Dean Baker's Blog, page 391

Serious Reporting on School Closings In Chicago

The media have largely accepted at face value the claims from Chicago Mayor Rahm Emanuel that is necessary to close a large number of the city's schools in order to save money and improve the quality of education. It turns out that much of what Emanuel has claimed about savings and moving students to better schools is not supported by the evidence as Chicago radio station WBEZ uncovered in its analysis.

One might think that this sort of follow-up would get more attention from the national med...

The Irish Recovery

Paul Krugman commented on the dubious claim that Ireland's economy is recovering. He noted that its GDP is still well below its pre-crisis level. While this is true, the employment to population (EPOP) ratio might give a better sense of how most people in Ireland might view the situation.

 

 

                                                  Source: OECD.

 ...

A Way to Tax Corporations That They Cannot Escape

Eduardo Porter has a column discussing the increasing ability of corporations to escape income taxes. The idea is that they can play games on where their income originated so that it always shows up in countries with the lowest tax rates.

There are different possible responses to this problem. One is to follow the lead of many state governments which tax companies in proportion to the share of total sales that occur within the state. That seems like a reasonable path, but I remember an even...

Why Would Anyone Expect Silicon Valley to Give a Damn?

I have had several people send me this George Packer article in the New Yorker article on the political and social attitudes of the Silicon Valley millionaires and billionaires. While the piece makes for entertaining reading, it is difficult to see it as any great expose.

The piece basically shows the Silicon Valley fast lane is filled with self-absorbed twits who don't have a clue about what the rest of the country looks like. So?

Seriously, who did we think was making big bucks in high te...

Thomas Friedman Tells Readers How to Get a High Paying Job Writing About Your Daughter's College Roommate

Okay, that's not exactly what he did, but he did devote a NYT column to tell readers about the business started by his daughter's college roommate. He claimed that this business shows how the labor market is changing. He produced literally no evidence whatsoever to support this claim.

The article tells readers:

"Underneath the huge drop in demand that drove unemployment up to 9 percent during the recession, there’s been an important shift in the education-to-work model in America. Anyone who’...

Yet More Bipolar Economic Reporting from the Post

You get a one month jump in housing prices and suddenly the economy is booming. Okay, that's not quite fair, housing prices have been rising at a pretty rapid pace for a year now, but still does the Post really want to claim that the economy is "surprisingly robust?"

Let's remember where we stand. The economy grew at a 2.5 percent annual rate in the first quarter. Given the economy's trend rate of growth is between 2.2-2.5 percent, this means that we were at best making up lost ground at the...

Blocking Keystone Is Like a Carbon Tax

My friend Jared Bernstein rightly points out that blocking the Keystone pipeline will not keep the tar sands oil in the ground. There are other ways to bring the oil to market and the industry will undoubtedly pursue these channels if opponents of the pipeline are successful.

But there is an important point here. These other methods of getting the oil to consumers are more expensive. We know this because the industry would not be pushing the pipeline if it was not the lowest cost way to get t...

Reinhart-Rogoff, Debt, and Assets

Since folks seem to have difficulty understanding how assets can be relevant to the Reinhart-Rogoff debt kills growth story, I will give a concrete example. Brad Plumer had a piece this weekend in the Post that discussed the potential of a carbon tax to slow greenhouse gas emissions and raise revenue. He presents estimates that a $20 a ton tax would raise $1.2 trillion over the next decade.

Okay, at this point everyone should have heard of the idea of selling emissions permits as being rough...

Nonsense in the Reinhart-Rogoff Rescue Effort

The mainstream of the economics profession continue to try to rescue Carmen Reinhart and Ken Rogoff (R&R) from the consequences of their famous Excel spreadsheet error. The latest is Michael Heller, who has pronounced Paul Krugman the loser in his exchanges with R&R because he conceded that countries with debt-to-GDP ratios that exceed 90 percent of GDP have slower growth.

This is the sort of piece that should really have the general public thinking about defunding economics programs...

Robert Samuelson Mostly Right on Over-Valued Dollar

Robert Samuelson makes an important point in his column today, the "strong" dollar is hurting the country's economy. This fact is central to understanding the imbalances that have shaken the U.S. and world economy over the last 15 years. Because of an over-valued dollar the trade deficit exploded in the late 1990s.

A trade deficit means that demand is going overseas rather than for goods and services in the United States. To offset this lost demand we must either have public sector deficits o...