Dean Baker's Blog, page 27

The Burden of the Debt: Lessons for Biden Adviser Ted Kaufman

Top Biden adviser, and long-time personal friend, Ted Kaufman was seen in the Wall Street Journal warning that the debt run up by the Trump administration will seriously limit what Biden will be able to do as president. This is wrong big time, and it is the sort of silly thing that no one in a Biden administration should ever be saying.

The government’s ability to spend is limited by the economy’s ability to produce, not the debt. If the government spends too much, it will lead to inflation. Whe...

Special Announcement

Hi everyone, this is Dawn, Development Director here at the Center for Economic and Policy Research. I’m hijacking Dean’s Beat the Press post today to ask all of you who aren’t already doing so to sign up to support Dean’s work through his Patreon page. Dean gives all proceeds raised through his Patreon page to CEPR, so not only will you receive early access to content, you will be ensuring that Dean’s work continues to inform the debate, especially his work on patent monopolies and economic rec...

Should We Be More Worried About the Economy?

We are really in an unprecedented period where the economy is trying to recover from the shutdowns of April and May, while being faced with partial shutdowns due to the resurgence of the pandemic in large parts of the country. We are struggling to make sense of data, which often has a substantial lag. We are still getting data from July even as we are in the last weeks of August. Furthermore, when we have large monthly changes, the picture at the end of July could have been very different than t...

Quick Note on Lost GDP Due to Shutdowns

Some folks have complained about the loss of GDP over the last five months and questioned whether the shutdowns have been worth the price. While people often toss around huge numbers in the trillions of dollars as the cost of the shutdown, these big numbers are often both inaccurate and misleading.

Measuring Lost GDP

The first place to start is getting a measure of lost GDP. This is fairly straightforward. We can just apply a 2.0 percent growth projection (approximately the projection from the C...

When Trump Proposes Giving More Money to the Rich, NYT Mind Readers Know That He’s Doing it to Increase Growth

Most of might think that when Donald Trump proposes a tax break for the rich it is because he wants to give more money to the rich. Fortunately, the NYT has a staff of mind readers who can keep us better informed. Therefore we are told:

“Mr. Trump and his advisers have regularly considered unorthodox tax maneuvers that they believe would spur economic growth, including reducing the taxes that investors pay on profits earned from selling assets like stocks or bonds (emphasis added).”

There is a l...

United Kingdom Economy Contracted at a 59.9 Percent Rate in Second Quarter

Some folks may have seen articles reporting that the United Kingdom’s economy shrank by 20.4 percent in the second quarter. While this number is accurate, it is reporting the quarterly rate of decline.

We typically report GDP changes as annual rates, which implies taking the quarterly growth rate to the fourth power. In the case of the UK, its second quarter pace of decline would imply a drop of 59.9 percent at an annual rate.

It is worth making this calculation for comparative purposes. Readers...

Financing Drug Development: What the Pandemic Has Taught Us

We are still very much in the middle of the pandemic, with the U.S. seeing tens of thousands of new infections daily, and the world experiencing hundreds of thousands of new infections. However, it is not too early to look at areas where we need to reevaluate public policy, most importantly in financing the research and development of new drugs and vaccines.

The accepted wisdom in policy circles has been, that while the government can finance basic research, we need to rely on government-granted...

NYT Does a Little Editorializing for Private Equity Company

The NYT had a piece on how the private equity company, Cerberus, is unhappy with the operation of the German bank Commerzbank. Cerberus has a major stake in the bank and, according to the piece, is unhappy that it has not moved more aggressively to cut costs, meaning firing people.

According to the article, Cerberus forced the resignation of two top executives at the bank. It then tells readers that it is unhappy with plans to replace them:

“But then, on Monday, the supervisory board nominated M...

Note on Non-Responses to E-Mail

I recently realized that Verizon is apparently randomly blocking e-mails to my account.  I have no idea why this would be the case, but it is. Anyhow, I generally respond to e-mails, if they raise real questions or make serious points. If anyone has sent me a note and not gotten response, I’d suggest trying Twitter. I’m at @deanbaker13.

The post Note on Non-Responses to E-Mail appeared first on Center for Economic and Policy Research.

The Trump Record on Unemployment

Donald Trump and his supporters routinely boast about his great success in reducing the unemployment rate. While the unemployment rate did fall to low levels under Trump, this was just a continuation of the downward trend that had been in place under Obama since 2010.

Here’s the picture with the overall unemployment rate.

See the sharp drop for the Trump years? Yeah, I don’t either. By the way, I am being very polite in leaving out the impact of the pandemic, which would show unemployment soari...