Dean Baker's Blog, page 367

Washington Post Beats Up on Disabled Workers, Again

The Washington Post might not be very aggressive when it comes to billionaire too big to fail bankers, hedge and private equity fund swindlers, or pharmaceutical companies exploiting patent monopolies by pushing bad drugs, but when it comes to beating up on people getting $1,150 a month for disability, there is no one tougher. The Post is on the job again today with an editorial warning about the "explosive recent growth" in disability roles. 

The Post conveniently ignores facts and real...

The Rise in Disability Is Not Just a Bad Economy

The Washington Post had an interesting article on the sharp rise in disability rates in the downturn. It would have been helpful to include some additional information.

One important reason for the rise in disability not connected to the recession, is the increase in the normal retirement age. This was increased from 65 for people who turned 62 before 2002, to 66 for people who turned 62 after 2008. The rise in the normal retirement age means that people on disability can collect benefits for...

Few Jobs Means Bad Jobs

Laura Tyson used her NYT column to warn about increasing wage inequality as more middle class jobs are eliminated. The centerpiece in this argument is that most of the jobs being created in the recovery are in low-paying sectors of the economy. In effect retail and restaurant jobs are replacing manufacturing and construction jobs. 

This is a serious concern, since obviously we care not just that workers have jobs, but also that the jobs pay enough to support them and their families. Howe...

Washington Post Wrong Again! China Did Grow Rich Before It Grew Old

When it comes to issues of an aging population the Washington Post gets very arithmetic challenged. An article discussing the plight of the rural elderly noted that many can't count on assistance from either the government or their children. It tells readers:

"The rapid aging of China’s society is one of its most profound economic challenges. By 2053, the number of senior citizens is expected to grow to 487 million, or 35 percent of the population, compared with just over 12 percent...

The ACA Does Require an 80 Percent Medical Loss Ratio

This point would have been worth including in a NYT piece that reported on how the state of Florida appeared to be undercutting provisions of the Affordable Care Act (ACA) that were designed to curtail abuses by insurers. The ACA requires insurers to make benefit payments that are at least equal to 80 percent of its premiums, unless they have been given an explicit exemption from this provision.

This provision is enforced by the Department of Health and Human Services. It should limit the ext...

The Hill Finds Sources of Support for Republican Budget Cuts in Strange Places

The Hill sees the onset of fall as providing support for Republican efforts to cut the budget. Okay, they didn't quite say this, but what they did say didn't make much more sense. It told readers:

"Republicans argue that their cost-cutting initiatives will foster the economic growth needed to reduce the stubbornly high poverty rate. Their efforts were boosted by a Congressional Budget Office report on Tuesday that shows the national debt increasing to from 73 percent to 100 percent of the eco...

NYT Says Ignore Those 9 Million Missing Jobs, the Budget Is Projected to Be Out of Balance in Ten Years

This is only a very slight caricature of Jonathan Weisman's "Congressional Memo" in today's NYT. He tells readers:

"For three years, Congressional leaders have relied on tactical maneuvers, sleights of hand and sheer gimmickry to move the nation from one fiscal crisis to the next — with little strategy to deal with the actual problems at hand. Medicare and Social Security continue to swell with an aging population. Health care costs grow. A burdensome tax code remains unchanged, and economic...

Lesson for Robert Samuelson on the Financial Crisis: Just Because You're Stupid Doesn't Mean You Didn't Commit Fraud

There have been considerable efforts made over the last five years to convince us that the bankers at the center of the financial crisis were victims just like the rest of us. Robert Samuelson does his part in a column today.

The main line in his argument are a couple of studies showing that most of the top execs at the banks at the center of the crisis were themselves heavily invested in real estate. This means that they also bought into the housing bubble. Therefore there was no fraud, just...

Wages as a Share of Net Output, not Gross

Brad Plummer has a good set of charts showing how different segments of the population have fared in the downturn. I have two minor quibbles with the selection. First, to show the decline in the labor share of output, chart 5 shows the labor share of GDP over the last three decades. This is slightly misleading. The depreciation share of GDP has risen by roughly two percentage points over this period, which means that if the division of wages and profits had stayed constant, the chart would st...

Could the Debt Ceiling Fight Eliminate the Trade Deficit and Create Millions of Jobs

Adam Davidson raised this possibility in his discussion of possible ramifications of the debt ceiling battle. He suggested that one possible outcome is that investors and foreign central banks cease to view the dollar as the world's reserve currency. This would lead them to switch their dollar holdings to other currencies. The result would be a decline in the value of the dollar.

This is exactly what is needed to make U.S. goods more competitive in the world economy. If the dollar were to fal...