Dean Baker's Blog, page 398

The Sequester Can Be So Inconvenient!

I have had plenty of occasion to criticize the editorial views of both the NYT and the Washington Post, but there are major differences between these two pillars of the national media. It would be hard to find a better statement of these differences than the Times and Post's view of the impact of the sequester on air travel.

One could also add that the sequester is throwing around 600,000 people out of work according to the Congressional Budget Office. These are people who have the necessary...

Problems in GDP Measurement and Rent Seeking

The Bureau of Economic Analysis (BEA) will adopt a new methodology for measuring GDP this summer. The methodology will treat research and development and the creation of artistic works as forms of capital that depreciate through time rather than one-time expenditures. This will lead to an increase in measured GDP of close to 3.0 percent according to BEA's analysis.

There are three points worth making on this change. First, for you conspiracy buffs, this one has been in the works for close to...

The Washington Post's Affirmative Action Policy for the United States on Global Warming

The United States emits more than twice as much greenhouse gas per person as the average for West Europe. If countries like Germany, France, and Spain emitted as much per person as the United States there would be no point worrying about greenhouse gas emissions because the planet would be fried. The world's emissions levels over the last three decades would be so much larger that there would be no hope of reducing emissions enough to prevent catastrophic levels of global warming.

This fact (...

Why Don't People Trust Government to Reduce Inequality? Because Government Policy Caused Inequality!

Ilyana Kuziemko and Stefanie Stantcheva seem determined to win the contest for greatest out to lunch oped column of all time. They note the huge rise in inequality in wealth and income over the last three decades. They tell readers that the public is aware of this increase. However they say that the public doesn't trust the government to do anything to address inequality:

"Whether or not the rise in inequality has itself lowered Americans’ faith in government, the low opinion in which America...

Moody's Evaluation of Municipal Pensions Are a Poor Way to Assess Their Health

The NYT told readers about efforts to require city governments to disclose their pension liabilities in order to be able to continue to issue tax-exempt bonds. While better disclosure of pension liabilities may be desirable, there are important methodological issues that the piece neglects to mention.

The piece notes that Moody's, the bond-rating agency, is now adjusting pension liabilities reported by city governments in making assessments of their financial situation. The methodology used ...

Robert Samuelson Finds Economics Is Way Too Complicated

That is quite literally what he told us in his column. His second paragraph tells readers:

"Among economists, there is no consensus on policies. Is “austerity” (government spending cuts and tax increases) self-defeating or the unavoidable response to high budget deficits and debt? Can central banks such as the Federal Reserve or the European Central Bank engineer recovery by holding short-term interest rates near zero and by buying massive amounts of bonds (so-called “quantitative easing”)? O...

Yet More Fun With Reinhart and Rogoff

In Carmen Reinhart and Ken Rogoff's (R&R) famous and now largely discredited "Growth in a Time of Debt," New Zealand's -7.6 percent growth (wrongly transcribed as -7.9 percent) in 1951 played an outsized role in their conclusion that high debt led to sharply lower growth. This number carried inordinate weight because R&R had mistakenly left out 4 high debt years for New Zealand in which it had seen healthy growth. Using their country-weighted methodology (each country counts the same,...

NYT Uses News Story to Express Dislike of Danish Welfare State

The NYT appears to be following the pattern of journalism practiced by the Washington Post in openly editorializing in its news section. Today the news section features a diatribe against the Danish welfare state that is headlined, "Danes Rethink a Welfare State Ample to a Fault." There's not much ambiguity in that one. The piece then proceeds to present a state of statistics that are grossly misleading and excluding other data points that are highly relevant.

The first paragraphs describe th...

Thomas Friedman Again Demonstrates the Skills Shortage for NYT Pundits

The NYT has difficulty finding pundits who can write knowledgeably about economics. Thomas Friedman made this point in his Sunday column. At one point he quotes Gary Green, the president of Forsyth Technical Community College, in Winston-Salem, N.C.:

"'We have a labor surplus in this country and a labor shortage at the same time,' Green explained to me. Workers in North Carolina, particularly in textiles and furniture, who lost jobs either to outsourcing or the recession in 2008, often 'do no...

Flexible Work Hours and Part-Time Work Hours are Not the Same

The NYT had a useful piece on the increase in the number of people working at part-time jobs who would like full-time employment. This is an important measure of under-employment in the downturn that is missed when people just look at the unemployment rate. Since part-time workers often lack benefits like health care insurance, this can be an especially important issue.

However the piece concludes by equating part-time work with flexibility for employers. This is not true. There is no direct...