Dean Baker's Blog, page 79

Robert Samuelson Says Our Wage Increases Went to Health Care, BLS Disagrees

Robert Samuelson used his Labor Day column to tell us that our pay really didn't end up in the pockets of rich people. The problem is that it all went to employer-provided health care insurance. The argument is that health care costs have vastly exceeded the overall rate of inflation. Since a standard health care benefit is larger as a share of the pay of a low-wage worker than a high-wage worker, the increased cost of the benefit took away the money that otherwise would have gone into pay in...

Milking Trump's Trade Dispute With Canada

The other 49 states have a massive trade deficit with Michigan in cars because of the terrible trade deals that our stupid trade negotiators signed with Michigan. Thankfully, Trump is going to impose a 25 percent tariff on cars from Michigan going into the other 49 states to set things right.

That is pretty much how we should understand Trump's complaint about the trade surplus that Canada has with the United States. (Yes, the United States actually runs a trade deficit with Canada, when prop...

The Fracking Financial Crisis Hoax, Brought to You by The New York Times

Perhaps it has something to do with the ten-year anniversary of the Lehman crash, but we seem to be seeing more financial crisis stories in the media lately. Today's version comes to us from The New York Times in a column by Bethany McLean, headlined "the next financial crisis lurks underground." The subhead tells us the basic story:

"Fueled by debt and years of easy credit, America’s energy boom is on shaky footing."

The piece looks to be a very reasonable discussion of the fracking boom a...

The Fracking Financial Crisis Hoax, Brought to You by the New York Times

Perhaps it has something to do with the ten-year anniversary of the Lehman crash, but we seem to be seeing more financial crisis stories in the media lately. Today's version comes to us from the New York Times in a column by Bethany McLean, headlined "the next financial crisis lurks underground." The subhead tells us the basic story:

"Fueled by debt and years of easy credit, America’s energy boom is on shaky footing."

The piece looks to be a very reasonable discussion of the fracking boom and...

NYT Is Mistaken on NAFTA Negotiations: Trump is Threatening Ford and GM with Auto Tariffs, not Canada

Donald Trump is very confused about trade and it seems the confusion has spread to the NYT. Its article on the trade negotiations between the United States and Canada told readers that Trump is threatening with tariffs on the cars it exports to the United States.

Canada doesn't pay tariffs on cars exported to the United States. The companies that import the cars to the United States would be the ones that pay the tariffs. This would primarily be Ford and General Motors, although there may als...

Are the Trump Tax Cuts Causing People to Turn to Drugs?

That could be one conclusion from the Commerce Department's release of consumption data for July. According to the release spending on prescription drugs accounted for 24.7 percent of the growth in real consumption spending for the month. Before people get too nervous about the worsening of the opioid epidemic it is worth noting that real spending on drugs actually declined in the prior two months. July's figure was just 3.0 percent above the year ago level.

It is worth noting that inflation...

Why Exactly Do We Need a Growing Labor Force?

It really is hard to follow economic policy debate these days. After all, we have robots taking all the jobs so no one will have any work, but then we keep getting reminded that the baby boomers are retiring, so we won't have any workers.

We got a dosage of the latter concern in the middle of a very interesting Thomas Edsall piece that everyone should read, on the question of whites becoming a minority. The piece quotes Thomas Frey, a demographer, at Brookings:

"Given the slow and in fa...

World Development Report Gets It Seriously Wrong on Inequality and Labor Markets

The World Bank’s annual World Development Report (WDR) is viewed as the Bank’s official statement on best practices in development policy. It is important both because it often serves as a basis for project loans and I.M.F. programs, and also because it is viewed as an authoritative document by many people in policy positions throughout the world.

For this reason, it is disconcerting that the draft report gets some very big things wrong. First and foremost, the overview dismisses concerns ove...

Washington Post Says Canadians at Truck Stops and Hockey Games Are Worried Trump Outmaneuvered Them on NAFTA

We wouldn't have known this without the a Washington Post article headlined "...on NAFTA, Canadians worry they have been outmaneuvered by Trump." While that is the theme of the piece, the only person quoted or cited in the piece who says anything like this is a member of the opposition Conservative party.

The piece also bizarrely concludes that the US has much more leverage with Canada than the other way around:

"But the latest turn in the talks makes the 'no deal' option particularly danger...

Is Trump's Switch to Semi-Annual Corporate Reports a Good Idea?

I've had a number of people ask me my opinion of the Trump administration's proposal to change Securities and Exchange Commission (SEC) reporting requirements so that companies only have to make reports semi-annually rather than quarterly. While I would say the switch would be good in principle, I would say it is not good now.

The basic argument is straightforward: companies that obsess on quarterly reports may neglect long-term planning for short-term profit targets. It is not clear to me th...