Dean Baker's Blog, page 324

There is Evidence That Cities Can Combat Inequality

The NYT had a piece on efforts to address inequality at the local level which might have left readers with the impression that there is little that cities can do. The only economist quoted in the piece was Edward Glaeser, who was very dismissive of the idea that cities could do anything that would have much impact.

It would have been useful to include the views of University of Massachusetts economist Arin Dube or Berkeley economist Michael Reich, both of whom have done extensive work on sta...

The Generation War Goes on Parade

Paul Taylor, a vice president at Pew and the author of a new book on generational conflict, took his generation war story to Parade Magazine this weekend. This magazine, which is distributed to millions of people with their Sunday paper, included a piece by Taylor that warned:

"By the time every boomer is collecting Social Security and Medicare, those two programs are projected to eat up about half our entire federal budget—and both the Social Security trust fund and one of Medicare’s two tru...

Can You Say "Patent Monopolies?"

It's hard to believe that patent protection was not mentioned in this useful NYT piece on the high cost of treating chronic diseases like diabetes. The prices of new drugs and devices are high because the government grants companies patent monopolies. It will arrest and imprison potential competitors.

As every intro econ textbook shows, the monopoly profits also provide enormous incentives for corruption. As a result companies routinely misrepresent the safety and effectiveness of their produ...

If Technology Has Increased Unemployment Among the Less Educated, Someone Forgot to Tell the Data

Tyler Cowen warns us that technology may be making it much harder for less educated workers to get jobs. He highlights a series of changes in the economy then tells readers:

"All of these developments mean a disadvantage for people who don’t like formal education, even if they are otherwise very talented. It’s no surprise that current unemployment has been concentrated among those with lower education levels."

Actually, the data show unemployment has been less concentrated among the less edu...

Glenn Hubbard Says We Have a Shortage of Workers

Glenn Hubbard, the dean of Columbia Business School and former chief economist to President George W. Bush, argued that we have a shortage of workers in a Wall Street Journal column. Hiubbard noted the sharp fall in labor force participation since the downturn. He attributed it to a lack of incentive for people to work. This is in striking contrast to the more obvious logic, that when people have been trying unsuccessfully to find jobs for 6 months or a year, they eventually give up. (This ex...

Lisa Caputo

 

Directorships: 1

Total director compensation, 2008-2012: $632,208

Average compensation for full year as director: $192,867

Lisa Caputo is currently an Executive Vice President of The Travelers Companies, one of the biggest insurance companies in the U.S. She previously worked for more than a decade at Citigroup, where she served as a senior advisor to three different CEOs and was the bank’s first global corporate Chief Marketing Officer in the years leading up to and following the fi...

CBO Estimates of Affordable Care Act Enrollment

Glenn Kessler provides a useful clarification of CBO projections for enrollment in the exchanges under the Affordable Care Act, pointing out that the numbers refer to enrollment years. This means that a person who signs up for coverage beginning on April 1 will only count as three quarters of an enrolled person since they will only be covered for three quarters of a year. 

However it is important to note that many more people will be signing up through 2014. While open season, in which a...

Would Anyone at the NYT Notice a Loss of 400,000 Jobs?

Just asking, since it seems that the paper missed an unexpected $3 billion rise in the trade deficit in February. This is a big deal for the economy.

On annual basis the February numbers would imply an increase in the deficit of $36 billion, or more than 0.2 percent of GDP. Assuming a multiplier of 1.5, this would reduce GDP by more 0.3 percent, implying a loss of over 400,000 jobs.

Fans of national income accounting know that a trade deficit implies a reduction in demand, it is money that is...

As Chicago Cuts Pensions, Are Bondholders Also Taking Losses?

The NYT reported that Chicago Mayor Rahm Emanuel is negotiating reductions in pension benefits with the city's workers, including some cuts to retirees. It would have been worth mentioning if the city is also engaged in negotiations with its bondholders to arrange a partial default. Pensions are legal obligations of the city, which enjoy a comparable or higher status than the city's bonds. (In its bankruptcy settlement, Detroit's workers will almost certainly see a higher share of their pensi...

David Ignatius Is Wrong: Trade Agreements are Not About Free Trade

David Ignatius' column in the Washington Post touting the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Pact (TTIP) is badly mistaken in connecting these deals with free trade. The agreements have very little to do with free trade, rather they are about imposing a business-friendly regulatory structure that would almost certainly not be approved through the normal democratic process in the countries that are parties to the deal.

The reality is that formal trade b...