Dean Baker's Blog, page 321

Patents Are Not the Only Way to Finance Research

Joe Nocera had an interesting column, based on a book by Lawrence Goldstone, that discussed how disputes over the Wright brothers' patents held up the development of the airplane. Unfortunately Nocera concludes the piece with a quote from Goldstone:

"That is, of course, the irony of the patent system. Without patent protection, a competitor can simply replicate an invention and undercut the inventor’s price — which necessarily includes all the time and expense of research and development — so...

The Number of People Helped by Obamacare is Far Larger Than the NYT Says

In an article on the likely political implications of the Affordable Care Act (ACA) in the November election, the NYT wrongly implied that the beneficiaries are a relatively small segment of the population. It told readers:

"Democrats could ultimately see some political benefit from the law.  But in this midterm election, they are confronting a vexing reality: Many of those helped by the health care law — notably young people and minorities — are the least likely to cast votes that could...

When It Comes to Generating Jobs It Pays Not to Listen to the Experts

It is remarkable that no country has outlawed economics as a dangerous occupation on a par with drug dealing or murder for hire. The damage done to the world over the last seven years based on policies designed by economists has been incredible.

Floyd Norris documents this fact in a nice piece comparing the change in employment rates (the percentage of the population employed) in rich countries since 2007. The only two countries with higher employment to population ratios today than at the st...

$15 Billion In Higher Pay: Cheap Fun for Republicans Over the Minimum Wage

The Republicans apparently think they got a powerful piece of ammunition from the Congressional Budget Office this week when it came out with an estimate that President Obama's minimum wage proposal would cost employers $15 billion a year. Under the "really big number" approach to public policy, many Republicans think they can scare people with a number that is much more money that almost anyone will see in their lifetime.

Fortunately at least some folks in the media recognize that their job...

The Health Care Exchanges Need Healthy People, It Doesn't Matter If They Are Young

The NYT again obsessed about the number of young people signing up for the exchanges, telling readers they "tend to be healthier." Yes, everyone knows they tend to be healthier, which is why they pay on average a third of the premium of the oldest age band (55-64). As the Kaiser Foundation showed, a skewing by age would have little consequence since the difference in premiums largely reflects the difference in average costs. What will matter for the success of the exchanges is if there is a s...

NYT Says Doctors May Not Talk About Expensive Treatments, Doesn't Talk About Patent Monopolies That Make Them Expensive

Yet again the NYT has given us a piece talking about trade-offs between the cost and quality of health care. The piece reports that some doctors may not discuss certain treatments with patients because they consider these treatments too expensive. Unfortunately, the piece never discussed the role of patent monopolies in making these treatments expensive.

The point is simple but incredibly important. In some cases, for example open-heart surgery, a medical procedure may genuinely involve a sub...

Joe Scarborough and His Band of Space Aliens Take on Paul Krugman

The Huffington Post really deserves to be called on the carpet for this piece. It implies there is a debate going on between Paul Krugman and Joe Scarborough over whether the Obama administration is tampering with Census data to make the Affordable Care Act look good.

There is no debate because Scarborough has no clue what he is taking about. He knows nothing about how the Census Bureau collects data and what is involved in changing questions as it is now doing. He is literally making a compl...

Ernesto Zedillo Ponce de León: Director of the Day

Directorships, 2008 - 2012: 5*

Total director compensation, 2008 - 2012: $3,626,109**

Average annual director compensation, 2008 - 2012: $725,222

Average compensation per full year of service as director: $244,276

*Zedillo was a director of the Electronic Data Systems Corporation from October 2007 to August 2008; however, compensation for his service in 2008 is not available and therefore not included in the above calculations.

**Grupo Prisa, a Spanish firm, denotes its director compensation...

The Washington Post Is Confused About Inflation, Economists Are Not

In an article reporting on a speech by Federal Reserve Board Chair Janet Yellen, the Post told readers:

"One of the puzzles currently confounding economists is why inflation has remained so low even as the recovery has picked up steam. The Fed set a 2 percent inflation target but its preferred measure of price changes shows inflation is about half that."

Actually economists are not at all confounded by why inflation has remained low. The predominant view of inflation is that the change i...

The I.M.F.'s Data Disagree With the NYT on the State of Russia's Economy

The NYT headlined a piece on the dismal state of Russia's economy, "Russia economy worsens even before sanctions hit." The piece goes on to describe an economy in decline telling readers about Russians moving abroad and storing cash in safe deposit boxes and foreign currencies. It reports:

"Russia’s $2 trillion economy was suffering from stagflation, that toxic mix of stagnant growth and high inflation typically accompanied by a spike in unemployment. In Russia, joblessness remains low, but o...