Dean Baker's Blog, page 72

NYT Can't Distinguish Between Patent Monopolies and Licensing Requirements

The New York Times ran a very confusing piece on the difficulties that many people in China are facing in getting access to drugs. The piece does not clearly distinguish between the problem of drugs not being legally available because they have not been licensed by China's drug safety agency and drugs being expensive in China due to patent monopolies.

These are very different issues. The first can be readily solved by making the licensing agency more efficient and possibly also relying on app...

Short-Term Health Insurance Plans Destroy Insurance Pools

This is a fact that would have been worth mentioning in a NYT piece on how health care may be affected by last Tuesday's elections. Near the end, the article referred to the Trump administration's promotion of short-term insurance policies but only said that they, "do not have to cover pre-existing conditions or provide all the benefits required by the health law."

The important feature of these short-term plans from the standpoint of the Affordable Care Act (ACA) is that they are designed to...

Good News, the Stock Market Is Plunging: Thoughts on Wealth

This post was originally published on my Patreon page.

Several people on my Twitter feed touted the drop in the stock market last month as evidence of the failure of Donald Trump’s economic policy. I responded by pointing out that he was reducing wealth inequality. I was being only half facetious.

I have always been less concerned about wealth than income both because I think wealth is less well-defined and because income is the more important determinant of living standards. In the case of t...

If Amazon Splits Its New Headquarters in Half, Does That Mean It Just Gets Half of the Incentives from Each City?

That seems like an obvious question that went unanswered in this NYT piece. It did talk about how this would increase Amazon's bargaining power if it could play off two cities (and Seattle) against each other, but it did not raise the question of the initial commitments. In many of these bidding wars, the winner ends up losing by giving away more in concessions than it could ever hope to get back from the investment generated. It will be surprising if this is not the case here.

The Washington Post Neanderthal Protectionists

The Washington Post used its lead editorial to demand that the Trump administration do more to protect US intellectual property from China. The highlight of the piece is the accusation that a Chinese state-owned company hired a number of employees from Micron, who brought over files containing Micron's latest DRAM technology.

Assuming this is true, this sort of theft is indeed a problem. The company has now been indicted and it will be interesting to see the response of the Chinese government...

NYT Tells Readers that Politicians Are Philosophers

In an otherwise useful and important piece on how the Trump administration has backtracked from the Obama administration in enforcing laws and regulations on corporate conduct, the NYT asserted:

"political appointees under Mr. Trump have led a philosophical shift in governing that favors big business and prioritizes the interests of individual investors."

How does the NYT knows that this shift is explained by "philosophy?" This sentence could have with equal plausibility have been written:

"p...

Do Economists Say Government Deficits Impose a Burden on Our Kids Or Is It Just the Washington Post?

When it comes to the budget deficit and programs like Social Security and Medicare, the Washington Post has had difficulty keeping its editorial views out of the news section. We see this again today in an article on the October jobs numbers that told readers:

"A growing number of Wall Street analysts and economists say that the tax cuts and additional spending caused a temporary boost that will fade and leave future generations with a substantially larger debt burden."

The piece actually doe...

Germany's Unemployment Rate is 3.4 Percent, Not 5.0 Percent

The NYT published an oped last week by Jochen Bittner, a political editor for a major German newspaper, asking what is wrong with German's Social Democrats. The focus of the piece is the collapse of popular support for the party as shown by its poor performance in several recent elections.

Bittner attributes this drop in support to its unwillingness to push an agenda that combats Germany's rising inequality. As one example, he comments:

"...the SPD [the German Social Democratic Party] seem...

Help Support CEPR, Give Us Your Vote at CREDO (you don’t have to be a member)

CEPR was selected as one of the organizations to get a share of CREDO’s November givings. The size of our share will depend on how many people vote for CEPR here.

I am really proud of all the issues where CEPR has been ahead of everyone else. We were saying that Social Security did not have to be cut at a time when even many Democrats said the program faced a crisis. We were warning that the I.M.F.’s structural adjustment programs were stifling growth and increasing inequality at the highpoin...

Lessons from the Trump Cut

It’s a bit less than a year since Congress passed the Trump tax cut, but we are far enough along that we can be fairly confident about its impact on the economy. There are three main lessons we can learn:

The tax cut is to not leading the promised investment boom; The additional demand generated by the tax cut is spurring growth and reducing the unemployment rate; The Federal Reserve Board’s interest rate hikes are slowing the economy in a way that is unnecessary given current inflation risk...