Dean Baker's Blog, page 354

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...

NYT Reinvents History of Euro Crisis

Those of us who are old enough recall the origins of the euro crisis remember that countries like Spain and Ireland had enormous housing bubbles, which were fueled by lending by incompetent bankers in countries like Germany and the Netherlands. When these bubbles burst, trillions of dollars in loans lost much of their value. In addition, the driving force for economies across Europe disappeared throwing them into severe recessions.

And, as budget fans everywhere know, government budget shift...

Obamacare and Katrina: No One Died at the ACA Website

Things seem to be spinning off the rails very fast here in Washington. The NYT has an article today explicitly comparing the rollout of the health insurance exchanges to President Bush's response to Hurricane Katrina.

There is no doubt that the rollout of the exchanges has gone very badly, with people having great difficultly getting on the Obamacare website and buying insurance. And the opponents of Obamacare have been very effective in hyping stories, real or unreal, of people losing their...

Obamacare Is Not in Nearly as Much Trouble As Ezra Klein Thinks

Ezra Klein warned readers that "Obamacare is in much more trouble than it was a week ago." The main reason is a bill being push by Senator Mary Landrieu that would require insurers to continue to offer plans that are in effect at the end of 2013.This bill is drawing support from a number of centrists and even liberal Democrats. Klein argues that this bill would risk seriously skewing the individual insurance market that would create a major problem of adverse selection, with healthy people st...

German Economists Exist to Make Economists Elsewhere Look Good

That is what readers of a NYT piece on criticisms of German government policies from the European Union and the German Council of Economic Experts, a panel of economists that advises the government might conclude. Unfortunately the piece did not make clear that the criticisms were coming from opposite directions.

The European Union is criticizing Germany for refusing to take measures that would help to correct its huge trade surplus with other euro zone countries. The list of policies that wo...

People Opposed Summers Because He Helped Give Us an Over-Valued Dollar and Massive Trade Deficit

In an interesting column discussing the splits on economic issues in the Democratic Party and how they affect Hillary Clinton's prospects for 2016, Harold Meyerson noted progressives opposition to Larry Summers as Fed chair. He told readers:

"To the liberals, Summers’s sin was his central role in deregulating derivatives when he served as Bill Clinton’s Treasury secretary as well as his support for repealing the Glass-Steagall Act, a change that allowed previously safe depositor banks to use...

The Trans-Pacific Partnership Is Designed to Increase Some Barriers

A NYT article on growing Congressional opposition to the Trans-Pacific Partnership (TPP) told readers;

"The T.P.P. as outlined is aimed at reducing barriers, cutting red tape and harmonizing international regulations,.."

It is not true that the TPP is designed simply to reduce barriers. The provisions on patent monopolies for prescription drugs and related protections like data exclusivity will almost certainly increase barriers and raise prices. This is likely to be the case with its copyrig...

Eugene Robinson Tells Us We Should be Very Worried

That probably wasn't his intention, but in a column where he tells readers:

"by historical standards, the United States is doing well domestically and internationally. And by any objective measure, the trend lines are positive, not negative,"

he shows the opposite.

His list of positives begins in the first paragraph:

"The economy is growing much more quickly than expected. Inflation is basically nonexistent. The federal budget deficit has been slashed dramatically. The stock market is reachin...

Charles Lane Kicks the Lunch Bucket

Charles Lane used his column today to take potshots at Telsa, the electric car company. While I actually share much of Lane's skepticism on Telsa (I suspect Telsa is taking lots of people for a ride, but not in their cars) his dismissal of liberals' interest in Telsa type projects is off the mark. He starts his piece by telling readers:

"Tesla epitomizes the mutation of modern American liberalism. Once an ideology whose central concern was the plight of lunch-bucket working stiffs and oppress...