Dean Baker's Blog, page 329

Washington Post Is Confused: Pharmaceutical Industry Lobbyists Try to Increase Profits, not Improve Global Health

The Washington Post finds politics to be very confusing. It apparently thinks that the people paid high six or even seven figure salaries to lobby for the pharmaceutical industry are humanitarians trying to advance global health. 

Toward the end of an article on efforts by drug companies to get stronger patent-type protections in the Trans-Pacific Partnership (TPP) the Post told readers:

"But pharmaceutical industry advocates worry that without strong global rules, the drug development p...

Was the Irish Recovery Driven by Drugs?

Apparently it was in large part, according to this WSJ article. The piece tells readers that Ireland's economy shrank by 2.3 percent from the third to the fourth quarter, meaning that it dropped at a 9.2 percent annual rate, to use the normal terminology of people in the United States when talking about growth data. However the article later tells us that the story is not as bad as it first appears, since much of this decline is due to a major drug going off patent, which has reduced the inco...

MSNBC Finds It's Hard to Get Good Help: Abby Huntsman on Social Security

It's always entertaining when people who obviously have no clue about the basic facts on Social Security take to educating people on Social Security. Of course it's unfortunate when such people actually get taken seriously. In the hope of reducing this risk, BTP takes this opportunity to address Abby Huntsman's warning to millennials about the risks posed to them by Social Security.

Ms. Huntsman (the daughter of unsuccessful presidential candidate Jon Huntsman) tells her audience that the pro...

The Root of Many U.S. Economic Problems Lie In Stanley Fischer's East Asian Bailout

Morning Edition engaged in ritualistic praise of Stanley Fischer, in discussing his prospects for approval as President Obama's pick to be vice-chair of the Federal Reserve Board. It accurately reported that economists on both the left and right of the political mainstream respect Fischer and see him as central to shaping the current state of macroeconomics.

The small point left out of this discussion is that this macroeconomics led us into the worst economic downturn since the Great Depressi...

Richard M. Daley

 

Richard M. Daley served as mayor of Chicago for twenty-two years, from 1989-2011, surpassing the record for longevity set by his father. Shortly after ending his term as mayor, Daley became a director of the Coca Cola Company. He received $18,322 in compensation for his time as a director two months in 2011, and $178,461 for 2012.

Coca Cola CEO Muhtar Kent was paid $29,115,573 in 2011 and $30,460,186 in 2012. During this period, Coca Cola has substantially underperformed the S&P...

Piketty's Relentless Wealth Gap Need Not Be So Relentless

Eduardo Porter picks up on the fashion book of the week, Thomas Piketty's Capital in the 21st Century. The punchline, which Porter accurately conveys, is that we are on a path of ever greater concentration of wealth and income. Piketty's isn't happy about this and recommends wealth and inheritance taxes as remedies, but since these taxes don't sound very likely, the picture looks pretty bleak.

While the book has much useful information and is well worth reading, folks can feel justified in ta...

WaPo Can't Find Anyone Who Wasn't Surprised by Housing Collapse As a Source on Privatizing Fannie and Freddie

A Washington Post article on plans to privatize Fannie Mae and Freddie Mac likely misled many readers about their role in the housing bubble and the nature of the new system of housing finance being pushed in Congress. The piece told readers;

"The companies [Fannie and Freddie], which were seized by the federal government in 2008, were widely blamed with exacerbating the financial crisis by buying millions of risky loans and passing on the risk to consumers."

While Fannie and Freddie did help...

The Exchanges Need Healthy People, It Doesn't Matter If They Are Young #24,321

Here we go again. The NYT told readers:

"A quarter of private plan enrollees are ages 18 to 34, who tend to have lower medical costs and their premiums are needed to help pay for the higher costs of insuring older and sicker consumers."

In the real world outside of wonkville wisdom the age of enrollees makes little difference to the finances of the program. It will matter if there is a skewing by health conditions. The logic is simple and straightforward. A healthy 60-year old and a healthy 2...

Evan Soltas and the Inflation Hawks

Evan Soltas has responded to me and others who don't quite see us as bumping up against full employment and capacity constraints any time soon. Fortunately, he clearly lays out his argument so it is easy to see the error in his ways. He notes the unemployment rate has fallen by 0.8 percentage points annually the last three years and assumes that we will continue on this path.

That one doesn't seem very likely unless Evan is either way more optimistic about growth than almost anyone else or wa...

Getting to Full Employment By Lowering the Goalpost

The folks controlling economic policy are apparently getting frustrated with their inability to restore the economy to full employment. So it seems that their answer is to redefine full employment to make the task easier, or so Evan Soltas tells us in a Bloomberg View piece today.

Soltas notes that the quit rate is not obviously out of line with the unemployment rate, which he adds is "close to most estimates of unemployment's natural level." It's worth noting that the quit rate used to be mu...