Dean Baker's Blog, page 296

Does Competition Really Increase in the Textbook Market When it Becomes Morre 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...

The Export-Import Banks Claims Need Not be Taken at Face Value

A New York Times article on the role that the debate over the Export-Import Bank is playing in the North Carolina senate race told readers that the bank:

"says it makes a profit and supported more than 200,000 jobs with $37.4 billion in transactions last year."

It would have been worth including the views of someone other than the bank who could have put these claims in context. If companies did not have access to the Bank's loans at below market interest rates, most of these sales would st...

Do Democrats Do Better on the Economy? Robert Samuelson Gets the Story Largely Right

Robert Samuelson discusses a new analysis from Princeton University economists Alan Blinder and Mark Watson that finds the economy has generally grown more rapidly under Democratic presidents than Republican presidents. Samuelson notes that Blinder and Watson can explain much of the difference on factors like the OPEC price shocks, wars, and trends in productivity, but but there is still a portion that remains unexplained.

Samuelson then comments:

"Actually, the explanation is staring them i...

Patent Monopolies: The Reason Drug Companies Pushed Synthetic Opioids

The New York Times reported on lawsuits being filed by the City of Chicago and two California counties over the promotion of painkillers. The suit charges that the companies promoted OxyContin and other drugs for uses where they may not have been appropriate or necessary and deliberately downplayed risks of addiction and overdose.

It would have been worth noting that the reason the companies being sued had incentive to push their drugs was the high profit margins provided by patent monopolies...

Patent Monopolies: The Reason Drug Companies Pushed Opiods

The New York Times reported on lawsuits being filed by the City of Chicago and two California counties over the promotion of painkillers. The suit charges that the companies promoted OxyContin and other drugs for uses where they may not have been appropriate or necessary and deliberately downplayed risks of addiction and overdose.

It would have been worth noting that the reason the companies being sued had incentive to push their drugs was the high profit margins provided by patent monopolies...

Will Robots Help Your Employment Prospects? Autor and Yglesias

The usually astute Matthew Yglesias falls off the track with his discussion of David Autor's latest paper on technology and wages. For background, Autor is the guru of the job polarization story: the idea that technology is destroying middle-paying jobs leaving only those at the top and bottom. He presented a new paper at the Fed's annual conference at Jackson Hole which reassesses his prior work.

Matt's take on this paper has Autor telling us that robots may not take our jobs, but they will...

David Autor Discovers the Rebirth of Middle Skill Jobs

Neil Irwin had a write-up of new research by M.I.T. economist David Autor explaining why the development of technology need not lead to a further growth in wage inequality. Autor's new work is especially noteworthy because Autor had previously been associated with the occupational polarization view that held that technology and globalization were wiping out middle wage jobs. This view was widely held up by the punditry as the major cause of wage inequality.

In Autor's paper, he concedes that...

Should Taxpayers Subsidize the Pay of College Presidents?

Colman McCarthy has a piece discussing the low pay received by many adjunct professors across the country. He argues that they should make a living wage and then suggests that a way to pay for this would be to cut the high salaries for university presidents and other top administrators, which can cross $1 million a year.

It is worth noting that universities, both public and private, operate with large taxpayer subsidies. In the case of private universities, most enjoy tax-exempt status. As a...

NYT on the Mark on the Fed and Interest Rates

The NYT had an excellent editorial on the Fed and interest rates today that nailed the main points very well. The piece pointed out that if the Fed raises rates it will slow the economy and keep people from getting jobs. There are two points that would provide a useful addendum to this piece.

First, the Fed's actions on interest rates swamp the importance of almost every government spending program designed to help low and moderate income people. There were big battles in Washington in the la...

It's Hard To Get Good Help: Trucking Industry Edition

Yes folks, apparently we apparently don't have enough people trained as truck drivers. Slate gives us yet another example of the skills shortage in the U.S. economy. Apparently there are not enough truck drivers.

The Bureau of Labor Statistics doesn't publish data directly on truckers' pay, but if we look at the larger category of transportation and warehousing, the data show the real average hourly wage has risen by 1.7 percent over the last seven years. This an annual rate of just over 0.2...