Dean Baker's Blog, page 374

Should Eurozone Be Mourning or Celebrating Its 0.3 Percent Growth in the Second Quarter?

That's a good question, but this Washington Post article probably won't help people answer it. A 0.3 percent growth rate sounds depressingly close to zero, but in fact this number refers to the quarterly growth, not the annual growth rate, which is the standard way of reporting growth numbers in the United States.

This one should be really simple. GDP growth data in the U.S. is always reported as an annual rate. Did anyone see a report that the U.S. economy grew 0.4 percent in the second quar...

Refereeing the Neil Irwin-Bette Midler Debate on Larry Summers

Things are getting hot and heavy as the battle for Fed succession moves into the second half. Earlier this week, the Washington Post's Fed reporter, Neil Irwin, decided to go head to head with Bette Midler over some unflattering tweets about Larry Summers and his prospects for becoming Fed chair. As a public service, Beat the Press is refereeing the exchange.

Ms Midler led off with the tweet:

"HUH. The architect of bank deregulation, which turned straitlaced banks into casinos and bankers int...

NYT Tells Readers Larry Summers Too Ineffectual as Treasury Secretary to Get Attention to Regulatory Efforts

The supporters of Larry Summers drive to be Fed chair are desperately trying to rewrite history so that this world class champion of financial deregulation was actually a prescient supporter of tighter regulation all along. Exhibit A in this historical rewriting is a report on predatory lending that the Department of Housing and Urban Development (HUD) and the Treasury Department put out in 2000, when Summers was Treasury Secretary. The report is featured as an example of Summers' commitment...

NYT Warns of a Looming Crises in Germany: Rising Wages

The NYT devoted an article to Germany's declining population, which it warns may lead to a "major labor shortage" according to unnamed experts. The piece warns that this is not only a potential crisis for Germany, but in fact all of Europe, telling readers:

"There is little doubt about the urgency of the crisis for Europe."

The piece is confused throughout, apparently misunderstanding the way markets work. At one point it tells readers that German employers "hundreds of thousands of skilled j...

Excellent Post Piece on What Deficit Reduction Is Doing to Spain

The Post has a lengthy piece reporting on how the austerity policies being imposed on Spain by the European Central Bank are ruining the lives of its people.

The Point of Tariffs on Solar Panels Made in China Was to Raise the Price

The Post had a somewhat confused editorial about the imposition of tariffs on solar panels made in China. The argument for the tariffs is that China subsidizes its panels leading to unfair competition. As the editorial correctly notes, the determination of whether the panels are subsidized is not easy. (Panels sell for less than average cost, but well above marginal cost.)

However the editorial notes a counter-tariff imposed on a key material input imposed by China and then tells readers:

"T...

Bad Science on Lyme in the NYT (Warning: Semi-Personal Post)

Sorry folks, I usually restrict this blog to economic issues, but I am going to stray a little bit here to beat up the NYT over its Room for Debate on Lyme disease. (My wife has Lyme disease.)

Three of the participants in the debate assert that the research shows long-term antibiotic treatment is ineffective for treating people who supposedly suffer from chronic Lyme. The argument is that Lyme is an acute illness that can be effectively treated with 2-3 weeks of antibiotics. In this view, peo...

Glenn Hubbard is Unhappy About the Budget Deficit

Glenn Hubbard, along with Tim Kane, had a column in the NYT today decrying the budget deficit. The column begins by repeating the warnings of that well known economic expert, Admiral Mike Mullen, that the debt is the “single biggest threat to our national security.”

There is more than a bit of irony in Hubbard writing this sort of piece. Hubbard was the chief economic advisor to President George W. Bush when he pushed through his tax cuts in 2001. The tax cuts, along with the recession and th...

Protectionists Continue to Control U.S. Trade Policy: The Case of Foreign Physicians

The NYT had an excellent piece on how a variety of arcane restrictions make it difficult for even well-trained foreign physicians to practice medicine in the United States. These restrictions are kept in place at the insistence of the doctors' lobbies since they allow them to sustain their high wages. This is a great example of how Washington is dominated by protectionists who are intent on using trade barriers to protect special interests even though it poses enormous costs on patients and t...

More Which Way Is Up Problems

An Associated Press article in the NYT told readers about Japan's "sluggish" growth in the second quarter. The article told readers that Japan's economy grew at a 2.6 percent annual rate in the quarter.

The problem is that the media generally touted the 1.7 percent annual growth in the U.S. in the second quarter as a being positive news. It's difficult to see how a 2.6 percent growth rate in Japan can be seen as sluggish while a 1.7 percent growth rate in the United States is healthly, especi...