Dean Baker's Blog, page 434

Background to Assess Ben Bernanke's Warning On the Fiscal Standoff and The Budget

The Washington Post gave a careful account of Federal Reserve Board Chairman Ben Bernanke's testimony to Congress:

"Federal Reserve Chairman Ben Bernanke delivered a stark warning to lawmakers in a high-profile speech Tuesday, saying that the U.S. economy is at risk if they bungle negotiations over the looming austerity crisis.

"Bernanke’s remarks are notable less for their substance than for their tone and timing. In his most prominent public speech in almost three months, Bernanke made clea...

More Affirmative Action for Deficit Hawks: USA Today Prints Column by Koch Institute Policy Analyst Who Is Way Over His Head

The affirmative action policy that major media outlets have for deficit hawks is widely recognized. Arguments that would never appear in a serious media outlet based on their merits, fill the pages of newspapers and fill the airspace of leading television and radio news shows. In keeping with this spirit, USA Today gave us a column from Evan Feinberg, a policy analyst at the Charles Koch Institute.

The main thesis of the column is that the United States government is like a subprime borrower...

More Affirmative Action for Deficit Hawks: USA Today Prints Column Koch Institute Policy Analyst Who Is Way Over His Head

The affirmative action policy that major media outlets have for deficit hawks is widely recognized. Arguments that would never appear in a serious media outlet based on their merits, fill the pages of newspapers and fill the airspace of leading television and radio news shows. In keeping with this spirit, USA Today gave us a column from Evan Feinberg, a policy analyst at the Charles Koch Institute.

The main thesis of the column is that the United States government is like a subprime borrower...

The WAPO Tells Us How Not to Think About Manufacturing and Jobs

A Washington Post blogpost, whose headline told readers that manufacturing jobs are not coming back, gave an incredibly misleading rationale for this assertion. It told readers:

"Manufacturing contributed 20 percent of the growth in global economic output in the decade ending in 2010, the McKinsey researchers estimate, and 37 percent of global productivity growth from 1995 to 2005. Yet the sector actually subtracted 24 percent from employment in advanced nations."

Note that the first two figu...

God Speaks to Robert Samuelson

That is what readers of his column on the budget standoff undoubtedly concluded when they read his line:

"It’s a pity, because the outlines of the needed deal are clear."

He then lists a number of items which would not obviously be in most people's outlines, such as reduction in the top tax rate from 39.6 percent to 30.0 percent, and "sizable cuts in Social Security and Medicare." The latter might be viewed as especially surprising since an overwhelming majority of people across the political...

"The Cost of the Looming Fiscal Crisis" Should Not Be a Throwaway Line

Unfortunately it is in an otherwise useful column by Thomas Edsall on evolving political attitudes. The second to the last sentence tells reader that:

"Nonetheless, the overarching division remains, and the battle lines are drawn over how to distribute the costs of the looming fiscal crisis."

But those wondering about the nature of the costly fiscal crisis to which Edsall is referring would follow the link to a Wall Street Journal piece on the fiscal showdown over the end of the Bush tax cut...

Thomas Friedman Says That Our Economy Is Being Killed By Employers Who Can't Do Arithmetic

The evidence presented in Thomas Friedman's column today would lead readers to believe that the economy's biggest problem is that companies are being run by executives who are so ignorant of economics that they don't know that the way to attract more workers is to raise wages. The column begins with the story of Traci Tapini, who with her sister is co-president of Wyoming Machine. For some reason Friedman assures us Tapini "is not your usual C.E.O."

According to Friedman, back in 2009, when t...

Washington Post Doesn't Try to Scare You

After warning readers of the dire consequences of waiting until after January 1 to reach a deal on taxes and spending, the Post told readers that the markets don't seem to share its concerns. This was a good honest assessment of what to date seems to be largely a non-response to the dire warnings emanating from Washington policy circles about THE FISCAL CLIFF!!!!!!!!

The Washington Post Is Trying to Scare You, Again

I'm not kidding, that's the headline of a blogpost:

"this graph should scare you."

The Post reports on a new study from the Congressional Budget Office (CBO) which shows that GDP growth in this recovery has been considerably weaker than the average of prior recoveries. It's not entirely clear why the graph from CBO is supposed to be scary. After all, don't most people already know the economy stinks?

And the reason is pretty simple, we don't have any source of demand to replace the $1 trilli...

USA Today Runs Huge Front Page Story Pushing Republican Line on Fiscal Showdown

The paper has a huge front page story showing the hit to the economy from each of the components of the showdown (e.g. the specific tax cuts that are ending and the various spending cuts). The problem is that what the article shows as the hit to the economy is the hit if nothing is done all year, it has zero, nothing, nada, to do with the impact of letting the December 31st deadline pass, with the tax increases and spending cuts reversed early in 2013. It is unlikely that many USA Today reade...