Dean Baker's Blog, page 237

Uber Provides Good Service to Minorities with Smart Phones and Credit Cards

Uber is once again dipping its toe into the world of innovative social science. Folks may recall that earlier this year it commissioned Alan Krueger, one of the country’s leading labor economists and formerly President Obama’s chief economist, to do an analysis of Uber drivers’ pay. While Uber shared data with Kreuger on drivers’ gross receipts, it did not share data on miles driven. This meant that Krueger was left comparing the gross receipts of its drivers with the net income of cab driver...

Another Round with Brad DeLong and Bubble Bursting Recessions

I see that Brad takes issue with my prior post arguing that the bubble-driven recession of 2001 and the more recent one in 2008 were really bad news which could not be easily escaped.

"You need to rebalance, but competent policymakers can balance the economy up, near full employment, rather than balancing the economy down. And from late 2005 to the end of 2007 the balancing-up process was put in motion and, in fact, 3/4 accomplished.

"There is no reason why moving three million workers from...

How Did the NYT Determine that the Social Welfare Systems in France and Italy Are Too Generous?

That's what millions of readers are asking after reading a NYT article on the fallout from Germany's hardline in negotiations with Greece over its debt. The piece noted the lukewarm support given to Greece from France and Italy. It told readers:

"France and Italy struggle with some of the same problems as Greece: low growth, youth unemployment, rigid labor markets, bloated state bureaucracies and social welfare systems too generous now, when people live longer, to be supported by current reve...

The Saudi Quest: High Prices or Large Market Share?

The Washington Post had a major piece describing what it called a "global competition" by oil producers to stay in business even as prices remain low. The piece seems to imply that the strategy of Saudi Arabia in this competition is to pump enough oil to keep prices low, thereby driving out competitors. They would then raise their prices once the competition is gone.

This strategy does not make sense. A prolonged period of low prices may push some of their competitors into bankruptcy, like Co...

News for Philip Bump, Scott Walker's Proposal for Education and Training Fits His Definition of "Lame"

Just after announcing his candidacy for the Republican presidential nomination Scott Walker denounced the left for not having any real ideas for workers. According to Walker:

"They've just got really lame ideas, things like the minimum wage. Instead of focusing on that, we need to talk about how we give people the skills and the education, the qualifications they need to take on careers that pay far more than minimum wage."

In his Washington Post "The Fix" column, Philip Bump largely endorsed...

Washington Post Still Worried About Consumer Psychology Even With Consumption at Record High Share of GDP

As they say at the Post, don't let the data bother you, or so it would seem with yet another article bemoaning the lack of consumption. The proximate cause was a Commerce Department report showing weaker retail sales in June after a big jump in May. The piece explained to readers:

"The figures suggest that Americans are still reluctant to spend freely, possibly restrained by memories of the Great Recession.

"'Household caution still appears to be holding back a more rapid pace of spending gro...

Steve Rattner Ignores the Austerity that Germany Gave Greece

In a NYT column Steve Rattner argues that the conditions being imposed on Greece by Germany as a condition of its bailout are for its own good. While Greece undoubtedly needs to reform its economy in many ways, Rattner ignores the extent to which austerity, both within the country and the euro zone as a whole, have worsened Greece's economy. This is both true in a macro sense, in that cuts in government spending and increased taxes reduce GDP and employment, but also the resulting depression...

Why People Aren't Working, Can We Talk About the Fed?

In her WaPo column Catherine Rampell points to the sharp decline in labor force participation rates for prime age workers (ages 25-54) in recent years and looks to the remedies proposed by Jeb Bush and Hillary Clinton. Remarkably neither Rampell nor the candidates discuss the role of the Federal Reserve Board.

There is not much about the drop in labor force participation that is very surprising. It goes along with a weak labor market. When people can't find a job after enough months or years...

Pensions: Greece and the European Central Bank

We've been hearing a lot about pensions in Greece lately. These have been a major target of the creditors in their negotiations with Greece. According to a recent article in the New York Times, 60 percent of Greeks receive a pension of less than $9,500 a year. An article in today's Washington Post may lead people to ask what sort of pensions the top officials at the European Central Bank (ECB) get.

The article briefly recounts how Greece and other crisis countries got themselves into difficul...

If the Fed Raises Rates, It will Force People Into Uber Type Jobs

Would a doctor work for Uber? Probably not, but if it turned out there were no jobs for doctors and the only way she could support her family was to work for Uber, then a doctor may work for Uber. That is an important point left out of an interesting article on growing economic insecurity for workers.

A big part of this story is the decision by the Federal Reserve Board to raise interest rates to deliberately limit the number of jobs in the economy. This disproportionately hits less educated...