Dean Baker's Blog, page 258

NYT's David Leonhardt Does Mind Reading on Hillary Clinton

It is amazing how many reporters want to be mind readers. I guess it's hard to make a living as a mind reader. Anyhow, David Leonhardt took some steps in the mind reading direction when he told readers:

"They both [President Obama and Hillary Clinton] consider the stagnant incomes of recent decades to be a defining national issue. They both want to address the stagnation through a combination of government programs and middle-class tax cuts. They both see climate change as a serious threat. T...

NYT's David Leonhardt Does Mind Reading on Hilary Clinton

It is amazing how many reporters want to be mind readers. I guess it's a hard to make a living as a mind reader. Anyhow, David Leonhardt took some steps in the mind reading direction when he told readers:

"They both [President Obama and Hilary Clinton] consider the stagnant incomes of recent decades to be a defining national issue. They both want to address the stagnation through a combination of government programs and middle-class tax cuts. They both see climate change as a serious threat....

Robert Rubin Is Not "Overly Friendly" to Wall Street, He Is Wall Street

Lydia DePillis and Jim Tankersley had an interesting wonkblog piece on how even mainstream Democrats are now at least paying lip service to the argument that unions are necessary to reduce inequality. The piece includes a pro-union statement from Robert Rubin who it describes as someone "whom liberals consider overly friendly to Wall Street."

This misrepresents Rubin's background. Robert Rubin was a top executive at Goldman Sachs before coming to the Clinton administration. After leaving the...

Robert Rubin Is Not "Over Friendly" to Wall Street, He Is Wall Street

Lydia DePillis and Jim Tankersley had an interesting wonkblog piece on how even mainstream Democrats are now at least paying lip service to the argument that unions are necessary to reduce inequality. The piece includes a pro-union statement from Robert Rubin who it describes as someone "whom liberals consider overly friendly to Wall Street."

This misrepresents Rubin's background. Robert Rubin was a top executive at Goldman Sachs before coming to the Clinton administration. After leaving the...

Getting It Wrong on Trade: TPP Is Not Good for Workers

The big money is sweating big time since it seems large segments of the American public have caught wind of the Obama administration's plans for the Trans-Pacific Partnership. After several decades in which trade has been a major factor depressing the wages and living standards of the country's workers, the Obama administration is going back to the well to push for more.

The immediate goal is the Trans-Pacific Partnership (TPP), which includes a number of countries in Asia and Latin America....

Profit Share Drops in 2014

The Federal Reserve Board released data on profits for 2014 this week. The good news, for those who are not Mitt Romney-types, is that the profit share fell in 2014 from its 2013 peak. Before-tax profits were 0.6 percentage points lower as a share of GDP than they had been in 2013. After-tax profits were 1.2 percentage points lower.

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Lower Inflation Due to Lower Oil Prices Does Not Raise Real Interest Rates for Businesses

That would be unless the business in the oil industry. A NYT piece on the drop in inflation across Asia seems confused on this point. It notes the sharp decline in the inflation rate across the region, which is mostly due to lower oil prices, and raises the concern that this may discourage businesses from investing.

This logic doesn't work insofar as the lower inflation is simply due to lower oil prices. From the standpoint of a business considering a new investment what matters is the price...

The Drop in the Value of the Euro Would Have the Same Impact on Oil Prices in Europe If Oil Was Priced in Euros

The silly things you read in the NYT! It really doesn't matter what units oil is priced in. We get a market price that is determined by supply and demand. This will be higher measured in euros any time the euro falls in value simply because at the same price measured in other currencies, oil will cost more euros.

It would only matter if the price were in dollars if there were long-term contracts that are specified in dollars. In some cases, companies will have long-term contracts, but not all...

Fun With Brad DeLong on TPP

Brad thinks he has a winner policy with TPP, taking issue with Paul Krugman who says the deal is not worth doing. Brad argues that even if the deal is worth half of the 0.5 percent of GDP figure that is widely cited, we are still talking about 0.25 percent of GDP, or $75 billion a year for the region as a whole and $45 billion for the U.S.

He acknowledges that these gains may not be spread evenly, but wants to see evidence that the losses to workers would be larger than their share of this $7...

The New York Times Gets Confused in Spain: It Doesn't Realize that Taxes Pay for Spending

It seems the paper is having more than a few problems with logic these days. (See yesterday's concern that inflation in the euro zone will drop from a small positive to a small negative.) An article on the rise of Podemos, a left populist party in Spain, discussed Podemos' program:

"The program also calls for new taxes on the wealthy and on financial transactions. It promises higher pensions and salaries, as well as a rise in spending on health care, education and other social services — with...