Dean Baker's Blog, page 538

Can't the NYT Find Someone With a Name to Talk About the World Economy?

In an article on the recent instability in financial markets and the weak world economy, the NYT turned to "a senior World Bank official" for extensive comments about the world economy. The official's comments included no inside information, nor were they qualitatively different from the views expressed by many other economists who would have no problem being on the record.

Many economists have extremely bad track records in assessing the state of the economy, including many officials at the ...

Disaster Relief Accounts for 0.1 Percent of the Budget

The Post reported that most House Democrats opposed a continuing resolution to keep the government running because it included cuts of $1.5 billion to partially offset an appropriation of $3.65 billion for disaster relief. It would have been worth telling readers that $3.65 billion is approximately 0.1 percent of the budget, whereas the $1.5 billion in cuts is equal to 0.04 percent of spending. Many readers would not know how large these sums are in total federal spending or relative to the d...

The NYT Has Not Heard About Work Sharing in Germany

The NYT noted that Germany's unemployment rate is just 6.2 percent and told readers:

"One reason is a series of policies that loosened job protections and put more pressure on unemployed people to find work."

That might be one reason, although most research shows that these measures have a limited impact on unemployment. The more obvious explanation for Germany's low unemployment rate is its policy of work sharing. This policy encourages firms to reduce work hours rather than lay off...

It Was Not Just Random Fed Members Who Opposed Boosting the Economy

A segment on Morning Edition noted that 3 members of the Fed's Open Market Committee (FOMC) opposed the plan to shift from shorter term debt to holding longer term bonds in an effort to drive down interest rates. It would have been worth mentioning that all 3 of the no votes came from the district bank presidents. The bank presidents are essentially appointed by the banks in the district.

The 5 bank presidents who are voting members of the FOMC split 3-2 against this measure. By contrast...

Tax Increases and Spending Cuts in Italy Will Slow Growth, Not Speed It Up

In an article discussing debt problems of euro zone countries the NYT told readers that a statement issued by the Italian government yesterday:

"said the government was preparing steps to lift growth and recently passed measures to control public finances through tax increases and spending cuts."

It would have been appropriate to remind readers that spening cuts and tax increases slow growth by pulling money out of the economy. It is likely that whatever steps the Italian government might p...

NYT Gets Taxing the Rich Story Right

President Obama made a simple and true statement in his speech on the budget Monday. He said that there were millionaires and billionaires who pay tax at a lower rate than middle income families.

Many news outlets went to town to point out that on average millionaires and billionaires pay tax at a higher rate than middle income families. Of course this is not what Obama said. He was pointing out that some of the richest people in the country (Warren Buffet was his model), get most or all of t...

The Post Turns Battle Over Money Into Philosophy

The major battle line in Washington budget debates is between those who want to cut Social Security and Medicare, the social insurance programs that the vast majority of low and middle income people depend upon, and those who believe that the wealthy should pay more to support the government. Since government policies have led to an enormous upward redistribution of income over the last three decades, the latter group would seem to have a good case.

While this seems a rather straightforward b...

Thomas Friedman Is Upset That President Obama Is Not Kicking the Elderly

Thomas Friedman joined the ranks of the Peter Peterson deficit hawks and criticized President Obama for not wanting to beat up the elderly. Specifically, he is upset that President Obama did not propose cuts to Social Security and Medicare.

Apparently Friedman is not aware of the upward redistribution of income over the last three decades. Nor does he seem to understand that the government just needs to spend money to create jobs now.

The current crisis is the result of the collapse of a...

Do You Have to Work for Peter G. Peterson to Be Cited on Budget Issues in the Washington Post?

That's the question that readers are undoubtedly asking after seeing this piece on President Obama's budget proposals. The piece featured three separate cites from Maya MacGuineas, who is the president of the Committee for a Responsible Federal Budget. (One cite included unnamed "others.") The Committee for a Responsible Federal Budget has received substantial funding from Peterson and his foundation over the years. 

It then turns to an unnamed "GOP aide" who criticizes Obama's "fictitious...

The Loss of Middle Class Jobs Is By Design

Marketplace radio had author Don Peck on this morning to tell listeners that middle class jobs are disappearing because of globalization and automation. This is not true.

The reason why factory workers lose their jobs to people in developing countries rather than doctors and lawyers is that we designed trade rules to make our factory workers compete with low-paid workers in China, Mexico and other developing countries. We largely protect our doctors and lawyers from the same sort of...