Dean Baker's Blog, page 347

NYT Isn't Sure Whether Abenomics Has Led to a Shortage of Workers or a Shortage of Jobs, but It Wants Readers to Think It's Bad

Japan's new Prime Minisiter, Shinzo Abe, is quite explicitly taking his country on an economic course that is 180 degrees at odds with the austerity policies being pursued in the United States and Europe. He is committed to major stimulus, which is increasing Japan's government debt, even though it is already almost three times as large relative to its economy as the U.S. debt. He also got the central bank to commit itself to raising Japan's inflation rate to 2.0 percent. Japan had been exper...

NYT Protectionists Won't Even Talk About Importing Doctors

Catherine Rampell had an interesting piece on the shortage of primary care physicians. Interestingly the piece never once raises the possibility of facilitating immigration of qualified doctors. It is striking that when industry groups have claimed shortages of nurses, STEM workers, and even farmworkers, immigration has been front and center on the policy agenda. This shows the striking difference in the power of doctors relative to other workers.

Ezra Klein Misses the Mark: Inequality and Unemployment Are the Same Problem

In his Washington Post column this morning, Ezra Klein dismisses the problem of inequality and argues that progressives should instead focus on unemployment. While he will get no argument from me on the need to focus on unemployment, the idea that this is a separate issue from inequality is seriously misplaced.

Ezra gets to this spot by first dismissing the idea that inequality harms growth. He is certainly right that the evidence is less conclusive than we might like, but I would attribute t...

Post Tries to Scare Readers About Mortgage Availability

The Washington Post ran a piece implying that new rules on mortgage issuance will exclude large numbers of potential homebuyers from the market. The piece fundamentally misrepresented the issues. The rules cover the mortgages that can be placed in mortgage backed securities without banks being required to keep a 5 percent stake.

If a bank believes that a mortgage is in fact a good mortgage, in spite of not complying with the rules, then keeping a 5 percent stake carries minimal cost. Furtherm...

We Actually Don't Have to Live With the Big Banks

Floyd Norris has a good discussion of the continuing hostility toward the big banks, pointing out that it has a real basis in their behavior. However, toward the ends it includes the strange line:

"We have the giant banks and must live with them."

Actually, we don't have to live with the big banks. The Justice Department could pursue anti-trust actions to break them up, the Financial Stability Oversight Council could act to break them up, or Congress could pass new legislation. There is no ob...

Politifact Attacks Obamacare Hard: Its 2013 "Lie of the Year" Were Statements from 2008-2010

Politifact apparently has given up any pretense of being a serious independent news source. It wanted so badly to trash Obama over his "keep your insurance" line that it made this the lie of the year in 2013 even though all its examples were from 2008-2010.

But, when you're trying to push an agenda there is no reason to let reality get in the way. It also decided to hype the horrors of people losing their insurance telling readers:

"there was no shortage of powerful anecdotes about canceled...

Comparing Minimum Wages Across Countries

The Economist ran a useful piece on the minimum wage in the United States. However in making cross country comparisons it shows the minimum wage relative to the median wage. This can give a somewhat misleading impression of the relative size of the minimum wage in different countries, since the median wage itself reflects distribution.

The median wage in the United States has fallen by roughly 20 percent relative to the average wage over the last three decades. This means that if the minimum...

Boeing Workers Have Less Bargaining Power Because We Have a High Unemployment Policy

Harold Meyerson has a good column in the Post talking about how workers in the United States have little bargaining power with employers. This explains why profits have soared and wages have stagnated.

While Meyerson focuses on the weakening of unions it would also have been worth noting that part of the reason for the decline in workers' bargaining power is that the government has decided to run a high unemployment policy. Congress and the president have approved budgets that keep the unempl...

If Would Have Been Worth Pointing Out That Republican Deficit Hawks Are Wrong

There is a bizarre cult in the Washington elite that insists that Social Security, Medicare, and Medicaid must be cut for our own good. Unfortunately, the NYT seems to be part of this cult. 

In its piece on the House of Representatives vote to approve the budget compromise worked out this week, it told readers:

"Some conservatives feel betrayed, as they often have since the Republicans took control of the House in 2011. Representative Jim Jordan, Republican of Ohio, said the House Republ...

Paul Krugman and TPP

I've got to take some issue with my friend Paul Krugman over his blogpost pronouncing the Trans-Pacific Partnership (TPP) no big deal. As a trade question he is undoubtedly right. The countries in the pact are ones with whom the United States already has extensive trade ties and generally low barriers. Eliminating or reducing the remaining barriers cannot possibly have much impact on the U.S. economy.

However it is a misunderstanding to see the TPP as being about trade. This is a deal that fo...