Dean Baker's Blog, page 469

The Housing Market is Recovering

Good piece by Binyamin Appelbaum in the NYT. It's surprising that the positive data in recent months has not gotten more attention after so many previous false starts made the front page. Here's my take.

Are Reporters Allowed to Talk About Mexico's Economy In the Washington Post?

That is what readers of a piece on middle class support for the PRI in upcoming elections must be asking. While the piece does make a reference to the "sluggish economy," but provides no details.

In fact, Mexico's economic poor economic performance stands out in Latin America. It's per capita growth since 2000 has been less than half of the average for Latin America as a whole. While the rest of the region has seen a sharp uptick in growth after two decades of near stagnation, Mexico has not...

Consumer Confidence: Expectations Are Meaningless

The consumer confidence index is a measure that gets way more attention than it deserves. It is has two components, a current conditions index and a futures expectations index.

While the current condition index tends to be a good measure of consumer spending, it has little predictive power. In other words, if the June reading is high, then June will probably be a good month, but it doesn't tell us much about July and August.

On the other hand, the future expectations index is erratic and prov...

Maybe Spain's Banking System Isn't a Model

The NYT has a good piece on how two of Spain's top banking regulators went on to top positions at the IMF. They were hailed for their success in designing a regulatory structure in Spain that was widely praised for having designed a system that survived the 2008 financial crisis.

As it turns out, the Spanish regulatory system was not especially successful. The country had an enormous housing bubble and it was inevitable that when it burst, the banking system would face the sort of problems i...

Home Prices Are Not Low

A Washington Post article on the relatively good new home sales data reported for May made a case that the housing market is rebounding (it is). At one point it told readers that "home prices are low."

This is not true. Home prices are roughly back to their long-term trend. They are low relative to their levels of the housing bubble years (1996-2007), but not compared to the prior hundred years of U.S. history.

Ezekiel Emanuel's Plan to Share the Wealth: Go After the Social Security of School Teachers and Firefighters

I'm not kidding. We have boys and girls on Wall Street making tens or even hundreds of millions of dollars at banks that enjoy taxpayer subsidies through "too big to fail" insurance. But Ezekiel Emanuel's "share the wealth" NYT blogpost tells us how we can tap the Social Security and Medicare benefits of people who earned $70,000 a year during their working lifetime to make the poor better off. 

It's amazing how much effort the Washington gang goes through to nail workers who earned slig...

Ezekiel Emanual's Plan to Share the Wealth: Go After the Social Security of School Teachers and Firefighters

I'm not kidding. We have boys and girls on Wall Street making tens or even hundreds of millions of dollars at banks that enjoy taxpayer subsidies through "too big to fail" insurance. But Ezekiel Emanuel "share the wealth" NYT blogpost tells us how we can tap the Social Security and Medicare benefits of people who earned $70,000 a year during their working lifetime to make the poor better off.

It's amazing how much effort the Washington gang goes through to nail workers who earned slightly mor...

Pearlstein Gets Europe Half Right

Steven Pearlstein gets half of the story of the euro zone right, it will take renewed spending supported by euro-wide bonds to end the crisis. But that is only half. To restore the competitiveness of the peripheral countries, Germany and other core countries will have to see higher inflation.

We are not going to see prices actually fall in Spain and Italy. This means that if output in these countries is going to become competitive again in a reasonable period of time we will need to see infla...

Serious People Do Not Use Wealth of People Under Age 35 as a Measure of Their Well-Being

There is a well-funded effort in this country to try to distract the public's attention from the massive upward redistribution of income over the last three decades by trying to claim that the issue is one of generational conflict rather than class conflict. Billionaire investment banker Peter Peterson is the most well-known funder of this effort, having kicked in a billion dollars of his own money for the cause.

However, he is far from the only generational warrior. The Washington Post has o...

Are Military Contractors Buying Articles in the Post Now?

Readers of an article that highlighted a study by the National Association of Manufacturers warning of the loss of nearly 1 million jobs due to cuts in military spending are undoubtedly asking this question. They no doubt remember a plan cooked up by the paper's publisher, Katherine Weymouth, to sell lobbyists access to its reporters at dinners at her house. This article essentially lent the paper's authority to a completely misleading study.

The basic story here is very simple, when you are...