Dean Baker's Blog, page 353

German Central Bank Head Argues by Assertion

If the goal is to increase the inflation rate, then printing more money might seem like a reasonable way to go. But not in Germany. A Reuters piece on the NYT quotes German central bank head Jens Weidmann saying:

"There are no easy and quick ways out of this crisis. The money printer is definitely not the way to solve it."

This appears in the context of a suggestion that the European Central Bank adopt quantitative easing to raise the inflation rate. So there you have it.

Washington Post Mistakes Wisconsin Politician for Political Philosopher

Jeff Bezos is apparently having a hard time getting good help. Yesterday his paper mistook Paul Ryan, the Chair of the House Budget Committee, for a political philosopher. It ran a lengthy article telling readers about Ryan's philosophy on taxes and poverty.

Of course the Post has no clue about Ryan's philosophy, it knows what the politician says and what people close to him say. It may be news to the Post, although probably not Post readers, that politicians often don't say what they really...

Sachs versus Krugman: Round ???

Jeffrey Sachs again takes on Paul Krugman (and indirectly Larry Summers) in his call for a new macroeconomics. (My comments on past attacks, with links to the originals, can be found here and here.) I'm not sure that there is much new here, so I would again take Krugman's side.

Sachs' complaint is that we should be doing long-term planning to lay infrastructure for transportation, energy, and other areas of the economy. This is fine and I would expect no objections from Krugman. Certainly the...

Andrew Ross Sorkin is Upset People Criticized Geithner's Move to Finance While It Was Still in the News

Andrew Ross Sorkin is angry that people are upset by seeing former Treasury Secretary Timothy Geithner cash in on his public service by taking a job at the private equity company Warburg Pincus. In his column he complained:

"Within 24 hours of Timothy F. Geithner’s announcement on Saturday that he would join Warburg Pincus, the private equity firm, a parade of naysayers emerged, almost like clockwork, to criticize the former Treasury secretary’s move as a prime example of the evil of the gove...

Is Mexico Adding Auto Jobs or Is It Just Losing them Less Rapidly?

A NYT article on the growth of the car industry in Mexico told readers:

"Around 40 percent of all auto-industry jobs in North America are in Mexico, up from 27 percent in 2000 (the Midwest has about 30 percent), and experts say the growth is accelerating, especially in Guanajuato, where state officials have been increasing incentives."

According to the Bureau of Labor Statistics, in 2000 the United States had roughly 1,310,000 jobs in the auto industry. Currently employment in the sector is a...

The Washington Post Wants to Kick Seniors Yet Again

The Washington Post thinks it's always a good time to beat up seniors. It continually complains that overly generous Social Security and Medicare benefits are the country's biggest problem. It never lets facts stand in the way.

Its latest attack tells readers that money going to seniors somehow comes at the expense of money for our kids. This is a loony tune invention of the Fox on 15th Street gang. In the real world, countries that spend a larger share of their GDP on seniors also spend a la...

Todd Stern, President Obama's Special Envoy on Climate Change, Says U.S. Can Take Lives and Destroy Property in Developing World With Impunity

It would have been useful if the NYT had made this point in an article that discussed the impact of global warming on the developing world. After noting the destruction caused by events related to climate change, like the typhoon that hit the Philippines and the droughts afflicted wide areas across Africa and the Middle East the piece tells readers:

"The United States and other rich countries have made their opposition to large-scale compensation clear. Todd D. Stern, the State Department’s e...

Bubbles Are Not Funny

Paul Krugman tells us that Larry Summers joined the camp concerned about secular stagnation in his I.M.F. talk last week, something that I had not picked up from prior coverage of the session. This is good news, but I would qualify a few of the points that Krugman makes in his elaboration of Summers' remarks.

First, while the economy may presently need asset bubbles to maintain full employment (a point I made in Plunder and Blunder: The Rise and Fall of the Bubble Economy), it doesn't follow...

The Washington Post is Worried About Rising Wages in China

That is the only plausible way to interpret its assertion that in an article on China's decision to relax its one-child that referred to a "looming shortage of labor." China has hundreds of millions of people unemployed, under-employed, or working in low productivity and therefore low wage jobs. If the labor market begins to tighten these people will be absorbed in higher productivity, higher paying sectors of the economy. That is the way economies develop.

The United States used to have more...

When It Comes to Obamacare, Businesses Don't Do What They Say

That would have been an appropriate headline for a Christian Science Monitor article on a poll of businesses sponsored by the Chamber of Commerce. The poll found:

"Some 31 percent of franchise businesses and 12 percent of non-franchise businesses say they have already reduced worker hours because of the law.

"About 27 percent of franchise businesses and 12 percent of non-franchise businesses have already replaced full-time workers with part-time employees because of the law."

Of course this i...