Dean Baker's Blog, page 38

When It Comes to Bailouts, Nancy Pelosi Is in the Drivers Seat

It looks like we are seeing an effort to do a replay of 2008 where we were told that we had to give all the money to the banks or the world would end. Today the story is that we have to bail out the airline, cruise, hotel, and restaurant industries or tens of millions of workers will lose their jobs. Well, the disaster threats were not true in 2008 and they deserve even less credence today.

The story in 2008 was that all our major banks had effectively made themselves insolvent through their...

Quick Thought on the Targeting of a Stimulus

The idea of a cash payment to all adults, in the neighborhood of $1,000, is gaining lots of support as a reaction to the crisis. This may not be an especially effective way to help people.

The reason is that, unlike in past recessions, it will not lead to much of boost in spending, and therefore have little impact on economic activity and employment. In past recessions, the reason most people did not spend is because they didnt have money. If you gave them more money, they would likely spend...

Educating the Washington Post: We Did Not Have to Bail Out the Banks in 2008

The Washington Post is again pushing crap about how we had to bail out the banks to prevent a second Great Depression and that we made a profit on it. And, it is attacking Bernie Sanders for not accepting this nonsense.

So lets go through the story for the 74,567th time. Suppose we let the market work its magic on Goldman Sachs, Citigroup and the rest. All the Wall Street behemoths would have gone bankrupt. We would have instantly downsized our grossly bloated financial sector, eliminating a...

Washington Post Says Trump Proposes Tax Cut that is More Than 10 Times “Vast”

Of course they wouldnt say that directly about a Trump proposal, but that is effectively what they said to fans of arithmetic. The Post ran a news article on the anti-recession package negotiated between Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin. The piece referred to Pelosis original proposal to increase the federal share of the joint state-federal Medicaid program.

A controversial provision in the bill as originally introduced by House Democrats would have increased the...

Good News in the Post-Coronavirus World

When the present looks bleak, its a good time to think about the future, which we can hope will be brighter. It is hard to see a story where the coronavirus wont spread widely in the U.S. and elsewhere, leading to tens of millions contracting the disease and hundreds of thousands or even millions of deaths that could have been prevented. But we, or least most of us, will likely make it through to a post-Coronavirus world. And, that world may be better in important ways because of the...

Can Coronavirus Force Policy Types to Think Clearly About Intellectual Property?

It will be hard to decide the most Trumpian moment in his dealing with the coronavirus pandemic, but my nomination is Trumps meeting with executives from several pharmaceutical companies, where he discussed developing a vaccine. According to Trump, he asked them to speed it up, and they said that they would.

The idea that Trumps admonition to hasten the development of a vaccine would have any impact on these companies efforts is too loony to envision for anyone outside of Trumpland. These...

Health Insurance Costs Still Soaring

I had some family matters, so I couldnt do my usual prices byte this morning, but I now that I have had the chance to see the CPI report, I know the story would have been the usual. Inflation is well-contained pretty much everywhere, but health insurance costs are out of control.

The overall CPI rose just 0.1 percent for the second straight month, while the core rate rose 0.2 percent, also the same as the prior month. The increases for the last year in the overall CPI and the core are 2.4...

Trump Wants a Stimulus Twice the Size of Obama’s but Everything is Fine

Okay, we know that logic has pretty much gone out the window in the Trump years, but this one sets new records. Donald Trump and the Republicans have been criticizing Democrats and the FAKE NEWS for exaggerating the threat from the coronavirus. Trump has insisted it is no big deal, nothing for us to be very concerned about.

However, according to NYT reporter Jim Tankersley, he asked Senate Republicans for a stimulus measure that would zero out the payroll tax for the rest of the year. This...

How Many Times Do the Drug Companies Have to be Paid for Their Research?

That’s what readers of this Politico piece on efforts to restrict patent monopoly pricing of a coronavirus vaccine as a quid pro quo for government funding must be wondering. One might think that if the taxpayers put up money for the research then they have already paid for it, and therefore no patent monopolies would be involved. The vaccine would sell as a cheap generic and drug companies would make profits from it in the same way that manufacturers of paper clips and plastic cups make...

What Do We Do When the Coronavirus Bankrupts the Health Insurance Industry?

I suppose it’s not an absolute certainty, but with Donald Trump in charge of stopping the spread of the disease, the bankruptcy of the health insurance industry would seem to be pretty much a foregone conclusion. After all, if large numbers of people contract the disease, which is hard to imagine will not be the case, the industry will face a huge bill paying for their care.

Anyhow, folks should be giving some thought to what sort of conditions we would impose on a bailout. I’ll start the...