Dean Baker's Blog, page 453

Paul Ryan and the Which Way Is Up Speech

Most of the media have been doing fluff pieces on Representative Ryan ever since he was announced as Governor Romney's pick for his VP candidate. (My favorite is this Post piece which waxes eloquently on his use of the word "baseline.") Just in case any reporters decide to do any real reporting, I'd suggest they try taking issue with his account of the crushing debt burden that we are passing on to our children.

Representative Ryan seems impressed by big numbers (i.e. trillions), but seems to...

The Food Here is Poison and the Portions Are So Small (Paul Krugman Edition)

The economics profession tends to be bipolar. It swings from periods of wild optimism to wild pessimism while rarely stopping anywhere in the mild. Hence we had the new economy optimists in the late 90s who insisted that all the problems of scarcity had been solved forever by the wonders of the information age. Now we have Paul Krugman citing new work by Robert Gordon which tells us that growth is dead.

Wow, that's quite a shift in a relatively short period of time. Let's back up a second.

Fi...

The Graph You Really Need When Watching the Republican (and Democratic) Conventions

Ezra Klein gives us a graph from the Center on Budget and Policy Priorities that shows the ratio of debt to GDP from 2001 to 2019. The graph attributes the rise in the debt to various causes. The Bush tax cuts and the wars in Iraq and Afghanistan are shown to be major culprits.

There actually is a much better graph that people can use. This is the graph showing interest on the debt as a share of GDP.

Source: Congressional Budget Office.

Note that this one looks considerably less scary. We do...

Problems of the Euro Zone

The Post had an interesting piece discussing the structural problems in the construction of the euro. While the basic points are largely accurate, it does misrepresent a couple of issues.

First, contrary to what the piece suggests, there was no general recognition at the time that the euro was created that Germany's economy would somehow dominate the euro zone. In fact, in the 90s and even at the start of the last decade, Germany's economy was viewed as seriously troubled. For example, Adam...

With Consumer Confidence It is Only Current Conditions That Matter

There may be a temptation by some in the business media to make a big issue out of the sharp decline in the Conference Board's measure of consumer confidence. Those so tempted would be wrong.

The key point to note is that almost all of the decline was in the future expectations index. The current conditions index was essentially unchanged, edging down from 45.9 to 45.8. While current conditions index does fit reasonably well with current consumption, there is little correlation between the fu...

Where the Rs and Ds Agree

Annie Lowry has a nice blogpost in the Economix section of the NYT listing some of the areas where Republicans and Democrats seem to largely agree (meaning the leadership, not the base). I'd agree with her list and add a few more items.

Both parties seem to agree on an uncompetitive dollar, having the Fed and Treasury maintain the dollar at a level that prices U.S. goods out of many markets. The result is a large trade deficit (currently around 4 percent of GDP or $600 billion a year) and the...

What Does It Mean to Put a Limit on the Cost of Regulations?

A NYT article on Governor Romney's approach to the economy discussed his attitude toward regulation. It tells readers that Romney:

"stopped talking about the benefits of regulation, focusing instead on its costs. His campaign platform includes proposals to curtail rule making, like capping the total cost of regulation at the current level, without adjusting for inflation."

What does a limit on the cost of regulation mean? Suppose that I have more oil than Saudi Arabia underneath my backyard,...

Jury in Apple Case Rules for Big Government

It is remarkable that in a campaign season where the media are constantly telling us that the election is a referendum about the size and role of government, no one seems to have noticed that the jury's verdict in the Apple-Samsung case is a big victory for big government. The ruling gives strong protection to Apple's patents, which means that it will be able to charge more money for its iPad, iPhone and other related products in the years ahead. The additional charges could well run into the...

Is There a Work Requirement for NYT Reporters? David Leonhardt Indicates There Isn't

Mitt Romney has made a big deal out of President Obama's decision to grant requests by governors from both parties for more flexibility in the work requirement in TANF, the reformed welfare program. The question that millions are now asking is whether the NYT has a work requirement for its reporters. David Leonhardt's piece on Mitt Romney's first 100 days suggests otherwise.

One of the big questions that serious people have been raising is how Governor Romney proposes to pay for the large tax...

Paul Ryan Said "Baseline," He Must Be Smart

The Washington Post has long been known for its sycophantic coverage of the rich and powerful but it may have hit a new low today. The theme of an article on the presidential race was that Representative Paul Ryan, the Republican vice-presidential candidate, used the word "baseline" in a discussion of the budget with reporters. The reporter and/or editor was just incredibly impressed with this fact.

Real reporters might ask Ryan to identify some of the loopholes that he plans to close to make...