Dean Baker's Blog, page 229

Robert Samuelson on Productivity and Living Standards

Robert Samuelson used his column today to note the weak productivity growth in recent years. The piece tells that there are two ways to improve living standards for the typical person. We can alter the distribution between the top and everyone else or we can increase output. He tells readers that Democrats tend to emphasize distribution while Republicans emphasize productivity. He then points out that redistribution has limits, since it is a one-time story, whereas more rapid productivity gro...

Paul Krugman Carefully Explains Why We Never Had to Worry About the Second Great Depression

We are approaching the 7th anniversary of the collapse of Lehman. As folks recall, this led to a massive financial crisis, with normal interbank lending freezing up, and most of the country's major banks teetering on the brink of bankruptcy. This was when then chair of the Fed Ben Bernanke, along with Treasury Secretary Hank Paulson, and New York Fed bank president Timothy Geithner, ran to Congress and demanded an immediate bailout of the banks, which was known as the TARP. The alternative wa...

Politicians Don't Always Do What they Say #23,314

Sorry folks, but sometimes politicians and political figures say things for public consumption, not because they actually reflect reality. This is why reporters should tell us what these figures say, not to assume that what they say reflects the truth.

Therefore, when Attorney General Loretta Lynch sent out a memo saying that the Justice Department would seek criminal prosecutions of individuals in cases of white collar crime, the NYT should have reported that she sent out a memo. It should n...

Politicians Don't Always Do What they Say # 23,314

Sorry folks, but sometimes politicians and political figures say things for public consumption, not because they actually reflect reality. This is why reporters should tell us what these figures say, not to assume that what they say reflects the truth.

Therefore, when Attorney General Loretta Lynch sent out a memo saying that the Justice Department would seek criminal prosecutions of individuals in cases of white collar crime, the NYT should have reported that she sent out a memo. It should n...

Getting Serious About Taxes with the Washington Post and Jeb Bush

The Washington Post began its editorial on Jeb Bush's tax cut proposal by telling readers, that it is "worth taking seriously." Most of the rest of the editorial is telling us the opposite. The basic story is that everyone gets a tax cuts, with the biggest savings going to the wealthy. That is projected to reduce revenue by $3.2 trillion over the next decade (@ 1.5 percent of GDP), but the magic growth elixir will get us back $2.0 trillion of this shortfall. 

Paul Krugman and others have...

The Crisis of Too Little Land

If you have been worried about the demographic crisis leaving us with too few workers or the technological revolution leaving us with too few jobs, my friend Noah Smith now warns us of the crisis of too little land. The problem is that we have too much money going to owners of land, who are not entirely accurately referred to as "landlords" by Noah.

There are a few problems with this story. First, the trend for an increasing share of income to go to land owners is less clear than he suggests....

Hold the Celebration on Job Openings

The Labor Department released new data this morning on job openings and turnover. The release showed a big jump in openings in July compared with June or July of 2014. In the past this has been taken as evidence of the economy's strength and also as an indication that employers are having problems get workers with the needed skills.

One problem with this story is that many of the openings are showing up in retail trade and restaurants, which are not areas where we ordinarily think the skill r...

David Brooks Sees Rise of Candidates Who Challenge Rich as Problem of "Expressive Individualism"

David Brooks discussed the rise of Jeremy Corbyn on the left in the Labor Party in the United Kingdom and Bernie Sanders on the left in the United States, along with Donald Trump and Ben Carson on the right. He argues that none of these people could conceivably win election. He therefore concludes that their support must stem from a psychological problem which he identifies as expressive individualism.

This is an interesting view. Of course, Brooks' assessment of who is electable may not be r...

The Washington Post Was Confused by August Jobs Report

That is what it told readers in its article writing up the data. The piece indicated surprise that wages are not rising more rapidly given the relatively low unemployment rate:

"Over the past 40 years, unemployment has almost never been as low as it is today, with the exception of a few years in the late 1990s."

This part is not quite right. The unemployment rate was below the 5.1 percent rate reported for August from May of 2005 until April of 2007, so an unemployment rate this low is not qu...

China as Number One

Most of the reporting on China and its current economic problems refers to it as the world's second largest economy. This is true if its GDP is measured on a currency conversion basis, in other words taking its GDP and effectively converting it into dollars at the official exchange rate.

However economists more typically use purchasing power parity measures of GDP. These involve using a common set of prices for goods and services in all countries. By this measure China's GDP is already more t...