Dean Baker's Blog, page 581

Wall Street Journal Needs Education on Oil Markets

The WSJ told readers that people in the United States are much better off today because of increased North American oil production, which it claims has led to more stability in world oil prices. It contrasts the current situation to the instability of 8 years ago:

"The group, made up of business executives, former diplomats and retired military leaders, hosted "Oil ShockWave" simulations, inviting former senior policy makers to role-play responses to hypothetical oil-market disruptions. Forme...

The Huge Variance in Wages of Male College Grads Discourages College Enrollment

Eduardo Porter's column on the drop in college graduation rates in the United States relative to other wealthy countries ignored the large variance in the wages of male college grads. While there is little dispersion for the wages of women who graduate college, this is not the case for men.

There are a substantial number of male college graduates who can anticipate wages that are less then the top quartile of men without college degrees. The marginal college graduate is presumably more likely...

Nocera Largely Right on Fannie and Freddie

Joe Nocera gets the story mostly right in his skepticism toward a bill put forward by Senators Mark Warner and Bob Corker that would replace Fannie and Freddie with a convoluted system of government guarantees. I would add three points.

First, the 30-year fixed rate mortgage is not necessarily dependent on a government guarantee. In the pre-bubble days banks did hold a substantial portion of the mortgages on their books. They also issued 30-year jumbo mortgages which could not be guaranteed b...