Dean Baker's Blog, page 305

Consumers Are Spending, Cash in Checking Accounts Means Alternative Investments Are Not Good

The Washington Post really has to discover the Commerce Department. It is less than a mile from the WaPo office. Furthermore, if they had access to the Internet, they could get economic data from the Commerce Department in seconds.

If the WaPo knew about the Commerce Department and the data it produces it would not have told readers told readers in a headline:

"Amercians' checking accounts are filling with cash, but they are afraid to spend it."

The Commerce Department's data would have told...

When It Comes to Infrastructure "Vast" Ain't What It Used to Be

The New York Times doesn't seem to use the term "vast" the way the rest of us would. It told readers that President Obama is:

"stymied by Republican lawmakers who refuse to go along with Mr. Obama’s call for vast new spending on the nation’s infrastructure."

The proposal in question would provide $300 billion in additional spending over the next four years. This is equal to roughly 0.4 percent of GDP over this period and less than 1.8 of projected federal spending.

 

Thanks to Robert Sal...

Sanctions Against Iran Lose the U.S. More than 40 Percent of the Exports Supported by the Export-Import Bank

Regular readers of Beat the Press know that putting numbers in context is one of my main beefs with economic reporting. News stories, especially about government budget items, routinely throw out big numbers are completely meaningless to almost everyone who reads or hears them. That is not serious reporting. Reporting is about informing your audience. (This is why I use the term "frat boy reporting" to refer to the use of big numbers without context. It conforms to a ritual among reporters, b...

Did the Banks Have to Commit Fraud?

Floyd Norris has an interesting piece discussing Citigroup's $7 billion settlement for misrepresenting the quality of the mortgages in the mortgage backed securities it marketed in the housing bubble. Norris notes that the bank had consultants who warned that many of the mortgages did not meet its standards and therefore should not have been included the securities.

Towards the end of the piece Norris comments:

"And it may well be true that actions like Citigroup’s were necessary for any ban...

Morning Edition Gets It Right on Patents

David Kestenbaum of the Planet Money team had an interesting piece on whether patents are an impediment or spur to innovation. The immediate issue was the decision by Tesla Motors to put all its patents in the public domain with the hope of helping to create a mass market for electric cars. However the piece went further and asked the question of whether patents actually promote innovation.

The argument in the opposite direction is that they lock up technologies for the period of the patent's...

Robert Samuelson Gets Part-Time Work Seriously Wrong

For decades people have relied on Robert Samuelson to give a confused rendering of economic reality in the pages of the Washington Post. He came through again today in his warnings about an explosion of part-time work.

The centerpiece of Samuelson's concern is a reported, "whopping — 1,115,000 — increase in part-time jobs offset by the 708,000 loss in full-time jobs." Yes, that sounds pretty worrying. The number of full-time jobs is plunging. 

The reason that you are hearing this concern...

Free Trade: The Answer to the Question of "How do you pay for a drug that costs $84,000?"

Wonkblog let down its readers badly in a piece on Sovaldi, the hepatitis C drug that Gilead Sciences is marketing in the United States at the price of $84,000 per treatment. While the post is headlined with the question in the title, it never makes the obvious point that the drug really doesn't "cost" $84,000.

This is the price that Gliead Sciences charges. It is able to get away with charging the price because the government gave it a patent monopoly, which means that any competitors would b...

President Obama Wants to Spend $302 Billion on Transportation Over the Next Four Years

Feel informed? That's the information you would have gotten from reading the NYT article on the debate over a new transportation bill. In case you cared, this comes to about 1.8 percent of projected federal spending over the next four years or about $240 per person per year. But hey, everyone knows how much $302 billion over the next four years is.

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NYT Says 12.4 Percent Growth in China Is "Sputtering"

The NYT had a piece on the release of new data showing China's economy was 7.5 percent larger in the second quarter of 2014 than a year ago. While the piece noted that this is a healthy pace, even for China, it told readers:

"Three of the four cylinders of the Chinese economy — exports, private sector construction and retail sales — are sputtering."

It then went on to explain that the government sector is filling the gap with large-scale lending. Readers were then warned that this pattern can...

Taxpayer Subsidy to Former Hospital CEO Is Equal to 16,800 Months of Food Stamps

We all know how hard it is to get by on a $5 million a year salary in New York City. Therefore readers should not feel bad about subsidizing the $5.6 million paycheck for Herbert Pardes, the former CEO of New York-Presbyterian Hospital and now the executive vice-chairman of its board of trustees. 

The NYT had an interesting piece on Dr. Pardes salary as well as the pay of other top executives at large hospitals. However the piece erred in presenting the issue of these large paychecks as...