Dean Baker's Blog, page 345

Bill Keller's Center-Left Is the Reason We Are Growing Less Rapidly

Bill Keller gives us some holiday fun by getting almost everything completely wrong in contrasting the left-left (Elizabeth Warren and Bill de Blasio) with his friends, the center-left. There are so many profoundly ill-informed assertions that it might be hard to know where to begin if Keller didn't make it so easy. Keller tells readers:

"The center-left (I’m somewhat oversimplifying these categories) agrees on the menace of inequality, but places equal or greater emphasis on the fact that th...

Meet the Press Is Incredibly Painful

Sorry, for family reasons I am seeing the Sunday morning shows. It's amazing these things exist. David Gregory is interviewing Yuval Levin about his book Tyranny of Reason, Imagining the Future, The Great Debate: Edmund Burke, Thomas Paine, and the Birth of Left and Right.

The book sounds like collection of painful cliches, the left likes activist government, the right believes in leaving civil society to work things out for itself. Really? So the patents and copyrights that shift far more mo...

Is Tyler Cowen a Protectionist?

It sure seems that way as he implies that greater patent and copyright protection are the wave of the future. He tells readers:

"The growing commitment of the American political system to intellectual-property protection and enforcement, like that in trade treaties, also hasn’t gained much explicit notice. This shift of priorities is likely to become more important as economies move toward creative production and information technology."

Already we lose close to $270 billion in patent rents o...

Bitcoin Mining: Textbook Example of Rent-Seeking and Waste in the Financial Sector

The NYT gave readers an excellent example of how the financial sector can lead to an enormous waste of economic resources. It reported on a massive set of sophisticated computers in Iceland that is devoted to the sole purpose of "mining" bitcoins. The point is that these computers are used to carry through complex algorithms more quickly than competitors in order to lay claim to new bitcoins as they become available on the markets.

While this can be quite profitable to an individual or firm...

NYT Goes for the Gold in the Find Bad Things to Say About Obamacare Game

Yes folks, the NYT is trying to dislodge Fox News. What they may lack in outrageousness they make up in credibility. Here they are with a front page story telling us about the tragic situation of the Chapmans, a New Hampshire couple making $100,000 a year who will have to spend $1,000 a month for insurance with Obamacare. This would come to 12 percent of their income. The piece tells readers:

"Experts consider health insurance unaffordable once it exceeds 10 percent of annual income."

That's...

Larry Summers Hasn't Heard About the Trade Deficit

Many of us are happy to see that Larry Summers, who served as President Clinton's Treasury Secretary and head of President Obama's National Economic Council, had a column talking about secular stagnation in the Washington Post. As they say here in Washington, if you repeat something that is true long enough, Larry Summers will eventually write about it in the Washington Post.

Unfortunately, Summers still only has part of the story. He notes the possibility that investment demand may have shif...

Washington Post Gets Carried Away on Revised Third Quarter GDP Report

The Commerce Department released its second revision to the third quarter GDP numbers on Friday. It showed the economy growing 4.1 percent, which was better than the earlier reports and more than most analysts had expected. However, the Post got more than a bit carried away on this one, telling readers in the second sentence of its article on the report:

"The Commerce Department reported that the nation’s gross domestic product grew at a 4.1 percent annual rate during the third quarter — the...

Washington Post Tells Readers That the Possibility of a Rising Debt to GDP Ratio in a Decade Is a Bigger Problem than Millions of Unemployed Young People Today

According to the Congressional Budget Office the economy is currently operating at a level of output that is 6 percent (@ $1 trillion) below its potential. This lost output represents income that would primarily go to currently unemployed or underemployed workers, a disproportionate share of whom are young. If the economy were near full employment, lower paid workers, who are also disproportionately young, could expect to see higher wages.

If Congress was prepared to spend more money on infra...

Fareed Zakaria Misses the Story: Technology and Globalization Only Favor the Rich When They Are Rigged

Fareed Zakaria misses the story big-time when he tells readers that the super rich have gotten richer in the United States because, "globalization and technology help superstars." This is not inherently true, it is only true when the government rigs the deck to accomplish this result.

For example, globalization could be used to promote competition in the CEO market so that U.S. corporations take advantage of the much lower paid CEOs in Europe and Asia to save tens of millions of dollars a yea...

NYT Missed the News: Exchanges Need Healthy People, Young Doesn't Matter

The NYT apparently hasn't gotten the word. Kaiser Family Foundation did an analysis showing that the age composition of the insurance pool in the exchanges will have little impact on costs. The issue is the health mix. If the exchanges fail to attract older healthy people it will cause as much of a problem as if it fails to attract young healthy people. (On a per person basis the loss is larger, since healthy old people pay three times as much for insurance.)

Unfortunately the NYT has not got...