Dean Baker's Blog, page 472

David Brooks Says That Mitt Romney and the Republicans Are Not Very Good at Arithmetic

That probably was not his intention, but that is the only conclusion that numerate readers can take away from his column. He tells readers that:

"But many Republicans have now come to the conclusion that the welfare-state model is in its death throes."

He points to the crises in Greece, Spain, and Italy and then adds:

"In the decades after World War II, the U.S. economy grew by well over 3 percent a year, on average. But, since then, it has failed to keep pace with changing realities. The ave...

Fareed Zakaria Is Really Mad About Public Pensions!

We would probably all be mad if we were as confused as Mr. Zakaria. Fortunately, the problem is with his arithmetic, not with the public pensions.

Zakaria seems to have convinced himself that public pension obligations are going to turn state and local governments into future Greeces, but that is not what the numbers show. His column contains one inaccuracy after another.

For example, he tells readers:

"The numbers are staggering. In California, total pension liabilities--the money the state...

Matt Miller is Worried That Bill Gates' Kids Will Go Hungry

The most striking development in the United States over the last three decades is the massive upward redistribution of income. So, what do we hear about when we go to the Washington Post oped pages? Naturally, we get columns telling us that old people are going to condemn the country's youth to poverty.

The effort to divert class anger into generational resentment is a huge industry in Washington. Just by himself, Wall Street investment banker Peter Peterson has invested $1 billion in this dr...

Romney Has Claims About the Economy, the Post Does Not Know If He Has a Theory

In discussing presumptive Republican presidential nominee Mitt Romney's statements on the economy, the Post told readers:

"Romney’s theory is that keeping tax rates low would spur investment in new businesses, thereby increasing economic growth and perhaps tax revenue itself. He believes that rolling back regulations would reduce the cost of doing business and make the United States more competitive."

It is not clear that Romney has a "theory" about the economy, nor does the Post know what he...

NPR Tells Us That Harvard Boys Who Completely Missed the Bubble Think That Housing Is Looking Up

In Washington the definition of an expert is someone who can be wrong all the time and still be an expert. The folks at the Joint Center for Housing Studies at Harvard are clearly experts.

The Joint Center gained notoriety in the last decade for completely missing the bubble, dismissing those of us who tried to warn that homebuyers in the years 2002-2007 were taking serious risks. Here are a couple of choice comments [thanks to Ben Zipperer].

"So that leads us to the conclusion that while dou...

Labor's Share Has Declined Across Europe

Harold Meyerson has a good column on the impact of the decline in unionization on the middle class. However he makes a mistake in saying the the labor share of income has only declined in the United States and crisis countries in the euro zone. Actually, if we go back to 1980, the labor share of income has declined pretty much everywhere in Europe, although there are differences across countries. In many countries the decline in labor shares has been larger than in the United States. (Meyerso...

Germans Flunk Economics 101

Hans-Werner Sinn, thepresident of the Ifo Institute and the director of the Center for Economic Studies at the University of Munich, compellingly argued that the euro cannot survive in an oped in the NYT this morning. That probably was not his intention. But as one of the respected economic voices in Germany, he showed how completely oblivious that country's economic policy makers are to the steps that would actually be needed to address the euro crisis.

Mr. Sinn lays out how much money Germa...

The Stock Bubble Created the Budget Surplus: Not Bill Clinton's Tax and Spending Policies

Bruce Bartlett is a decent person and an honest economist. A former Reagan and Bush I administration official, he now regularly berates Republican politicians for making nonsensical assertions about the economy. However in his NYT blogpost today he may go a bit overboard in telling readers:

"The projected surplus was primarily the result of two factors. First was a big tax increase in 1993 that every Republican in Congress voted against, saying that it would tank the economy. This belief was...

Romney's Education Agenda: Beliefs Do Not Replace Policies

The NYT reports that Governor Romney will strongly push school vouchers if he gets into the White House. It told readers:

"Now Mr. Romney is taking his party back to its ideological roots by emphasizing a lesser role for Washington, replacing top-down mandates with a belief in market mechanisms."

Top down mandates are a policy. The policy is not replaced with beliefs, it is replaced with other policies. In this case, the piece tells us the policy is a voucher that can be used for private scho...

Romney's Education Agenda; Beliefs Do Not Replace Policies

The NYT reports that Governor Romney will strongly push school vouchers if he gets into the White House. It told readers:

"Now Mr. Romney is taking his party back to its ideological roots by emphasizing a lesser role for Washington, replacing top-down mandates with a belief in market mechanisms."

Top down mandates are a policy. The policy is not replaced with beliefs, it is replaced with other policies. In this case, the piece tells us the policy is a voucher that can be used for private scho...