support the claim that the pact will have a noticeable positive impact on growth.

The most favorable positive assessment comes from the Peterson Institute. It projects that the agreement would boost growth by 0.03 percentage points annually over the next dozen years. This would mean, for...

The Fed's Excuse Makers Still in High Gear

Remember when then Federal Reserve Board Chair Ben Bernanke assured the public that the problems in the financial system will be restricted to the subprime market? This one ranks, along with some comments from and about Alan Greenspan, as one of the worst economic predictions of all time. In other words, the folks at the Fed really missed it.

This is worth remembering because it seems that the Fed is trying to get the excuse making going in advance for the next economic crisis. The NYT report...

Are East Germans Poorer than People in Mexico?

Okay, I'm sure it was just an error in editing, but come on. An NYT article on Germany on the 25th anniversary of the unification told readers:

"A new government report showed that gross domestic product per capita in eastern Germany has more than doubled in the past 25 years, but is still one-third the level in the western part of the country."

I'm sure this is supposed to read that per capita GDP in former East Germany is one-third less than in the western part of country. Even this figure...

Washington Post Runs Anti-Sanders Editorial In News Section

The Washington Post's difficulties in separating its news and opinion pages showed up again in a piece by David Fahrenthold that warned the public against Senator Bernie Sander's agenda in his presidential campaign. The piece is headlined "how Bernie Sanders would transform the nation."

Fahrenthold is quite direct about his opinion of Sanders. He begins by referring to Sanders' proposal to have free tuition at public colleges, then tells readers:

"And, once government was paying for college,...

NYT Does PR Push for TPP: Was Iraq War a "Legacy Achievement" for President Bush?

Elites like the Trans-Pacific Partnership (TPP). After all, it was designed to redistribute more income to sectors like the pharmaceutical industry, the financial industry, and the entertainment industry. The point is to use an international agreement to over-ride national and subnational governments that might pass laws to protect workers, consumers, or the environment.

In keeping with this spirit, the NYT touted the virtues of the TPP in an article describing President Obama's efforts to co...

Washington Post Goes to Bat for Boeing and General Electric (i.e. the Export-Import Bank)

Steve Mufson picked up the Washington elite's quest to get more money for some of the country's biggest corporations by telling readers that the Export-Import Bank is not really corporate welfare because it makes a profit.

"It isn’t much welfare; the bank has an excellent lending record — a default rate of 0.175 percent as of September 2014 and a 50 percent recovery rate on defaulted loans — and the appropriation for about $110 million covers administrative expenses."

This displays the sort o...