Dean Baker's Blog, page 466

Robert Samuelson Blames the 60's 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 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 wrong.

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Income Is Definitely Being Redistributed Upward, but Why Do We Think It's Technology?

Thomas Edsall devoted his blogpost today to a several economists who claim that the upward redistribution we have seen over the last three decades is a result of revolutions in technology and that it will be difficult to reverse this development. In fact much of this economic analysis is quite sloppy and it is easy to show that many of the factors leading to upward redistribution had nothing to do with technology.

For example, the post features a graph that shows for the first time a sustaine...

The Problem Was the Housing Bubble, not Subprime Loans

The Post had a major front page article about how subprime loans threaten to undermine the prospects of African Americans for a decade. While African Amercians do face discrimination in lending, and are more likely to be given a subprime loan than a white with comparable credit and employment history, the real problem stemmed from the fact that so many bought homes in the middle of a housing bubble.

If someone bought a home at a bubble-inflated price that could be twice as much as its trend l...

Why Does the NYT Think That People Have Learned About the ACA?

A NYT piece on another possible round of court battles over the Affordable Care Act (ACA) told readers:

"White House officials have repeatedly underestimated opposition to the health care law. They predicted that public support for the law would grow as people learned more about it."

This implies that people have learned about the ACA. That does not appear to be the case. According to poll conducted last fall by Kaiser only 45 percent of people knew that the ACA did not create panels that wou...

George Will Does Not Have Acess to the Internet, Can Someone Get Him A Copy of Obama's Stimulus Report

In the middle of Washington it can be difficult to get your hands on publicly available government documents. This is undoubtedly why George Will continues to misrepresent what President Obama's economic advisers said about the stimulus package.

On This Week, ABC's Sunday morning talk show, Will claimed that Obama's advisers told him that if he did the stimulus that the unemployment rate would never get above 8.0 percent. Actually, if Will could find the publicly available document written in...

Those Bio-Chemists Would Have Jobs If Only They Got the Skills Needed in a Modern Economy

The Washington Post ran perhaps the best ever in your face article to the pundits who talk about the skills gap. Just to remind people, the skills gap story is that there all sorts of jobs that are going unfilled because employers just can't find people with the necessary skills. In this story, the problem with the economy is not a lack of demand, the problem is that unemployed workers just don't have the skills for the jobs that are available.

This one gets repeated endlessly in spite of the...

NPR Has Never Heard of Global Warming or Arithmetic

That is what listeners to a segment that bemoaned the fact that China's population might decline in the decades ahead undoubtedly concluded. The piece presented the views of people who saw the prospect of a smaller Chinese population as being a potential crisis, but not one word from anyone who indicated that it could potentially benefit both China and the world.

In terms of global warming and demand on resources more generally, the more people there are in China and the world as whole, the g...

The WAPO Misexplains the LIBOR Scandal to You

In a piece that has the word "explainer" in its headline, the post proceeds to mis-explain the LIBOR scandal to its readers. The second paragraph tells readers:

"This is a big deal. Remember that JP Morgan scandal a few months back? That was mostly JP Morgan hurting itself. The LIBOR scandal was Barclay’s making money by hurting you."

The claim is that LIBOR liars cost people money by inflating the LIBOR rate, thereby causing people to pay more on mortgages, car loans and other debts that wer...

The Desperate Search for a Silver Lining In the June Jobs Numbers

Washington Post blogger Sarah Kliff tried to find a silver lining in the weak June jobs report. She pointed to the 0.1 hour increase in the length of the average workweek and the 6 cent increase in the average hourly wage. This is not much on which to hang your hat.

The length of the average workweek slips up or down by 0.1 hours pretty much at random. In fact it had fallen by 0.1 hour to 34.4 hours in May, after having been 35.5 hours for several months. This is hard to get very excited abou...

The NYT and WAPO Don't Think Workers Should Have Any Savings When They Retire

They may not realize this fact, but that is the logical implication of comments in both the NYT and Washington Post articles on the Friday jobs reports. Both papers complained that high debt burdens are depressing consumption, which would otherwise lead to more demand and more jobs.

In fact, the saving rate is currently under 4.0 percent. In the decades prior to the stock and housing bubbles the saving rate averaged over 8.0 percent. A 4.0 percent saving rate implies that workers are accumula...