Dean Baker's Blog, page 480

Geithner Decides to Focus on Business Concerns at the Expense of Workers in Negotiations With China

That would have been an appropriate headline for a Washington Post article that essentially told readers that Treasury Secretary Timothy Geithner would focus on issues that matter to business in his discussions with Chinese leaders. The most important issue for workers in dealing with China is a drop in the value of the dollar relative to yuan.

This would reduce the price of U.S. exports to people living in China and make imports from China more expensive. The would lead to more exports and f...

Italy Locks Up Journalists to Promote Press Freedom

Actually, they did not do this (as far as I know), but if the government ever asserted that its motive in locking up journalists to prmote freedom of the press, presumably the NYT would not just take this assertion at face value. This is why readers must be scratching their heads over the assertion that:

"Aiming to ease budgetary pressure and spur growth, Prime Minister Mario Monti of Italy has announced cuts to state spending by the end of the year."

Of course budget cuts will typically lead...

The Stability Treaty Would Have Done Nothing to Prevent Ireland's Current Crisis

That fact should have mentioned prominently in an NYT article discussing the debate over the adoption of the European Union's stability pact by Ireland. The pact only places restrictions on deficits and debt in the public sector.

However Ireland had no problem with debt or deficits in the public sector, it was running budget surpluses until the crisis hit and it had a very low ratio of debt to GDP. Ireland's problem was the buildup of massive private sector debt, which fueled an enormous hous...

Homeownership Rate Plummets and NYT and Post Don't Notice

Every quarter the Census Bureau puts out data on vacancy rates and homeownership. For some reason, this release is almost always ignored.

This is unfortunate because it often contains very useful information on the housing market. One of the reasons that I could be so sure that we were seeing a bubble when house prices started diverging sharply from historic trends was that the vacancy rate was reaching record levels as early as 2002. As we learn in advanced economics, excess supply is suppos...

Fun Facts About Representative Ryan

The NYT ran a profile of House Republican Budget Committee Chairman Paul Ryan today. It misrepresented some important features of Representative Ryan's budget plan.

For example, while it told readers that the plan would, "reduce domestic federal spending to its smallest share of the economy since World War II." it failed to point out that it would essentially eliminate all areas of the federal government, except Social Security, Medicare and other health care spending, and the military.

The C...

The Power of the Rich Is Measured by their Income, Not Just Their Taxes

Robert Samuelson somehow concludes that the rich don't have disproportionate influence on policy because the top quintile pays almost 70 percent of federal taxes. It is difficult to understand the logic of this one.

The rich don't just lobby for lower taxes, they also lobby for rules that redistribute before tax income upward. For example, patent monopolies on prescription drugs redistribute roughly $270 billion a year from the public as a whole to drug companies in the form of higher drug pr...

Washington Post Gives Scary Demographic Story About Japan, Again

The Washington Post has a practice of running a story ever month or so about Japan facing a demographic nightmare because its population is living longer. The idea is that this will impoverish the nation's youth, imposing a crushing burden for caring of the elderly. Of course those who know arithmetic know better.

This month's feature began by telling readers:

"The ominous demographics of this aging nation have long been seen by Japanese as a distant concern, not a present-day one. But that m...

The Washington Post Continues Its Love Affair With NAFTA and Disdain for Facts

The Washington Post was a strong supporter of NAFTA at the time the deal was approved. It continues to be a strong defender of the pact nearly two decades later. It has repeatedly shown itself willing to make up facts or just ignore them to push its pro-NAFTA line.

An example of the former occurred in December of 2007 when its lead editorial criticized the leading Democratic presidential candidates for saying that they would renegotiate NAFTA. The editorial told readers that not only had NAFT...

"Skilled Workmen in Demand Despite Vast Unemployment"

That was the headline of a Washington Post article (March 13, 1935, p 22). The subhead was, "technological progress has been so rapid during the depression that welders and other experts, idle since 1929, are outmoded." The first paragraph told readers:

"unemployment may run into the millions, but as the iron, steel, and metal-working industries improve, a scarcity of skilled workmen is developing, states the magazine Steel this week."

This shows that technology might change rapidly, but econ...

Brooks Does the Big Lie on Stimulus (with no shame)

David Brooks is playing the "it's all so confusing, we just can't really know anything about economic policy" game. The point is to try to make it intellectually respectable to question whether stimulus spending can boost the economy.

This is important for the right, because the evidence from the austerity induced double-dip in the UK and euro zone is making it ever harder to deny that government spending can and does stimulate the economy just as the old textbook models predict. In the wake...