Dean Baker's Blog, page 404

The War on Social Security and the War on Excessive Health Care Costs

Ezra Klein put up a blogpost last night on the corruption of national politics and the media. It showed graphs from the International Federation of Health Care Plans that compared the cost of various medical procedures and products in the United States with the cost elsewhere in the world.

The graphs showed that the United States is a huge outlier, paying two or three times as much as other countries (sometimes more) for nearly every item on the list. The bottom line is that we spend 8.1 perc...

Consumer Confidence Index (the one that matters) Declines

The Conference Board's index of consumer confidence fell in March. What is noteworthy for those following the economy is that the current conditions index dropped by 3.5 points to 57.9. This component is the one that actually tracks current consumption reasonably closely, so it is giving us information about the economy.

By contrast the future expectations components is highly erratic and bears little relationship to actual consumption patterns. Reporters generally don't make a point of disti...

Disability Insurance: The Problem of Contagion in the Media

Economists are used to talking about contagion, the idea that a financial crisis can spread from one country to another. Unfortunately it appears to be at least as serious a problem in news reporting.

Last week This American Life ran a full hour long segment on the Social Security disability program. While the piece was well-done and provided much useful information about the difficulties facing people on the program, it fundamentally misrepresented the economic context. The piece implied tha...

"Other People" Speak Out on Financial Regulation in the Wall Street Journal

The WSJ had a piece on lobbying efforts by high speed traders against a financial speculation tax that would badly damage their profits. At one point the article tells readers that:

"More-aggressive regulatory oversight and depressed trading volumes have weighed on valuations of trading outfits that have pondered selling stakes to outside investors, investment bankers and other people say."

This might be the first appearance of "other people" as a news source in a major national newspaper. Pe...

Why Don't We Import Doctors to Deal With Shortages?

It is bizarre that the idea of bringing in more foreign doctors as a way to drive down wages is never discussed. Readers of a front page Washington Post article on using nurses for some of tasks currently done by doctors must have been puzzled by this omission.

While allowing nurses to do work for which they are qualified would seem to be a win-win for everyone but doctors, it seems especially strange that this piece never raised the possibility of bringing in more foreign trained doctors as...

Planet Money Misses the Boat on Social Security Disability

Last week This American Life had a piece on the increase in the number of people on Social Security disability. While the segment had many interesting stories, and presented useful background, it got some of the basics wrong.

While the story did note the impact of the economic downturn on disability claims, it failed to recognize the actual importance of the economic collapse. Instead the piece turned to a variety of other explanations, for example citing the 1996 welfare reform bill.

If we...

How Do You Think About U.S. Manufacturing?

Dylan Mathews promised that "this chart will change how you think about U.S. manufacturing." The piece actually has two charts, but neither rises to the bar.

Both charts come from a new book by Robert Z. Lawrence and Lawrence Edwards: Rising Tide: Is Growth in Emerging Economies Good for the United States?. I've not seen the book, but I am familiar with Lawrence as a long-time optimist about the state of the economy and one who pooh poohs the idea that trade might hurt large segments of the w...

Robert Samuelson is Optimistic About the Economy

Well, at least someone is. Let's look at his case:

"The long-dormant housing market is reviving. Home prices and sales are up; homebuilders are increasing production to satisfy rising demand. Personal finances have improved. Loans have been repaid or written off. Since year-end 2009, the ratio of household debt to disposable income has dropped from 130percent to 111 percent, according to Federal Reserve data. It’s probably still declining. Over the same period, a rising stock market and highe...

Fred Hiatt Bemoans the Fact that We Are Unlikely to Get an Economic Crisis to Advance His Agenda

Nope, I'm not kidding. In his column today, Hiatt complained that no one seems to be moving forward on his deficit reduction agenda. He then told readers:

"What could shake them out of their own devices? One possibility, a fiscal hawk in the Obama administration told me almost wistfully, would be a 'minor market event.' A stock market plunge, an interest rate spike, a race to the exits by America’s foreign lenders — just enough to spook Congress.

"But as long as the Federal Reserve is gobblin...

Neither the NYT nor Washington Post Has Heard About Unemployment

It's apparently hard to find out about the state of the U.S. economy in the nation's capital. That is the only way to explain the fact that in their articles on the budget passed by the Senate last night neither the NYT or Washington Post said one word about how the budget would affect the economy over the next decade.

This one should have been pretty basic and simple. As tens of millions of graduates of intro economics classes know, GDP is equal to the sum of consumption, investment, governm...