Dean Baker's Blog, page 55

New Jobs In Manufacturing are Not Union Jobs

That point would have been worth mentioning in a NYT article on the fact that most new manufacturing jobs have been in prosperous areas of the country rather than in areas that lost numbers of manufacturing jobs in the last decade. While the economy has been adding a moderate number of manufacturing jobs since 2011, the number of union members in the industry has continued to fall. 

According to the Bureau of Labor Statistics, there were 84,000 fewer union members employed in manufacturi...

Restraining Inflation Has not Traditionally Been a Central Bank's Only Task

An otherwise useful NYT article on the ending of Mario Draghi's tenure as the president of the European Central Bank (ECB) included the bizarre assertion that restraining inflation is "traditionally a central bank’s only task." This is not at all true, as central banks around the world have often acted to increase employment and maintain financial stability. In fact, the Federal Reserve Board quite explicitly has a dual mandate for price stability and high employment.

The piece is correct in...

New York Times Column Says that High Wages are the Major Obstacle to Faster Growth

People may not have gotten that immediately picked this up from Ruchir Sharma's column complaining that not enough companies are going bankrupt, but this is the gist of the argument. Sharma complains that because of continuing fiscal stimulus (large budget deficits) and low interest rates from central banks, too many zombie companies are able to survive.

He tells us:

"The Bank for International Settlements, the global bank that serves central banks, says low rates are fueling the rise of “zom...

The Wall Street Journal Doesn't Like Rent Control

We know that because of the way it presented the results of a study of the impact of rent control in New York City. The article showed the average savings on rent controlled units by borough, by income quartiles, and by race and ethnic group. It showed that the average savings were by far the largest on rent controlled units in Manhattan, renters in the top quartile had the largest average savings, and that white beneficiaries of rent control saved far more on average than black, Hispanic, or...

Andrew Yang Is Wrong

Either that, or everyone else is. The centerpiece of Yang’s campaign is that technology is rapidly displacing labor, creating the prospect of mass unemployment in the not distant future.

As a factual matter, this is wrong about the present and recent past. Productivity growth, which measures the rate at which technology is displacing human labor, has averaged just 1.3 percent annually since 2005, the slowest pace on record. This compares to an annual growth rate of 3.0 percent in the long Gol...

Oh No, Japan Is Running Out of People!

That’s what Robert Samuelson tells us today in his column. That might seem a strange concern for a country that is ten times as densely populated as the United States, but Samuelson apparently sees it as a real nightmare.

After all, if its population keeps shrinking, Japan will face a severe labor shortage. They may have a hard time getting people to fill lower paying lower productivity jobs. For example, it might be hard to find workers to shove people onto Toyko’s overcrowded subways.

But i...

Elizabeth Warren Is Right on Currency Values (see Second Addendum)

Elizabeth Warren’s proposal to raise the value of the Chinese yuan and other currencies against the dollar is not getting good reviews in the media from economists. As can be expected, some of the arguments are pretty strange.

As the usually astute Noah Smith tells it in his Bloomberg piece, the problem with the trade deficit is:

“U.S. consumers are consistently living beyond their means, which seems unsustainable.”

The implication is that if the trade deficit were lower than we would be forc...

It’s Monday and Robert Samuelson Is Wrong

Robert Samuelson complains in his column that people want too much from government and that the Democratic presidential candidates are being unrealistic in promising them more. He begins the piece with John Kennedy’s famous “ask not what your country can do for you” line, then tells readers:

“Anyone who has paid the slightest bit of attention knows that government has expanded substantially over the past half-century.”

He’s of course right about this, but not in the way he discusses in his...

The Corporate Debt Stories Show People Still Don’t Understand the Great Recession

The Washington Post had another column telling us about the run up in corporate debt and how this is going to be 2008 all over again.  This is a popular one with the media. William Cohan has a regular feature in the New York Times telling us how a collapse of the debt bubble is imminent, giving us another financial crisis.

While excessive corporate debt can pose problems, nothing we see now, or will plausibly see in the near future, looks anything like 2008. The fact that ostensibly know...

Curing Alzheimer's Without Drug Patents

The Washington Post had an interesting article on how Pfizer learned that its arthritis drug, Enbrel, may be useful in slowing the onset of Alzheimer's disease. According to the article, Pfizer chose not to pursue any further testing of the usefulness of Enbrel as an Alzheimer's treatment, nor did it share its evidence with anyone else.

The most obvious reason why it did not pursue further testing itself is that the main patent on Enbrel was about to expire. This meant that if Pfizer invested...