Dean Baker's Blog, page 528

Sham Shareholder Elections Do Not Reveal Views on CEO Pay

The Soviet Union regularly held elections for office in which the Communist Party would win well over 99 percent of the vote. No serious person would have concluded that the Soviet leadership enjoyed the overwhelming support of its people. The elections were a joke, with no opposition allowed to participate or even to publicly criticize the government.

In the same vein, shareholder votes on CEO compensation should not impress anyone as a serious expression of shareholder sentiment. The votes ...

Washington Post Gets Even Shriller About the Deficit!

"The budget deficit is coming and its going to eat your children!" I'm sure it will not be long before we see this line in a Washington Post news story.

In an otherwise reasonable editorial urging that the dollar bill be replaced by a coin to cut down on printing costs the Post referred to "the country's financial emergency." Yes, that would be the crisis that has driven the interest rate on 10-year Treasury bonds to 2.4 percent.

The Washington Post and much of the rest of the media are...

NPR Misleads Its Listeners by Implying That it Knows What Republicans Think

Reporters should know that politicians do not always say what they think. That is why good reporters never claim to kn ow what a politician actually thinks, they only know what they say and do.

NPR badly misled its listeners this morning when political Mora Liasson said that Republicans see taxes on the wealthy as penalizing "job creators" [sorry, no link yet]. Actually, Ms. Liasson does not know how Republicans see these taxes, nor is it plausible that all of them see taxes the same way.

The...

The NYT Touts the Fact That GDP Data Show the World Did Not End

There was no reason why people who know economics would have expected a double dip recession, absent a meltdown in the euro zone. Unfortunately, policy debate tends to be dominated by people who don't fall into this category, hence the discussion of a double dip.

The unfortunate result of a debate dominated by ignorance is that a terrible 3rd quarter GDP growth number is touted as better than expected. As the NYT tells us in its headline:

"U.S. Economy Picks Up Pace, Averting a Stall."

At...

E.J. Dionne Understands Zero Economics

There is a caricature of political debate that the right has invented whereby conservatives claim to be supporters of free markets whereas progressives want government regulation. This was always utter nonsense, but it should be especially apparent that it is utter nonsense today.

Few mainstream conservatives supported letting the market put Wall Street out of business when their collapse of the speculative bubble in the housing market made most major banks insolvent in the fall of 2008. At t...

The Post Uses the Double Dip Story to Diminish Expectations

The headline of a Washington Post article used the term "optimism" in reference to a prediction of 2.5 percent growth for the third quarter. It is very difficult to view 2.5 percent growth as much less than disastrous. At this rate the economy is growing just fast enough to keep pace with the growth of labor force.

That means we are making zero progress in reducing the unemployment rate. If the economy continues to grow at a 2.5 percent pace, the unemployment rate will remain around 9...

The Washington Post Imposes Its Own Agenda on the Supercommittee

The Washington Post told readers that the supercommittee had an "original goal of at least $1.2 trillion in savings through 2021." Actually, its goal was specified in terms of deficit reduction which can come in the from of either higher revenue or reduced spending. The term "savings" implies spending cuts. That may be the Post's agenda, but it is not the one that Congress gave to the supercommittee.

Robert Samuelson Complains About the Paint Job on the Titanic: Yet Another Deficit Whine

It is really incredible how much ink that Robert Samuelson and his colleagues on the Post's opinion and news pages can devote to the budget deficit at a time when 26 million people are unemployed, underemployed or out of work altogether. In a column on Monday Samuelson told us of his "fantasy":

"Retired presidents Bill Clinton and George W. Bush would tour the country together and apologize. They would apologize for not tackling Social Security and Medicare when they had the chance."

What a f...

A Bit of Confusion on Consumption

I'm not ordinarily one to complain that a person is not an economist, but when one writes on economics, it does help to have some familiarity with the topic. That does not seem to be the case with the NYT column by James Livingston touting the merits of more consumption.

While part of the story sounds very good -- reverse the upward redistribution from wages to profits -- some of the rest does not make sense. Yes, consumption has grown more than investment over the last century. That happens ...

Contrary to What the Post Says It's Not Hard to Project the Lost Revenue from Governor Perry's Tax Plan

The Washington Post left readers with the impression that because Governor Perry's flat tax proposal would give people the option of staying under the current tax code. It favorable cited a Heritage Foundation analyst comment that:

"it will be difficult for analysts to accurately predict what its economic and fiscal impact would be."

Actually, it should not be very difficult to project the economic and fiscal impact of the plan.

If people are given the option of paying $2 for a gallon of gas ...