Dean Baker's Blog, page 26

New York Times Again Forgets to Mention the Fool Proof Way to Prevent Foreign Governments from Stealing Vaccine Research

Of course that would be having open research that was freely shared. That would immediately make theft impossible, since there would be nothing to steal.

This simple and obvious point is not mentioned once in a piece describing efforts by Russia and China to gain access to vaccine research being done at U.S. universities and private companies. Since the whole world is struggling to get a vaccine as quickly as possible to bring the pandemic under control, it might have made sense to have a cooper...

Post Fact-Checker Buys Trump’s “Just Joking” Defense on Eliminating Social Security

Donald Trump routinely says outlandish things and then when he is called on them, he or his staff insist he was just joking. To take some recent favorites, people may recall his “joke” about injecting people with disinfectant at a press conference a few months back. And then there was the joke about telling his aides to slow down testing so that there would be fewer reported infections with the coronavirus. Just this week, we heard Trump quite explicitly tell his supporters in North Carolina to ...

Seeing the Last Acceptable Prejudice Clearly: The More Educated Screwed the Less-Educated

I was happy to see Michael Sandel’s piece in the NYT arguing that is still acceptable to have negative views of less-educated people because of their lack of education. Sandel makes the lonely argument that rather than focusing on increasing opportunities for people to become more educated:

“We should focus less on arming people for a meritocratic race and more on making life better for those who lack a diploma but who make important contributions to our society — through the work they do, the ...

Are Corporate CEOs Worth $20 Million?

This simple and important question does not get anywhere near the attention it deserves. And, just to be clear, I don’t mean are they worth $20 million in any moral sense. I am asking a simple economics question; does the typical CEO of a major company add $20 million of value to the company that employs them or could they hire someone at, say one-tenth of this price ($2 million a year) who would do just as much for the company’s bottom line?

This matters not only because a thousand or so top ex...

The Old Japan’s Debt Burden is Reaching Its Limits Story

That’s a theme we have been hearing for decades. Japan is a huge embarrassment for the deficit hawks. It has a debt to GDP ratio of close to 250 percent, more than twice as high as in the United States, yet it has none of the problems that the deficit hawks tell us will come from high debt.

It currently pays 0.05 percent interest on its long-term bonds. Much of its debt carries a negative interest rate so that its debt burden is currently near zero. This means that in spite of its high debt, the...

Spending on Prescription Drugs: Lies My President Told Me #3,475,652

Donald Trump’s re-election campaign has been touting that he is tough on the drug companies, unlike the wimpy Joe Biden. Perhaps in Trumpland this is true, but not in the real world. Spending on prescription drugs has actually increased somewhat more rapidly under Trump than Obama-Biden, rising at a 6.3 percent annual rate under Trump compared to a 5.5 percent rate under Obama-Biden.

Here’s the picture showing year over year increases.

As can be seen, spending grew relatively slowly through Oba...

New York Times Reports that 0.01 Percent of the Paycheck Protection Program was Fraudulently Spent

Yep, that’s its big story for the day, although people probably saw the number $62 million in the headline. The program spent a total of $525 billion to keep small businesses alive and workers being paid in the period where the economy was largely shutdown. It was a rushed program that was completely improvised, since nothing had ever been done like this before.

It was inevitable that there would be some fraud, since the safeguards were obviously far from perfect. In fact, we can be sure that th...

The Comeback of Manufacturing Jobs: MAGA Land and the Real World

We know that Donald Trump has no interest in reality, but just in case anyone might be tempted to take his boasts about bringing back manufacturing jobs seriously, it is worth a quick visit to the actual numbers. In 2016 Trump focused his campaign on a series of Midwestern swing states that had been hard hit by the loss of manufacturing jobs due to trade. He insisted that he would bring back these jobs as a result of his great skills as a deal maker. He would negotiate new trade deals so that we...

Uber, Lyft, and Lessons on the Market for Megan McArdle

Washington Post columnist Megan McArdle had a piece today arguing that California is taking a big risk if it insists on requiring that Uber and Lyft treat their drivers as employees. The risk is that these companies have threatened to shut down their operations in the state, leaving their drivers out of jobs (actually Uber and Lyft insist they already don’t have jobs). According to McArdle, people then won’t be able to get rides and restaurants will not longer have access to a delivery services....

Seattle’s High-End Wage Tax and Taxing Stock Returns

Sometimes random events come together in ways that help clarify our thinking. I had such an event last Friday. I was happy that day because Bloomberg ran a column by me on an idea I’ve toyed with for years: replacing the corporate income tax with a tax on stock returns.

The logic is that this is a simple and largely foolproof method of taxing corporate profits. Since the components of stock returns (capital gains and dividend payments) are public information, corporate tax liabilities could be d...