Dean Baker's Blog, page 325

NYT Reports Republican Misrepresentations Without Comment

It is not responsible reporting to report without comment statements from prominent politicians which are almost certainly not true. For example, if President Obama said that Speaker Boehner has blown up the Washington monument, it would be irresponsible to simply report the assertion without noting that the president has no evidence for this assertion and that the Washington Monument is still standing.

In the same vein, it was irresponsible for the NYT to quote without comment Speaker Boehne...

NYT Does Hilarious April Fools Joke on Budget Reporting

The NYT took advantage of April Fools Day to do budget reporting that provided no information to almost all of its readers. An article on the budget introduced by Paul Ryan, the Republican head of the House Budget Committee, told readers how much the budget proposes to cut over the next decade in dollar terms. Since virtually no one has any idea of how much the government will spend over the next decade, this information is meaningless to almost everyone who reads the New York Times.

The NYT...

High Speed Trading and Slow-Witted Economic Policy

Michael Lewis' new book, Flash Boys, is leading to large amounts of discussion both on and off the business pages. The basic story is that a new breed of traders can use sophisticated algorithms and super fast computers to effectively front-run trades. This allows them to make large amounts of money by essentially skimming off the margins. By selling ahead of a big trade, they will push down the price that trader receives for their stock by a fraction of a percent. Similarly, by buying ahead...

The Washington Post is Confused About Obamacare, People With Insurance Benefit Too

The Washington Post is still having a hard time understanding Obamacare. It repeated the silliness about the exchanges needing young people to sign up. (The issue is health, not age, as we have been trying to explain to elite reporters for years.)

A front page article on the political impact of Obamacare told readers:

"Still, Democrats may be disappointed if they expect the newly insured to emerge as a politically powerful constituency, as senior citizens did for Medicare. Robert J. Blendon,...

It's Hard to Get Good Help: The Case of the European Central Bank

Many economists have difficulties with simple arithmetic. That is why so many of them failed to recognize the rising and unsustainable ratios of house prices to rent and income. Apparently arithmetic problems still figure large in policy at the European Central Bank (ECB).

The NYT noted a slightly lower than expected inflation measure for February and told readers:

"The ECB, which targets inflation of just below 2 percent, left borrowing costs unchanged at 0.25 percent in March and has argue...

Robert Samuelson Hypes the Views of Always Wrong Economists to Tell Us to Get Used to Being Poor

Economics is a great profession for people who are not very good at their work. Messing up all the time does not affect at all your ability to maintain a high-paying job and get people to take your views seriously. 

Hence we have Robert Samuelson warning us that we might have to just accept that we will be faced with continuing slow growth and high unemployment. First off, it is important to sort out two different issues which Samuelson mushes together.

The first one is the extent to wh...

NYT Decides to Abandon Distinction Between News and Opinion

The NYT, even more than other newspapers, tried to maintain a clear separation between its news and opinion sections. It apparently abandoned this distinction in an article today that could have been a press release from the California farmers' association.

The article tells readers:

"A work force that arrived in the 1990s is aging out of heavy labor, Americans do not want the jobs, and tightened security at the border is discouraging new immigrants from arriving, they say, leaving them to s...

Why Is MSNBC's Heiress Unwilling to Talk About the Most Important Economic Issues Facing Her Generation

Abby Huntsman, the daughter of Jon Huntsman, a millionaire and unsuccessful presidential candidate, seems determined to press the idea of cutting Social Security and Medicare, apparently unaware that people from her class have been doing the same for decades.

As I wrote in response to her previous diatribe, there is no way that paying for Social Security will have a major effect on the standard of living of people of Huntsman's age. Even if we resolved the projected shortfalls entirely by rai...

Uwe Reinhardt on the Cost of an Extra Year of Life

Uwe Reinhardt picked up on an earlier blogpost in which he asked how much should we be willing to pay for an extra year of life. I had objected to his framing since the high cost in the matter he raised was associated with the patent protected price for the drug in question, not actual resources from society.

The point is that the (possibly considerable) resources involved in developing the drug had already been used. The marginal resources in the form or producing additional units of the dru...

The Quit Rate, the Fed, and Braindead Employers

The raise-interest-rates crew has lately been getting excited over a slight rise in the quit rate, the percentage of workers who voluntarily leave their jobs. The claim is that the labor market is now getting so tight that workers are able to get wage gains, which will be passed along in higher prices, which will soon mean accelerating inflation.

It's a bit hard to see much of a case here. While the quit rate is above the troughs seen in 2009-2010 it is still lower than at any point in the 20...