Dean Baker's Blog, page 505

The Industry's Invented Numbers on SOPA Are Not Facts

The NYT presented as fact the the movie and entertainment industry are losing $58 billion a year due to the lack of enforcement of copyrights. This is simply a number invented by the industry. It is almost inconceivable that the industry would gain even 20 percent of this amount if all unauthorized copies could be eliminated. (Current revenue from DVD sales and downloads are around $10 billion and recorded music around $6 billion.)

Furthermore, insofar as households are forced to pay more...

Zakaria Gets the Story Half Right on Workers and Jobs

Readers don't expect much from the Washington Post when it comes to economic issues, so it is notable when an opinion column gets issues at least half right. In that vein, Fareed Zakaria's piece today noting the ways in which Germany seems to be outperforming the U.S. is worthy of attention. 

First, let's note a couple of the things he gets wrong. Zakaria touts the growth in exports under President Obama, claiming that they have been growing at a 16 percent annual rate. He tells readers that ...

Activist Supreme Court Makes Government Bigger

The NYT reported on a Supreme Court ruling that retroactively granted copyright protection to foreign works that had previously been in the public domain. As Justice Breyer argued in dissent, this action appears to exceed the constitutional authority given to Congress, which ties copyrights to a specific public policy goal:

"to promote the progress of science and useful arts."

In this case, since the copyright is explicitly being applied retroactively to work that has already been produced...

The NYT, SOPA and Jobs: Where Was the Truth Vigilante?

The NYT's truth vigilante was apparently sleeping when the paper printed without comment the Motion Picture Industry's claim that the country lost 100,000 jobs due to on-line "piracy." The truth vigilante would have pointed out that the money that consumers do not spend paying for copyright protected work is available to be spent in other areas. The payments for copyright protected items have the same effect on the economy as a tax, they pull money out of the economy. While some of this may e...

NPR Doesn't Like the 35 Hour Work-Week in France

Morning Edition did a segment this morning (sorry no link yet) on the 35 hour work week in France. To show how bad the 35 hour work week is, the segment told listeners that hospital workers had accumulated 2 million days worth of overtime, which they will have to take as days off by the end of 2012. It warned that this would force hospitals to shut down for months at a time.

Most listeners would have little ability to assess the risk from taking this many days of leave since they probably...

Economics Lesson for Senator Leahy

Senator Patrick Leahy, the sponsor of the Protect Intellectual Property bill, claimed that if Congress rejected his bill it would "cost American jobs." This is almost certainly not true.

Insofar as individuals are able to able to gain access to copyrighted material for which they would otherwise have to pay, they are able to save money. This if effectively the same thing as a tax cut, putting more money in their pocket, the vast majority of which will be spent on goods and services in their c...

Numbers in Space on Taxes and Spending

The NYT went overboard in an effort to present numbers in no context whatsoever when it discussed efforts to pay for the extension of the payroll tax cut for the rest of 2012. The article discusses the cost of various spending cut proposals without putting them in any context whatsoever, including even the number of years involved.

For example, it told readers that requiring a Social Security number to claim the child tax cut would save $9.4 billion according to the Congressional Budget...

The Non-Mystery of Slow Job Growth

The Wall Street Journal had a bizarre article about capital investment and robotics to explain the slow job growth in this recovery. There actually is a much simpler explanation, it's called "slow growth."

Productivity growth has averaged close to 2.5 percent since 1995. That means the economy must grow at a 2.5 percent rate just to keep labor demand constant. If it grows slower than this, we expect the demand for labor to fall and the number of jobs to decrease or the average number of...

Why Should People in the United States be Concerned About Getting Lower Cost Engineering Services?

The Wall Street Journal wants us to be worried that we will be paying less for our shoes, clothes, and engineering services. Actually, they only want us to be concerned about the last of these three, although it never tells us why.

It had an article the point of which is to warn readers that engineering is increasingly being outsourced to Asia. This may be bad news to people who hope to work in engineering, but for the rest of us, it means cheaper products, just as buying clothes and shoes...

Is an Identity Crisis Worth 10 Percentage Points of Unemployment?

That's the question that the Washington Post is implicitly raising for readers in its discussion of Iceland's recovery from the recession. The piece notes that Iceland's unemployment rate is 7.0 percent. It doesn't make the comparison to other crisis-afflicted countries which have unemployment rates well in the double-digits, with Spain leading the pack at 22 percent.

In general the piece does paint a reasonably positive picture of Iceland's economy, but it warns readers that:

"It's tempting ...