Dean Baker's Blog, page 522

Will Cutting Social Security and Medicare Help Congressional Approval Ratings?

In an article noting that some Republican members of the supercommitttee are willing to raise taxes, the Washington Post told readers that Republicans might be willing to make concessions on taxes because they are:

"wary of Congress's dismal approval ratings are loath to appear incapable of deficit reduction."

The packages that have been talked about in the media include cuts to Social Security and Medicare, both of which are likely to be highly unpopular. It is not clear that members of...

The NYT Gets the Story Wrong on College Grads Returning Home

The NYT had an interesting piece discussing the large number of college graduates who have moved back home with their parents because they have been unable to find jobs. While this is an important economic and social trend, some of the numbers are clearly not right.

For example, it cites Mark Zandi as saying that the average new household adds $145,000 in output to the economy. The median household income is approximately $50,000. Most new households have incomes that are well below the...

The NYT Disappears the Housing Bubble

Way back in 2008 much of the world sank into recession because housing bubbles in the United States, the UK, Ireland, Spain and elsewhere began to deflate. This ended a boom in construction and caused consumption to plunge as the housing wealth that provided its foundation vanished.

Unfortunately, memories at the NYT are apparently weak. It told readers today:

"To the roster of pain inflicted by the European debt crisis, add this: rising and persistent joblessness among young Britons."

Of...

Tell NPR: Solyndra's Loan Was $528 MILLION, not Billion

In its top of the hour news segment Morning Edition mentioned congressional hearings where Secretary of Energy Steven Chu would testify about the loan guarantees for Solyndra, the now bankrupt solar energy firm. The segment said that the guarantees were for $528 billion. In fact, the guarantees were for $528 million. It makes a difference.

Robert Samuelson Never Heard of the European Central Bank

Who can blame him, after all it is hard to get news when you're buried away in the middle of Washington, DC. Samuelson claims that Europe can't bail itself out. He calls on the IMF to come to the rescue -- at the cost of dismantling Europe's welfare state.

Of course there is nothing wrong with Europe's welfare state, as everyone who bothers to look at the data knows. In fact the troubled countries have the weakest welfare states in Europe. The ones with the strongest welfare states, Denmark, ...

Germany's "Success" and Southern Europe's Failure

The NYT had a misleading piece contrasting the success of Germany with the difficulties facing the countries of southern Europe. The problem is not just a question of southern European countries emulating Germany, as the article implies. The problem is that Germany has acted to shut off the adjustment mechanisms that would allow southern Europe to accomplish this task

At the moment, southern Europe is not competitive with Germany, which is the cause of its large trade deficits. If these...

Keynes, Hayek, and Rand: NPR's False Symmetry

Morning Edition did a three part series featuring segments on Ayn Rand, Friedrich Hayek, and John Maynard Keynes. In addition to the fact that two of these three are extreme conservatives, the pieces create a false symmetry on the influence of these three thinkers.

Keynes' work provides the basis for modern macroeconomics. The vast majority of the economics profession works within a framework that was established by Keynes, regardless of their political leanings. The influence of Rand and...

Hot Air and the Fracking Jobs Boom

Most major news outlets have done pieces touting the jobs boom associated with fracking. The story goes that allowing this relatively new form of drilling will both lower energy prices in the United States and also lead to an employment boom in the regions where the drilling takes place. And, how do we know there will be a boom? Well, the industry said so.

It turns out that the employment boom ain't all it is cracked up to be. The environmental group, Food and Water Watch, released a report

Do Social Security Costs Have to Be "Soaring" in Washington Post News Stories?

That's the question millions are asking. In an article on the supercommittee this morning we find a sentence like:

"Republicans indicated a willingness to do so [raise more revenue], aides said, but only in exchange for additional reductions to soaring Social Security and Medicare costs (emphasis added)."

A real newspaper would have just said that the Republicans were demanding "additional reductions in Social Security and Medicare costs." That would provide the same information as the...

Why Does NPR Rely On Economic Experts Who Only See Things In Hindsight?

Morning Edition included a discussion this morning (no link yet) with WSJ economics editor David Wessel and the Economist's economics editor Zanny Mintos Beddes. When the discussion turned to housing, David Wessel said that in retrospect we underestimated the extent to which housing would be a drag on the economy.

Actually, those who understood the housing market were saying at the beginning of the downturn and before that the collapse of the housing bubble would be a serious and longterm...