Dean Baker's Blog, page 233

The Affordable Care Act and Part-Time Employment: Voluntary vs. Involuntary

We here are CEPR were glad to see that new research confirms what we had shown earlier, the Affordable Care Act (ACA) did not create a "part-time" nation as many of its opponents warned. In contrast to these studies, our work actually looked at the period when employers would have expected the sanctions to have been in effect, the first six months of 2013.

We did find a small increase in the percentage of workers employed between 25 and 29 hours a week, just under the 30 hours a week cutoff f...

The $4 Trillion Problem With China's Currency Being Market Valued

Several of the articles discussing the decision of China's central bank to lower the value of the yuan have referred to the assessment of the I.M.F. that the Chinese currency now reflects its market value. Many have pointed out that China's central bank has stopped buying large amounts of foreign exchange to keep the yuan from rising, implying that the current value now reflects the market rate.

The problem with this story is that China's central bank is still sitting on more than $4 trillion...

Global Warming, Australia, and the Marshall Islands

The NYT ran an article on the goal for greenhouse gas emission reduction set by the Australian government. The article noted criticism of the goal as being inadequate. In particular, it refers to criticism from the Marshall Islands' government that this sort of action will not be sufficient to keep the islands from being destroyed by rising sea levels.

While it would be a tragedy if the Marshall Islands were destroyed and its 53,000 people had to be relocated, this would be a relatively minor...

The Washington Post Has Determined that Government Granted Patent Monopolies Are the Most Efficient Way to Finance Drug Research

Those of you who were wondering about the best way to finance drug research need look no further, the Washington Post has the answer: It's government-granted patent monopolies. They told us in an editorial today:

"The profit-driven system in this country has its inefficiencies, including high marketing costs and the like; but on balance it has served the United States, and the world, well, by promoting more innovation than a state-dominated system of research probably would have."

It would ha...

Should We Think That China is Managing Its Currency Just Because Its Central Banks Says So?

One of the most bizarre debates in national politics is over whether China "manipulates" its currency. It is bizarre both because of the term used and also because the fact that China manages its currency is really not a debatable point.

The use of the term "manipulation" is bizarre because it implies that China is doing something sneaky in the middle of the night when no one is looking. There actually is nothing sneaky about it. China openly targets the value of its currency at a level that...

San Francisco's Public Radio Station Argues California Should Have Raised Taxes and/or Cut Spending by $15 Billion in the Recession Following the Collapse of the Tech Bubble

That is the implication of comments by John Myers, a reporter with KQED radio in San Francisco. Myers was interviewed on the occasion of California paying off the last of $15 billion of bonds issued in 2004 to cover a large deficit. When Myers was asked how the bond issue worked out for the state, he responded:

"Well, certainly, the state got through the worst times. But again, in that million dollars a day, every day, for 11 years, that's a lot of interest. I don't think that the voters real...

WaPo Tells Readers that Hillary Clinton Wants to Spend Really Big Number on Making College Affordable

That's pretty much what the headline and article said, telling readers that Clinton wants to spend $350 billion "to make college affordable." Is that a lot of money?

Well, the article doesn't tell us whether the spending is over one year or twenty years, which would make some difference. If we assume that it is over ten years, the standard budget horizon, that comes to $35 billion a year. With total government spending a bit over $5 trillion in a 2017-2026 budget horizon, this would come to r...

An Innovative Way to Address Teacher Shortages: Higher Pay

Apparently pay increases aren't on the list of ways to address a teacher shortage according to the New York Times. The paper had an interesting piece reporting on a nationwide shortage of applicants for open teaching positions. The article described a number of ways in which schools are attempting to address this shortage, including lowering standards and recruiting overseas.

It does not indicate any plans to raise wages, which would be the textbook way to address a shortage of workers. Lack...

Why Krugman Should Not be Surprised

Paul Krugman makes a good point comparing the economy's performance under President Reagan and Obama. He shows the path of unemployment was actually worse under Reagan than Obama. This is to show there is no real basis for praising the Reagan record. Krugman then concludes the piece by saying, "anyway, I’m surprised that this chart isn’t more widely discussed."

Actually there is a good reason the record is not more widely discussed. The employment to population ratio is still much lower now t...

China's Trade Surplus

Catherine Rampell seems to want to turn trade issues between China and the United States into a he said/she said in a column citing complaints by Chinese businesses over U.S. practices. While there are undoubtedly many instances of U.S. practices that are protectionist, the overall picture is very clear.

China continues to run a large trade surplus. We usually expect fast growing developing countries to run trade deficits. The logic is that they offer a return on capital, leading to large inf...