Dean Baker's Blog, page 471

The Left, and People Who Know Arithmetic, Always Said the Stimulus Was Inadequate

Dana Milbank devoted his column to the disenchantment of progressives with the current political situation. At one point he comments that:

"the still-lumbering economy has depressed President Obama’s supporters."

While this is no doubt true, it is worth mentioning that just about all progressives said at the time that the stimulus would be inadequate to restore the economy to a healthy growth path. The collapse of the housing bubble destroyed close to $1.2 trillion in annual demand from const...

The Money Should Come from the ECB, Not Germany

The NYT had two pieces today discussing the euro zone crisis, both of which implied that additional funds to support the peripheral countries will have to come from Germany and other core countries. Actually, this route would be problematic because at some point even Germany's credit would be called into question.

The key to restoring the euro zone to stable growth would be to have the European Central Bank (ECB) back up the debts of the euro zone countries. This would immediately restore the...

Someone Has to Tell Mitt Romney That He Supports a Lower Valued Dollar

In an article on the likelihood that the Fed would take steps to boost the economy at its meeting this week the NYT gave readers Governor Romney's assessment of Fed actions to boost the economy. The article tells readers:

"As for the consequences [of measures to boost the economy], Mr. Romney said the program was 'not extraordinarily harmful, but it does put in question the future value of the dollar and it will obviously encourage some inflation down the road.'"

Romney has repeatedly said th...

Robert Samuelson Doesn't Like the Affordable Care Act

That's what he told us in a column that purported to show why Obamacare is bad for the economy. While he gave a list of reasons as to why the bill is bad policy, since his list doesn't hold much water, we are primarily left with the conclusion that Samuelson simply doesn't like the bill.

Reason #1 is that the Affordable Care Act (ACA) "increases uncertainty and decreases confidence when recovery from the Great Recession requires certainty and confidence."

I know this is a Republican talking p...

The Race Between Brazil and Mexico: Is It Close?

The NYT told readers that Mexico looks set to surge past Brazil in its growth rate in the years ahead. It notes the fact that it grew more rapidly last year and looks set to grow more rapidly again in 2012. It is worth noting that Brazil grew considerably more rapidly since 2000, so Mexico would have a long way to go to make up lost ground, although its initial GDP was considerably higher than Brazil's.

[image error]

Source: IMF.

It's also worth noting that Mexico's 3.9 percent growth rate for 2011, whic...

Start-ups and Job Creation

There was a lengthy and pointless debate that began in the early 90s over what sized businesses created the most jobs. The original story was that small businesses created the most jobs. This turned out not to be true on more careful investigation, since small businesses also lost the most jobs. There were various twists and turns in the academic literature before most economists came to the conclusion that businesses of all sizes on net create jobs at roughly the same rate.

While this debate...

Obamacare Without the Mandate, WAPO Misrepresents Washington State Example

The Washington Post had a piece that looked at the experience of Washington State to see what might happen with President Obama's health care plan if the mandate is struck down. Washington State provides an interesting model because it had established a similar model of health care reform in the early 90s.

While the initial plan did have mandates, these were never put into law. As a result, people could opt to not buy insurance until they actually had serious medical problems. Many people wen...

The Cure for Budget Deficits: Train More Deficit Hawks

The United States has more than 25 million people unemployed, underemployed, or out of the labor force altogether because of the weak economy. Investors are willing to make long-term loans to the country at 1.5 percent interest. The idea that the budget deficit should be the country's major concern is close to loony, but nonetheless in policy circles that seems to be the case.

This is best demonstrated by Niall Ferguson's nutball column in the Financial Times, which we are warned is only the...

Andrew Kohut Doesn't Know How to Read His Own Data

That arguably should have been the headline of a Post segment discussing the release of new polling data from the Pew Research Center, which Kohut heads. The Center's poll asked people a series of questions about the budget, taxes, and various programs. Most people answered that they viewed the deficit as a major concern. They were also strongly supportive of all major areas of federal spending with the exception of the military. In the case of military spending, there were almost equal numbe...

Dana Milbank: Jamie Dimon Is an Expert on the Impact of the Debt on the Economy

Those of you who thought that Jamie Dimon, JP Morgan's CEO, was only good at blowing billions of dollars in risky bets, will be surprised to discover that he is also an expert on the impact of the government debt on the economy. That at least is what Dana Milbank would have us believe.

Milbank commented that President Obama is:

"hoping to limp to a second term without addressing the looming debt crisis — which, as JPMorgan Chase’s Jamie Dimon told Congress this week, has contributed to today’...