Dean Baker's Blog, page 529

Does the NYT Invest in Pets.com?

For those young uns out there, Pets.com was the poster child of the craziness of the 90s stock bubble. At the peak of the bubble it had a market valuation in the hundreds of millions of dollars even though it had never made a profit nor any clear way of making a profit.

While most people now recognize the craziness of the stock bubble years, there are some people, apparently including the NYT editorial board, who still do not recognize the craziness of the housing bubble years. Its editorial ...

Brooks Is Wrong: The OWS Crew Is Against Redistribution

David Brooks told readers that the Occupy Wall Street movement it out of step with the country because it favors redistribution while most of the country opposes it. It is not clear what Brooks thinks he means by this.

The country has been seeing enormous redistribution over the last three decades, but it has all been in an upward direction. For example, the government gave trillions of dollars of below market interest rate loans to the largest banks to save them from collapse. The big banks ...

The Washington Post STILL Has Not Heard About the Housing Bubble

During the run-up of the housing bubble the Washington Post's main and often exclusive source in stories on the housing market was David Lereah, the chief economist for the National Association of Realtors and the author of the 2005 bestseller, Why The Real Estate Boom Will Not Bust and How You Can Profit From It. A front page article in today's newspaper indicates that its understanding of the housing market has not improved much.

Many of the basic facts in the article are wrong. For...

Doesn't NPR Know That the Wage Matters for Workers?

Workers work for pay. Most of the country understands this fact, but apparently the reporters and editors at National Public Radio do not. A Morning Edition segment [sorry, no link yet] on the impact that Alabama's crackdown on illegal immigrants is having on the ability of farms in the state to get workers never once mentioned the wages being offered for this work. 

The piece repeated complaints by farmers that they could not get citizens or green card holders to work in their fields...

The NYT Can't Find Anyone to Say Anything Good About Argentina

That is sort of striking since its President Cristina Kirchner seems headed for re-election with a clear majority of the votes. Argentina has also enjoyed the strongest growth over the last decade of any country in Latin America. Nonetheless all 5 of the NYT's sources in an article discussing the election were critical of Kirchner.

It really should not have been hard to find someone who has positive things to say about President Kirchner. It appears that the NYT is relying on a narrow range o...

More NYT Editorializing About the Budget in the News Section

The NYT discussed Defense Secretary Leon Panetta's responsibilities and told readers that one of the issues on the table is "the financial health of a debt-ridden country." It is not clear how the NYT made the determination that the United States is debt ridden. The financial markets seem to disagree with its assessment since they are willing to lend money to the United States at very low interest rates.

The more obvious economic problem is massive unemployment and the fact that the economy i...

Greg Mankiw Gets It Wrong on the Budget

Mankiw told readers that:

"to maintain current levels of taxation, we will need to substantially reduce spending on the social safety net, including Social Security, Medicare, Medicaid and the new health care program sometimes called Obamacare."

Actually, all we have to do is to fix our private health care system. If per person health care costs in the United States were the same as in any other wealthy country we would be looking at huge budget surpluses, not deficits. However, the...

New York Times Editorializes on Budget Policy in Pension Article

The New York Times used an article on Rhode Island's pension system to denounce "the nation's profligate ways," which it warns will catch up with us. Newspapers are supposed to leave such editorializing to the opinion pages.

In fact there is good reason to believe that the nation's obsession with frugality is now catching up with us. The country lost close to $1.4 trillion in annual demand due to the collapse of the housing bubble. In the short term this can only be replaced by larger...

False Paradoxes on Immigration

The Post's Outlook section featured a piece by Roberto Suro and Marcelo Suarez-Orozco, a public policy and anthropology professor, respectively that purports to examine a paradox on the public's view on immigration. The piece tells readers:

"But our public disagreements are matched by private conflicts. When it comes to immigration, we are not only a divided nation — we have a divided brain.

The national ambivalence is evident. A Gallup survey this year found that a majority of Americans, 53 ...

Is the Double Dip Drifting Away?

One of the items that many of the forecasters warning of a double dip held up as evidence was the drop in Philadelphia Fed's manufacturing index in September. It showed a reading of -17.5, which is definitely pretty bad. While the index, like most indexes, does generally move in step with the overall economy, the Philadelphia Fed's coverage is a relatively narrow slice of the country (most eastern Pennsylvania and New Jersey). Since this reading was out of line with most other data, it...