Dean Baker's Blog, page 314
May 31, 2014
"Recovery" In Spain Doesn't Mean the Same Thing as Elsewhere
A New York Times article on four nights of riots in Barcelona was headlined, "In Spanish riots, anguish of those recovery forgot." The unemployment rate in Spain was 25.3 percent in March, the most recent month for which data are available. It is done by less than 1.0 percentage point from its year ago level. At this pace of recovery, the unemployment rate will first fall below 10 percent somewhere around 2030.





May 30, 2014
The $84,000 Drug Costs $84,000 Because of Government Patent Protection
The Washington Post had an interesting piece discussing the issues associated with the cost of Sovaldi, a new drug designed to treat Hepatitis C. As the headline tells readers, Gilead Science, the manufacturer of the drug, is selling a year's dosage for $84,000. The piece notes that many new drugs are now being developed which will likely carry similar price tags.
At one point the piece raises the possibility of price controls, which it implies would be a government intervention into the mark...
Doctor Shortages at the Veterans Affairs Hospitals: Why Aren't People Talking About Immigration?
The Silicon Valley folks and their allies in think tanks and academia are constantly touting the need to have more immigrants to work as engineers in their companies. This is in spite off the fact that the wages of the workers in the sector do not demonstrate evidence of a serious shortage (i.e. they are not rising rapidly).
Given the frequency with which more immigration comes up in the context of the tech sector, is striking that the issue is not mentioned once in a major NYT article on do...
Why Is It So Acceptable to Lie to Promote Trade Deals?
It's not polite to use the "L" word here in Washington, but it's hard not to be more than a bit disgusted with the frequency with which trade pacts are sold as great engines of job creation and economic growth, when they clearly are not. The latest offender in this area is Bruce Ackerman, a Yale Law professor.
In a Washington Post column Ackerman called on President Obama to push for the Transatlantic Trade and Investment Pact (TTIP), which he described as, "opening the path for job-creating...
May 29, 2014
Andrew Sentance Wants Us to Stop Worrying About Deflation
Andrew Sentance, a former member of Bank of England's Monetary Policy Committee, wrote in the Financial Times that we should stop worrying about deflation. He actually is at least partly right.
Sentance distinguishes between what he calls "chronic" deflation, "benign" deflation, and "price adjustment." He says that we need only worry about the former, a process whereby price declines become self-perpetuating, much as an inflationary spiral can become self-perpetuating. He writes that in this...
Amazon's Tax Breaks Are Essential to Its Survival
An NYT article on the battle between Amazon and Hachette, a major publisher, told readers that:
"Thanks to Wall Street’s unwavering support, Amazon could afford to sell books for what it paid for them — something no physical bookseller could do."
While the willingness of investors to pay large amounts of money for the stock of a company that makes little or no profit has been important to Amazon's success, it is also worth noting that through most of its existence it has been exempt from the...
Six Things George Will Would Not Have Said If He Had Access to Economic Data
George Will devoted his column today to complaining about Obamanonmics, or more specifically the state of the economy during the Obama administration. The article includes a serious of inaccurate or misleading statements which Will presumably made because he doesn't have access to data from his home or office in Washington.
1) Will told readers:
"June begins the sixth year of the anemic recovery from the 18-month recession. Even if what Obama’s administration calls “historically severe” weath...
The Economic Recovery in Spain Should Push Unemployment Below 10 Percent by 2030
A New York Times article on the success of Podemos, a new anti-austerity political party in Spain, referred to the "hints of recovery" in Spain. In the last year, the unemployment rate in Spain has fallen by 1.0 percentage point to its current level of 25.3 percent. At this pace of recovery, the unemployment rate in Spain should fall below 10.0 percent just before 2030.





May 28, 2014
Why Would the Addition of Young Healthy People Raise the Cost of Insurance?
That's what Washington Post readers are asking after reading an article warning of large price increases in 2017. The piece reported the output from a simulation model developed by Stephen Parente, a University of Minnesota health economist who advised Sen. John McCain's 2008 presidential campaign.
According to the article, Parente's model predicts a large increase in the price of bronze and catastrophic plans in the exchanges in 2017. It gives the reason for this increase:
"Parente estimate...
The NYT Makes Silly Mistakes Because It is Determined to Use Numbers Without Any Context
Newspapers should be in the business of informing their readers, but not the New York Times. Last fall I had raised the issue of putting large numbers in some context so that readers would be able to understand their significance. I was primarily thinking of budget numbers. Almost no readers have any idea what the billions or trillion mean, but they would immediately be able to understand a number expressed as a percent of the budget. The latter takes no additional research, it takes one seco...
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