Dean Baker's Blog, page 515

Robert Samuelson Does Some Serious Fed Apologetics

The Federal Reserve Board is a perverse animal. While ostensibly a public institution, the banking industry has the extraordinary privilege of being able to pick 5 of the 12 members of its most important governing body, the Open Market Committee (FOMC). The banks also get to have 7 other representatives sit in on the FOMC's secret meetings. Given this structure, it is not surprising that people who do not believe that the banks necessarily place the interest of the general public first are...

The Washington Post Tells Readers that a Climate Deal with no Binding Caps is Catching Up With Reality

That's right, if you thought there was some urgency to do something about climate change the Post is now telling you the opposite. It told readers that the agreement that came out of the Durban talks, which includes no binding commitments:

"shows that the byzantine negotiations which have steered global policymaking on climate for two decades are now catching up with reality."

The agreement does propose a plan that will eventually impose limits on emissions by fast growing developing...

President Obama Wants Credit for Avoiding a Great Depression: Where Is the Ridicule?

In its top of the hour news segment NPR reported that President Obama hoped that voters would give him credit for avoiding a second Great Depression. If this is an accurate representation of what President Obama said then it should have devoted a segment to economists ridiculing the president for trying to set an unbelievably low bar for measuring the success of his economic policy.

The first Great Depression was the result of a decade of inadequate policy responses. The massive spending...

Budget Numbers Without Meaning

It is unlikely that many NYT had any idea of the meaning of the numbers in an article on various budget issues, such as adjusting the Alternative Minimum Tax for inflation and increasing doctors' payment under Medicare. None of them are put in any context, for example expressing them as a share of the budget. In many cases, it is not even clear how many years spending would be affected by the measure.

This is a classic Washington fraternity type piece. The article reports on these numbers in ...

Is Associated Press Working for the Fracking Industry?

That's what millions of readers are asking after seeing a piece that asserted:

"The vast Marcellus and Utica shale formations are already paying off in thousands of wells in Pennsylvania and West Virginia, bringing great wealth to landowners and jobs throughout the region."

Actually, the industry has created relatively few jobs in Pennsylvania and many of the jobs that it has created have gone to out of staters, providing little benefit to the people in the regions where fracking is taking p...

Maybe Merkel and the ECB Want to Weaken Labor

If someone has a gun and is shooting it repeatedly at another person, we might infer that the shooter wants to kill this person. In this vein, how could it never occur to analysts that the purpose of Chancellor Merkel and the ECB's policy of austerity across Europe is to permanently weaken the power of labor across the continent.

It is hardly a secret that workers can be forced to make concessions on wages and benefits in periods of high unemployment. The power of workers will be further...

Thomas Friedman Is Flat: More Nonsense on Economics In the NYT

The NYT continues its policy of affirmative action for people ignorant of the world by allowing Thomas Friedman to write two columns a week on whatever he chooses. Today he talks about the job crisis.

He does get some things right in pointing out that we have a huge shortage of jobs. He also notes the growing crisis posed by long-term unemployment in which millions of people are losing their connections to the labor market and risk being permanently unemployed.

However he strikes out in his d...

The Washington Post Just Can't Resist Editorializing About Fiscal Policy in Its News Section

Fox on 15th yet again did some heavy editorializing in a front page story on the euro zone crisis. It referred to the plan to constrain debt as an effort to create an institutional structure that will:

"slap automatic penalties on governments that recklessly spend and borrow."

How did the word "recklessly" get into this article and why did it make it past the Post's editors? The point is that if the penalties are automatic, then they will not distinguish between countries that borrow...

Why Is Anyone Asking Why We Don't Have Enough Jobs?

If we see a car that runs into a brick wall at 80 miles an hour, we don't ask why its front end is messed up. In this same vein, why on earth would be looking for a reason for a lack of jobs in an economy that has a gap of close to $1 trillion a year in annual demand.

This is what Robert Atkinson does in a column in the Huffington Post. If we take him at face value, Atkinson is actually confused about the reason that the economy is lacking jobs. He must have missed the housing bubble and its ...

Larry Summers' Poor Memory on the IMF

Larry Summers, who was Treasury Secretary under President Clinton and a top Obama economic advisor, apparently has forgotten the IMF's role in the world economy. In an oped column he told readers that:

"From the problems of Britain and Italy in the 1970s, through the Latin American debt crisis of the 1980s and the Mexican, Asian and Russian financial crises of the 1990s, the IMF has operated by twinning the provision of liquidity with strong requirements that those involved do what is...