Dean Baker's Blog, page 378

News for WAPO: The Reasons Given by Politicians Are Often Not Their Real Motive

Most people are sophisticated enough when it comes to politics that they know politicians can't always be taken at their word. Unfortunately, the people who write for major news outlets apparently lack this sophistication. That is the reason an AP article in the Washington Post warned readers that Republicans may oppose a proposal for reforming the corporate income tax because:

"they have long insisted on tying corporate and individual tax reform so that small business owners who use the indi...

NYT Tells Readers That Some Basic Decisions on the Budget NEED to Be Made, In News Section

Does God speak directly to the NYT? If not, how can it justify telling readers in a news article:

"But some basic decisions need to be made, starting with whether to try again for a broader deal to tackle deficit spending long term with significant changes to entitlement programs and more tax revenue."

Those of us who just look at the data and official projections would never know such things. The deficit is currently at relatively modest levels compared to the size of the economy and is proj...

Why Better Housing Policy Would Not Fill the Demand Gap

Inspired by Noah Smith's tweets, I thought I would give a quick response to Brad DeLong's post arguing that better housing policy offers a quick way to fill much of the gap created by the collapse of the bubble. Brad has two contentions. First that years of very low building has led to huge pent-up demand for new housing units and second that if underwater homeowners could refinance their homes then we would see much more consumption.

Taking these in turn, Brad uses a trend line for housing c...

U.S. Health Care Costs: Billions, Trillions, Who Can be Bothered?

The NYT caught this one itself, but it still is worth noting. An article discussing hospitals' efforts to promote themselves included a quote from Dr. Eric Topol, chief academic officer at Scripps Health in California:

“We’re pushing $3 trillion in health expenditures, and one-third of that is waste.”

The piece originally said $3 billion in health expenditures. Of course mistakes happen, but you have to wonder if the NYT's editors would have missed the error if the original sentence told read...

AP's Economist Sources Are Wrong: Business Investment Will Contribute to Growth in the Second Quarter

An AP story that ran in the NYT told readers:

"business investment is not likely to help economic growth in the April-June quarter, economists said. That is because the government measures shipments, rather than orders, when calculating business investments’ contribution to growth. Shipments fell in June. But the increase in orders this spring suggests shipments will rise in the July-September quarter and add to growth."

The first part of this is wrong and the second part is questionable. The...

It Is Not Good News That Obamacare Will Create Lots of Jobs to Steer People Through the System

"Which way is up?" reporting makes a big-time appearance in this Washington Post article telling us that Obamacare will create a boom in jobs since workers will have to be hired to steer people through the system. The article reports:

"About 7,000 to 9,000 new customer service agents will be needed to man phones and Web chats for the marketplace, called an exchange, the federal government will run for more than half of the states, a spokesman for the Centers for Medicare and Medicaid Services...

Fed Arithmetic

The Washington Post had a piece discussing views at the Fed about the prospect of either vice-chair Janet Yellen or Larry Summers taking over as chair. At one point the piece discusses the arithmetic of votes on the 12 person open market committee that decides monetary policy. It tells readers:

"The chair sets the tone of the discussion. The Fed staff members who prepare economic projections and the range of policy options work directly for the chair. And the Washington-based governors usuall...

The Battle of Fed Succession, 1994 Edition

The current efforts by Larry Summers' acolytes to have him replace Ben Bernanke as Fed Chair reminded me of a past battle. Back in the first term of the Clinton administration it was not assumed that Alan Greenspan had a lifetime position as Fed chair. Some folks thought that the Democratic president might want to take the opportunity to appoint a Democrat as Fed chair. The Vice-Chair at the time, Alan Blinder, was an obvious choice. Blinder had been a highly respected Princeton professor bef...

Post Chart on Corporate Taxes as a Share of GDP is Deceptive

The Post had a chart showing that corporate income taxes have risen as a share of GDP across the OECD over the last 45 years. This is somewhat misleading. The chart is showing an unweighted average. This means that the sharp rise in the tax share in Norway would have the same weight as the sharp decline in the tax share of GDP in the United States. As a practical matter, the OECD data shows sharp declines in the corporate tax share of total tax revenue in most of the large countries.

For exam...

The IMF Projects Weak Growth Across the Euro Zone

A Washington Post article noting the IMF's projections for weak growth and rising unemployment in the euro zone told readers:

"For 2014 as a whole, growth of 0.9 percent is forecast.

That is not only weak, it also masks the continued wide divergence in outcomes among the euro countries, with some nations likely to remain in recession and some growing at a faster pace. The gap in performance — between Germany’s globally competitive export sector and the stalled economies of southern Europe — i...