Dean Baker's Blog, page 59

Are New York Times Reporters Really Prohibited from Talking About Currency Values and Trade?

I asked that question about Washington Post reporters about a year ago, it turns out I have to ask the same question about New York Times reporters. It turns out it comes up in the exact same context, an effort to blame Trump's trade war for the plight of U.S. farmers.

The issue here is a very simple one that is completely non-controversial among economists. Other things equal, a dollar that has a higher value in currency markets will mean lower prices for U.S. farmers. The logic on this one...

The Cost of a Financial Transactions Tax to Retirement Funds

Hawaii Senator Brian Schatz recently introduced a bill proposing a 0.1 percent tax on financial transactions. This means that when people trade a share of stock or a bond, they would pay a tax rate of 0.1 percent ($1 on $1,000), on their trades. According to the Congressional Budget Office, this tax can raise more than $80 billion a year in revenue, somewhat more than the entire annual budget for the food stamp program.

Not surprisingly, the financial industry doesn’t like the idea. It has ar...

Is There Evidence a 0.91 Percentage Point Increase in the Payroll Tax Would Hurt Growth?

I'm just asking because that's what the Washington Post told readers in an article on the 2019 Social Security and Medicare Trustees reports. The piece noted that the Medicare program is first projected to face a shortfall in 2026. It would take an increase in the payroll tax of 0.91 percentage points (0.455 percentage points on both employees and employers) to fill the projected gap. The piece tells readers this is "a measure that could hurt business development and growth."

It's not clear w...

Trade Games Are Back: The USITC Report on the New NAFTA

U.S. trade policy is truly fascinating. Probably more than in any other area of public policy, trade agreements are structured by corporate interests behind closed doors. Then when a deal is produced, the establishment media and economists insist that we have to support the deal behind the important principle of “free trade.” The opponents are treated as knuckle-dragging Neanderthals who just can’t understand how the economy works.

We got another episode in this long-running show last week wh...

Coming Clean on Washing Machine Tariffs

Jim Tankersley had a piece in the NYT yesterday on the cost per job saved of Trump's tariffs on Chinese washing machines. According to the study, the cost per job saved was $817,000. While that is a steep tab, there are a few points that should be added to this sort of analysis.

First, if the point of the tariffs is to benefit workers, part of this $817,000 cost is going to higher pay to workers who would have jobs with or without the tariff. The study doesn't look at the impact on wages of w...

Payments to Hospitals Are Not Going to Hospital Buildings

In keeping with accepted standards in debates on economic policy, we are now getting a debate on Medicare for All that is doing a wonderful job of ignoring the relevant issues. The focus of this debate is what Medicare for All will pay hospitals. As The New York Times tells us, if Medicare for All pays hospitals at Medicare reimbursement rates, many will go out of business.

The reason why this is a bizarre way to frame the issue is that the payments to hospitals are not going to buildings. Th...

Fun Fictions in Economics

Economists pride themselves on being the serious social science, the one most deserving of status as an actual science. I will let others make the comparative assessment, but there is an awful lot of nonsense that passes as serious analysis within economics. For cheap fun, I thought I would use a nice spring afternoon to highlight some of my favorites.

Myth 1: The Robots Are Taking All the Jobs

The "robots taking the jobs" story gets top place both because it is completely ridiculous and it i...

Federal Government Will Spend 0.0008 Percent of Budget on Tent Cities for Migrants

The New York Times told its readers that the government plans to spend $37.2 million ("nearly $40 million" in first sentence) on two new tent cities for migrants coming over the border and applying for asylum. Most readers probably have no idea how much money this is to the federal government. If the paper was actually trying to provide information, it would have told readers that this is equal to approximately 0.0008 percent of spending this year.

Medicare for All 64-Year-Olds

The push for universal Medicare was given new momentum by Bernie Sanders campaign for the 2016 Democratic nomination. While it is still quite far from becoming law in even an optimistic scenario, it is certainly now treated as a serious political position. This is probably best demonstrated by the fact that the Medicare for All (M4A) bill put forward by Washington representative Pramila Jayapal has 107 co-sponsors, nearly half of the Democratic caucus in the House.

As much progress as M4A has...

The "Independent" Fed Isn't Quite What It Is Cracked Up to Be

Neil Irwin had a New York Times article warning readers of the potential harm if the Fed loses its independence. The basis for the warning is that Donald Trump seems prepared to nominate Steven Moore and Herman Cain to the Fed, two individuals with no obvious qualifications for the job, other than their loyalty to Donald Trump. While Irwin is right to warn about filling the Fed with people with no understanding of economics, it is wrong to imagine that we have in general been well-served by t...