Dean Baker's Blog, page 355

What is Larry Summers' Criticism of the Fed?

The NYT had an article on a conference at the International Monetary Fund with the headline, "Candid Criticism of the Fed That Wasn't On the Agenda." The piece promises blunt criticism of the Fed from former Treasury Secretary and top Obama adviser Larry Summers:

"Now that he is no longer a candidate to head the Federal Reserve, Mr. Summers — who withdrew from consideration this fall in the face of stiff resistance in Congress, with the White House ultimately nominating Janet L. Yellen — was...

Robert Rubin Wants to Redistribute More Income Upward

Along with Alan Greenspan, Robert Rubin is the person most responsible for the country's economic downturn. He helped steer the country on a path of bubble-driven growth and massive trade deficits. The latter was the result of the IMF engineered bailout from the East Asian financial crisis. The outcome of this bailout was a rush by developing countries to accumulate dollar reserves in order never to have to be in the situation that the East Asian countries faced in dealing with the IMF. This...

When It Comes to the Jobs Report, WaPo Prefers to Repeat What Its Friends Say Rather than Look at the Data

Folks at the Washington Post generally don't like to have facts interfere with their stories about the world. We got another example of this behavior in its article on the Labor Department's job numbers for October. The Post told readers:

"In addition, Chudars [Judy, Chudars, the president of a job placement firm in Washington] said, more people are voluntarily leaving their jobs for lateral positions — a key characteristic of a healthy labor market that economists call 'churn.'"

Contrary to...

Did People Think That President Obama Had Pledged to Nationalize the Insurance Industry?

The news media have been eagerly joining in Republican attacks on President Obama for having broken his pledge that people could keep their insurance if they liked it. Of course people can keep plans in existence as of 2010, if the insurers opt to offer them. However many insurance companies have cancelled these plans because they no longer consider them profitable.

This outcome can be seen as a violation of President Obama's pledge if people understood him as pledging to effectively take ove...

NYT Finds Economist to Trash France

Most economists probably would not put France as one of the worst basket cases in the euro zone. While its unemployment rate is over 11 percent, it still less than half of the 20 percent plus unemployment rates being experienced by Spain and Greece. In fact if we focus on employment rates, the percentage of prime age workers who have jobs, France is doing considerably better than the United States. Its employment rate is down by less than 1.0 percentage point from the pre-recession level, whi...

The Stock Market Redistributes from Non-Whites to Whites

Does that seem surprising? After all, people do choose to buy into the market voluntarily, why would African Americans and Hispanics buy stocks if the result was just to make white people richer? Well, I'm not talking about market manipulations, which may well have this result. I'm actually referring to an Urban Institute analysis of Social Security which was highlighted in an Economix blogpost by Eduardo Porter.

This methodology compares the benefits that each group receives by decade, start...

Insurance Premium: The Item Missing from NPR's Piece on Subsidies Under Obamacare

NPR did a piece on the pattern of subsidies created by Obamacare. It rightly noted that the Affordable Care Act restructures the individual market so that healthy people will subsidize less healthy people, just as is now the case in the market for employer provided insurance.

However it may have misled listeners about the size of the subsidies. It gave an example of a person who is being made worse off by the change in the structure of insurance under Obamacare:

"Dentist Aaron McLemore of Lo...

Billionaires Received 0.00002 Percent of the Budget in Farm Subsidies Since 1995

That's what a NYT article told readers this morning. Of course that is not exactly what the article told readers. Instead it said that billionaires received a total of $11.3 million in farm subsidies between 1995 to 2012. This is yet another example where the intent is to mislead people by using large numbers that they are not likely to understand.

In fact, the subsidies paid to billionaires were trivial in terms of the federal budget, spending on the program, or even as income to these billi...

Senator Mary Landrieu Proposes Government Takeover of Insurance Industry

That would have been a more appropriate headline to a NYT article discussing politicians' reactions to the troubles facing Obamacare. The piece notes several Democrats expressing concern about the program's rollout. At one point it refers to Senator Landrieu's proposed bill which would, "force insurance companies to reissue the health plans they have been canceling by the thousands."

Such legislation would imply that insurers had to issue plans even if they were losing money on them, for exam...

NYT Endorses Imaginary TPP Deal

The Trans-Pacific Partnership (TPP) is a trade deal that is being negotiated completely in secret. The main actors at the table are large corporate interests like Wall Street banks, multinational drug companies, and oil and gas companies. This might lead one to think that the end product will be an agreement that furthers the upward redistribution of income rather than benefits the bulk of the population. That seems especially likely since this is a "next generation" trade agreement that is p...