Dean Baker's Blog, page 335

Tennessee Republicans Don't Believe in a Free Market

The NYT has a fascinating piece about threats that Tennessee Republicans are making against Volkswagen if they recognize a union formed by its workers. Apparently, these politicians believe they are better able to run a car company than the Volkswagen's managers. This is an interesting view coming from people who usually claim to be supporters of a free market and to believe that the government should not interfere in the running of a business.

Not Everyone is Confused by Housing Bubbles

Eduardo Porter tells readers about confusion among central bankers about how to deal with international capital flows and asset bubbles like the housing bubble in the United States. While there has been considerable confusion among central bankers, this appears to be more linked to their lack of qualifications than the intrinsic complexity of the subject matter.

For example, Porter notes how Greenspan was confused by the inflow of foreign capital that kept long-term interest rates low even as...

Pew Research Finds Almost No Gains for Young College Grads Over Last Quarter Century

Most NYT readers probably would have missed this fact, since the blogpost highlighted the growing gap between the pay of recent college grads and those with less than a college degree. While Pew did find an large increase in the gap, almost all of this was due to a fall in the year-round pay of less-educated workers.

In the 27 years from 1986 to 2013, Pew found that the median wage for full-time workers between the ages of 25-32 with college degrees increased from $44,770 in 1986 to $45,500 i...

$85 Million Would Be About 2.2 Percent of Arkansas' State Budget

That may not have been obvious to some of the readers of a NYT article that discussed the impact of the state rejecting an expansion of the Medicaid program under the ACA. The article told readers that this rejection would create a hole of $85 million in the state's budget. Just in case some readers haven't checked in on spending levels in Arkansas recently, the 2.2 percent number might have been useful information to include in the article.

Marc Thiessen Says Last Year's Stock Market Run-Up Led to a Huge Cut in Pay

Many people who have retirement funds in the stock market are able to retire this year as a result of the big run-up in the stock market last year. According to Washington Post columnist Marc Thiessen this means that these people will see a big cut in their pay. After all, retired people won't be collecting paychecks.

I'm not making this up, that is the argument in Marc Thiessen's latest column, cleverly titled, "Obamacare's $70 billion pay cut." Thiessen's basis for claiming that the Afforda...

Does National Public Radio Have the Ability to Control Its Obsession With the National Debt

In recent months we have heard comments from the chief economist at the I.M.F., the chair of the Federal Reserve Board, and the Congressional Budget Office, all saying that austerity is hurting growth and costing the country jobs. By the Congressional Budget Office's estimates we are still operating at a level of output that is more than $1 trillion below potential GDP. Comparing its most recent projections with its 2008 pre-crash projections, we stand to lose a cumulative total of more than...

It's Monday and Robert Samuelson is Beating Up on Seniors, Again

It's great that the Washington Post lets Robert Samuelson run the same columns again and again. Otherwise he might have to work for his paycheck.

Today's column is a rerun of the senior bashing piece. The premise is that we can never raise taxes and that we are too stupid and/or corrupt to get our health care costs in line with the rest of the world. And, if these two claims prove to be true, then voila, spending on seniors will crowd out other spending in the budget. 

It's not clear wh...

Take This Job and Shove It: The Fruits of Obamacare

Yes, this was one of the points of Obamacare, at least for some of us. Many people find themselves stuck in jobs they hate because they need health care insurance and can't see any other way to get it. The Washington Post tells us that some workers are recognizing their new freedom as a result of being able to buy affordable insurance on the individual market.

This is great news in my book, but I see from the article that my friend Douglas Holtz-Eakin is unhappy.

The Efficiency of Drug Patents and Other Silly Things Economists Say

If you want to see an economist get really angry, suggest imposing a 20 percent temporary tariff on imported steel, as President Bush did in 2002. He can quickly produce the charts showing how this will lead to an inefficient outcome.

If you want to see an economist get really confused, ask him how the story is different with a drug patent that allows a company to charge a price that is several thousand percent above the free market price. Of course you can use the exact same chart to show th...

The Secret of Slow Wage Growth: College Myths in the NYT

The NYT noted that wages have been growing slowly in the recovery, which it argues also explains slow consumption growth. It then blamed weak wage growth on an uneducated workforce;

"The problem for economic growth in general, and wage growth in particular, is that only one-third of the American work force — 50.4 million out of 155 million — have a college degree or more. By contrast, there are approximately 73 million workers who have a high school diploma or some college, and 11 million wor...