Dean Baker's Blog, page 350

We Could Also Import More Doctors

Interesting piece on the prospects of a doctor shortage by Scott Gottlieb and Ezekiel Emanual in the NYT. Interestingly they never discuss the possibility of bringing in more qualified doctors from other countries. It's much cheaper to train doctors (to U.S. standards) in other countries than in the United States. If the political system were not so completely dominated by protectionist Neanderthals, opening up our system to foreign trained doctors would be a central item on the trade agenda....

Job Loss in the Low-Wage Labor Market

My friend and co-author Jared Bernstein has a good post on the minimum wage this morning. It would benefit from one additional point.

While Jared acknowledges that the minimum wage may lead to some job loss it is important to note that jobs in the low wage labor market tend to be high turnover jobs, although turnover is likely to be slower in response to a higher wage. The reason why this matters is that when we talk about job loss in response to a minimum wage hike, we rarely are talking abo...

Americanizing the European Labor Market

Eduardo Porter has a good piece on efforts to use the economic crisis to make Europe's labor market more like the U.S. market. One result is likely to be much higher levels of inequality.

Economists and Inflation: It's Also Interest Rates, not Just Wages

Binyamin Appelbaum had an interesting post about how many economists would like to see a higher rate of inflation to help recover from the downturn. The piece emphasizes the role of inflation in lowering real wages, with the argument that lower real wages are necessary to increase employment.

While there may be some truth to this point, it is worth fleshing out the argument more fully. At any point in time, there are sectors in which demand is increasing and we would expect to see rising rea...

NYT Says the Republicans Want to Cut Food Stamps by $40 Billion

That's more than half of the money appropriated for the program. Yes, some folks will know that the $40 billion refers to a cut over 10 years. But is there some reason that the NYT can't provide such information in the article and not risk misleading a large share of its readers.

That comes to roughly 5 percent of the cost of the program. To give readers a bit more context, the NYT could have used CEPR's nifty Responsible Budget Calculator to inform readers that the cut amounts to 0.09 percen...

Is There a Stock Bubble? Joining the NYT Debate

Since the NYT decided to devote a Room for Debate on the question of whether the stock market is currently in a bubble, I thought I should join the party as one of the stock bubble warners from the 1990s. To my mind the story for the overall stock market is a fairly simple one. Look at the ratio of stock prices to trend earnings.

This one doesn't look too terrifying. Obviously the market is hitting record highs measured in nominal dollars, but if we expect the price to earnings ratio to remai...

Can Robert Samuelson Say "Trade Deficit?"

It seems that he can't. In his column today on finding a word for the continuing downturn he tells readers:

"Why? Unlike Hansen, today’s stagnationists haven’t identified causes [of secular stagnation]. The problem might not be a dearth of investments so much as a surplus of risk aversion. For that, candidates abound: the traumatic impact of the Great Recession on confidence; a backlash against globalization, reduced cross-border investments by multinational firms; uncertain government polici...

The Post Only Calls It Redistribution When Government Policy Pushes Income Downward

For the last three decades the government has pursued a wide range of policies that have had the effect of redistributing income upward. For example our trade policy, by deliberately placing manufacturing workers in direct competition with low paid workers in the developing world, has lowered the wages of large segments of the work force. By contrast, we have left in place the restrictions that protect doctors and other highly paid professionals from foreign competition, ensuring that their p...

How Big Is Puerto Rico's Economy?

That is the question that readers of this front page Washington Post piece on the island's $70 billion debt were undoubtedly asking. For some reason the paper never bothered to give this information, although it did compare the debt to that of other states.

Puerto Rico's GDP is a bit over $100 billion, which means that its debt-to-GDP ratio is a bit under 70 percent. That is low for wealthy countries, however it would be a very high ratio for a state. Puerto Rico, as a territory of the United...

Spending on Clothes and Cars

The NYT had an interesting piece on the extent to which companies are shifting production to the United States in response to desires by consumers to buy American made products. At one point the piece tells readers;

"Americans spend more than $340 billion a year on clothes and shoes, more than double what they spend on new cars, according to the American Apparel and Footwear Association."

Actually, the Commerce Department reported that consumers spent more than $230 billion last year on new a...