Dean Baker's Blog, page 497

Ross Douthat Demands That Progressives Restrict Themselves to Loser Liberalism

In a column discussing Charles Murray's new book, Coming Apart, Ross Douthat decries the fact the choices posed are between Murray's do nothing libertarianism and the "liberal view" that:

"there's nothing wrong with America's working class that can't be solved by taxing the wealthy and using the revenue to weave a stronger safety net."

Of course there is a more obvious progressive response that involves reversing the policies that have led to the massive upward redistribution of income over t...

The Post Carries Protectionism to a New Level

The Washington Post is widely known as a hotbed of Neanderthal protectionism, strongly supporting measures that shield highly educated professionals from international competition. This has the effect of redistributing income from autoworkers, textile workers and other people who have been subjected to international competition by deliberate policy to the highly educated workers who enjoy protection.

It carried its protectionist agenda a step further in a lengthy front page business section...

NYT on Future of Government Safety Net, Misses Growth and Health Care Stories

The NYT had a thoughtful piece on the public's greater reliance on Social Security, Medicare and other benefits. While the piece provides many useful insights into the increasing importance of these programs in people's lives and their attitudes toward them, it does miss a few key points.

First, it implies that the growth of government programs, rather than the economic downturn are the main factor behind the current deficit:

"Politicians have expanded the safety net without a commensurate...

Patents are Not Free Trade, #24,567

The Washington Post has an interesting piece about opposition to a trade pact between the European Union and India which could limit the ability of India to supply generic medicines for treating AIDS and other diseases. The article repeatedly refers to the agreement as a "free-trade" pact.

This is 180 degrees wrong. Patent protection is the opposite of free trade. It is a government granted monopoly. Patent protection is a government policy for supporting innovation. Just as trade protection ...

Trade Deficits and National Income Accounting for Deficit Hawks

The trade deficit jumped by $1.8 billion in December, putting the monthly deficit more than $8 billion above its year ago level. This item got almost no attention from the business press. If there were articles on the rise in the WSJ and NYT, I couldn't find them. The Post did have a somewhat respectable piece, which ran in the business digest in the print edition.

It is remarkable how little attention is given to the trade deficit by people who routinely get nearly hysterical about the...

Trade Deficits and National Income Accouting for Deficit Hawks

The trade deficit jumped by $1.8 billion in December, putting the monthly deficit more than $8 billion above its year ago level. This item got almost no attention from the business press. If there were articles on the rise in the WSJ and NYT, I couldn't find them. The Post did have a somewhat respectable piece, which ran in the business digest in the print edition.

It is remarkable how little attention is given to the trade deficit by people who routinely get nearly hysterical about the...

BusinessWeek Tries to Inject Humor Into the Stimulus Debates

BusinessWeek decided to take a shot at Paul Krugman. Okay Krugman, like everyone else in public debate, is fair game. But if they can find a reporter who knows a little economics they might better serve their readers by constructing a little scorecard.

Krugman (along with a few other Keynesian types out here) has staked out very clear positions on a number of key economic issues such as the size of the stimulus, the impact of deficits on interest rates, and the impact of quantitative easing o...

USA Today and Marketing Scams on Household Income Measure

Short-term measures of real family income are driven primarily by sampling error and erratic movements in the consumer price index. The latter is mostly due to fluctuations in energy prices.

This is the reason that most economists, unlike USA Today, would not take seriously a report showing a large gain in median family income in the last four months of 2011. The main reason for the sharp rise in income shown in this report is likely the sharp drop in the consumer price index over this...

People Do Have Ideas on Reducing Inequality of Income/Education, They Just Don't Get Mentioned in the New York Times

The NYT had an interesting article reporting on new research showing a sharply growing gap in educational outcomes based on the income of children's parents. While the racial gap has fallen sharply, this income gap has exploded.

The discussion of this research was quite valuable, however the second part of the article was devoted to telling readers that nothing can be done. For example, article concluded by presenting the views of Douglas Besharov, a fellow at the Atlantic Council who was...

The Housing Market is Recovering from a Bubble, It Is Not In a Slump

The Washington Post still seems to not have seen the housing bubble. A front page article refers to a housing "slump" and discusses the possibility that the states' settlement on foreclosure practices will heal the housing market.

These sorts of comments imply that it is plausible that the housing market will somehow bounce back to its bubble levels of prices and construction. It isn't.

The bubble led to house prices in many parts of the country that were completely out of line with the...