Dean Baker's Blog, page 447

David Brooks' Concern for Entrepreneurial Spirit

David Brooks devotes his column today to profiling Elon Musk. Musk emigrated to Canada from South Africa when he was 15, eventually coming down to attend school in the United States. According to Brooks, he was one of the leading figure in PayPal. He later helped financeSpaceX, a space exploration company; Tesla, an electric car company, as well as several other companies.

After describing Musk's extraordinary career and lifestyle, Brooks tells readers:

"Today, grandiosity is out of style. We...

Robert Samuelson Badly Understates the Size of the Welfare State

Robert Samuelson used his column today to urge Mitt Romney to make the welfare state the major issue in the presidential race. For some reason Samuelson's indictment of the welfare state missed many of the largest items.

For example, in listing the beneficiaries of government largess Samuelson missed obvious ones like homeowners who benefit from the mortgage interest deduction, the deduction for property taxes, and the subsidy provided by government guarantees of mortgage debt. He also misse...

Can the Fed Rein in the Big Banks?

Good piece by Simon Johnson.

The Point of QE3 Could Be Higher Inflation

The Washington Post ran a piece that highlighted the concerns of Richard Fisher, the President of the Dallas Federal Reserve Bank, that the Federal Reserve Board's latest round of quantitative easing may lead to higher inflation. Fisher notes that financial markets indicate that investors are now anticipating higher rates of inflation than was the case before the Fed's latest move.

It would have been worth noting that this is arguably the intention of the policy. This certainly is the goal of...

Dana Milbank, Budget Heroes and Real Heroes

You can get paid lots of money in this town to try to convince people that the country's biggest problem is not the fact that we have 25 million people unemployed, underemployed or out of the workforce altogether due to lack of job opportunities. Dana Milbank illustrates this point by touting his new favorite video game, Budget Hero. Budget Hero was apparently put together with lots of money from folks who want to distract the country from its real problems.

As all budget experts know, the re...

Dana Milbank, Budget Heros and Real Heros

You can get paid lots of money in this town to try to convince people that the country's biggest problem is not the fact that we have 25 million people unemployed, underemployed or out of the workforce altogether due to lack of job opportunities. Dana Milbank illustrates this point by touting his new favorite video game, Budget Hero. Budget Hero was apparently put together with lots of money from folks who want to distract the country from its real problems.

As all budget experts know, the r...

Penalizing Teachers for Low Test Scores

Morning Edition had a segment this morning in which it touted new research from John List, a University of Chicago economist, that found that student test scores rose the most when teachers were given a bonus at the start of the year which they would lose, if their students didn't score at a certain level. The argument is that teachers will more fear losing money they have already received than they value getting a bonus at the end of the year.

While this is an interesting result, there is an...

When the Big Debate Is Over Taxes, Progressives Have Lost

Ever since Governor Romney's comment about writing off the 47 percent of households who don't pay federal income tax became public, news stories and opinion pieces have been dominated by discussions of who does and does not pay taxes. This is great news for the one percent.

The obsession with taxes means that the one percent are playing a game that they can only win. The vast majority of the upward redistribution of income over the last three decades has been in before tax income. This has...

Paying Taxes and Getting Benefits Misses the Boat

Bill Gates is a huge beneficiary of government largess. So are Pfizer and Merck. If you don't immediately understand why, then you haven't been reading BTP enough.

Gates and Microsoft are incredibly wealthy because of the copyright and patent monopolies given to them by the government. Without these government enforced monopolies, we would all be getting Windows and Word for free (they're worth it). The same applies to Pfizer and Merck. These companies' drugs would be selling for $5 per pres...

President Obama's Big Tax Hike on Working People

Thanks to the liberal media most of the public probably has not heard about President Obama's big tax hike on working people, Dennis Cauchon at USA Today is on the case. Just 16 days into his term in office, President Obama signed a bill that raised a tax that primarily hits working people. To date this tax hike has meant more than $30 billion out of taxpayers' pockets.

If you missed this one, it's probably because you don't smoke. Obama raised the tobacco tax. It had the effect of leading to...