Dean Baker's Blog, page 442

Romney and Obama Might Agree on Trade, But Not Free Trade

Adam Davidson has an interesting piece in the NYT Magazine that highlights the similarities in the economic positions of President Obama and Governor Romney. While many of the points are likely true, some are less clear.

For example, if Governor Romney follows his budget plan, then he will have dismantle most of the federal government after two terms in office. (Odds are that he won't.) If he follows his campaign pledge he would also have to dismantle the health care plan that President Obama...

NYT Uncovers Shocking Truth: Mitt Romney is a Capitalist!

The NYT has a major article today that begins by telling readers about Asimco Technologies, which it describes as: "an auto parts manufacturer whose plants dot eastern China, would seem to underscore Mitt Romney’s campaign-trail complaint that China’s manufacturing juggernaut is costing America jobs."

The piece then tells the story of two Michigan factors that Asimco bought and then shut down. Then we get the big punchline, Asimco is owned by Bain Capital. There you have it, Mitt Romney who c...

The NYT Q&A on the "Fiscal Cliff" Is Not Very Helpful

The piece, titled "understanding the fiscal cliff" never once mentions the fact that there is not really a cliff. Almost nothing happens to the economy if we reach the end of the year without an agreement on taxes and spending. This point is well explained in another NYT piece today.

Children and Grandchilden Do Not Pay for Budget Deficits, They Get Interest on the Bonds

Politicians, especially those who want to cut programs like Social Security and Medicare, are fond of telling people that our children and grandchildren will pay the national debt. That one may sell well with focus groups, but it is complete nonsense. Unfortunately, Eduardo Porter repeats this line in his column today.

A moment's reflection shows why the debt is not a measure of inter-generational equity. At some point everyone alive today will be dead. At that point, the bonds that comprise...

The Fiscal Cliff Doesn't Live Up to the Hype

The NYT has a nice piece pointing out that the notion of a "fiscal cliff" hitting the country at the end of the year is fundamentally wrong. The immediate impact of leaving the scheduled tax increases and spending cuts in place through the end of the year will be almost zero. As the piece points out, the dire projections of sharply slower growth or even a recession are not based on letting the December 31 deadline pass, but rather leaving the higher taxes and lower spending in place for the w...

David Brooks on Drugs and Medicare

While we may not know whether David Brooks' try out as a Romney speechwriter was successful, he clearly is doing his best for the campaign. Today he pushes the idea that a voucher system is the only way to contain Medicare costs. This requires ignoring an awful lot of evidence, but that is an exercise at which David Brooks excels.

To start, in dismissing the idea that governments can be successful in designing policies that contain costs, Brooks ignores all the evidence from every other wealt...

Robert Samuelson Celebrates Stagnation in Europe

Robert Samuelson is excited by the fact that Europe's economy faces stagnation. Unfortunately he gets almost everything in the piece wrong.

First, his central point, that the stagnation is due to overly generous welfare state, is 100 percent at odds with reality. The countries with the most generous welfare states are the Nordic countries and Germany, all of which are doing fine. The problem countries are Greece, Italy, Spain, and Ireland, all countries that rate near the bottom in the gener...

Very Good Account of Patent Abuse in High Tech

The NYT has an excellent piece on how patents can obstruct innovation in high tech. The sector has wasted tens of billions of dollars in lawsuits in recent years and now takes out patents routinely as a legal weapon. The one major error is that the piece implies at one point that the story with prescription drugs is better, if anything it is almost certainly much worse. The enormous patent rents that drug companies are able to earn (drugs that can be profitably sold for $5 are instead sold fo...

Greg Ip Gets the Basics Wrong in Analysis of Downturn (with response)

Greg Ip is usually a solid analyst of economic trends. However he apparently agreed to adopt house standards in his column for the Washington Post that told readers that "Obama is saving the economy, but maybe not in time to save the economy."

The main assertions in the piece are just flat out wrong. For example, column tells readers:

"Paradoxically, the same forces that made for such a weak recovery during Obama’s first term suggest that the next four years will be better, regardless of who...

Greg Ip Gets the Basics Wrong in Analysis of Downturn

Greg Ip is usually a solid analyst of economic trends. However he apparently agreed to adopt house standards in his column for the Washington Post that told readers that "Obama is saving the economy, but maybe not in time to save the economy."

The main assertions in the piece are just flat out wrong. For example, column tells readers:

"Paradoxically, the same forces that made for such a weak recovery during Obama’s first term suggest that the next four years will be better, regardless of who...