Dean Baker's Blog, page 465

Defense Industry Lobbyists Buy Attention in the NYT

The NYT had a piece on the potential impact that uncertainty around the extension of tax cuts and the imposition of legislated spending reductions might be affecting the economy. At one point it tells readers that:

"Outside the military contracting industry, the fiscal cliff has not received the same amount of attention."

Of course the reason that the impact of spending cuts on the military contracting industry has received attention is that the industry has payed lobbyists to hype its impact...

Meatpacking Didn't Always Have Bad Pay

The NYT Magazine has an interesting piece on Postville, Iowa, a small town whose major employer is a meatpacking plant. Postville gained notoriety in 2008 because of a raid on the plant by immigration authorities that resulted in dozens of undocumented workers being arrested and deported.

At one point the article notes the low pay and bad working conditions in the industry and explains that only immigrants would be willing to take these jobs. Actually the pay in the meatpacking industry was n...

Drug Patent Monopolies Lead to Corruption #23,462

Economic theory predicts that when the price of a product substantially exceed its marginal cost that we should expect corruption. Economists usually use this prediction to complain about trade barriers that can the price of protected products by 15-20 percent above their free market price. Somehow they ignore the implication of this prediction when it comes to patent monopolies for prescription drugs that raise prices by many thousand percent above their free market.

This is the basis for th...

Outsourcing, Offshoring, and the Presidential Campaign

It appears that both President Obama and Governor Romney are going to be accusing each other of being offshorers in the fall campaign. Both have a case, even if not exactly the one they are making.

Obama's case on Romney being an offshorer is that the companies owned by Bain Capital shipped many jobs overseas. Romney counters that the offshoring began after he had given up his role as a top executive at Bain, although he did still have a substantial stake in the company. He said that while he...

Credit Card Debt Plunged in April

That fact should have mentioned in a NYT article that touted an 11.2 percent jump in credit card debt in May. Much of this increase was offsetting a 4.9 percent decline reported for April.

Consumer Confidence, Fiscal Cliffs, and Going Off the Deep End

Folks in Washington like to think that their silly dramas have much more impact on the world than they in fact do. The battle over extending the debt ceiling last year is a case in point, with its sequel, the 2013 Fiscal Cliff, providing another example.

Ezra Klein traced a slowdown in the economy last year to the uncertainty resulting from the battle over the debt ceiling. He tells readers:

"Early in the year, the recovery seemed to be proceeding smoothly. In February, the economy added 220,...

NYT Does He Said/She Said on Bush Tax Cuts

The NYT must assume that its readers know all about the policy impact of allowing the Bush tax cuts on the richest 2 percent of the population. That is the only possible explanation for an article that reported what various political actors had to say about this idea without telling readers what is actually true.

For example, the piece told readers that:

"He [President Obama] said that 98 percent of households and 97 percent of small businesses would receive a tax cut under his plan. But Repu...

The Conundrums of David Brooks: Reducing Class Inequality Without Talking About It

David Brooks deserves to be congratulated. He has discovered that the children of less affluent people don't have the same opportunities as the children of the wealthy. While most of us have long known this, David Brooks still deserves credit for being open to evidence. Better late than never.

Of course he still seems to have some problems figuring out what to do about this fact. He tells readers:

"Political candidates will have to spend less time trying to exploit class divisions and more ti...

Joe Olivo Plays a Small Business Owner on NPR

Okay folks, NPR should feel some real pain on this one. Some of you may recall last week when I beat up on NPR for presenting the views of Joe Olivo, a small business owner, on the Affordable Care Act (ACA). I pointed out that the piece the segment did not put Olivo's complaints in any context so that listeners would have no way of assessing their validity.

It turned out that I was overly generous. Olivo was not a random small business owner who NPR happened to stumble upon. He is a person th...

Robert Samuelson Blames the 60s Again

Robert Samuelson decided to blame the 60s again for the economic problems that we are suffering today. He argues that the decision by Kennedy to deliberately run higher deficits to boost the economy and to tolerate a higher rate of inflation gave us all of our current headaches. The former because we ended up with so much debt that we can't now use large deficits to boost demand and the latter because it led to the runaway inflation of the 70s. It's easy to show that both contentions are wron...