Dean Baker's Blog, page 273

What's Complicated About a Government That Works to Benefit Rich People?

The Washington Post ran part one of what promises to be a very good series on the plight of the middle class in the United States over the last four decades. After noting the lack of wage growth in the 2000s the piece tells readers:

"Jobs came back more slowly, if at all. Even before the 2008 crisis, the 2000s were on track to be the weakest decade for job creation since the Labor Department started tracking the statistics. The great mystery is: What happened? Why did the economy stop boostin...

What the Fresher Data Show on Down Payments and Mortgage Default Rates

Ron Lieber had a well-reasoned "Your Money" piece in the NYT that discussed the merits and pitfalls of buying a home with a low down payment. However it may have misled readers about the findings of the research.

It noted that some people have raised concerns about the risks of default on low down payment mortgages (it linked to a post by me) and then it referred to others disputing that low down payments are associated with higher risks, using "fresher data." The fresher data in question is...

That Horrible Debt Burden On Japanese Children

Due to Japan's national debt, which is well more than twice its GDP, Japan's children are burdened with interest payments that are close to 0.8 percent of GDP. That sounds pretty awful right? How are the kids going to be able to make it?

If the sarcasm isn't obvious, then you need some basis of comparison here. The interest burden in the United States is now 1.4 percent of GDP. When our children were really being crushed by the burden of the debt back in the early 1990s the interest burden pe...

The Incompetence of Economic Policy Makers: Why U.S. Women Are Leaving the Labor Force

The NYT seems intent on hiding the elephant in the living room. Yesterday it gave us a piece on why men are leaving the labor force, today it gives us a piece on why women are leaving the labor force.

Both articles raise some interesting and important issues. The article on women and work in particular gives an excellent discussion of how most other wealthy countries are far ahead of the United States in providing support for working mothers in the form of paid family leave, paid sick days, a...

Global Warming: The United States Does More Harm Than Just Being the World's Largest Economy

A NYT article on a change in other countries' attitudes towards the United States role in global warming negotiations seriously understated the basis for other countries' anger toward the United States on this issue. It referred to reactions to President Obama's inability to get Congress to pass a law to reduce greenhouse gas emissions:

"the United States went back to being viewed as the world’s largest economy and largest historic greenhouse gas polluter, refusing to change course."

Actually...

The Decline In Male Employment: Look to Large Trade Deficits and Small Budget Deficits

The NYT had an interesting piece on the decline in employment rates among prime age male workers. While it discusses many of the causes of this decline, it missed the most obvious: policy decisions that have depressed demand in the economy. Many readers of the piece may wrongly believe that the current low employment rate is primarily the result of a long-term trend. This is not true.

From 1979 to 2000 the employment to population ratio (EPOP) fell by 2.1 percentage points. If it had continue...

Chronic Lyme Disease, the State of Science, and the Trans-Pacific Partnership

I apologize for a bit of a digression here for personal reasons (my wife has chronic Lyme disease), but if you'll bear with me, I think I can make some connections. The immediate prompt for this post is a snide article in Slate by Brian Palmer, warning readers that, "New York is about to change its medical misconduct law to protect quacks."

The "quacks" referred to in the article's sub-headline are doctors who provide long-term antibiotic treatment for people who have chronic Lyme disease. As...

Single Parents and the Break-Up Between the White Working Class and the Democratic Party

Thomas Edsall has as interesting piece this morning discussing the changing plight of working class whites in the United States and their increasing estrangement from the Democratic Party. He gets much of the story right. Certainly they can no longer be assured of a comfortable middle class existence. And, if they do manage to get middle class jobs, they certainly cannot guarantee that their children will be as lucky.

However some of the argument is misplaced. Edsall notes the sharp growth in...

Lowering Down Payments Increase Risk of Mortgage Default (see correction)

The housing bubble was apparently too far in the past for many of the people writing about housing to remember. Part of the problem was that many borrowers got loans that they were ill-situated to repay.

One of the factors that is a strong determinant of whether people will be able to pay a mortgage is the size of the down payment. The equity from a down payment serves as a cushion in bad times. It also reduces the risk to lenders, since this is money they stand to recover in the event of a d...

Lowering Down Payments Increase Risk of Mortgage Default

The housing bubble was apparently too far in the past for many of the people writing about housing to remember. Part of the problem was that many borrowers got loans that they were ill-situated to repay.

One of the factors that is a strong determinant of whether people will be able to pay a mortgage is the size of the down payment. The equity from a down payment serves as a cushion in bad times. It also reduces the risk to lenders, since this is money they stand to recover in the event of a d...