Dean Baker's Blog, page 54

Why Aren't the Democrats Talking About Ending Patent Financed Drug Research?

(This post orginally appeared on my Patreon page.)

Many of the leading Democratic candidates, especially Sanders and Warren, have been putting forward bold progressive plans in a wide variety of areas. Sanders and Warren have both supported a quick transition to a universal Medicare program, with no premiums, co-pays, or deductibles. Several candidates have supported a Green New Deal, which in some versions would guarantee every worker in the country a decent paying job.

Such policies are rea...

There are Still Good Paying Jobs for People Without Skills, Just Read the Washington Post Opinion Page

No folks, it's not a rerun of the Three Stooges, it is Washington Post columnists pretending to say wise things about economic policy. They apparently decided to work overtime to criticize the more progressive Democratic candidates, which is what Jeff Bezos pays them to do. (No, I have no idea if Bezos is especially pernicious among rich people, but if the Washington Post was owned by people who were not rich Steven Pearlstein, Charles Lane, and Fred Hiatt would not be getting paid to spout i...

Is the U.S. Trade Deficit with China Exaggerated? It Depends What Story the Media Are Trying to Sell

For many years we regularly saw news stories, like this Washington Post piece, telling us that the official data on the bilateral U.S. trade deficit was hugely exaggerated. The argument was that we count the full value of a final good imported from China in calculating our trade deficit, even though much of the value added came from other countries.

The classic case is an iPhone exported from China to the U.S. We would count the full value of the iPhone as an import from China even though the...

Bad News: Guardian Tells Us China is Running Out of Workers

Seriously, that's what a piece on the state of China's economy told readers.

"Another headache is China’s demographic problem, namely that it is running out workers thanks to the failure of its now-abandoned one-child policy. With growth slowing, China faces a race to avoid the dreaded “middle-income trap” where the economy of developing countries stagnates once the low-hanging fruit of industrialisation has been picked but before income has been spread widely enough around the population. Ch...

A Little Honesty May Help Sell the Green New Deal

(This post originally appeared on my Patreon site.)

The Washington Post had two columns last week that told us much more than their authors likely intended. The first was a piece by E.J. Dionne, that told readers about the need to “tame” capitalism, because of the damage caused in recent decades by the untamed version.

The second piece was by Catherine Rampell. From France, she told us of the difficulties of imposing taxes on carbon, even in a country that is ostensibly fully committed to the...

Can You Say "Exorbitant Privilege?" You Can Write for the New York Times

Ruchir Sharma again used a New York Times column to complain about plans put forward by Elizabeth Warren and Donald Trump (more the former than the latter) to lower the value of the dollar to make U.S. goods and services more competitive in the world economy. While he raises a number of geopolitical arguments, the gist of his economic argument is that the U.S. is able to run large and persistent trade deficits because the dollar is the leading reserve currency in the world. (Hence the "exorbi...

Household Debt Service Levels Are at Historically Low Levels

That would have been a useful piece of information to include in a Washington Post article on couples taking on debt to pay for the costs of their weddings. The piece told readers:

"Demand among Americans, who are already holding record levels of debt, for help financing weddings are giving rise to an industry of personal loans marketed specifically to brides and grooms."

While debt is at record levels, so is income levels and asset levels. It is pretty meaningless to tell readers that debt i...

Is Merck Really Too Shy to Raise Drug Prices?

That's what the Washington Post told readers in reference to the drug BCG, a treatment for early stage bladder cancer. According to the Post article, there is now a worldwide shortage of BCG. The reason is that the manufacturer, Merck, is producing at the capacity of its manufacturing facility, but the current price does not justify the expenditures associated with building a new facility. The piece tells us that Merck doesn't want to raise the price because it is worried that it will be seen...

The Issue Is not "Taming" Capitalism, the Issue is not Rigging Capitalism to Give all the Money to the Rich

In talking about learning lessons from the collapse of the housing bubble and Great Recession, E.J. Dionne and leaders of the Wall Street funded Third Way group both showed they have not learned any lessons. Dionne approvingly quotes Matt Bennet, Third Way's executive vice-president for public affairs:

"We need to be working to tame capitalism at this moment, because it is not functioning well, ..."

The quote implies that upward redistribution of the last four decades is simply the result of...

The Old Japan Disaster Horror Story

(This post first appeared on my Patreon site.)

A theme often repeated in the media is that Japan is suffering terribly because of its low birth rates and shrinking population. This has meant slow growth, labor shortages, and an enormous government debt.

Like many items that are now popular wisdom, the story is pretty much nonsense. Let’s start at the most basic measure, per capita GDP growth. Yeah, I said per capita GDP growth because insofar as we care about growth it is on a per person basi...