Dean Baker's Blog, page 50

Combatting Global Warming and Austerity

In the United States, proposals for a Green New Deal have been getting considerable attention in recent months as activists have pressed both members of Congress and Democratic presidential candidates to support aggressive measures to combat global warming. There clearly is much more that we can and must do in the immediate future to prevent enormous damage to the planet.

However, major initiatives in the United States to combat global warming will almost certainly require some increases in t...

News Flash: Job Loss from Automation and Addressing Climate Change Are Opposite Problems

"The idea of guaranteed income is gaining traction, from the presidential debate stage to Silicon Valley, where tech titans such as Mark Zuckerberg and Elon Musk have promoted it as a way to fend off a gloomy future in which automation and climate change eliminate millions of jobs."

This came up as a throwaway line in an article about a trial program for a guaranteed basic income. The problem is that the type of of job losses being described here are 180 percent opposite from each other.

Job...

Megan McArdle and the Washington Post Are Upset About Public Pensions and Budget Deficits

It is widely known that for Washington Post columnists writing on economics, ignorance is an asset. Megan McArdle helps make the case in a piece on Chicago’s pensions that tells readers in its headline:

“Chicago kept saying it would pay for pensions later. Well, it’s later.”

The gist of the piece is that Chicago has seriously underfunded public pensions. This is true. Where McArdle combats reality is in implying that this sort of underfunding is typical for public pensions and also that the s...

No Recession for 2020

These days the business press is full of predictions of recessions. This could get people worried, except that the track record of economists in predicting recessions is basically awful. As much fun as a bunch of scary warnings from economists is, it is best to look at the data.

At the most basic level it is important to recognize that some sectors are very cyclical, meaning they grow rapidly in upturns and fall sharply in recessions, and others tend not to fluctuate very much over the course...

The Incentive for Pushing Opioids: Patent Monopolies

It's probably too simple and obvious to be worth mentioning, but it seems none of the news coverage on the suits against opioid manufacturers say that the reason that companies like Purdue Pharma and Johnson & Johnson had so much incentive to push their drugs was that the government gave them patent monopolies that allowed them to sell their products for prices that were far above the free market level. While generic manufacturers also made money on opioids, the largest profits were made...

China Goes Generic!

The New York Times had a piece about a new law in China that reduced penalties for importing drugs that have not been approved by China's regulatory agency. While it is not clear from the piece how far-reaching this change in the law will be in practice, the potential impact for both China and the world is enormous.

India has continued to be a massive supplier of generic drugs, both to its own people, but also to the rest of the world. Many drugs that are subject to patent protection in the U...

Robert Samuelson Doesn't Like Budget Deficits

He again used his weekly Washington Post column to tell us this. Somehow, our budget deficits are supposed to be a "high-stakes gamble," although he really has no explanation as to how or why.

The standard economics story on why deficits are supposed to be bad is that they lead to high interest rates, thereby crowding out investment and slowing growth. Alternatively, if the Fed is lax and offsets the impact of the deficit by printing money, then the deficits lead to high inflation.

Fans of da...

Brazil, the Amazon, and Global Warming: It Ain't Quite What the Media Tell You

Brazil has gotten a huge amount of bad press with the fires in the Amazon with the emphasis on the harm its development policies are doing to efforts to limit global warming. While the policies of Brazil's right-wing president, Jair Bolsonaro, are disastrous, there is an important part of the story that is being left out of most discussions.

The reason that we are worried about global warming is because rich countries, most importantly the United States, have been spewing huge amounts of gree...

Media Go Trumpian on Trade

The New York Times ran an article last week with a headline saying that the 2020 Democratic presidential contenders faced a major problem: "how to be tougher on trade than Trump." Serious readers might have struggled with the idea of getting “tough on trade.” After all, trade is a tool, like a shovel.  How is it possible to get tough on a shovel?

While this headline may be especially egregious, it is characteristic of trade coverage which takes an almost entirely Trumpian view of the top...

"How Uber Got Lost," Headline Writer Badly Needed at NYT

I know that it is not always easy to write a headline for an article, but this one for a book excerpt should not have been a rush job. The piece, from a new book by Mike Isaac, describes the arrogance and stupidity by Uber and its found, Travis Kalanick. The gist of the piece (haven't seen the full book) is that Kalanick was an arrogant jerk who didn't know what he was doing, but hero-worshipping brainless investors decided that he was a visionary.

Given the argument in the piece, it is absur...