Dean Baker's Blog, page 533

Newt Gingrich Wants to Force Taxpayers to Pay for Useless Medical Procedures

The NYT had a short piece commenting on and correcting some of the statements made by the Republican presidential nominees in last night's debate. One of the items was a complaint by Newt Gingrich that a government task force had recommended that Medicare and private insurers stop paying for routine prostate cancer tests, where there is no reason to believe that a patient has cancer. The piece notes that, contrary to Gingrich's claims, the task force was comprised of medical professionals...

If the Volcker Rule Forces Other Countries to Subsidize Their Banks, Why Should We Care?

An NYT piece on the Volcker rule raised the possibility that if the rules are too tight then some trading may go overseas. It would have been worth reminding readers that rule would only limit the activity of banks that hold government insured deposits. Independent investment banks, which do not have government insured deposits, would be entirely free to do whatever trading activity they liked. 

If the rules are drawn in a way that are too restrictive then we would expect that trading...

The Oil Industry Gets Its Jobs Numbers the Old-Fashioned Way: It Makes Them Up

The is the gist of a front page Washington Post article on the jobs numbers that are frequently cited by the oil industry, as well other industries, to justify changes in regulatory policy. This piece is very useful for pointing out that the job numbers that industry uses to push industry policies are often very flimsy.

In fact, in many cases the numbers are even worse than this article implies, since in many cases policies promising big job gains may have no discernible effect on employment ...

Nouriel Roubini Has NOT Consistently Been Right

Joe Nocera has a column touting what appears to be a very interesting recovery plan by Dan Alpert [a friend], Robert Hockett, and Nouriel Roubini. In describing Roubini, Nocera tells readers that his "consistently bearish views have been consistently right."

Actually, this is not true. I recall in the fall of 2008, following the Lehman collapse, Roubini was running around telling reporters that all credit had become unobtainable. He claimed that firms could not even get letters of credit to s...

David Brooks: Bard of the 1 Percent

David Brooks delved deep into his storage locker of misinformation to tell readers that the idea of blaming the richest 1 Percent for the country's problems is just silly. He told us that the really big ideas aren't about reversing the upward redistribution of income from the top, they are from centrists who want to do things like cut our Social Security and make us pay more for health care. Let's have some fun with Mr. One Percent.

First he begins his piece by telling us:

"The U.S. economy i...

The Boston Globe Hits It Out of the Park In Promoting Economic Fallacies

The Boston Globe ran an editorial over the weekend calling for a nationwide settlement to the mortgage fraud suits. The 824 word editorial managed to repeat most of the major fallacies being circulated about the economy today. It wrongly told readers that:

1) the bad financial position of banks, and their resulting hesitance to make loans, is a major factor impeding growth;

2) house prices are depressed because of the mess in the mortgage market;

3) that housing lock is a major factor in...

China Is Deliberately Slowing Its Economy

An NYT piece discussing weak consumer demand in China told readers that:

"Unless China starts giving its own people more spending power, some experts warn, the nation could gradually slip into the slow-growth malaise that now afflicts the United States, Europe and Japan. Already this year, China's economic growth rate has begun to cool off.

'This growth model is past its sell-by date,' says Michael Pettis, a professor of finance at Peking University and senior associate at the Carnegie...

The Downturn Is Whacking People, But We Need Good Data

People reading a front page story in the NYT might have been surprised to find that the situation of ordinary families is deteriorating even more rapidly than had been generally reported. The article tells readers that:

"Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent, to $49,909, according to a study by two former Census Bureau officials. During the recession — from December 2007 to June 2009 — household...

Ezra Klein on the Stimulus and After

Ezra Klein has a seriously researched piece in the Post on why the stimulus was inadequate and what else could have been done. The major item missing in my book is any discussion of the overselling of the stimulus after its passage.

By all accounts, Obama's economic team knew that the stimulus they got through Congress was inadequate for the task. They needed a stimulus that was at least twice as large as what Congress passed and quite possibly three or four times as large. Nonetheless...

How Many Jobs Do We Need: Teaching Arithmetic To Economists

I hate to harp on a seemingly small point, but it does offend me that professional economists and people who write on economics have such an aversion to simple arithmetic. One of the numbers that frequently in appears in discussions on the state of the economy is the number of jobs that we need to keep pace with the growth of the labor force. I have consistently been using 90,000 a month, however I see considerably higher numbers routinely thrown out, sometimes as high as 150,000 a month...