Dean Baker's Blog, page 328

NYT Says That the Rise of Manufacturing Output Almost to December Levels Is Grounds for the Fed to Tighten

The headline of the piece was "manufacturing gains likely to spur Fed's stimulus cuts." The actual news was that manufacturing output was reported as rising 0.8 percent in February, reversing most of a 0.9 percent decline in January. It's a bit hard to see this as solid growth. If we add in December, manufacturing has grown at a 0.4 percent annual rate over the last three months.

Manufacturing output is just 1.5 percent above its year ago level. This has led to a drop in the capacity utiliza...

In Coverage of Health Care Reform Washington Post Substitutes Republican Talking Points for Reality

The Washington Post told readers that the Republicans are putting together an alternative to the Affordable Care Act (ACA). Unfortunately it substituted Republican talking points for an actual description of the plan.

At one point the article told readers:

"They would prefer to see a shift away from the federal government and to the states, with an emphasis on getting more consumers on private plans."

In fact the Republican plan explicitly takes away authority from the states. It would have t...

Robert Samuelson Doesn't Have Access to Government Data

That wouldn't be such a big problem if he didn't write on economic issues. This time the problem affects his discussion of past and future efforts at boosting the economy.

Samuelson seems to think that investment and consumption are depressed because of businesses and consumers fears about the economy. If he had access to the economic data, he would know that non-residential investment is almost back to its pre-recession share of GDP (12.3 percent in the most recent quarter compared to an ave...

Are Average Weekly Hours Really Plummeting?

Last week we were being warned that the labor market was too tight and an outbreak of inflation was imminent. Today, Edward Lazear, formerly chief economist in the Bush administration, is telling us that labor demand is plummeting as shown by a reduction in the length of the average workweek. Okay so the labor market is too tight and too weak, that looks really bad. Given that economists also tell us that robots will take all our jobs and that a growing population of retirees will leave us wi...

Locking Up the Banksters: It's Not Hard

Gretchen Morgenson had a column on a new report from the Inspector General of the Justice Department which found that prosecuting mortgage fraud was a low priority, contrary to claims by the Obama administration. Since there is so much confusion on the topic it is worth repeating again what the Justice Department would have done if law enforcement had been its concern.

It's not a question of simply locking up Jamie Dimon and Lloyd Blankfein and other top bankers, the point would be to build a...

The Fed's Mandate Means That It Must Pay Attention to Stock and Housing Prices

A NYT commentary by Jeff Sommer told readers that the Fed is not likely to focus much on recent trends in stock and housing prices at its next meeting because asset prices are not part of its mandate. The piece commented:

"Even if such issues [recent trends in stock and house prices] provide a subtext for Fed discussions, the direct effects of Fed policy on the stock and housing markets may not be an explicit part of the Fed’s agenda this week.

"That’s partly because Congress didn’t include f...

George Will Is Badly Confused on Economic Issues, Again

Fortunately for Mr. Will, he works for Jeff Bezos, a man who accumlated $32 billion (more than 40 percent of the annual food stamp budget) by assisting people in evading state and local sales taxes. (Under most state laws, people are obligated to pay sales tax on items they buy over the Internet, however enforcement is essentially zero. The amount of tax that Amazon customers have avoided as a result of purchasing over the web is at least an order of magnitude greater than Amazon's profi...

Fun With Really Big Numbers at the Washington Post

Some folks might think that the point of a newspaper is to provide information to readers. Those people have nothing to do with reporting at the Washington Post. That is why, in an article on unexpected state budget surpluses, the paper told readers that capital gains taxes from the initial public offerings of Facebook and Twitter generated $3 billion in unexpected revenue for California, that Florida's legislature is voting on a $400 million tax cut, and Idaho is projecting an $80 million su...

Stiglitz Sets the Record Straight on "Globalization"

Joe Stiglitz had a nice piece on globalization pointing out that recent "trade" agreements have been largely about shaping rules and regulations to benefit the one percent rather than reducing trade barriers. The strategy of the Obama administration and other proponents of deals like the Trans-Pacific Partnership is to make nonsense claims about the economic benefits of these deals and use ad hominem arguments against the opponents (i.e. call them Neanderthal "protectionists").

In reality, it...

Inequality in Income Translates Into Inequality in Life Expectancy

This NYT piece compares life expectancy and health outcomes in Fairfax, Virginia, a wealthy county of Washington suburbs, with McDowell County, West Virginia, a poor coal-mining county in Appalachia. It describes some of the differences in living conditions that have led to a 15-year gap in life expectancies between the two counties. The differences in health outcomes in these counties are attributable to factors that have led to sharp increase in gaps in life expectancy by income across the...