Dean Baker's Blog, page 65

Good News: Kevin Roose Says Businesses Are Finally Thinking About Productivity Growth!

Economists have been concerned about the sharp slowdown in productivity growth since 2005 and wondering whether it will persist indefinitely. Productivity (a.k.a. "automation") grew at an annual rate of almost 3.0 percent from 1995 to 2005, roughly the same pace as during the long Golden Age from 1947 to 1973. For reasons that are not clear, growth then slowed sharply to a 1.3 percent annual rate in the years since 2005.

 

Productivity: Non-farm Business Sector

 

Source: Bureau of...

Putting Allegations of Improper Voting In Context

The NYT did a very simple step today and performed a great public service. In an article on allegations by Texas Secretary of State that 95,000 non-citizens in Texas might be registered, it put the numbers in the context of the total number of registered voters in Texas. 

The piece reported on the conclusions from an investigation which found that 58,000 of these people voted since 1996. The NYT article points out that even if all 58,000 of these votes were cast in 2018, it would amount...

Labor Market Disagrees With Washington Post Column on Skills Gap

Greg Case and Julie Sweet had a column touting the apprenticeship programs arranged through their companies, Aon and Accenture North America. They argue that these sorts of apprenticeship programs are needed to combat the "skills gap."

The key factoid in this argument is the increasing number of jobs requiring college degrees and the loss of jobs that need just a high school degree:

"Georgetown University’s Center on Education and the Workforce reports that our country lost — and has not r...

Andrew Van Dam Tells Us CBO Is Wrong, Productivity Growth Is About to Soar

That is the gist of a piece telling us that automation (a.k.a. productivity growth) will surge in the next recession. Since the Congressional Budget Office (CBO) and most other forecasters project continued slow productivity growth, the prediction of an imminent surge in automation goes against standard views in the economics profession.

I have to say, the basic story here is hard to follow. Here are the first two paragraphs:

"Robots’ infiltration of the workforce doesn’t happen gradually, at...

Jack Bogle, Vanguard, and Financial Transactions Taxes

(This post originally appeared on my Patreon page.)

Last week, Jack Bogle, who founded Vanguard Funds, died at the age of 89. Bogle was widely praised in his obituaries (including by me) for starting Vanguard, which now has over $5 trillion in assets.

Bogle’s innovation was the recognition that most people lose money by trading. This is regardless of whether it is their own trading or they have an actively managed mutual fund. The fact is that the vast majority of people do not beat the marke...

No One Said Rich People Were Very Sharp: Davos Tries to Combat Populism

Let's see, cattle ranchers are against vegetarianism, coal companies are against restricting CO2 emissions, and the Davos crew is trying to combat populism, according to The Washington Post. It is kind of amazing that the rich people at Davos would not understand how absurd this is.

Yeah, we get that rich people don't like the idea of movements that would leave them much less rich, but is it helpful to their cause to tell us that they are devoting their rich people's conference to combat...

How Worried Should We Be If China's Growth Rate Slows to 6.4 Percent?

There have been numerous articles in the news recently telling us about China's slowing economy (e.g. here and here). From the accounts I've seen, it does sound like China has problems, although we have heard this story before. (There have been China experts predicting a financial collapse since the late 1990s.)

But the striking part is that a slowing economy is treated as something unexpected. China had been maintaining extraordinary double digit through the 1980s, 1990s, and 2000s. The idea...

Pushing Opioids: More Evidence on the Harm Caused by Patent Monopolies

The Washington Post had a piece on a new study finding a correlation between opiod overdoses and the money spent by drug companies marketing opiods to doctors. Of course no one would spend large amounts of money promoting a drug without the huge profit margins they enjoy as a result of government-granted patent monopolies.

It is standard practice for pharmaceutical companies to push their drugs in contexts where they may be appropriate. The spread of opiods is simply an extreme case. Without...

The Trump Tax Cut Is Even Worse Than They Say

(This piece was originally posted on my Patreon page.)

Jim Tankersley had a nice piece in the New York Times last week pointing out that the tax cut pushed through by the Republicans last year is leading to a sharp drop in tax revenue. While this was widely predicted by most analysts, it goes against the Trump administration’s claims that the tax cut would pay for itself.

Looking at full year data for calendar year 2018, Tankersley points out that revenue was $183 billion (5.6 percent) below...

Arithmetic Help for Mitch McConnell on Voting Measure (see correction)

We know that Republicans have trouble with arithmetic so I thought I would take a few minutes to help Mitch McConnell with some of the numbers in a column he wrote for the Washington Post complaining about a bill to protect voters' rights and limit the influence of money in elections.

The column complains

"the legislation dedicates hundreds of pages to federalizing the electoral process. It would make states mimic the practices that recently caused California to incorrectly register 23,000 in...