Dean Baker's Blog, page 452

150,000 Jobs Per Month Is Not Robust Growth

Okay, some cheap WAPO bashing this morning, an article on Bernanke's speech as Jackson Hole, described a rate of job growth of 150,000 a month or more as "robust." Sorry, that isn't close to right.

The economy is down by more than 9.5 million jobs from its trend path. We need roughly 100,000 jobs per month to keep pace with the growth of the labor force. This means that at 150,000 jobs per month, we are making up the jobs shortfall at the rate of 50,000 a month. At this pace it will take us c...

The NYT's Confusion Over Why More Men Don't Go to College Isn't as Confusing to People Who Know the Data

A lengthy NYT Magazine piece reports on the increasing number of couples where the women earns more than the man. It notes that one reason is that women are graduating college in higher numbers. At one point it presents the views of Michael Greenstone, an economist at M.I.T. and director of the Hamilton Project:

“An important long-term issue is that men are not doing as well as women in keeping up with the demands of the global economy. ... It’s a first-order mystery for social scientists, w...

China Teaches Apple About the Inefficiency of the Patent System

The United States doesn't understand much about free markets. If it did, people here would realize that patents and copyrights are big government, not the free market. China is trying to teach this lesson to Apple. As the Post reports, a Chinese firm is filing a patent infringement lawsuit against Apple.

This is undoubtedly the first of many such suits. Strong patent laws are likely to create many high-paying jobs for lawyers, however they are almost certainly an impediment to innovation in t...

Bad Macroeconomic Policy Disproportionately Hit The Middle Class and Poor

The NYT notes that the new jobs being created in the upturn tend to be low-paying jobs. This is not surprising. The jobs that are created in large part reflects the state of the labor market. No one will work the midnight shift at the local 7-11 for the minimum wage if they have the opportunity to get relatively good paying jobs in manufacturing, construction, and health care.

High unemployment leads to lower wages for most workers both by lowering the wages in their jobs and leading to a mix...

Bad Macroeconomic Policy Disproportiionately Hit The Middle Class and Poor

The NYT notes that the new jobs being created in the upturn tend to be low-paying jobs. This is not surprising. The jobs that are created in large part reflects the state of the labor market. No one will work the midnight shift at the local 7-11 for the minimum wage if they have the opportunity to get relatively good paying jobs in manufacturing, construction, and health care.

High unemployment leads to lower wages for most workers both by lowering the wages in their jobs and leading to a mix...

David Brooks Is Much Younger Than He Looks

That is the only conclusion that readers of David Brooks' column could reach. After all, he tells us:

"today’s Republican Party unabashedly celebrates this ambition and definition of success. Speaker after speaker at the convention in Tampa, Fla., celebrated the striver, who started small, struggled hard, looked within and became wealthy. ...

Republicans promised to get government out of the way. Reduce the burden of debt. Offer Americans an open field and a fair chance to let their ambition...

Casey Mulligan's Reality on Unemployment Insurance and Reality for the Rest of Us

In a blogpost yesterday Case Mulligan told readers:

"in reality, cutting unemployment insurance would increase employment, as it would end payments for people who fail to find work and would reduce the cushion provided after layoffs."

Unfortunately Mulligan provides no evidence to back up his version of reality. By contrast, Jesse Rothstein, an economist at Berkeley, looked at the behavior of unemployed workers. He found that at most, the supply-side effect from the extended duration of unemp...

What Part of the Fed Fulfilling Its Mandate is "Delicate?"

An article reporting on the Commerce Department's release of data showing a small upward revision in second quarter GDP told readers that Federal Reserve Board Chairman Ben Bernanke faces a "delicate decision" in deciding whether to take further steps to boost the economy. While the piece notes the economy's continuing weakness, it tells readers:

"More aggressive steps to stimulate the economy will also draw criticism from Republicans, who have demanded that Mr. Bernanke forswear additional m...

NYT Thinks That President Obama is a Philosopher

It really is bizarre, but apparently the NYT doesn't know what line of work President Obama is in. Perhaps they think he is a jazz singer, a mystery writer, who knows? While the rest of us know that President Obama is a politician, the NYT somehow thinks he is a philosopher. It told readers this in the very first sentence of a front page article on Representative Ryan's acceptance speech at the Republican convention referring to "President Obama’s governing philosophy."

The article never expl...

Correcting Erskine Bowles

Morgan Stanley director Erskine Bowles got a couple of big things wrong in a "Room for Debate" comment in the NYT. First he refers to, "our commission’s plan." His commission did not produce a plan. To produce a plan it would have needed 14 votes. The plan that he and his co-chair, Alan Simpson, developed only got the support of 11 members of the commission.

He also refers to the crisis that will result from not taking steps to reduce the deficit as "the most predictable economic crisis in h...