Dean Baker's Blog, page 24

Educating the Washington Post on Section 230

In an article on a contribution by Facebook to support efforts to administer the election, the Washington Post noted that Donald Trump recently tweeted “REPEAL SECTION 230!!!.” The piece then described Section 230 as “a part of U.S. law that protects social networks from litigation for their decisions regarding content moderation.”

Actually, Section 230 has nothing to do with protecting Facebook and other social networks from litigation over their content moderation. Facebook is a private networ...

The Washington Post Has Never Heard of the International Monetary Fund

That would seem to be the case from reading the paper’s editorial on the need to take steps to reduce extreme poverty in developing countries. The editorial never once mentions the proposal before the International Monetary Fund to substantially increase the special drawing rights available to developing countries.

This measure, which has the support of the I.M.F. leadership, and most of its member states (but not the Trump administration), would give the developing countries resources to help t...

Waiting for a Vaccine: Killing for Inequality

I have been harping on the fact that it is very likely China will be mass producing and distributing a vaccine at least a month, and quite possibly several months, before the United States. This should make people very angry.

Even a month’s delay is likely to mean tens of thousands of avoidable deaths and hundreds of thousands of avoidable infections. And, it adds a month to the time period before we can get back to living normal lives. Of course, the delay could end up being many months, since ...

Auto Suppliers Complain that They Can’t Get Good Help

The business press routinely gives us stories of employers complaining about labor shortages. This Reuters piece on struggling auto suppliers is the latest example.

The piece does tell us the suppliers have tried the one proven remedy for labor shortages, higher wages, but the data don’t support the claim. According to the graph in the article, the average hourly wage rose from $26.80 in January of 2019 to $28.20 in August. This amounts to a 5.2 percent increase over one and two-thirds years or ...

Jump in Wage Growth Shows Disparate Impact of Layoffs

This recession has been very different from prior recessions. Most prior recessions were caused by the Fed jacking up interest rates to fight inflation, which sinks the housing and auto sectors. The last two recessions were driven by the collapse of bubbles that were driving the economy (stocks and housing). This recession is due to the pandemic, which has whacked personal services that are especially likely to spread the disease, such as restaurants, hotels, and gyms.

This has meant that a very...

How Much Will Trumpcare Insurance Cost People with Health Issues?

One of the main goals of Obamacare was to make insurance affordable for people with health problems. Insurers are happy to insure healthy people. People in good health have few claims, so essentially they are just sending a check to the insurer every month. It’s a good deal if you can get it.

But it’s a very different story if you have serious health issues. For these people insurers actually have to cough up money. In the good old days, before  the Affordable Care Act (ACA), insurers would eith...

Patent Monopolies in Prescription Drugs Cause Corruption # 43,508

Economists and economic reporters all know that tariffs can lead to corruption. The idea is that if a government-imposed tariff raises the price of a product by 10-25 percent above the free market price, companies have a large incentive to find ways to avoid the tariff. This can mean reclassifying imports to get around the tariff or trying to curry favor with politicians to get exemptions. The New York Times and ProPublica have run several excellent pieces providing examples of such behavior (e....

How’s that Recovery Going?

Donald Trump boasts endlessly about the economic recovery and insists that people are doing great now. The numbers disagree.

We will get the last employment report before the election on Friday. The unemployment rate reported for August was 8.4 percent. We’ll see what happens on Friday, but we are not doing especially well compared to other countries. Here’s the picture.

Source: OECD.

As can be seen, the 8.4 percent August unemployment rate reported for August was well above the 2.9 percent rat...

Your Periodic Reminder that CEOs Maximize CEO Pay, Not Shareholder Returns

It is a cult among policy types to say that CEOs maximize shareholder returns, as in this NYT piece. This is in spite of the fact that returns to shareholders have not been especially good in the last two decades. And, this is even though returns were boosted by a huge corporate tax cut in 2017 that increased after-tax profits by more than 10 percent, other things equal.

There is considerable evidence that CEOs do not earn their $20 million pay, in the sense of providing $20 million in additiona...

It’s Not Vaccine Nationalism, It’s Vaccine Idiocy

Last week an official with China’s Center for Disease Control and Prevention (CDC) said that the country may have a vaccine available for widespread distribution by November or December. This would almost certainly be at least a month or two before a vaccine is available for distribution in the United States, and possibly quite a bit longer.

While we may want to treat statements from Chinese government officials with some skepticism, there is reason to believe that this claim is close to the mar...