Dean Baker's Blog, page 287

Jason Millman Thinks Firefighters Should Be Paid Millions of Dollars a Year

That would be the logic of his Wonkblog column arguing that specialty drugs are worth the cost. The basic point is that some of these specialty drugs constitute radical breakthroughs that substantially extend or improve the quality of life. The $84,000 Hepatitis C drug Sovaldi is the case in point. After all, isn't it worth a great deal of money to save a life?

By this same logic when the firefighter shows up at our burning house with our family and dogs inside we would gladly pay her million...

If Only the Washington Post Could Get Its Hand on the Social Security Trustees Report

It might help editorial page editor Fred Hiatt understand how the budget works. He is appalled because "reactionary defenders" of Social Security think that seniors should be able to get the benefits they paid for. (I wonder if it's reactionary to think that Peter Peterson type billionaires should be able to get the interest on the government bonds that they paid for.)

Anyhow, the basis for Hiatt's fury is that John Podesta, now a top advisor to President Obama, is boasting about entitlements...

Defending Economics from Robert Samuelson - See Addendum on China and the Dollar

I am not usually inclined to defend the economics profession, but Robert Samuelson brings out my defensive impulse in his discussion of Financial Time columnist Martin Wolf's new book (which I have not read). Before getting to the main matter at hand, it's worth making a couple of other points.

First, Samuelson tells us that Wolf's explanation of the financial crisis goes via the way of the U.S. trade deficit:

"The trade-surplus countries couldn’t spend all their export earnings, so they plow...

Defending Economics from Robert Samuelson

I am not usually inclined to defend the economics profession, but Robert Samuelson brings out my defensive impulse in his discussion of Financial Time columnist Martin Wolf's new book (which I have not read). Before getting to the main matter at hand, it's worth making a couple of other points.

First, Samuelson tells us that Wolf's explanation of the financial crisis goes via the way of the U.S. trade deficit:

"The trade-surplus countries couldn’t spend all their export earnings, so they plow...

$29,100 a Year Is the Good Life?

Kevin Carey had a good piece in Upshot on the college programs training people as "medical assistant." The point of the piece is that the market for people with this training is saturated, so that most of the people coming out of these programs are not able to find full-time work. It notes that almost a third of the students who graduated the program in one school ended up defaulting on their loans.

The blame here clearly rests with schools who are deceptive about the job prospects of gradua...

In Washington Policy Circles the Trade Deficit Is Like Sex Used to Be, No One Is Supposed to Talk About It

That is perhaps an unfair headline for a comment on a generally interesting and useful piece on the sources of future job growth by Jim Tankersley, but the general pattern of reporting in the Post and elsewhere seems to demand it. Tankersley's piece is asking what we should expect to be the drivers of job growth in the decade ahead. He notes that in the past increased consumption had been the main driver of growth. The piece argues that the consumption share of GDP is unlikely to rise further...

WaPo Complains About Budget Ignorance, But Doesn't Take Any Responsibility

Christopher Ingraham had a piece in the Post's wonkblog in which he reports on a Pew poll showing the public has no idea where there tax dollars are going. The poll found that oe third of respondents thought foreign aid was the biggest item in the budget. In fact, it accounts for less than one percent of spending.

While we can decry the ignorance of the American people, the media deserves much of the blame in the same way that teachers are held responsible for the poor performance of their st...

The Unrepentant Inflation Hawks and Obamacare Foes

Bloomberg News did a thing of simple and rare beauty. It went to the 23 economists who signed a letter to Fed Chair Ben Bernanke in November of 2010 warning of inflation and other dire consequences from its policy of quantitative easing. It urged him to reverse course.

In fact, not only did Bernanke not reverse course, he doubled down with two subsequent rounds of quantitative easing. And four years later the inflation rate is still below the Fed's 2.0 percent target. So Bloomberg decided to...

The Unrepetant Inflation Hawks and Obamacare Foes

Bloomberg News did a thing of simple and rare beauty. It went to the 23 economists who signed a letter to Fed Chair Ben Bernanke in November of 2010 warning of inflation and other dire consequences from its policy of quantitative easing. It urged him to reverse course.

In fact, not only did Bernanke not reverse course, he doubled down with two subsequent rounds of quantitative easing. And four years later the inflation rate is still below the Fed's 2.0 percent target. So Bloomberg decided to...

"Drill, Baby, Drill" The Slogan for Uber and the Sharing Economy?

In her Washington Post column Catherine Rampell raises an obvious but generally neglected point in discussions of Uber and Lyft. Many cities strictly regulate the number of taxis on the road with a medallion system. The cost of these medallions, which license someone to operate a taxi, typically run into the hundreds of thousands of dollars. Economists are prone to see this system as a form of protectionism, which is designed to increase the profits of the cab companies and perhaps to raise t...