Dean Baker's Blog, page 371

The New York Times Declares War on Renters

A homeowner down the street from me left his dog outside all day in the mid-summer heat. The dog died. Is this supposed to mean that homeowners are irresponsible people who can't be trusted to keep up a neighborhood and use basic common sense? Apparently in the pages of the NYT it does.

The NYT devoted a whole article to complaints that renters who have moved in to homes that were formerly occupied by owner occupants were bringing down the quality of neighborhoods. The piece is full of anecdo...

Rising Mortgage Rates Did Not Affect June Case-Shiller Data

The Washington Post seems to have made it a goal to get everything possible about the housing market wrong. Its article today on the Case-Shiller June price index attributed the slower price growth in part to higher interest rates. This makes no sense.

The Case-Shiller index is an average of three months data. The June release is based on the price of houses that were closed in April, May, and June. Since there is typically 6-8 weeks between when a contract is signed and when a sale is comple...

Missing Facts from Andrew Sorkin's Discussion of Bailouts and Bonuses

Andrew Sorkin used his Dealbook column to tell readers that the 2008 bailout "worked." That is of course true if the definition of success is to keep the Wall Street banks in business and operating as they had prior to the crisis. It is far less apparent that the bailout worked from the standpoint of the economy as a whole.

The piece presents comments from then Treasury Secretary Henry Paulson expressing the concern that if bailout money had been tied to real conditions, such as a plan to bre...

Many Economists Say the Debt Ceiling Battle Had No Notable Impact on the U.S. Economy

That was the missing sentence in a Washington Post article on the battle over the debt ceiling. The article referred to the 2011 battle that brought the country within days of hitting the legal limit on borrowing. It told readers:

"Many economists say that episode led to uncertainty that harmed the economy."

It's hard to find evidence for this assertion in the data. The economy grew at a 2.3 percent annual rate in the second and third quarters of 2011, the period most immediately affected by...

The Economy Did Not Bounce Back from the 2001 Recession and We Did Not Face Another Great Depression in 2008

Robert Samuelson repeats two common myths in his discussion of the battle over the successor to Ben Bernanke as Fed chair. He tells readers that the 2001 recession was mild by historical standards and that Bernanke might have prevented another Great Depression with his actions in 2008-2009.

While the length and severity of the official recession in 2001 would imply that it was mild, at the time it was the longest period without job growth since Great Depression. Aruably the Fed was up against...

The NYT Doesn't Like the French Welfare State

Earlier this year the NYT gained considerable notoriety for claiming the Danish welfare state was on its last legs. While the article included several stories that made this point, the data refused to cooperate. By almost any measure Denmark's economy looks considerably stronger than the U.S. economy.

Having struck out in its effort to push its Danish welfare state scare story, it now appears to be turning its attention to France. An article in today's paper, which was headlined "a proud nati...

The Machines Displacing Middle Wage Jobs: Don't Let the Facts Get in the Way of a Comforting Story

We are hearing endless accounts of how technology is displacing middle wage jobs (e.g. see the piece by David Autor and David Dorn in the NYT today). That would be work like manfacturing jobs, bookkeeping jobs, and other jobs that used to provide a middle class standard of living. It's a comforting story for the people who control the media, but it happens not to be true.

The story told by Autor and Dorn is that technology displaces these jobs putting downward pressure on the wages of formerl...

Jeff Bezos' Newspaper Runs Joke Front Page Story on Deficit

Those who hoped that Jeff Bezos takeover of the Washington Post would lead to a quick improvement in the quality of its budget reporting will be seriously disappointed by the paper's lead story today. The story bemoaned the fact that, "after six budget showdowns, big government is mostly unchanged [the article's headline]."

The article uses four metrics to measure the size of government, none of which would inform readers of anything. Its lead metric is spending in nominal dollars, which it t...

The Washington Post Still Can't Find Anyone Who Knows About the Housing Market

The Washington Post's housing reporting during the bubble years became world famous for its reliance on David Lereah as it main source for information on the housing market. Lereah, in addition to being the chief economist of the National Association of Realtors, was also the author of the 2006 best seller, Why the Real Estate Boom Will Not Bust and How You Can Profit From It. Somehow it never occurred to the great minds at the Washington Post that Lereah may have any motive other than dispen...

Quick Note on July New Homes Sales: It Is a Big Deal

The Census Bureau reported a 13.4 percent drop in new home sales in July. This could be a really big deal.

House prices had been rising rapidly in many parts of the country and there was a real basis for concern about bubbles in many markets. While these bubbles were not driving the national economy, as they had been in the years 2002-2007, there was a real risk that many homebuyers would again buy into seriously over-valued markets and face large losses on their homes.

It appears that the in...