Dean Baker's Blog, page 255

Restaurants Can't Find Qualified Workers

That's what Yahoo Finance effectively told us in the headline of a piece on the Labor Department's release of new data from its Job Opening and Labor Turnover Survey. The headline said, "U.S. jobs opening data points to skills mismatch." The evidence was a modest rise in the overall rate of job openings from 3.4 percent to 3.5 percent. But if this is evidence of a skills mismatch then the biggest problem is in the restaurant sector where the jobs opening rate was 5.1 percent. Apparently there...

If We Pay Peter Peterson More Money in Interest Than He Pays for Buying New Bonds, Is It Supremely Irrelevant That He Paid for His Bonds?

That's the question Megan McArdle raises in her Bloomberg column condemning efforts to raise Social Security benefits. McArdle tells readers:

"Now, I don't want to get mired in the tired old arguments about whether the trust fund is "real" -- whether it's a stupid accounting abstraction or a profound moral promise on the part of the U.S. government -- because this obscures the actual point we need to be concerned with: If we want to pay Social Security beneficiaries more money than we are col...

Too Many Pinocchios? The Washington Post Fact Checker, Public Citizen, and the Korea Free Trade Agreement

Glenn Kessler has a difficult job. He is asked to assess claims that often arise in the middle of heated political debates. Inevitably his judgements will leave some unhappy. I sometimes fall into the unhappy camp, as is the case today with his assessment of Public Citizen's claims on the job impact of the Korea-U.S. Free Trade Agreement. He gave Public Citizen a whopping four pinocchios in saying that the deal led to the loss of 85,000 jobs.

Before getting to the substance, let me say that I...

Federal Reserve Board Independence of What?

The NYT article discussing Republican efforts to limit the Fed's power to boost the economy presented an overly narrow view of the issue of the Fed's independence. It contrasted efforts by Democrats to make the Fed more accountable to the president and the Congress, with Republican efforts to make the regional Feds stronger by giving the banks more control. The latter was described as increasing Fed independence.

In fact, the Republican path would make the Fed more dependent on the financial...

Robert Samuelson Is Partly Right on High Employment Economy

Robert Samuelson comes down largely in the right place in arguing that the Fed should error on the side of raising employment in a context where we don't low how far the unemployment rate can fall before triggering inflationary pressures. However his warnings that bad things happen if the Fed gets too carried away pushing high employment is misplaced.

First it is worth reminding everyone that the economics profession was far more confident (with far more evidence) back in the 1990s that the u...

Tyler Cowen's Three-Card Monte on Inequality

Tyler Cowen used his Upshot piece this week to tell us that the real issue is not inequality, but rather mobility. We want to make sure that our children have the opportunity to enjoy better lives than we do. And for this we should focus on productivity growth which is the main determinant of wealth in the long-run.

This piece ranks high in terms of being misleading. First, even though productivity growth has been relatively slow since 1973, the key point is that most of the population has se...

The True Myths on the Trans-Pacific Partnership

The proponents of the Trans-Pacific Partnership (TPP) are doing everything they can to try to push their case as they prepare for the fast-track vote before Congress this month. Today, Roger Altman, a Wall Street investment banker and former Clinton administration Treasury official weighed with a NYT column, co-authored by Richard Haass, the President of the Council on Foreign Relations.

They begin by giving us three myths, all of which happen to be accurate depictions of reality. The first "...

What's This "We" Jazz, Matt O'Brien?

One of the few pleasures of the dismal science is getting to watch the surprised faces of economists and economic analysts when things don't turn out as they expect. NAFTA didn't lead to a boom in Mexico, who could have imagined? The 1990s stock bubble burst and took the economy and those big budget surpluses with it, how could that be? The housing bubble exploded, sending house prices plummeting and the financial system into the abyss, who could have imagined?

We got a smaller item in this s...

Secular Stagnation and Retiring Baby Boomers: Can Economists Get Anything Right?

Suppose our leading physicists told us that fire will either lead to high temperatures that will cause burns or very low temperatures that would lead to hypothermia and frostbite, they couldn't be sure. This would be pretty much the state of macroeconomic debate in the United States and the world.

For decades we have heard endless accounts of how the retirement of the baby boomers was going to devastate the economy. The story was that the cost of their Medicare and Social Security would be an...

China Can Develop a Drug for Just 3 Percent the Cost in the United States

That would be an implication of research by Tufts University professor Joseph DiMasi. He found that it cost an average of $2.6 billion to develop a new drug in the United States. By contrast, the Wall Street Journal reported that a company in China developed a new cancer drug for just $70 million, less than 3 percent of DiMasi's estimate.

Given the enormous difference in costs, the United States and the world economy would be much better served if we shifted drug development to efficient coun...