Dean Baker's Blog, page 547

Good News, There are Federal Limits on Greenhouse Gas Emissions!

Those who are concerned about global warming will be happy to discover when they read the Washington Post that the federal government has limits on greenhouse gas emissions. The Post had a page two article that told readers how the world would be different if the Tea Party folks, as personified by the House Republicans, ran the country.

The second item in the Post's list of differences is:

"It would no longer have federal limits on greenhouse gases."

Yes, that would be a big difference if...

Health Care Will Only Crowd Out Other Employers, if We Don't Need Health Care Jobs

The NYT had an interesting, if somewhat confused, piece on whether the health care sector will continue to be a reliable source of job creation. The piece notes that the health care sector has been the one major sector that has consistently added jobs since the beginning of the downturn, however it notes that cost pressures are likely to slow the rate of employment growth in the future.

The article concludes with the comments of Joshua Shapiro, chief United States economist at MFR Inc.:

"If s...

If S&P's Downgrade Was So Important to Financial Markets, Why Did Bond Prices Soar?

It's pretty bad when our nation's leading newspaper can't tell which way is up. The NYT told readers today that:

"members of Congress are investigating why S.& P. removed the nation's AAA rating, which is highly important to financial markets."

If the triple A rating is so important to financial markets then why did bond prices soar in the first trading day after the downgrade. The downgrade should have meant U.S. government debt is viewed as more risky. This means that government bonds...

Casey Mulligan Unloads the Kitchen Sink

Casey Mulligan has been putting on a one-economist show in his NYT blog, arguing week and after week that the downturn is really a supply story and has little or nothing to do with the plunge in demand created by the collapse of the housing bubble. This week he sums up his evidence.

Most of it has to do with the fact that even in the downturn employers will hire better qualified workers over less qualified workers and lower paid workers over higher paid workers. He infers from this fact that ...

Any Hope That the ECB Will Stop Adhering to Superstitions?

The NYT had a piece on the prospect that the euro zone countries might move to a closer fiscal union. The piece commented that one positive aspect to the recent growth numbers for most euro zone countries,

"was the hope that slower growth would lead to less inflation, giving the European Central Bank [ECB] more leeway to keep interest rates low and intervene in bond markets."

Of course it is also possible that sufficient evidence that the euro zone is growing way below its potential could i...

NYT Notes Problem With GDP Accounts, but Gets the Solution Wrong

The NYT reported on the fact that the large revisions to GDP that the Commerce Department reported last month changed our view of the state of the recovery. (Although it is not accurate to term the 1.8 percent growth rate originally reported for the first quarter as respectable. This growth rate is not even sufficient to keep pace with the growth of the labor force.) The data are often subject to large revisions which can substantially change the assessment of the economy from the originally ...

Didn't Anyone Tell the NYT About Work Sharing in Germany?

The NYT has a front page piece touting the health of the Germany economy. While the piece notes employment protections in Germany that make it difficult for employers to lay off workers, it doesn't explicit mention the country's shortwork program. This program (noted today by columnist Joe Nocera) encourages companies to reduce work hours rather than lay off workers. Largely as a result of German policies promoting short work (which go beyond the official program), the unemployment rate in...

Good Piece On Perry and the Texas Economic Miracle

The NYT did a nice job outlining the issues in an assessment of the economic performance of Texas under Governor Perry. The piece is not an exhaustive (no short news story could be), but it touched the main points at issue.

Fun With Robert Samuelson

It's always fun to read Robert Samuelson's column on Monday morning to see what silliness he is pushing to justify cuts to Social Security and Medicare. Today he has his plan for balanced the budget over the next decade (the country's most important problem for people who never heard about unemployment).

As part of his argument for cutting benefits for the elderly Samuelson tells us that, "in 2008, the median net worth of married elderly couples was $385,000." (Actually, if we check his...

WAPO Should Make Clear, Constraints on Monetary and Fiscal Policy Are Political

A front page Washington Post piece was headlined, "Geithner, Bernanke Have Little in Arsenal to Fight New Crisis." This piece should have made it clear to readers that the obstacles to additional action are political not economic. All the obstacles noted in the piece are political in nature. The one possible exception is the S&P downgrade of U.S. government debt, which does not appear to be an obstacle at all. The markets laughed off this downgrade, sending U.S. bond prices soaring on the...