Dean Baker's Blog, page 306

Get Me Another Bucketfull of Economic Nonsense: The Rich Boys Want to Pass the Transatlantic Trade and Investment Partnership

Economics just flies out the window when the business interests want to get a trade deal passed. The NYT gave us more evidence of this fact in an article on the state of negotiations on the Transatlantic Trade and Investment Partnership (TTIP).

The article tells us that the TTIP appears to be facing troubles because of the opposition of environmental and consumer groups and the recent spying scandal in Germany. This opposition is presented as sort of tragic given the need for a deal:

"From th...

More Fun with the Export-Import Bank: It's the Customers, Stupid

Wow, the pundit class is really worried about the Export-Import Bank reauthorization. Today's big shot comes from NYT columnist Joe Nocera.

Nocera is honest enough to acknowledge that big companies like Boeing and Caterpillar are the main recipients of support. The Export-Import bank supporters have been pushing the line that most loans go to small businesses. This is of course true, but most of the money goes to the Boeings and Caterpillars, and serious people care about the money, not the n...

Yet More Frat Boy Budget Reporting at the Washington Post

Some folks might think that a newspapers job is to convey information to its readers: not the Washington Post. At least when it comes to budget reporting the Post firmly believes in the frat boy ritual of throwing out really big numbers that will be almost meaningless to virtually all of its readers.

It gave us one such ritualistic piece on Saturday that discussed new budget projections from the Office of Management and Budget (OMB). Among other things the piece told readers:

"The White House...

Central Bank Battles Against Bubbles

In a Wonkblog post Matt O'Brien discusses central bank efforts to deal with bubbles. His starting point is the decision by the central bank in Sweden to begin raising interest rates in 2010, ostensibly to head off the development of a bubble there.

There are two points worth noting here. First, it is difficult to imagine what the central bankers were drinking in Sweden when they decided to start shooting at bubbles. A bubble that threatens the economy is a bubble that moves the economy. If th...

The Secret of the First Quarter Health Care Spending Slowdown

Floyd Norris had an interesting piece noting the incongruity between the relatively strong job growth we saw in the first half of 2014 and the near zero or possibly negative GDP growth for the period. (First quarter growth was -2.9 percent, second quarter growth will be positive, but quite possibly less than 2.9 percent.) While it is easy to explain the drop in first quarter GDP as an anomaly driven by falling inventories and bad weather, it is still difficult to reconcile with a rate of job...

Fellow Travelers of the Depression Lobby

Paul Krugman took off the gloves in his column today. He said that much of the opposition to the Fed's low interest rate policy stems from the narrow interest of very rich people who earn lots of interest on their money. While we hear arguments, often from prominent economists, that low interest rates and other expansionary policies from the Fed risk hyper-inflation and other evil things, these arguments have repeatedly been disproven by the evidence. Krugman argues that the reason the argume...

If Working Is a Lifestyle Choice in Norway, Why Do So Many More People Choose This Lifestyle There Than In the United States

Most readers expect better than silly cliches from the New York Times. That is why it was striking to see an article on Svalbard, a small town in northern Norway, tell readers:

"But it [Svalbard] shuns the leftist, leveling consensus that according to conservative critics has made working almost a lifestyle choice in the rest of Norway."

Hmmm, a leveling consensus that makes working a lifestyle choice? A quick visit over to the OECD's website tells us that 75.1 percent of the people in Norway...

President Obama Asks Congress for 0.1 Percent of the Budget to Deal With Children at the Border

That one may be helpful if you read the NYT article on President Obama's request of $3.7 billion from Congress.

China Is a Rich Country?

That's what millions are asking after hearing Morning Edition's top of the hour news segment (sorry, no link). The segment referred to negotiations over emissions caps for greenhouse gases. It said that China argued that it should not be subject to the same rules that apply to other rich countries.

China was presumably making the argument that it was not a rich country and therefore should not be subject to the same rules as rich countries. While China's economy is now larger than the U.S. e...

High Asset Prices, the Savings Glut, Secular Stagnation, and Unemployment

Neil Irwin has an interesting piece in the NYT noting how high prices for a wide variety of assets have driven returns down to historical low levels. He notes that this is a predictable outcome, and in fact an intended result, of the low interest rate policy being pursued by the Fed and other central banks.

The idea is that high asset prices make it cheap for firms to borrow to finance new investment. They also make it easier to buy a home and allow many people who had higher interest rate mo...