Dean Baker's Blog, page 265

The BS Storm is Coming on Trade Deals

Okay folks, get out those umbrellas, we are about to showered with all sorts of garbage as the corporate interests pushing for the Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Pact ((TTIP) go into overdrive to get Congress to approve their deals. We are entering the logic-free zone where ostensibly serious people say any sort of nonsense imaginable to advance these trade deals (not free-trade deals).

Today's entry is a piece by David Ignatius in the Washington Post...

Why Does the Washington Post Call the Trans-Pacific Partnership a "Free-Trade" Pact?

Is someone paying them to give their readers inaccurate information? I'm inclined to doubt that explanation, but why does the paper keep using this description when it is so obviously not true?

The issue came up in the context of a discussion of the agenda of the Democrats in the House of Representatives. The article notes differences between House Democrats and President Obama and trade, and then tells readers;

"Republican leaders are preparing legislation that would grant Obama broad author...

Arithmetic Is Very Simple, But It's Still True

Steven Rattner doesn't like people focusing on stimulus as a path to help Europe grow because it is "simplistic." Instead he wants Europe to focus on reducing business regulation, protections for workers, and taxes for the wealthy.

Interestingly, he presents zero evidence that these changes will boost the continent's growth, in contrast to the now vast amount of evidence (e.g. here, here, and here) that stimulus will increase growth. On their face, many assertions seem outright wrong. For ex...

More Debt Fetishism at the Washington Post

We're still down close to five million jobs from our trend employment path. Or, to put this in generational terms, millions of kids are being raised by parents who can't find work. We have endless needs for infrastructure, health care, child care, and education, and reducing greenhouse gas emissions which are not being met because of concerns over budget deficits. Given this situation, Ruth Marcus would naturally use her column in the Washington Post to warn about the government debt.

She be...

NYT Says Greek Election Sets Up a Conflict With Northern Europeans Who Don't Believe in Economics

That is not exactly what the NYT said. Instead its article on the dispute between the new Greek government and Germany and other northern European countries chose to use bias in the opposite direction telling readers:

"But beneath the arguments over austerity is a deeper conflict of democratic wills, between the verdict of voters in Greece, who are desperate for some relief, and those in Germany, Finland and the Netherlands, who do not want their taxes used to underwrite a blank check for cou...

Today's Seniors Do Not Have Better Retirement Benefits Than Prior Generations

A NYT article on the dwindling size of the middle class noted that seniors are more likely to be middle class than in the past. It told readers:

"Today’s seniors have better retirement benefits than previous generations. Also, older Americans are increasingly working past traditional retirement age."

In fact, seniors on average almost certainly have worse retirement benefits. The increase in the normal retirement age from 65 to 66 is equiavlent to a 6 percent cut in Social Security benefits....

The Wall Street Journal Goes Fox News, With "Some People Say"

It's not quite that bad, but pretty close. An article on the victory of Syriza in Greece told readers:

"International economists say the eurozone needs a judicious mix of all of the above: monetary stimulus to avoid deflation, deficit-cutting by debtor countries, higher spending by creditor countries, and broad economic overhauls in many nations to lift long-term prospects."

Really? Do all international economists say this? Did these international economists predict the economic collapse in 2...

Japan's Economy Is Not In Recession

Robert Samuelson cautioned, somewhat reasonably, against over-optimism on the U.S. economy. His basic point is that other economies around the world don't look very good right now. Their weakness could spill over and dampen growth in the United States. This is largely right, especially with the recent run-up in the dollar making U.S. goods and services less competitive.

However Samuelson does get some items wrong. He tells readers that Japan's economy is in a recession. This is almost certain...

A Stronger Dollar Means a Larger Trade Deficit and More "Secular Stagnation"

The Washington Post had a major business section piece on the "winners and losers of a stronger dollar" which never explicitly discussed its impact on the trade deficit. This is truly remarkable since the $500 billion plus annual trade deficit (@3 percent of GDP) is the main cause of the economy's weakness and continued high unemployment.

The logic of this is straightforward. The deficit is money that is income that is generated in the United States but is creating demand overseas. It has the...

Did the Keynesians Get It Wrong in Predicting a Recession in 2013?

I have had several readers send me a blogpost from Scott Sumner saying that the Keynesians have been dishonest in not owning up to the fact that they were wrong in predicting a recession in 2013. The argument is that supposedly us Keynesian types all said that the budget cuts and the ending of the payroll tax cut at the start of 2013 would throw the economy back into recession. (Jeffrey Sachs has made similar claims.)

That isn't my memory of what I said at the time, but hey we can check these...