Dean Baker's Blog, page 411

Is an "Expert" Someone Who Is Surprised by Developments in Their Area of Expertise?

That might seem to be the definition given the way they are often featured in news accounts. A NYT piece on the results of the election in Italy, in which a comedian received almost a quarter of the votes, told readers:

"Few experts anticipated the depth of anger displayed by Italian voters over the austerity that Mr. Monti, the technocrat beloved by other European leaders but resented at home for pushing tax increases and spending cuts, represented. The electorate chose two men convicted of...

The Fall of the Pound Is Good News for the United Kingdom

At least it is for those who want to see its economy grow. In a context where the government is cutting back spending in an already depressed economy, the boost in net exports that would be expected to be the result of a lower valued currency is pretty much the only plausible source for an increase in demand. It would have been useful to mention this fact in an article that implied the fall in the pound is bad news for the UK.

It May Not Be That Easy for College Grads to Get a Job

The NYT had a very good piece on how government cutbacks in spending and employment have slowed the recovery. At one point it presents the view of Tyler Cowen, an economics professor at George Mason University, that:

"military contractors and personnel might be able to find new jobs with relative ease, because unemployment rates are fairly low for well-educated workers."

While workers with college degrees do have lower unemployment rates than less educated workers, the current unemployment ra...

Steven Davidoff Doesn't Consider the Successful 300 Years of Financial Transactions Taxes In London (See addendum)

Steven Davidoff really doesn't like financial transactions taxes (FTT) but is not honest enough to acknowledge this fact. Instead he tells readers that proponents of a tax haven't thought about its consequences and uncritically repeats every piece of nonsense produced by the financial industry to attack the idea.

In the course of a 1300 word essay, we get assessments of the tax from Credit Suisse, Blackrock, and the Partnership for the City of New York, which is effectively the New York City...

Steven Davidoff Doesn't Consider the Successful 300 Years of Financial Transactions Taxes In London

Steven Davidoff really doesn't like financial transactions taxes (FTT) but is not honest enough to acknowledge this fact. Instead he tells readers that proponents of a tax haven't thought about its consequences and uncritically repeats every piece of nonsense produced by the financial industry to attack the idea.

In the course of a 1300 word essay we get assessments of the tax from Credit Suisse, Blackrock, and the Partnership for the City of New York, which is effectively the New York City C...

NYT Tells us that People Without Names Accuse Republicans of Playing Politics In Lew Nomination

The NYT reported on questions from Senate Republicans on the investments of Jack Lew, President Obama's nominee to be Treasury Secretary. The questions focused on whether Lew had taken advantage of tax havens in the Caymen Islands. It then told readers:

"Privately, officials involved in the confirmation process called the spate of attacks on Mr. Lew politically motivated, arguing that the Cayman Islands criticisms are a direct reprisal for attacks leveled at Mitt Romney during the presidentia...

David Brooks Is Upset Because President Obama Won't Raise Taxes on Middle Income People and Cut Them for the Wealthy

After all, that is what real Democrats are supposed to do. (It's not sufficient in David Brooksland to have just one party that openly advocates redistributing money to rich people.) Of course Brooks doesn't put the agenda he imagines as bold in these terms, but these are two of his three big points.

On taxes he proposes replacing the income tax with a value added tax for people earning less than $100,000 and reducing the corporate income tax to 15 percent. Brooks asserts that this will incr...

Robert Samuelson Tells Us That Our Ratio of Interest Payments to GDP Is Near a Post-World War II Low

Actually he neglected to mention this fact in his column this morning. (It's less than 1.0 percent of GDP and only about 0.5 percent of GDP if we net out the interest rebated by the Fed.) Samuelson tells us:

"The true national debt could be triple the conventional estimate, anywhere from $11 trillion to $31 trillion by my reckoning. The differences mostly reflect explicit and implicit “off-budget” federal loan guarantees. In another economic downturn, these could result in large losses that w...

Are Republicans Confused on the Issues Involved with the Sequester or Is Ezra Klein?

Ezra Klein tells us that both sides are badly confused about the issues at stake in the sequester. (The piece is more appropriately headlined in the print version, "Why both sides are misreading the budget battle.")

Klein explains that tax expenditures, like the mortgage interest deduction and the deduction for state and local income taxes, are really forms of spending. He says that the problem is that Republicans are just failing to understand this fact:

"No one has worked harder to disabuse...

Cancer Drug Prices: We Could Take Away Their Government Granted Monopoly

The Washington Post gave us one of its classics, an opinion piece that struggled with the dilemma of the proper pricing of cancer drugs. While the piece tells readers how the price of these drugs are bankrupting families it never once mentions why the prices are so high. The word "patent" does not appear in the column. Of course without patent monopolies most cancer drugs could be easily copied and sold as low-priced generics.

Drugs are expensive to develop, but once they have been developed...