Dean Baker's Blog, page 295

NYT Does Free Promotion for Oil Industry

The NYT noted that gas prices remain relatively low in spite of the fighting taking place in or near several major oil producers. In an article entitled "a new American oil bonanza, it told readers:

"The reason for the improved economics of road travel can be found 10,000 feet below the ground here, where the South Texas Eagle Ford shale is providing more than a million new barrels of oil supplies to the world market every day. United States refinery production in recent weeks reached record...

Low Inflation Causes Consumer to Delay Purchases and Undercuts Profits and Jobs

In an article discussing the drop in the year over year inflation rate in the euro zone to 0.4 percent, the New York Times told readers that the inflation rate could fall further, turning into deflation, which it told readers:

"causes consumers to delay purchases and undercuts corporate profits and jobs."

That is true of deflation, but it is also true of very low inflation. The reported inflation rate is an average of the inflation rate seen in millions of different goods and services being s...

NYT and Alan Krueger Discover that Some People Don't Respond to Employment Surveys

It's always nice when a prominent economist and the NYT pick up on a line of work that we started at CEPR. That is why we are all happy to see David Leonhardt's piece on a new paper by Alan Krueger, the former head of President Obama's Council of Economic Advisers.

The gist of the piece is that Krueger has discovered that many people do not respond to the Current Population Survey (CPS), the main survey used to measure the unemployment rate. Krueger discovered that the unemployment rates are...

Headline Writer at Washington Post Gets Budget Story Backward

The headline of the Washington Post piece on the new budget projections from the Congressional Budget Office (CBO) told readers, "CBO: Deficit falls to $506 billion in 2014, but debt continues to rise."

Both parts of this are wrong if the comparison is the most recent prior set of projections. The deficit projected for 2014 is actually somewhat higher in the most recent projections, $506 billion compared to $492 billion in the projections made in April. Both figures are below last year's defi...

Jared Shoots Back on the Corporate Income Tax

Jared has a few more points in response to my least post -- certainly very reasonable concerns. As far as his comparison of me to Mr. Burns, I'll just say "excellent!"

The Mostly Good News on Housing

Neil Irwin had a good post on the latest Case-Shiller house price data. he argued that the flat, or even modestly declining house prices are good news. This means that prices are now more or less following a normal pattern where they move pretty much in step with the economy.

This is right, with one important qualification. The Case-Shiller tiered price indexes show some worrying numbers in some cities for the bottom third of the housing market. Prices for the bottom tier fell by 0.7 percent...

Subverting the Inversions: More Thoughts on Ending the Corporate Income Tax

I see that my friend Jared Bernstein has some more thoughtful (if mistaken) arguments on ending the corporate income tax. I recognize his concerns about giving more money to the people who have the most (hey, it’s the American Way), but I still think this is a policy that could be a big winner in the battle against the enemies of the people.

I will quickly address two issues Jared raised, the extent to which any of the savings will be passed on in wages and the ability to replace the revenue....

How to Think About the Corporate Income Tax

My friend Jared Bernstein had a piece in the NYT warning against plans to eliminate the corporate income tax. He argues that the corporate income is paid primarily by owners of capital, who in turn are primarily wealthy people. Therefore, if we eliminate the corporate income tax we will be giving a big tax break to the wealthy.

This is largely true. Eliminating the corporate income tax without some major increases in the personal tax rates for high income people would be a big gift to the wea...

NYT Has Determined That Brazil's Neo-Liberal Policies Were Necessary to Allow Growth

That's right, you might have thought there was a debate on whether the neo-liberal policies pursued by Brazil and other Latin American countries promoted or retarded growth, but the NYT settled the issue. It refers to the policies put in place by Social Democratic Party from 1994-2002 and then tells readers:

"The measures vanquished galloping inflation, opening the way for the next decade’s growth."

This voice of authority should perhaps explain why it took seven years of moderate inflation b...

Does Competition Really Increase in the Textbook Market When it Becomes More Concentrated?

A Vox piece on soaring textbook prices told readers:

"And the college textbook market has changed, too. Publishers used to spread out the cost of a new edition over five years before publishing the next edition and starting the cycle over. Since the publishing industry began consolidating in the 1980s — five major publishers now control 80 percent of the market — competition has become keener, and the window before a new edition has narrowed from five years to three. That means higher prices...