Dean Baker's Blog, page 288

More on Corporate Taxes

Eduardo Porter has a good piece discussing the increasing problem of the evasion of corporate income taxes. At one point he notes that some people have called for eliminating the corporate income tax altogether and making up the lost revenue with higher taxes on the wealthy. 

Porter dismisses this idea by saying that it would be politically difficult to raise taxes on wealthy individuals by enough to make up the lost revenue. He then adds:

"Mr. Saint-Amans [the head of the OECD's Center...

Krugman Too Generous to Germany: Wages Didn't Fall

Paul Krugman had a short blogpost in which he criticizes Hans-Werner Sinn, the head of a prominent German think tank, for insisting that the southern European countries have to go through deflation in order to restore competitiveness, rather than Germany having somewhat higher inflation. Sinn effectively says that these countries must do what Germany did in the last decade.

Krugman then links to a post which shows that Germany, along with Japan, were the only countries in the OECD to see decl...

Economists and Uber

Justin Wolfers tells us that economists are unanimous in supporting Uber and Lyft in a NYT piece this morning. He notes a survey of prominent economists which found that 100 percent either agreed or strongly agreed with the proposition:

"Letting car services such as Uber or Lyft compete with taxi firms on equal footing regarding genuine safety and insurance requirements, but without restrictions on prices or routes, raises consumer welfare."

This seems like a proposition that it would be diff...

Silly Budget Reporting Goes to France

Regular readers of BTP know that expressing budget numbers without context is a pet peeve of mine. The practice is infuriating since almost no readers have any knowledge of the size of the total budget, so they have no clue what it means to cut food stamps by $40 billion over a decade or to spend $180 billion on transportation over the next six years. This problem can be easily remedied expressing budget numbers as a percent of the total budget or as per person expenditures. This would make t...

Abuses of Patent Monopolies #45,764: Drug Company Payments to Doctors

If the government imposed a tariff on imports so that companies could sell their products at prices far above the cost of production, economists would predict there would be corruption as companies sought to maximize the amount of the product they sold. If the government imposes patent monopolies so that drug companies can sell their drugs at prices that are several thousand percent above the cost of production, economists would predict there would be corruption as companies sought to maximiz...

If the Fed had Bailed Out Lehman, Who Would Have Stopped Them?

We continue to be treated to stories of how everything about the housing bubble and the economic crisis caused by its collapse was simply unpreventable. None of the people responsible for this immense policy failure has been held accountable in any way. With few exceptions, all are now incredibly rich.

One of the items on the failure list that deserves immense ridicule is that the Fed did not rescue Lehman because it lacked the legal authority. (There is another question as to whether it shou...

Consumers Do Not Start Delaying Purchases If Inflation Crosses Zero: #65,786

I guess this is one of those unsupported assertions that reporters think they just have to repeat to show someone they know economics. In fact they show the opposite. When inflation is near zero, many prices are already falling. Crossing zero, just means more prices are falling. So what?

Again, inflation is too low in the euro zone now. If it crosses zero, then it will be too low by a larger amount: end of story.

The Vicissitudes of the Market Would Be a Big Improvement

Bob Kuttner has a good column in the Huffington Post comparing the progress made in improving the living standards of ordinary people in the forty years following the New Deal with the deterioration of the last three decades. However the piece doesn't go far enough in contrasting the former period with the latter period.

After noting the lack of progress in recent years he comments:

"You wonder why people are turning away from the Democrats' proposition that affirmative government can buffer...

Steven Pearlstein Isn't Into Shorts

Don't worry folks, this is a family-friendly blog. The issue is that Steven Pearlstein takes great offense at the possibility that people are manipulating the stock price of a biotech company by shorting its stock on a massive basis. Pearlstein is right to be angered about stock manipulation, he is wrong to imagine it bears any direct connection to shorting stock.

The issue here is that short sellers of Northwest Biotherapeutics (people betting against the company's stock) are supposedly spre...

Unmentioned Myth About Billionaires: They Know Anything About Public Policy

The Washington Post treated us to "five myths about billionaires" this morning. Incredibly, they missed the most obvious one: that billionaires know anything special about what is good for the country and the world.

Most billionaires (at least those who didn't inherit the money) are probably smart and hard-working, but so are millions of other people. What most distinguishes someone like Bill Gates from the hundreds of thousands of other software entrepreneurs is luck and sharp elbows. Suppo...