Dean Baker's Blog, page 444

Do Germans Find Jobs and Profits a Bitter Tonic?

A Washington Post piece onJens Weidmann, the head of the Bundesbank, told readers of his anger over the European Central Bank's bailout of debtor countries and his concerns about inflation. It then told readers:

"Many Germans fear that printing the money to buy the bonds will contribute to higher inflation in the long run — a violation of what they see as the ECB’s principal mandate and a bitter tonic for a country that gave up its cherished mark in exchange for assurances that the euro woul...

If Obstetricians Charge Medicaid for More Unnecessary Caesarean Sections Will It Reduce the Poverty Rate?

It will according to the Congressional Budget Office's new method of measuring income as discussed in a column by Eduardo Porter. While Porter does present the view of Timothy Smeedling a critic of this new approach, it would have been worth expanding on some of the issues raised. In contrast to items that are directly under consumers' control, we are measuring what the government pays for health care.

We know that the United States pays more than twice as much per person for care as the aver...

Ross Douthat Tries His Hand as a Romney Speech Writer

Ross Douthat is the third columnist this week who is trying his hand as a Romney speechwriter following on an effort by Robert Samuelson on Monday, and David Brooks on Tuesday. Let's see what he's got.

Douthat has a plan for what Romney should "tell the 47 percent." He begins by noting that Romney is at best even with President Obama among white working class voters outside of the South. He tells readers that Romney is even losing some voters who are convinced that Obama is really Kenyan. The...

David Brooks Tries His Hand as a Romney Speechwriter

It apparently is that time of year when columnists try out as speechwriters for the candidates. After Robert Samuelson tried his hand by writing speeches for both candidates in his Washington Post column yesterday, David Brooks took a shot in drafting a debate intro for Governor Romney today. Brooks' speech is not especially truthful, but I suppose that is par for a presidential candidate.

He tells readers:

"The next president is going to face some wicked problems. The first is the “fiscal cl...

The Bowles Simpson Commission Did NOT Issue a Report

Why does the media keep telling us that the Bowles-Simpson commission issued a report when it clearly did not. If we go to the commission's website and read its bylaws we can quickly find:

"The Commission shall vote on the approval of a final report containing a set of recommendations to achieve the objectives set forth in the Charter no later than December 1, 2010. The issuance of a final report of the Commission shall require the approval of not less than 14 of the 18 members of the Commis...

Washington Post Doesn't Know Which Way Is Up #45,671: Savings are Low, not High

Consumption amounts to 70 percent of the economy, so getting the basic facts right about consumption and savings is pretty central to understanding the economy. That's why it is pretty incredible that the Post told readers today:

"Households began squirreling away cash in the midst of the recession. The savings rate, which was at 1percent in 2005, generally fluctuated between 5percent and 6percent during the recent recession. This year it has hovered around 4percent, still above historical no...

Fiscal Cliff Notes Have no Place on NPR

I have always been a big fan of good headlines and let me begin by expressing my admiration for the folks at NPR for coming up with the title "Fiscal Cliff Notes" for their series on the budget standoff. But sometimes you can't use a title even if it's good. (My staff has restrained me from using many of my best titles and headlines.) "Fiscal Cliff Notes" belongs in that do not use box.

First and foremost the problem is that it is not accurate. It also helps push the Republican agenda on budg...

Robert Samuelson's Speeches for the Presidential Candidates

Robert Samuelson used his column today to write speeches for President Obama and Governor Romney which are supposed to be giving us what both of them should be telling the public. (Aren't columnists cute when they do this?) In the case of President Obama the focus is on the need to increase taxes on middle income people and cut benefits:

"'Fellow Americans. For years, your leaders — including me — have misled you. Your government has made more promises than it can keep, even if the economy re...

Does Congress "Need" Revenue from Payroll Tax?

A generally informative NYT piece on the expiration of the payroll tax cut at the end of the year told readers:

"The original point of the payroll tax holiday was to stimulate consumer spending and aid middle-income households. But now Congress needs the money as it struggles with vast deficits and believes the economy can withstand the expiration."

It is not clear in what way Congress "needs" the revenue nor why it faces any objective need to struggle with "vast" deficits. Nor is there any o...

The Problem is a Collapsed Housing Bubble, Not a Financial Crisis #4306

It is remarkable how people keep insisting, in spite of all the evidence to the contrary, that the problem of the downturn is a financial crisis rather than simply a collapsed housing bubble. The latter story is simple. Housing construction was driven by bubble-inflated prices. When prices plunged, construction collapsed. Not only did we no longer have inflated prices to drive construction, we also had an enormous oversupply as a result of 5 years of near record rates of construction. From 20...