Dean Baker's Blog, page 62

Does the NYT Prohibit Its Reporters/Columnists from Saying the Trade Deficit Is a Problem?

In the Soviet Union, for a long time, official publications (which were the only publications) were prohibited from mentioning Leon Trotsky, one of the leaders of the revolution, who subsequently fell out with Stalin and was forced into exile. I'm wondering if The New York Times has the same policy towards mentioning the trade deficit as a cause of economic weakness.

It's hard to reach any other conclusion after seeing David Leonhardt's piece on the recurring tendency of forecasters to be ove...

Does the NYT Prohibit Its Reporters/Columnists from Saying the Trade Deficit Is a Problem

In the Soviet Union, for a long time, official publications (which were the only publications) were prohibited from mentioning Leon Trotsky, one of the leaders of the revolution, who subsequently fell out with Stalin and was forced into exile. I'm wondering if the New York Times has the same policy towards mentioning the trade deficit as a cause of economic weakness.

It's hard to reach any other conclusion after seeing David Leonhardt's piece on the recurring tendency of forecasters to be ove...

If CEOs are Gaming Share Buybacks, They are Ripping Off Shareholders

That seems pretty much definitional, but many readers of this Washington Post piece, on what is in effect insider trading by top management, may miss this point. As CEO pay has exploded over the last four decades, from 20 to 30 times the pay of a typical worker, to 200 ro 300 times, many have discussed this rise as though it is somehow in collusion with shareholders.

That makes zero sense. The money that CEOs and top management pocket is money that otherwise could have gone to shareholders. S...

For the Fed's Consideration, Higher Productivity Growth

Neil Irwin had a good piece discussing the slower job growth reported for February, along with more rapid wage growth. He argued that as a result of recent evidence of slowing growth (not so much from this jobs report) the Fed may be inclined to leave interest rates where they are, or possible even lower them. However the pick up in wage growth may lead the Fed to worry about inflation and therefore raise interest rates.

While Irwin notes the pick up is modest, so it's not obvious it will lea...

Can Journalism Be Saved? A Tax Credit System for Creative Work

The latest round of layoffs at Buzzfeed, the Huffington Post, and other major news outlets has raised new questions about the future of the traditional model of advertising supported journalism. While a small number of news outlets, like the New York Times, continue to thrive, few others seem to be profitable in the current environment.

This raises the prospect of a future in which there will be ever fewer reporters to keep the public informed and to scrutinize the actions of public officials...

That Record Merchandise Trade Deficit Is 4.3 Percent of GDP

It is always fun, even if tiresome, to mock Donald Trump for getting things wrong. This is why the jump in the merchandise trade deficit last year to $891.2 billion was especially newsworthy.

Trump had made the trade deficit one of the central issues in his campaign and promised to reduce it to bring back good-paying jobs in manufacturing. He was going to use his skills as a negotiator to get better deals from our trading partners. For this reason, the fact that the deficit is going up, not d...

David Brooks Very Moderate Tirade Against Medicare For All

David Brooks likes to present himself as a voice of reason in the midst of crazy ideologues of the left and the right. He gave us an example of his voice of reason routine today in a piece telling us that Medicare for All is an impossibility.

While the piece raises some reasonable points (the transition will be difficult) the highlight is a condemnation of the Canadian health care system, which is often held up as a model by supporters of Medicare for All.

"Finally, patient expectations would...

Bill Niskanen and a Collectible Corporate Income Tax

(This post originally appeared on my Patreon page.)

Bill Niskanen was the rarest of all creatures, an honest libertarian. He actually believed in libertarian ideas, rather than just using them as an excuse for policies to redistribute income upward.

He headed the Cato Institute for more than two decades, from 1985 until 2008. While CATO generally took conservative views, it also followed Niskanen’s principled libertarianism. This meant the institute was anti-imperialist. Niskanen argued that...

Vox Gets Story on Schatz’s Financial Transactions Tax Badly Wrong

I had a longer piece on this Vox article, but our site ate it, so I will be very brief. This Vox piece on the financial transactions tax introduced by Hawaii Senator Brian Schatz gets the story badly wrong.

The CBO revenue estimate does assume a substantial reduction in trading volume. It does not assume that trading volume remains unchanged, as the piece seems to imply.

Of course, the reduction in volume could be larger than CBO assumes, but this would not be a bad thing. In principle, we wa...

New York State Has a Legal Workaround on Limits on State and Local Tax Deductions

That would have been worth mentioning in a New York Times piece on how the limits are hitting upper middle class and rich taxpayers in liberal states like New York and California. The tax law pushed through by Trump and the Republican Congress in 2017 was quite explicitly designed to make it more difficult for liberal states to raise revenue for purposes like providing health care and quality education.

It did this by limiting the amount of state and local tax that people could deduct from th...