Dean Baker's Blog, page 303

Justin Wolfers False Symmetry on Unemployment Benefits

Justin Wolfers shows more of a commitment to coming down in the middle than to being true to the data in his pox on both your houses piece on the impact of North Carolina's cut in unemployment benefits. The basic story is that in July of last year North Carolina both cut the duration of unemployment benefits and vastly ramped up the job search requirements. The result was that the number of people getting benefits fell by 48,500, a decline of 53.4 percent between May of 2013 and May of 2014.

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North Carolina's Pro-Business Climate Reduced the Unemployment Rate by Driving People Out of the Labor Force

A New York Times article on the senate race in North Carolina referred to cuts in the state's unemployment benefits and tax breaks for businesses. It then told readers:

"The resulting business climate, Mr. Jordan said, has played a role in an unemployment rate drop from 10.4 percent, when Mr. Tillis was elected speaker in January 2011, to 6.2 percent today."

The reason that unemployment dropped more rapidly in North Carolina than in most other states was that people gave up looking for work a...

More Confusion on Sovaldi and Government Granted Monopolies at the Washington Post

Sometimes it seems like we are living in the Bizarro World when it comes to talking about drug prices. This is one of those times.

The Washington Post's Wonkblog had a Q& A on Sovaldi, the new drug for Hepatitis C that is being sold for $84,000 in the United States. In the final answer about the price of the drug the piece tells readers:

"Sovaldi is cheaper in countries where the government sets drug prices, ranging from $900 in Egypt to $66,000 in Germany."

This is almost the opposite of...

Can Someone Tell Homebuilders How to Raise Wages?

The Washington Post told us that homebuilders are having a hard time attracting workers, which is keeping construction of new homes down.

"Labor is scarce. As the housing crisis dragged on, the workers that builders relied on found jobs in other industries, including the energy sector. It’s been tough luring those workers back, Crowe [David Crowe, chief economist for the National Association of Homebuilders] said. Meanwhile, the workers that hung in there are aging, and the industry is having...

When it Comes to Drugs the Washington Post Is So Protectionist It Can't Even Discuss Free Trade

The Washington Post gave us another front page moral hand wringer. A round of treatment of Sovaldi, a new and effective drug for treating Hepatitis C, costs $84,000. With three million people suffering from the disease that comes to $250 billion. Should insurers be required to pay the price? How about government programs like Medicaid?

Yes, that could be a real tough question, but for those not committed to using protectionism to maintain the drug industry's profits, the answer is simple: tr...

Rewriting History on Doctor Shortages: Protectionists Bury the Bodies

Earlier in the week the NYT had an editorial decrying the shortage of doctors and proposing routes to address it. (Strangely, bringing in more foreign doctors was not on the list.) Today the paper ran a number of letters responding to the editorial including one from president of the American Medical Association (A.M.A.) discussing its heroic efforts to alleviate the doctor shortage. This is opposite to the reality.

The A.M.A has long supported measures to restrict the number of doctors in ord...

The West Is Indebted Because China Is Not

The NYT ran a confused column by Kwasi Kwarteng, a Conservative member of the U.K.'s parliament, calling for China to adopt the gold standard. The piece has many bizarre claims, most importantly attributing the U.K.'s prosperity in the 19th century and the U.S.'s prosperity in the post-World War II period to the gold standard, as opposed to the strength of their manufacturing sectors and overall economy.

However the most misleading item is the contrast of China, which does not have much gover...

Charles Lane Is Badly Confused About Obamacare

Washington Post columnist Charles Lane must have been off the planet or at least out of the country in 2009. In a column on the recent appellate court ruling banning subsidies in the federal exchanges, he tells readers that the Republican obstruction was to be expected given the extreme Democratic positions on the stimulus, cap and trade legislation and the Affordable Care Act:

"Everything might have been different if Democrats and Republicans had operated in a spirit of compromise, the Frame...

The Problem Is Not Debt: Consumption Is High Not Low

Economists and economic reporters continually try to make the problem of the weak economy and prolonged downturn appear more complicated than it is. After all, if it is very simple then these people would look foolish for not having seen it coming and figuring out a way around this catastrophe. Fortunately for us, if unfortunate for them, it is simple.

One of the efforts to make it more complex than necessary is to assign an outsized role to the debt associated with the collapse of house pric...

Why Would Anyone Think Republican Opposition to Obamacare Is Based on Ideology as Opposed to Just Money

It's understandable that conservatives would like to say that their arguments are based on deeply held convictions, as opposed to crass self interest, but it's difficult to understand why liberals feel the need to help them make this argument. Jonathan Cohn is the guilty party today. In his Q.E.D. section in the New Republic, a segment discussing the appellate court ruling on Obamacare tells readers:

"But the motives of Republican leaders, like the motives of the individuals who thought up th...