Dean Baker's Blog, page 262

Bad News In China: Blue Collar Wages Are Soaring

Yes folks, the news just keeps getting worse. The NYT had an article touting India's economic prospects, which it contrasts with China. It told readers:

"China’s investigations of multinationals, persistent tensions with neighboring countries and surging blue-collar wages have prompted many companies to start looking elsewhere for large labor forces."

The piece also includes a box with a figure showing that the number of people in China between the ages of 15-24 (prime factory worker age) is...

Confusion on Japan's Economy

A NYT piece on the release of new data showing Japan's economy grew at a 2.2 percent annual rate in the fourth quarter gave an excessively pessimistic view of Japan's economic performance under Prime Minister Shinzo Abe. The article tells readers:

"The economy did not grow at all in 2014, with two quarters of recession almost exactly canceling out two quarters of expansion, according to Monday’s report. Growth in the two years since Mr. Abe began his campaign has added up to a modest 1.6 perc...

Supporters of Trans-Pacific Partnership Claim Obama Has Incompetents Negotiating Trade Deals

That would have an appropriate headline for a NYT article on the fact that many members of Congress may refuse to support fast-track trade authority without some rules on currency. At one point it refers to comments by Bruce Josten, a senior lobbyist at the U.S. Chamber of Commerce and supporter of fast-track, who argued that the administration could not effectively write rule on currency values:

"Would the Federal Reserve’s program of 'quantitative easing' — basically printing money to keep...

Funny Numbers on the Cost of 529 Accounts

The NYT seems to be backsliding again in its commitment to put numbers in context. A NYT article on the prospects of tax reform threw around many big numbers which would almost certainly be meaningless to nearly all of its readers.

I will pick on one here, because it doesn't seem to make any sense. According to the article, President Obama's proposal to end the tax deductions for money placed in 529 accounts in future years would have saved the government $1 billion over the next decade. (The...

Washington Post and the Affordable Care Act: Another Swing and a Miss

As regular readers know, the Washington Post editorial board has problems with economics. They were foremost among the Very Serious People who warned about financial crises and soaring interest rates if we didn't tame the deficit. They still regularly issue demands for what they consider fiscally responsible policies (e.g. cutting Social Security and Medicare).

Anyhow, today they used their lead editorial to wag their finger at supporters of the Affordable Care Act (ACA) for not acknowledging...

Productivity Debates: Confusion is Not a New Argument

It speaks to the state of economic debate in the United States that we have prominent voices arguing both that we face a future in which productivity growth will be near zero (Robert Gordon)  and that productivity is about to soar through the roof so that most of us will not have any work to do (Erik Brynjolfsson and Andrew McAfee). If we envisioned the same debate in climate science, a substantial group of climatologists would be warning of an impending ice age even as others raise conc...

David Brooks Is Making History

David Brooks cast his column today as a battle between the economic agendas put forward by Larry Summers in a recent report for the Center for American Progress and Marco Rubio in his campaign book, American Dreams. After a brief summary of key points Brooks asks,

"The questions for Summers are: Have we forgotten the lessons of the last quarter-century? Do we think government is smart enough to intrude into millions of business decisions? Do we worry that in making hiring more expensive we wi...

Cheap Gas Depressed Consumption

That's not my line, it's the headline of an AP article in the Washington Post. The exact words were, "cheaper gas lowers retail sales; spending up elsewhere." Yes folks, once again we see the march of surprised economists.

The immediate cause was a report from the Commerce Department showing a drop in retail sales of 0.8 percent in January that followed a drop of 0.9 percent in December. These declines do not quite fit with the story of a soaring economy led by a consumption boom. So now in t...

Throw the Truth Out the Door: President Obama Has to Pass a Trade Deal

Wow, this stuff just keeps getting worse. Apparently anything goes when the big corporations want a trade deal. Otherwise serious people will just make stuff up, because hey, the big campaign contributors want a trade deal to make themselves richer. The latest effort in creative myth-making comes from Third Way, which tells us that post-NAFTA trade deals aren't job losers like NAFTA.

As Jim Tankersley and Lydia DePillis point out, this implicitly tells us that all those pro-NAFTA types weren'...

Export Subsidies and Currency Values in China

The NYT reported on a decision by the Obama administration to file a complaint before the World Trade Organization over alleged subsidies by China to its exports. The subsidies take the form of government support for product design, information technology, and worker training for exported items. According to the article, the value of these subsidies came to roughly $1 billion over the last three years.

It would have been helpful to put this complaint in some context for readers. China has an...