Dean Baker's Blog, page 61

The New York Times and Steven Rattner Go Trumpian on Climate

We all know that Donald Trump insists that he is too ignorant to recognize the dangers to the planet of human-caused climate change. While the NYT has pretensions of being more interested in science and reality, it printed a column this morning by Steven Rattner that suggests the opposite.

Rattner says that we have to do something about climate change, but quickly dismisses the idea of a Green New Deal as far too expensive. His alternative is a carbon tax that would start at $43 a ton and the...

Trillion Dollar Wall Street Bailouts, Bernie Sanders, and the Washington Post

Glenn Kessler, the Washington Post Fact Checker gave Bernie Sanders two Pinocchios yesterday for saying that the Wall Street banks got a trillion dollar bailout. Kessler raises several points of contention. First, whether the Wall Street banks actually got that much money. Second, whether it can really be called a bailout since the government made a profit on the loans. Third, that the bailout was necessary to keep the financial system running.

Taking these in turn, Kessler points out that th...

Slipping Some Really Big Numbers into the China Trade Debate

We know that the secret to being a successful capitalist in today's America is to be able to cry effectively about the need for the government to save you from the market (see the Wall Street bailout from the financial crisis). We got more evidence of this basic truth in a New York Times piece on the status of the Trump administration's trade negotiations with China. 

The piece includes a reference to a report from the Trump administration that claims companies in the United States are l...

Taxing Nothing: The Idea of a Vacant Property Tax Spreads

In the wake of the Great Recession, when many properties were sitting vacant, I began pushing a vacant property tax. The idea is that the tax would make it more costly to hold unoccupied housing. This gives owners more incentive to rent out a unit or to sell it, putting more property on the market and bringing pirces down.

The tax has several nice features. First, we already have an assessed value on the books, so it doesn't require a new administrative apparatus to impose a tax of say, 1-2 p...

Recessions Are Not As Sneaky as Austin Goolsbee Tells You

Austin Goolsbee warned readers in a NYT column that a recession can just sneak up on us with very little warning. Strangely, he picks the 2001 recession as his example.

The 2001 recession seems a bad example, since it had a pretty clear cause, the collapse of the 1990s stock bubble. The tech heavy NASDAQ had declined by more than 40 percent by the start of the recession in March of 2001 from its bubble peak in 2000 and the S&P 500 had fallen by almost 20 percent. Both were also on a clear...

Federal Reserve Board Policy and the 3.8 Percent Unemployment Rate

Last week’s job report, in spite of the slow job growth for February, was actually pretty good news. As many of us pointed out, the most likely reason that the Labor Department reported only 20,000 new jobs in February, is that the economy reportedly added 311,000 jobs in January.

There is always a substantial element of error in these numbers. If we envision that there is some underlying rate of job growth of say, 180,000 a month, if we get a number like January’s strong figure, it is reason...

Turning Class Conflict into Generational Conflict: Huffington Post Edition

There continues to be a large market for pieces saying the big conflict in the U.S. is generational rather than class. The Huffington Post made its latest contribution today.

The piece is more than a bit confused, but its headline explicitly gives the intention "America's Defining Divide Is Not Left vs. Right. It's Old vs. Young." Beyond this basic point, as in worry about age, not class, it is difficult to figure out what the article is talking about.

The subhead tells readers, "voters over...

Before-Tax Profit Share Rises in 2018

This is getting annoying. According to data in the Fed's Financial Accounts for the 4th quarter of 2018, the profit share of national income rose again in 2018. While national income rose 4.7 percent, profits rose 7.8 percent. There are two reasons this is annoying.

The first is that these are before-tax profits. Remember that big corporate income tax the Republicans pushed through Congress in 2017? One of the stories why this was going to be good for all of us, and not just for that small gr...

Washington Post Says Republicans Oppose Debt

I'm serious. In an article on the history of socialism in Milwaukee, the city chosen to host the Democratic national convention in 2020, the Post told readers:

"And, at least on an ideological level, the socialists of that time had a surprising amount in common with today’s Republicans. They supported low taxes and opposed public debt. They believed in a “pay-as-you-go” form of governance ...."

This assertion is so obviously contradicted by the facts, it is amazing that it could appear in the...

In Praise of Budget Deficits

With the presentation of his 2020 budget, Donald Trump has been getting a ton of grief over the large current and projected future budget deficits. While his budget shows the deficit coming down, this is due to large cuts to programs that middle income and lower income people depend upon, like Social Security, Medicare, and Medicaid. His projections for falling deficits also depend on assuming a faster growth rate than just about anyone thinks is possible. So realistically, we are looking at...