Dean Baker's Blog, page 478

Outstanding Piece on German Labor Markets In Washington Times

The Washington Times showed that it can do serious reporting. This piece on the German labor market is solidly researched and carefully written. At last, the nation's capital has a real newspaper.

The Washington Post Has Not Heard of the Federal Reserve Board

That is what readers of a front page article on the impact of austerity in Spain must have concluded when the Post told readers:

"The tensions between tackling runaway deficits and stimulating the economy are in many ways akin to those facing the United States, where political leaders are struggling to agree on the right balance."

Actually, the problems facing Spain and the U.S. are not comparable, most importantly because the United States issues its own currency and Spain does not. This is...

How Did AP Determine that the Scheduled Cuts to the Military Budget Would be "Crippling?"

That is what readers of an AP article on the impact of budget cuts stemming from last year's agreement must be wondering. The first sentence of the piece told readers that:

"Moving to protect the military from a crippling wave of budget cuts next year, a key House committee voted Monday to cut instead food aid, health care and social services like Meals on Wheels."

The piece would have been more informative if it had avoided editorializing by including the word "crippling." That assessment is...

Spanish Debt, the European Central Bank, and the Maginot Line

The NYT had an article that reports on the high level of corporate debt and indebtedness in general in Spain. The article gives a measure of the total debt to GDP in Spain and then compares it to the ratios in other countries.

This is a confused way to assess the issue. Debt by itself will reveal nothing about the state of an economy. Debt is also an asset.

Suppose every household in the United States lent $300,000 to the household on its left. (We are going to make the United States a circle...

France's 35-Hour Workweek is "Much Criticized" In the Washington Post

A Washington Post article on the likely composition of France's new socialist government mentioned Martine Aubrey, a former minister, who it identified as the main proponent of "the much-criticized 35-hour workweek in the 1990s." There is probably no major policy change that could not be described as "much criticized," however they generally do not appear with this characterization in the Washington Post and other major news outlets.

In fact, the 35-hour workweek has proven to be hugely popul...

Germans Hold Incoherent Views On Greece and Southern Europe

It would have been useful to include this fact in an article on how Germans are losing patience with Greece. Germany has been anxious to build up and preserve its export market in southern Europe. However if Germany wants to have an export surplus with these countries, as it does, then it must lend them money. There is no logical way around this.

For this reason, it is absurd that Germans are both upset about the borrowing by Greece and other peripheral countries, but yet refuse to take the s...

The European Central Bank Is Accountable to Governments

That fact should have been mentioned in a NYT article that told readers, "few options if Europe turns from austerity." If there were a political consensus within Europe to reject austerity, the euro zone countries could call Mario Draghi, the European Central Bank (ECB) president, and tell him that he must guarantee debt and run expansionary policy or look for a new job and surrender his pension. (Which is far more generous than the ones that were cut in Greece.)

This piece might wrongly lea...

Can Anyone Say "Patent?"

Washington Post readers must be wondering after reading an article on a settlement by Abbott labs in a case brought by the Justice Department over promoting its drugs for off-label uses, in which Abbott agreed to pay $1.6 billion. The issue is that the Food and Drug Administration determines the acceptable uses for a drug. While doctors are allowed to prescribe drugs for other uses, the manufacturers are not allowed to promote their own drugs for "off-label" uses.

The Justice Department appar...

How Can an Election Result be "Shrill?"

If the Washington Post doesn't like it. That would explain the lead sentence of its lead from page story on the elections in France and Greece on Sunday:

"The shrill anti-incumbent message that has emerged from a pair of European elections carries a threat to the U.S. economic recovery and a political warning for President Obama, whose reelection prospects could hinge on whether the economy can improve."

Other newspapers might leave such editorializing for the opinion pages, but not Fox on 15...

David Brooks' Parallel Universe

Just in case you thought that the failure of austerity in the United Kingdom and across the euro zone, and its rejection by voters in France and Greece, might be cause for changing course, David Brooks has a column to tell us otherwise. He says that there are two different arguments going on over economic policy which unfortunately don't intersect.

First, we have the cyclicists who worry about silly things like 25 million people who are unemployed, underemployed or out of the workforce altoge...