Dean Baker's Blog, page 323

Catherine Rampell Is Right: Medicare Is a Steal, but for Whom?

Catherine Rampell used her column today to defend an earlier column complaining that baby boomers are taking from young people through Social Security and Medicare. She acknowledges that most baby boomers will not come out ahead on Social Security (actually they come out someone behind in the source she cites) but then tells readers:

"Medicare, on the other hand, is pretty much a steal no matter when you turned 65."

This is true, but it's hard to argue that it is the beneficiaries who are doi...

David Brooks Doesn't Believe We Should Jail People for Stealing (At Least on Wall Street)

Everyone thought David Brooks was a conservative. But in today's column on high frequency trading and the fact that it has often been used to support front-running in which traders effectively engage in inside trading, Brooks tells readers:

"You can’t tame the desire for money with sermons. You can only counteract greed with some superior love, like the love of knowledge.

"Third, if market-rigging is defeated, it won’t be by government regulators. It will be through a market innovation"

So th...

Reed Hundt

Directorships, 2008-2012: 2

Total director compensation, 2008-2012: $ 2,688,560

Average compensation per full year of service as director: $384,080

Reed Hundt was chairman of the Federal Communications Commission (FCC) from 1993 to 1997, during which the Telecommunications Act of 1996 was passed into law. While the law arguably helped encourage further development of information technology, it included a major concession to the industry, allowing television stations to broadcast on dig...

Two Pinocchios for the President?

Glenn Kessler, the Washington Post fact checker, gave President Obama two Pinocchios for saying that women earn on average just 77 cents for every dollar that men earn. Kessler makes some valid points as to why this number overstates the gap. First it is an annual number that doesn't take account of the fact that women are more likely to work part-time and part-year. It is also true that women typically have less work experience because they take time out of the paid labor force.

These and ot...

Krugman, Greider, and the Continuing Saga of Sustained Secular Stagnation

Paul Krugman continues to delve into the depths of sustained secular stagnation asking about the possibility of a prolonged period where the economy does not self-correct to full employment. In the process he takes a sidestep to tell readers that this is not the secular stagnation story of Bill Greider from the 1990s. This to one is worth a moment's thought. (Just to be clear, I consider both Krugman and Greider friends, so I don't have a particular ax in grind in this story.)

Greider hit on...

Casey Mulligan Argues Insurance Deductibles Should Rise by 40 Percent in 2015 (corrected version)

Casey Mulligan has once again left me baffled by the economic analysis in his Economix blogpost. If I'm understanding him correctly he is saying that the deductibles for insurance provided through the exchanges in 2015 should be allowed to rise by 40 percent, based on a rise of this amount in the average premium of non-employer provided insurance policies in 2014 compared with 2013. This is based on the provision of the law that deductibles and other adjustable payments should rise in step wi...

Third Way Proposes to Tax Workers to Subsidize Wall Street

For those who have been worried about the plight of the poor boys and girls who work in the financial sector, Jonathan Cowan and Jim Kessler, respectively the president and vice-president of Third Way, have a plan to help. In a NYT column yesterday, headlined "Capitalize Workers!," Cowan and Kessler proposed a supplemental retirement system which would require employers to put 50 cents an hour into a retirement fund for all of their workers. Cowan and Kessler tell us that this should lead to...

Michael Gerson Is Confused About Health Care Costs

In his Washington Post column Michael Gerson told readers that health care costs increased at the fastest rate in 10 years in the last quarter of 2013. His source lists the growth rate of expenditures (not costs) at 5.6 percent in the quarter. This follows very slow growth in the prior three quarters. By comparison, health care spending grew by 6.7 percent over the whole year in 2007. There may well have been quarters more recently in which the growth rate exceeded 5.7 percent (the quarterly...

Obamacare Increased Voluntary Part-Time Employment, Involuntary Is Down

Paul Solman seems determined to make me an optimist on the state of the economy, at least by comparison. Following the comments of Kristin Butcher, chair of Wellesley's economic department, his blogpost on the March jobs report dismisses the 192,000 job growth reported for March:

"That’s because, according to the survey of 60,000 households, roughly 170,000 more Americans of working age were added to the population in March, consistent with the number we add just about every month, and also c...

Are Investors Less Confused About Real and Nominal Interest Rates Than They Were 40 Years Ago?

Brad DeLong picks up on Paul Krugman's column and questions whether the top one percent of the income distribution (or top 0.01 percent) really have much to fear from higher inflation. Brad concludes that they don't, but that they think they do.  He says:

"The top 0.01% were impoverished by the 1970s as a whole. But they have not been enriched by the post 2008 era. What they have gained via a higher capitalization via low safe interest rates has been offset by what they have lost as a re...