Dean Baker's Blog, page 493

Secret Commerce Department Report Shows the Economy May be Faltering

Actually, it wasn't secret, it's right here on the Census Bureau's website, but for some reason no one in the media thought it was worth reporting a drop in durable goods orders of 4.0 percent in January. I am always the first to say that we should not make too much of any single report. Monthly data are often erratic and if one report seems out of line with most other data, odds are that the report was driven by some flukish factor or just sampling error.

Nonetheless, this is a big drop...

China's Premature Aging Process: Another Arithmetic Failure at the Washington Post

The Washington Post is absolutely obsessed with the costs of an aging population and it refuses to let arithmetic stand in the way. Today it ran an editorial complaining about China's "premature social aging process, saddling China with a large dependent elderly population before it's truly rich enough to support it."

As the piece correctly notes, China has had very slow population growth over the last three decades by deliberate design, primarily its one child policy. While some results of t...

Local Governments Argue That Financial Markets are Highly Monopolistic

The Washington Post told readers that local government officials complained about the monopolistic nature of U.S. financial markets in an article on the Volcker Rule. The article reported that a number of local government officials complained that the Volcker Rule would force them to pay higher interest rates on their bond issues.

While the article never discussed the issue of monopolistic markets, this is what the complaints by these officials imply. If the markets were highly competitive...

The World Bank's Advice to China on Growth

It is striking that the reporters can write about recommendations from the World Bank or International Monetary Fund to China about sustaining its growth, without any comment on the irony. These institutions have been making policy recommendations for six decades that have often not resulted in much growth at all. In some cases, most notably the situation of Argentina following its default in 2001, they have been astoundingly wrong. Therefore it is impressive that Washington Post can report

Joe Nocera Claims Fracking Raises U.S. Greenhouse Gas Emissions by Almost 20 Percent

In his column today, which argues for responsible fracking, telling readers that there can be enormous gains from using cleaner techniques in fracking. In discussing the importance of reducing fracking related methane emissions Nocera comments:

"How big a difference will it make to the environment if industry can minimize methane leaks? A lot. ... Suppose, for instance, the current leak rate turns out to be 4 percent. Suppose we then reduce it in half. That would mean an immediate reduction i...

There Was No Bowles-Simpson Commission Report

The New York Times badly misled readers by repeatedly referring to a report of the deficit reduction commission led by former Senator Alan Simpson and Morgan Stanley Director Erskine Bowles. There was no report from this commission.

The report discussed in this article was exclusively the report of the co-chairs. It did not receive the necessary support of 14 members of the commission that would have made it an official commission report, a point noted only in passing toward the end of the...

Wages and the Lottery

Adam Davidson has an interesting piece about how many low-paying jobs have a sort of lottery component where people are willing to accept low wages for a period of time in the hope that they will end up having a very high-paying job in the future. The best example of this sort of lottery system is probably the motion picture industry in Hollywood, where many people will spend years working in low-paying jobs in the hope that at some point they will make it big as an actor or director.

The...

Thomas Friedman Goes Euphoric on Energy Production

Correcting Thomas Friedman can keep anyone busy. Today he is excited about the prospect of the United States joining the Organization of Petroleum Exporting Countries. That sounds like a great idea for a country that imports close to 9 million barrels of oil a day.

The basis for his excitement is that the United States is becoming somewhat less dependent on foreign energy imports. The main reason for this is the increased production of natural gas from shale deposits. However it is not clear ...

There is No Shortage of Rental Housing and Rents Are Not Rising Rapidly

The NYT told readers that a shortage of rental housing is driving up rents. This is wrong and wrong.

The NYT story is that the flood of foreclosures has forced people out of their homes and led them to look for rental housing. While this is true to some extent (homeownership rates have fallen), former homeowners would have discovered that there was a glut of rental housing.

Furthermore, ownership units can become rentals and vice-versa. This is true even for multi-family units, but 30...

President Obama Doesn't Just Say We Are Producing More Oil, We Are Producing More Oil

The NYT did some heavy-duty he said/she said reporting on the issue of gas prices and energy production. It devoted an article to President Obama's efforts to counter Republican complaints about high gas prices.

The article told readers:

"The president said that the United States is producing more oil now than at any time during the last eight years, with a record number of rigs pumping."

President Obama did not just say this, it also happens to be true. There are reasons that people may not ...