Dean Baker's Blog, page 482

Postal Service's Business Failures Might Have Something to Do With Political Connections of Competitors

A NYT article on the financial difficulties of the Postal Service concluded with a comment from Art Sackler,  the chairman of the Coalition for a 21st Century Postal Service:

"They haven’t had a good track record when it comes to developing new lines of business."

This organization is identified as "a mailing industry group that includes companies like FedEx."

It might have been worth reminding readers that FedEx and UPS have in the past used their political power to limit the ability of...

The Washington Post Doesn't Like Populist Governments in Latin America

In keeping with its new journalism model of eviscerating the distinction between news and editorial positions, the Washington Post told readers in a news article that “populism is running out of gas in Latin America,” using the words of Arturo Porzecanski, a Uruguayan economist who teaches at American University in Washington. Mr. Porzecanski is one of several critical voices used as sources for the piece. (The only statement from a supporter of the populist governments is a comment from Vene...

European Budget Deficits Did Not "Balloon" in the Credit Bubble of the Last Decade

Fox on 15th Street is on the loose again. A Washington Post article on renewed worries over European sovereign debt referred to:

"massive cuts in government spending aimed at reducing deficits that ballooned during the credit bubble of the past decade."

No, the deficits did not balloon during the bubble. Greece and Portugal did run large deficits in the bubble years. However Italy's debt to GDP ratio was falling and the other two crisis countries, Spain and Ireland, were running budget surplu...

Preemptive Strike: Don't Panic About Unemployment Claims

As I've complained in the past, the media frequently make too much of a single week's data on unemployment claims. There will likely be some tendency to hype the fact that last week's claims were reported today as 380,000 [corrected --thanks David G.], well above the consensus expectation of 355,000.

Before the exaggerations were on the positive side, today they are likely to be on the pessimistic side. Remember folks, it is just one week's worth of data. The numbers are erratic and are...

The Moment of Truth: Post Tell Readers We Should Only Care About Business Concerns

There have been many people who have suggested that the Washington Post has a pro-business bias. The Post seemed to confirm that view in a piece on the first-day as president agenda outlined by Mitt Romney, the presumptive Republican presidential candidate.

It noted that Romney said he would demand that China raise the value of its currency as one his day one items. It then told readers:

"But some China experts say Romney would nevertheless be risking a backlash from the Chinese — over an...

Tax Fraud Is Not A Healthy Basis for Growth

The NYT wants readers to be sympathetic to countries that set themselves up as tax havens for corporations who would rather not pay their taxes. In a piece on the problems facing the Cypriot banking system the NYT told readers that the Cyprus does not want to turn the European Union for a bailout of its banking system because:

"In return, the Union might demand that Cyprus raise its 10 percent tax on corporate profits, a crucial selling point and key to an economy based on financial and...

Can Someone Tell the NYT About the Chinese New Year?

After last month touting the fact that China's trade surplus had plunged, the NYT  reports that in March:

"Exports surged last month, helping to produce an unexpected trade surplus of $5.35 billion in March, according to government data released Tuesday."

This one is getting really painful. If we do some deep investigative reporting and look at chart accompanying the article we notice a sharp dip in exports every February which is followed by a big jump in March. Now we might think that...

Since When Did Unionized Autoworkers Become Republican and Family Farmers and Doctors Become Democrats?

When David Brooks is not busy trying to destroy Social Security, he is often making grand pronouncements that make no obvious sense. Today he tells readers that the economy is being divided into an efficient globally competitive sector that has lots of productivity gains but few jobs and a moribund sector that is uncompetitive but has lots of jobs. The distinction is not especially new (or accurate), but Brooks adds the twist:

"Republicans often live in and love the efficient globalized...

Robert Samuelson Shows that the Post Has no Fact Checkers on Its Opinion Pages

Social Security and Medicare are hugely important for the security of the non-rich population of the United States. For this reason, Robert Samuelson and the Washington Post hate them.

As we know, this is a question of basic political philosophy. In the view of Samuelson and the Post, a dollar that it is in the pocket of low or middle class people is a dollar that could be in the pocket of the rich. And Medicare and Social Security are keeping many dollars in the pockets of low and middle...

The Secret Source of Economic Weakness: The Trade Deficit

I know, it isn't really secret. The Commerce Department publishes data on the trade deficit every month, but given the extent to which it is ignored in economic policy discussions, as for example in this otherwise thoughtful NYT column, it might just as well be secret. 

The basic story is incredibly simple. If we are buying more from abroad than we are selling, this means that we have negative national saving. If we have negative national saving, then either the public sector must have...