Dean Baker's Blog, page 253

Ruth Marcus, Budget Deficits, and the Meaning of "Whopping"

According to inside reports, the main reason the Washington Post opposes nuclear war is because of its impact on the budget deficit. The paper's never ending obsession with the budget deficit, even as it is clear that we have been suffering from a deficit that is too small, is a testament to the ability of people to ignore reality. 

Ruth Marcus treated us to another example of this obsession when she warned of a restructuring of Medicare payments that comes at the cost of:

"a whopping ha...

NYT Misses Story on Redistribution: Maybe People Don't Want Government Policies that Rig the Deck for the Rich

Neil Irwin had an interesting Upshot piece that noted polling data showing people do not favor much higher taxes on the rich. It questioned why it was that people were opposed to redistribution even though inequality has become a major national concern.

A major problem with this sort of analysis is that it treats distribution as though it is only a function of tax policy. This is clearly secondary. The upward redistribution of the last 35 years was overwhelmingly the result of government poli...

NYT Does Clean-Up for Chris Christie: He Wants to Cut Social Security not "Change" It

Apparently the NYT feels it has to protect Chris Christie from his unpopular proposals. In an article on the Republican presidential candidates, it told readers:

"He [Christie] has not spent as much time in New Hampshire as some other candidates, and he chose to focus on introducing his own policy ideas, like major changes to Social Security, Medicare and Medicaid."

Christie has proposed raising the normal retirement age to 69, which is equivalent to a 12 percent cut in benefits. He would als...

If the Machines Are Taking our Jobs, They Are Hiding It from the Bureau of Labor Statistics

The NYT gave us yet another account of how the machines are taking our jobs. This one carries the warning that they are taking the jobs of highly educated workers as well, not just less-educated workers. This story apparently carries lot of appeal among elite types (i.e. people who write for the NYT) even if it has little basis in reality.

We have a very good way to measure the extent to which machines are taking our jobs. It's called "productivity growth." It means the extent to which we can...

Does David Plouffe Believe in Uber?

That's the question millions are asking after reading Matthew Yglesias' piece arguing that former Obama political adviser David Plouffe is cashing in the right way by working as a lobbyist for Uber. Matt argues that Plouffe is getting rich by openly arguing for a cause that he believes in. I'm not convinced.

First, Matt argues that if Plouffe thought the incumbent taxi industry was mostly right in its battles with Uber, then he could have gone to work lobbying for them. While this is true, my...

Ain't No Family Farms Lost Due to the Estate Tax

It's repeal the estate tax season, which means we are hearing all sorts of nonsense about how the tax forces people to sell their family farm or business. It should be self-evident that this is nonsense since no one owes a penny of tax on an estate worth less than $5.4 million. And, just to be clear, this is net of debt. If the "family farm" is worth $10 million, but comes with $5 million in debt, then the net worth is $5 million, meaning the kids get it after paying zero in tax.

But if you s...

The Incredibly Low Expectations of Germany's Finance Minister

The NYT gave Germany's finance minister, Wolfgang Schauble, the opportunity to lay out his government's position on austerity in a column today. I don't have time to go through the piece in detail (there is not much new here), but I will make a couple of points.

First, Schauble touts the reform record of Spain and Ireland, Germany's star pupils. It's worth noting that, rather than being spendthrifts, both countries had budget surpluses before the crisis and had debt to GDP ratios well below G...

Charles Lane on Social Security and the False Equivalence of Chris Christie and Elizabeth Warren

Like many other folks connected with the Washington Post, columnist Charles Lane wants to cut Social Security. He used his column today to argue that New Jersey governor Chris Christie and Massachusetts senator Elizabeth Warren want to address the shortfall in Social Security in essentially the same way, but progressives are too dumb to recognize this fact.

"The irony is that the progressive plan and Christie’s plan are equivalent, at least in their very broad financial strokes. Both claim to...

Redistribution Can Involve Less Government Rather than More

Thomas Edsall presents some interesting polling results in his NYT column indicating less public support for government policies to redistribute income even as the distribution of income is becoming increasingly unequal. He argues that this presents a paradox for Democrats who are concerned about inequality.

Actually the situation is less paradoxical when we consider the possibility that government policies are largely responsible for growing inequality. This is most obvious is with the bailo...

The TPP is Not a "Free Trade" Pact and President Obama is a Politician, not a Political Philosopher

The Washington Post has long been completely gung ho for trade deals. Whether this stems from some sort of religious fervor or a desire to help wealthy friends and advertisers is not clear. What is clear is that the paper routinely departs from reality in pushing their trade agenda.

It did this most famously back in 2007 when a lead editorial proclaiming the virtues of NAFTA asserted that Mexico's GDP had quadrupled in the prior 20 years. According to the I.M.F., Mexico's growth was actually...