Dean Baker's Blog, page 431

Organizing Among Low-Wage Workers

Eduardo Porter had a good piece on the plight of low-wage workers and their efforts to organize with unions. He points out that these workers now receive substantial subsidies from the government (e.g. food stamps) because their pay is low.

Nonsense on Conflicts of Interest in Public Pension Case

The NYT's reporting on the finances of public pensions has been extremely partisan, giving extensive coverage to those who want to exaggerate the funds' liabilities (e.g. here and here). It continued in this vein today when it made a big issue of an alleged conflict of interest of a Rhode Island judge in a case involving Rhode Island's pension systems.

The alleged conflict is that the judge has several close relatives including her mother and son, who would potentially be affected by cuts to...

NYT Promotes Confusion Over Budget

Politicians often try to obscure unpopular proposals in euphemisms. Reporters are not supposed to help them in this effort.

The NYT failed badly in this respect when it told readers:

"Republicans would demand deep concessions on spending and changes to Medicare and Social Security as a price to raise the debt ceiling a few weeks later."

Of course the Republicans are pushing for cuts to Medicare and Social Security, not generic "changes." They want the government to pay less money and for bene...

Krugman Uses Misleading Deficit Graph

Paul Krugman's columns and blogs are a great source of insight on the economy and the budget, but he does occasionally make mistakes. He is guilty of one today, when he used a very misleading graph on the sources of the budget deficits in his blog.

There are two major problems with the graph. First, it begins in 2009. This might lead readers to believe that large budget deficits had been an ongoing problem. That is not true. The deficit was just 1.2 percent of GDP in 2007 and was projected...

Economics Lesson for Charles Lane

Washington Post columnist Charles Lane is angry with Ben Bernanke and the Federal Reserve Board. He is upset because the Fed is not working to advance his agenda of cutting Social Security and Medicare by raising interest rates and putting more pressure on Congress.

Lane tells readers:

"With the U.S. economy still reeling from the Great Recession, the Fed has been trying to stimulate economic growth by holding down interest rates, and it has pledged to keep doing so through mid-2015. It does...

Washington Post Does Front Page Hit Piece on AARP

The Washington Post, along with the other Serious People in Washington, is engaged in a full court press to cut Social Security and Medicare. It is prepared to use all the resources of the newspaper to accomplish this end, even if this means ignoring normal journalistic standards.

This explains its front page attack on AARP over its opposition to cuts to Medicare and Social Security. The piece tells readers that AARP, because of its marketing of Medigap insurance, has a conflict of interest i...

Washington Post Doesn't Realize that Sometimes Politicians are not Truthful

While it apparently is news to the Washington Post, those who follow politics realize that politicians are not always completely honest in their public statements. That is why it is important never to take what they say entirely face value.

For this reason the Washington Post erred when it reported in a front page story that:

"Republicans were outraged by the president’s proposal [on the budget], calling it a step backward."

In fact, the Post has no way of knowing whether the Republicans were...

David Brooks Think When Democrats Win Elections They Have to Give Everything to Republicans

It's fascinating to read David Brooks' column today. He boldly argues that Republicans:

"have to acknowledge how badly things are stacked against them. Polls show that large majorities of Americans are inclined to blame Republicans if the country goes off the 'fiscal cliff.' The business community, which needs a deal to boost confidence, will turn against them. The national security types and the defense contractors, who hate the prospect of sequestration, will turn against them.

"Moreover a...

Tax Principles

The Washington Post told readers:

"both sides agree that as a principle, keeping tax rates low while eliminating deductions is better than increasing tax rates."

While this is true as a general principle, the preference for lower rates is considerably more complex than the statement implies. In almost any scenario of trading off lower rates for fewer deductions, the very wealthy end up ahead. Not everyone views this as desirable.

Also, the limiting of deductions is likely to pose problems for...

Lindsey Graham Commits Huge Gaffe: Shows Complete Lack of Understanding on the Budget

The Post neglected to point out that Senator Lindsey Graham, a Republican often cited on budget issues, is apparently badly confused about the basics of the budget. A Post piece quoted Graham as saying:

"This offer doesn’t remotely deal with entitlement reform in a way to save Medicare, Medicaid and Social Security from imminent bankruptcy."

This statement is absurd on its face. Medicaid is paid out of general revenue, it makes no more sense to say that Medicaid faces bankruptcy than to say t...