Dean Baker's Blog, page 437

Housing Vacancy Rates Fall and No One Notices

The Census Bureau reported this week that housing vacancy rates in the third quarter were substantially lower than their year ago level. The vacancy rates for rental units fell from 9.8 percent in third quarter of 2011 to 8.6 percent this year. The vacancy rate for ownership units from 2.4 percent to 1.9 percent. (There are roughly twice as many ownership units as rental units.) The third data quarter data indicates that the housing market is substantially tighter than it was 2-3 years ago, e...

The Surge in Employment Reported for September Looks Reasonable in Context

The Washington Post told readers that:

"the sharp improvement visible in the survey of households in the September jobs numbers may turn out to be a overly positive statistical aberration. An additional 872,000 people reported having a job in September’s household survey, which does not square with the amount of hiring that employers reported."

While this is true for the September numbers, the data look less anomalous if we take into account that the household survey reported a fall in employ...

David Brooks Is Upset that President Obama Hasn't Inflicted More Pain on the Middle Class

I'm not kidding. If you get through the excess verbiage in his column, the main point is that President Obama hasn't moved to cut Social Security and Medicare in his first term. This is what Brooks means when he says:

"get our long-term entitlement burdens under control, get our political system working, shift government resources from the affluent elderly to struggling young families and future growth,"

and by his later call for "sacrifice." Of course Brooks doesn't really mean "affluent" el...

The Global Warming Tax

It is common for news reports on efforts to limit global warming with carbon taxes to mention the negative impact that such taxes can have on growth and jobs. In the same vein it is worth pointing out that the costs associated with damage caused by global warming related storms, like Sandy, also will in the long-run slow growth and reduce the number of jobs.

For example, this Washington Post article that noted estimates of the damage from Sandy are in the range of $30-$50 billion could have p...

What Economic Theory Is the NYT Pushing on France?

A NYT article on the problems facing France's president Francoise Hollande included several peculiar assertions. At one point it noted Hollande's efforts to meet a deficit target of 3 percent of GDP (strangely labeled as "economic rigor") and then tells readers:

"Others complained that Mr. Hollande’s decision to meet the target by raising taxes and freezing spending, rather than cutting it, would throw France into recession, even as growth, so far elusive, would by itself provide more tax rec...

Des Moines Register Endorsement of Romney Flunks the Which Way is Up Test on Economics

Back in the 2000 presidential campaign, then Governor George W. Bush, described his plans for education and raised the famous question "is our children learning?" Unfortunately when it comes to former children who write on economic policy issues, the answer is a resounding "no!"

The Des Moines Registrar editorial encouraging readers to vote for Governor Romney managed to get just about every major aspect of the current economic situation wrong. For beginners, it told readers that:

"consumers...

NYT Can't Resist Editorializing Against the European Welfare State in Its News Section

The NYT has apparently designed to join the crusade against the European welfare state. A profile of German Chancellor Angela Merkel noted that Europe accounts for 25 percent of world GDP, but a "staggering" 50 percent of social spending.

There is nothing obviously out of line in this story. Poor countries don't have much by way of social spending. In the United States, benefits like health care and pension coverage are largely provided through employers. Europe has adopted a much more effic...

David Brooks Is Upset that the Interest Burden of the Debt Is Near a Post-War Low

When NYT columnists make absurd assertions they deserve ridicule. In his NYT column today, David Brooks make the absurd assertion that, "the mounting debt is ruinous." Right, and we know this because the interest rate on 10-year Treasury bonds is less than 1.8 percent? (That compares to rates of more than 5.0 percent when we had budget surpluses in the late 1990s.) Do we know that the mounting debt is "ruinous" because the ratio of interest on the debt to GDP is near a post-war low?

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What's Really Dragging Down the U.S. Economy

The Post had an interesting idea that went badly awry. It thought to tell its readers what parts of the economy are lagging by comparing the share of GDP in the most recent quarter to the average over the period from 1985 to 2005. While the choice of years is somewhat problematic (in the years 1996-2000 the economy was being supported by an unsustainable stock bubble and in the years 2002-2005 by an unsustainable housing bubble), the bigger problems stem from a failure of arithmetic and also...

The Washington Post Thinks Its Terrible that Japan is Becoming Less Crowded and the People are Becoming Healthier

That's what readers of a front page piece highlighting Japan's "decline" would assume. After all, the major facts cited to make the case are a projection that its population would decline from 127 million today to 47 million at the end of the century and that it has the oldest population in the world.

The decline in population might be seen as good news except by those who feel that people exist to give their politicians more power in the world. Japan is a very densely populated country. Peo...