Dean Baker's Blog, page 456

Robots Don't Cost Jobs, Bad Economic Policy Does

The NYT had an interesting piece on how a new generation of robots is able to do far more sophisticated tasks in factories and warehouses than earlier generations of robots. The piece repeatedly warns that this new technology could cost large numbers of jobs.

While one outcome of the introduction of this new technology could be the loss of jobs in the economy, that would be due to inept economic policy. What the article is describing is productivity growth. This is exactly what we should want...

Do All Conservative Intellectuals Have Trouble With Arithmetic?

The NYT ran a promotion for Representative Paul Ryan as a news story. The piece did not include a single critical comment from any of the the people interviewed.

This is truly remarkable since many of Ryan proposals would add enormous costs to the economy and/or don't seem to add up. For example, according to the Congressional Budget Office's projections, his 2011 Medicare proposal would have increased the cost to the country of providing Medicare equivalent insurance policies by $34 trillio...

Martin Wolf Goes Soft on Bowles-Simpson

The normally astute Martin Wolf failed to do his homework for a column yesterday in which he described the deficit reduction plan put forward by Morgan Stanley director Erskine Bowles and former Senator Alan Simpson as "the only politically realistic long-term fiscal solution."

Actually there is a much politically viable solution: do nothing. Yes, this will make the deficit hawks at the Washington Post and other such places yell and scream, but it is both politically viable and economically s...

Doctors Remove Bullet from Victim's Head, Seek to Determine Cause of Death: David Leonhardt Edition

David Leonhardt poses the biazarre question in the headline of a blogpost today: "Is Simple Demography Behind Weak Economy?"

There is a simple answer to this simple question, "no."

The basic story, which is well-known to those who read the monthly employment numbers, or who are unemployed themselves, is a lack of jobs, not a lack of workers. Yes, population growth and therefore labor force growth has slowed. This would imply a lower growth rate of potential GDP. That means that once we have a...

Doctors Remove Bullet from Victim's Head; Seek to Determine Cause of Death: David Leonhardt Edition

David Leonhardt poses the biazarre question in the headline of a blogpost today: "Is Simple Demography Behind Weak Economy?"

There is a simple answer to this simple question, "no."

The basic story, which is well-known to those who read the monthly employment numbers, or who are unemployed themselves, is a lack of jobs, not a lack of workers. Yes, population growth and therefore labor force growth has slowed. This would imply a lower growth rate of potential GDP. That means that once we had ab...

Doctors Remove Bullet from Head: Seek to Determine Cause of Death: David Leonhardt Edition

David Leonhardt poses the biazarre question in the headline of a blogpost today: "Is Simple Demography Behind Weak Economy?"

There is a simple answer to this simple question, "no."

The basic story, which is well-known to those who read the monthly employment numbers, or who are unemployed themselves, is a lack of jobs, not a lack of workers. Yes, population growth and therefore labor force growth has slowed. This would imply a lower growth rate of potential GDP. That means that once we had...

Washington Post Strikes Out in Attack on Joe Biden's Courage on Social Security

The Washington Post once again confounded its critics who insisted that it couldn't get any worse. Yesterday the paper ran an editorial that criticized Vice President Joe Biden for his lack of courage when he committed the administration to a policy of not cutting Social Security. Biden repeatedly told an audience in Southern Virginia that he guaranteed there would be no cuts to Social Security in a second Obama administration.

The paper then laid out its case for cuts to the program and outl...

The Recession for College Grads

The WAPO has a nicely graphed blog post telling us that there was no recession for college grads. It shows that employment for college grads has risen at a strong pace since the start of the recovery and is well above its pre- recession level. The problem is that we need a denominator in this story. (This seems to be a recurring problem at the WAPO, like when they tell us about the multi-trillion dollar shortfall projected for Social Security without pointing out that it is equal to around 0....

Doctors Remove Bullet from Victim's Head: Seek to Determine Cause of Death

A New York Times article on "Europe's lost decade" could have easily had a headline like this. The piece talks about the high unemployment and weak growth across the euro zone, but never notes the obvious cause, major cutbacks in government spending and tax increases. The predicted result of such austerity measures is a contraction in demand.

This is even more likely to be the outcome of austerity in the euro zone than in the United States, since the private sector is a smaller share of the e...

It's the Housing Stupid

In a Washington Post column today, Kevin Hassett and Glenn Hubbard, two of the top economists on Governor Romney's economic team, rightly take President Obama to task for blaming the weakness of the economy since the downturn on the financial crisis. They cite a recent study from the Federal Reserve Bank of Cleveland as showing that recoveries following financial crises tend to be stronger not weaker than other recoveries.

While there are some questions that can be raised about this study (wa...