Dean Baker's Blog, page 279

NYT Reports That Some Health Insurers Are Raising Their Prices and Some High School Kids Are Smoking Marijuana

This one should be in the "you must be kidding category." The New York Times has a front page story with the headline, "Cost of Coverage Under the Affordable Care Act (ACA) to Increase in 2015." Hmm, that would mean that 2015 is just like 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007 ... you get the idea. Costs of health care have always gone up, apparently the Affordable Care Act didn't change this fact. NYT headlines ain't what they used to be.

The substance of the article, insofar as ther...

Actually, Republicans Are Pushing for More Restrictions on Trade

It is bizarre how many people can't seem to understand that patent and copyright protection are "protection" and not free trade. It doesn't matter if your friends are the ones who benefit from them or even if you think these forms of protection are good for the economy. They are still forms of protection. By giving firms and/or individuals monopolies, they are 180 degrees at odds with free trade.

This is why everyone should be very angry when the NYT told readers that:

"Mr. Obama has made cle...

Paying Off Student Debt Is Saving

Hate to be the econ nerd here, but this is the sort of thing that folks writing on economics should get straight. (The failure by econ writers to get such things right is one reason that Jonathan Gruber thinks the public is "stupid.") Anyhow, Catherine Rampell messes this one up in an otherwise reasonable piece discussing differences in saving rates by age.

The piece notes the negative saving rate reported for people under age 34 and then comments:

"These numbers have inspired various condem...

Contrary to G-20 Goals, the United States is Working to Increase Trade Barriers

A NYT article on the G-20 summit describes the goal of such meetings:

"World leaders would work together to remove the roadblocks to economic progress, including corruption, trade restrictions and regulations that discourage hiring and firing."

Actually the United States has been working hard in international negotiations to increase barriers to trade in the form of patent and copyright protection. These barriers can raise prices of drugs and other products by several thousand percent above t...

Getting Carried Away in Attacking Refinancing

Bethany McLean goes a bit overboard in arguing against refinancing in a NYT column this morning. She cites data showing that the vast majority of subprime loans in the bubble years were for refinancing homes rather than home purchases.

The data are misleading because many of the subprime loans were issued to be refinanced. Many of these loans carried teaser rates and were pushed with the promise that people could refinance before the teaser rate reset. Many buyers took advantage of this opti...

Does the Chinese Government Prohibit the NYT from Talking About Drug Patents?

It seems as though someone must be preventing a discussion of the patent system. The NYT Magazine has a lengthy piece on the slowdown in the development of new drugs. It focuses on one scientist's struggles to perfect a new treatment for diabetes, a process that is likely to take well over twenty years, even in a best case scenario.

One of the issues that contributed to this delay is the fact that a single scientist held the patent on the original innovation, which meant that no other scient...

Kevin Drum Doesn't Like Postal Banking: A Reply

I see Kevin Drum is unhappy about my endorsement of postal banking as a way to address the Postal Services financial problems. Kevin correctly points out that the Inspector General’s (IG) argument for postal banking didn’t involve conventional savings and checking accounts, but rather more narrow financial services:

“1) payment mechanisms (i.e., electronic money orders), (2) products to encourage savings, and (3) reloadable prepaid cards. The first is fine, but not really ‘postal banking.’ Th...

Did the Payroll Tax Increase Bite the Dems in the Election?

Zachary Goldfarb raises this possibility in a Wonkblog post today. Certainly there is evidence that many voters were unhappy about stagnating incomes, and the payroll tax increase associated with the end of the payroll tax holiday in 2013 contributed to this stagnation.

However as a practical matter, it appears that few people noticed the tax increase at the time it took place. While 28.9 percent of respondents correctly answered a poll saying that their payroll tax was increased in 2013, 19...

How Did the NYT Decide that 6.75 Percent Pension Returns are "Strong?"

That is what millions are asking after reading its piece on the financial status of Detroit's pensions following its bankruptcy. At one point the piece tells readers:

"Contributions to the system will not be nearly enough to cover these payouts, so success depends on strong, consistent investment returns, averaging at least 6.75 percent a year for the next 10 years. Any shortfall will have to ultimately be covered by the taxpayers."

Actually the returns to the pension do not need to be consis...

The Postal Service Could Economize by Making Full Use of Its Assets

The Washington Post called for further cuts to the Postal Service and implicitly cuts in pay and benefits in an editorial today. There are two points worth noting on its proposed agenda.

First, the Postal Service has already experienced enormous downsizing. It employed more than 900,000 workers in 1999. In the most recent data it employed 587,600, a decline of 35 percent. This downsizing has been associated with substantial gains in productivity, so it is wrong to imply that it has not been c...