Dean Baker's Blog, page 349

Robert Samuelson Says We Should Seize Bill Gates' Software Copyrights

In his column today he noted the need to seize Bill Gates property, telling readers:

"Copyrights were once thought to be legally and politically impregnable."

Okay, we know Robert Samuelson would never advocate policies that hurt the rich. He actually said "pension benefits were once thought to be legally and politically impregnable," as he celebrated pension cuts in Rhode Island and Illinois, along with the prospect of further cuts in Detroit and Chicago.

There is no doubt what is going on h...

Will the South Walk Away from Obamacare?

Ross Douthat raises an interesting issue in his column on Obamacare. Douthat suggests that Obamacare may not succeed elsewhere in the same way as it did in Massachusetts because people don't feel as warmly inclined toward the government in other states.

There are several pieces of Douthat's story that aren't quite right. First, this is private insurance, not government insurance. It's not clear how people think they would be making a strike against the government by not buying private insuran...

Patent Monopolies Lead to Corruption: #43,261

The Washington Post had a major article on how the drug company Genetech has managed to create a substantial market for its drug Lucentis, at a price of $2,000 per injection, even though it manufactures another drug Aventis, which is just as effective and sells for $50 an injection. Both are used to prevent blindness. A number of studies have shown them to be equally effective. The article explains how Gentech has been able to maintain a market for a drug that costs 40 times as much as its eq...

The Technological Transformation in Thomas Friedman's Mind

No one expects Thomas Friedman to base his columns on evidence, but he strayed even farther than usual today. The piece is a complaint that the United is not prepared to deal with "a huge technological transformation in the middle of a recession." The data won't support that one. 

The usual measure of technological progress is productivity growth. That has been lagging in this upturn, averaging close to 1.0 percent for the last three years.

 

We know that Thomas Friedman has lots o...

WaPo Tells Readers They Should be Happy Because Growth Path Will Bring Us to Potential GDP in 2021!

I'm not kidding. That was in a front page "news" story on the November jobs report. The piece told readers:

"Some economists are forecasting growth as high as 3 percent next year. New data released Friday showing robust hiring in November suggested that the private sector already is gaining momentum.

"The only thing that has to happen is that lawmakers have to do nothing,' said Mark Zandi, chief economist at Moody’s Analytics. 'It’s a pretty low bar.'"

According to the Congressional Budget Of...

Too Big to Fail and the Economic Crisis

Neil Irwin seems to miss the major issues on too big to fail in his discussion of Treasury Secretary Jack Lew's remarks proclaiming too big to fail (TBTF) to be sort of over. The most obvious issue is simply whether the markets believe TBTF is over.

This is a question of whether they think Jack Lew or his successors will simply wave good bye if J.P. Morgan, Goldman Sachs, or one of the other megabanks goes under. If they don't believe that the government will just let one of these banks sink...

Security in Insurance: The Most Important Gain from Obamacare

Ezra Klein highlights the most important feature of Obamacare. People who have insurance now will be assured that they can still buy it if they lose it for some reason. This will make a huge difference to the bulk of the population who do already have insurance. They can now change jobs or even quit and still be assured of being able to get insurance at a reasonable price.

Charles Lane Complains About "Vast" Transfer to Big Banks

Couldn't resist this one. No the WaPo columnist isn't complaining about too much money going to big banks. He is once again complaining about money going to seniors, or more specifically the idea pushed Senators Tom Harkin and Elizabeth Warren that we might want to increase the money going to seniors.

Harkin proposed a bill, which Warren has now endorsed, which will base the annual cost of living adjustment on a price index that more closely tracks the consumption patterns of seniors than the...

President Obama Misrepresents Role of Government: It Has Promoted Inequality

The Washington Post should have found someone who would have pointed out President Obama's misrepresentation when it quoted him saying:

"“Government can’t stand on the sidelines in our efforts [to reduce inequality and increase mobility], because government is us. It can and should reflect our deepest values and commitments.”

Of course government has not been on sidelines, it has pursued policies that increase inequality. There are a long list that fall into this category including the bank b...

Missing Background on Chicago's Pensions

The NYT had a piece discussing the situation with Chicago's underfunded pensions. It could have used some additional context.

First it would have been useful to point out how the pensions became badly underfunded. The problem goes back to the late 1990s when Chicago, like many other state and local governments, largely stopped contributing to their pensions because they thought the run-up in the stock market made it unnecessary. They made projections, with the blessing of bond-rating agencie...