Dean Baker's Blog, page 567

Meaningless California Budget Numbers

The NYT told its readers nothing when it said that California is using an optimistic revenue assumption of an additional $4 billion in revenue next year in order to balance its budget. It is unlikely that even 1 percent of NYT readers have any idea of how large California's budget is. There is no way to assess the importance of the revenue assumptions or spending cuts discussed in this article without knowing how large the total budget is.

California spends roughly $90 billion a year...

New Prostate Cancer Drugs are Expensive Because of Government Granted Patent Monopolies

That point would have been worth making in an article about new drugs approved by the Food and Drug Administration for treating prostrate cancer. According to the article, these drug costs can cost uo to $8,000 a month. If the drugs were sold in a free market without patent protection, they would almost certainly sell for less than $100 a month. It would have been worth noting this cost of the patent system for financing prescription drug research.

Why Is It Relevant That EPI Gets Money from Teacher Unions, But It's Not Relevant That Erskine Bowles Gets $350,000 a Year from Morgan Stanley?

The NYT has a piece this morning on the teacher evaluation policy used in the Washington, DC schools. The end of the piece includes a quote from Mark Simon who works on education issues with the Economic Policy Institute (my former employer). In identifying the Economic Policy Institute (EPI), the NYT added the comment:

"which receives teachers' union financing."

While it arguably relevant that EPI gets teacher union funding in this context, it is unusual for the NYT to present the sources...

Why Is It So Hard to Understand that the Fiscal Commission Never Issued a Report

The rules under which President Obama's fiscal commission were very clear. They required that any report must be approved by a vote of 14 of the 18 members. The rules also required that the vote take place by December 1, the date that the commission went out of existence.

As it turned out, there was no plan approved by 14 of the 18 commissioners. Nor was there a formal vote taken by the members of the commission before December 1, although 11 of the 18 members did indicate support for a plan ...

NPR Missed the Recession

In a segment of Morning Edition where Scott Horsley discussed the budget negotiations [no link yet], he told listeners that we face a large debt because Congress likes to spend money. This is like saying that firefighters spray water on buildings because they like to spray water from hoses.

The proximate cause of the large budget deficit, as every budget analyst knows, is the economic downturn caused by the collapse of the housing bubble. If Congress opted not to spend money, then the...

The Washington Post Still Has Not Heard About the Housing Bubble

A Post article on the lowering of the loan limit for Fannie and Freddie backed mortgages could hurt the "faltering" housing market, pushing prices down further. Of course the current price decline is simply the deflation of a bubble. Nationwide prices still have to fall by around 10 percent to return to their trend level.

The piece is also somewhat confused on the effect that lowering the limit would have. It tells readers that:

"The loan limit [the new limit of $625,500]— down from $729,750 ...

NYT Does Its Homework on Shale Gas [corrected]

The NYT has an excellent piece today presenting evidence that the Energy Information Agency has been presenting an overly optimistic picture of potential shale oil reserves as a result of relying on industry claims instead of independent analysis.

It also has a piece on an rule change by the Securities and Exchange Commission that allowed gas companies to claim much larger reserves. Yesterday it ran a piece suggesting (based on internal e-mails and discussions with company insiders) that...

NYT Does Its Homework on Shale Oil

The NYT has an excellent piece today presenting evidence that the Energy Information Agency has been presenting an overly optimistic picture of potential shale oil reserves as a result of relying on industry claims instead of independent analysis.

It also has a piece on an rule change by the Securities and Exchange Commission that allowed gas companies to claim much larger reserves. Yesterday it ran a piece suggesting (based on internal e-mails and discussions with company insiders) that...

Doctors Say, Just Give Us Government Money and Stop Asking Questions

The NYT tells us that doctors are really upset that the government is trying to find out how easy it is for patients to get access to their services. The article interviews several doctors who expressed anger that the government plans to have testers call for appointments without identifying themselves as testers. The purpose is to determine how difficult it is for people with various types of insurance (e.g. Medicare and Medicaid) to get appointments.

This is a standard practice for...

President Obama Uses His Travel for Political Purposes and the Washington Post Is Shocked!

The Washington Post had a clean out the refrigerator front page piece taking pot shots at President Obama for favoring a certain number of politically connected firms in the clean energy business and also using his travel for political purposes.

There are two distinct issues here. Is the president using his travel for political purposes? Do fish swim in the ocean?

Come on folks, this is not serious. There is no front page story in presidents using their travel for political ends, there's no s...