Dean Baker's Blog, page 402

The Budget Affects Economic Growth and Unemployment

Can it be a requirement that major budget pieces include at least two sentences on the budget's impact on growth and jobs. This may not be important to balance budget worshippers, but this does matter to the people who have to work for a living.

Are Improving Health Care Outcomes a Red-Blue Divide?

I hate to be partisan here (seriously -- I criticize the Obama administration all the time), but this map showing declines (blue) in mortality rates for women and increases (red) looks a lot like voting patterns. There is a lot of red across the south and Republican Midwest. The blue tends to show up in Democratically dominated states like California and New York and to be most highly concentrated in the Democratic parts of Democratic or mixed states, such as the Chicago metro area in Illinoi...

Japan's New Economic Program Faces Risk of Runaway Inflation and Attacks from Martians

In a piece on the new initiative by Japan's central bank to raise its inflation rate to 2.0 percent, the Washington Post told readers:

"The risks are known but impossible to quantify: of inflation remaining tame until it roars out of control, or of asset bubbles creeping into unexpected parts of the economy as investors take advantage of cheap money worldwide to make ever-riskier bets."

While central banks, like the bank of Japan and the Fed, have displayed an enormous lack of competence in r...

President Obama Proposes a Bigger Hit to Seniors Than to the Rich

It might have been worth making this point in an article on President Obama's budget proposal that tells readers of his plan to cut Social Security by reducing the annual cost of living adjustment. It would have been worth putting this proposal in some context, since many readers may not understand its consequences.

President Obama's proposal would reduce benefits by 0.3 percent for each year after a worker retires. After ten years benefits would be cut by 3.0 percent, after twenty years 6.0...

Nevermind: Headline of Correction for NYT Piece on Projected Cost of Dementia

The New York Times ran a front page piece warning readers that the cost of treating dementia is "soaring." The piece tells readers of the findings of a new study by the Rand Corporation that shows the cost of dementia doubling by 2040 from its 2010 level.

Are you scared? Are you shaking in your boots? Thinking about pulling the plug on these costly old-timers?

Well our friend, Mr. Arithmetic, reminds us that the Congressional Budget Office projects that the size of the economy is projected to...

Robert Samuelson Calls Me Nobody

In his column today Robert Samuelson talks about the euro zone crisis and its latest manifestation in Cyprus in the context of the new book, The Alchemists. by his Washington Post colleague Neil Irwin. At one point he tells readers:

"The constant goal, as Irwin shows, has been to prevent a collapse of the global financial system, which could plunge the world economy into a genuine depression. Everyone embraces the goal...(emphasis added)"

Well not everyone shares the goal of preventing a fina...

Pundits' Misconceptions About U.S. Health Care Costs Make Them More Anxious to Trim Benefits

The New York Times ran a piece with a headline complaining "public misconception of government benefits makes trimming them harder." The piece goes on to explain that the cost of the Medicare benefits received by a typical beneficiary vastly exceeds the taxes they will have paid into the system using standard discount rates. The piece tells readers that most readers do not recognize this fact, so they get upset at the idea of cutting benefits.

The desire expressed in the piece to cut Medicare...

The Post is Badly Confused About Housing, Again

The Washington Post, which relied on David Lereah, the chief economist of the National Association of Realtors, as its main and often only source on the housing market, remains seriously confused about housing. An article on efforts by the Obama administration to push banks to increase lending implied that the situation of the bubble years were normal.

It told readers:

"Before the crisis, about 40percent of home buyers were first-time purchasers. That’s down to 30percent, according to the Nat...

It's Economic Crank Week in the Major News Outlets!

Anyone who thought David Stockman's screed in the Sunday NYT against fiat money and the New Deal was an isolated incident has to contend with Roger Farmer's call for bringing back the housing bubble in the Financial Times. It's obviously nutty season at the major news outlets.

So boys and girls, get out those columns calling for a universal currency, the switch to seashell standard, and 28 cent a gallon gasoline. The major media outlets are waiting.

Post Says Drug Companies Will Try to Use Economic Power to Retaliate Over Indian Patent Ruling

The Post told readers that drug companies would try to punish India for a Supreme Court ruling that denied Novartis, a Swiss drug company, a patent for its cancer drug Glivec. The court determined that the drug involved only a minor modification of an earlier invention and therefore was not entitled to a patent monopoly. As a result generic producers in India are able to produce and sell the drug for less than one-tenth its patent protected price.

In discussing the implications of the decisio...