Dean Baker's Blog, page 558

Why Can't the Post Use Percentages in Discussing Proposed Cuts to the Military?

In a relatively lengthy article discussing potential cuts to the military budget, the Post never once told readers what baseline projected spending is, nor what the cuts would be as a share of baseline spending. The Post told readers that the military had prepared for cuts of $400 billion over the next 12 years, but now it seems possible that the cuts could be as large as $800 billion.

Wow! Those are really big numbers. And no responsible newspaper would ever print them without giving its...

NYT Warns That Debt Ceiling Crisis May Boost Net Exports and Increase Growth

Of course they did not know that this was their warning. The NYT told readers that:

"Deterioration of investor confidence in the United States could also hurt the value of the dollar, according to William H. Gross, co-chief investment officer of Pimco, a bond fund based in California. Mr. Gross said he believed that the dollar would become weaker because of the country's inability to deal with its rising deficit. Instead, he favors currencies in China, Canada, Brazil and Mexico."

While M...

President Obama and the Gang of Six Want to Cut Social Security and Medicare, but Readers of the NYT Probably Wouldn't Notice

It is understandable that politicians would use euphemisms to conceal the true nature of their actions. But what serious newspaper would use the same euphemisms? Newspapers are not supposed to be assisting politicians in their deceptions, they are supposed to be informing readers.

Apparently this fact is not understood at the NYT. In an article on President Obama's redoubled effort to push the budget program of the gang of six, the NYT referred to "cost-saving changes to entitlement...

Casey Mulligan Says There Are Jobs for Those Who Really Want Them

The NYT featured another Casey Mulligan episode of There Is No Unemployment this morning. Mulligan's argument is that if we look at employment rates for the older population we see that they have actually risen in the downturn even as employment for people ages 25-55 plummeted. Mulligan interprets this as evidence that highly motivated older workers are able to find jobs, and if younger workers were equally motivated they would find jobs too.

This is an interesting story. The rise employment ...

Fox on 15th Imagines a Deficit Commision Report That Does Not Exist

As its drive to cut Social Security and Medicare builds steam the Post is throwing reality to the wind. It again refers to the deficit commission report in its lead editorial. This should not be a tough one, the report did not have the support of the necessary majority to be approved by the commission. It therefore should be referred to as the report of the co-chairs, former Senator Alan Simpson and Morgan Stanley director Erskine Bowles.

The editorial also praises the plan by the Senate's...

Intro Econ for WAPO: Foreign Holdings of U.S. Debt Depend on the Trade Deficit, not the Budget Deficit

Many deficit hawks are anxious to exploit nationalistic sentiments and even resort to crude xenophobia to push their agenda of cutting Social Security and Medicare. The starring role in this story goes to the foreign holdings (especially Chinese) of U.S. government debt. The Post did its part by having a chart showing the growth of foreign holdings of "our mountain of debt."

Those who are actually concerned about foreign holdings of U.S. government debt should know that it depends on the...

Thomas Friedman Thinks That the Greeks Have to Work Less

This is what Thomas Friedman said in his column this morning, even if he didn't know it. Friedman told readers that:

"Germans are now telling Greeks: 'We'll loan you more money, provided that you behave like Germans in how you save, how many hours a week you work, how long a vacation you take ...'"

If we look to the OECD data, we see that the average number of hours in a work year for Germans in 2008 (the most recent data avilable) was 1430. This compared 2120 hours a year for the average G...

The NYT Gets It Wrong on the Deficit Commission, Again

The prospect of cutting Social Security benefits for seniors and giving more money to the very wealthy seems to have excited reporters so much that they just can't get anything straight. The NYT again told readers that President Obama's fiscal commission produced a deficit reduction plan. This is not true. The deficit commission did not have the votes necessary to produce a plan. The plan referred to in this article was the plan of the co-directors, former Senator Alan Simpson and Morgan...

Rewriting the History of the Stimulus

Ezra Klein recounted the record of President Obama's stimulus with the help of two of his top economic advisers at the time, Larry Summers and Christine Romer. Romer commented that she failed to recognize that they would only have one shot at stimulus, therefore they had to get as much as possible in their first package.

While this turned out to be true, a main reason was the way the Obama administration sold the stimulus. They used a set of economic projections that were hugely...

The Non-Existant Fiscal Commission Report Reappears in a Washington Post Column

The Post obviously finds it hard to get good help. That must be why it had to use a column by a person, Norman Ornstein, who didn't know that the Simpson-Bowles commission never issued a report. Ornstein is referring to the report of the co-chairs, Bowles and Simpson. This report never got the support from the necessary majority of the commission. This is an example of the sort of skills mis-match that economists refer to as "structural unemployment," where workers do not have the skills nece...