Dean Baker's Blog, page 39

Planning the Anti-Recession Stimulus: The Make Work Pay Tax Credit

As the Trump administration’s ineptitude is rapidly increasing the likelihood of a recession, we have to plan for a stimulus to counteract the worse effects. Many people (including me) have mentioned the possibility of a cut in the Social Security payroll tax as being a major component of a stimulus package. The idea is that the cut would be simple, progressive, and could get into people’s pockets quickly. We have a model for this, the Obama administration put in place a 2.0 percentage point...

Wanting to Cut Social Security, Along with Everything Else, Is Still Wanting to Cut Social Security

Glenn Kessler, the Washington Post’s fact checker, has a tough job. He tries to sort of what is true and what is false in the various claims made by public figures. I don’t always agree with his calls, but I know he tries to be fair in his approach.

Recognizing this fact, I think he made the wrong call in criticizing a Bernie Sanders campaign ad that went after Joe Biden for repeated efforts to cut Social Security. The gist of Kessler’s criticism is that Biden was never singling out Social...

Coronavirus, the Stock Market, and the Economy

Many people have become very concerned about the economy because of the stock market’s plunge in the last two weeks. While the spread of the coronavirus gives us very good reason to worry about the state of the economy, the plunge in in the stock market does not. In fact, those folks who are very concerned about wealth inequality can celebrate because the wealth of the top 1 percent has just dropped by around 10 percent, while the wealth of the bottom 50 percent has barely been touched. (I...

Donald Trump Says People in the United States Should be Getting Lower Interest Rates than People in Other Countries

This was in an early morning tweet. Trump actually said that, when it comes to interest rates, “we should be paying less,” but that also means that we should be receiving less. In fact, our interest rates would be expected to be higher than in places like the euro zone, since our inflation rate is also roughly 1.0 percentage point higher.

But Trump is right that the Fed should lower interest rates, but it probably makes little difference whether it does so now or waits until its meeting later...

The Washington Post Really Does Not Like Populism

Yes, I’m talking about its new section, not its opinions pages, where populists are always bashed. Today, the Post gave us a major piece telling us how Bernie Sanders and Donald Trump are two sides of the same populist coin. While the piece is confused in many ways, the one point it makes very clearly is that the Washington Post really dislikes Bernie Sanders.

The piece is determined to tell people the problem is just one of perceptions:

“Each is powered by a disdain for elites they perceive...

NYT Does Public Relations Work for Emmanuel Macron

A New York Times article on the status of France’s president Emmanuel Macron gave him some free public relations work touting the decline in France’s unemployment rate to 8.1 percent. It tells readers:

“The intractable unemployment rate, slayer of his predecessors, appears finally to be bending to a French president’s touch, recently reaching its lowest rate in 12 years at 8.1 percent.”

This is a 1.4 percentage point drop from when Macron took office in May of 2017. In the same period, the...

Do Stockholders Look Forward to a Decade of Very Low Returns?

In spite of completely missing the crash of the stock bubble in 2000-2002 and the housing bubble in 2007-2010, people tend to think that the big actors in the stock market have great insight into the economy’s prospects. While I won’t claim to have a crystal ball that predicts the future of the economy (I had warned of both of those crashes), I did learn arithmetic in third grade.

There are some simple and important statements we can make about future stock returns, based on nothing more than...

The NYT’s Analysis of Democratic Tax Plans — A Really Big Number Orgy

I have often gone after the media on printing large numbers that are meaningless to almost all their readers. The point is that when you throw out numbers in the millions, billions, and trillions, very few readers have any idea what these numbers mean. It is possible to make them meaningful by simply adding some context, such as expressing them relative to the size of the economy or as a per person amount.

I actually got Margaret Sullivan, then the NYT Public Editor, to completely agree with...

Washington Post and Fareed Zakaria’s Trumpism on Trade

Serious people have long known the Washington Post as a pathetic propaganda organ when it comes to trade. After all, it was so shameless in its promotion of NAFTA that it ran an editorial back in 2007 claiming that NAFTA had been so great for Mexico that its GDP had quadrupled in the twenty years since 1987. The actual figure was 84.2 percent. (This has never been corrected.) It also has repeatedly run fantasy pieces about how NAFTA is creating a thriving middle class in Mexico, even though...

What if Buttigieg Said That he Doesn’t Accept the “Fashionable” View that Climate Change is a Problem?

To my knowledge, he hasn’t said anything like that, but Buttigieg did say that he doesn’t accept the “fashionable” view that current deficits are not a problem. When he made this comment, many progressives denounced him for supporting deficit reducing policies that will slow growth and raise unemployment. Since most plans for deficit reduction also involve cuts to social programs (it’s compromise land), this is likely to mean additional hardships for the poor and elderly who are the primary...