Dean Baker's Blog, page 87

The "Need" for Cheap Foreign Labor: In a Growing Economy, Low Productivity Jobs Disappear

The NYT had an article featuring employers complaining that they couldn't get low-cost immigrant labor. The piece focuses on the H-2B visa program which allows a limited number of foreign workers to come into the United States temporarily to work at low paying jobs such as restaurant work and housekeeping.

In particular, the article highlights the concerns of the two owners of landscaping businesses in the Denver area, Rhonda Fox, who owns a family business and Phil Steinhauer, who owns a lar...

The Washington Post Doesn't Want to Talk About the Federal Debt

Okay, that is sarcastic. Of course the Washington Post wants to talk about the federal debt, but only part of the debt. It continually highlights debts and deficits. But borrowing to finance spending is only one way the government makes future commitments for taxpayers.

The government also obligates taxpayers by issuing patent and copyright monopolies. These monopolies, which allow companies to charge prices that can be ten or even a hundred times the free market price, are effectively privat...

Thomas Friedman Plays with Economics, Gets Hurt

In a period of record low productivity growth Thomas Friedman tells us the robots are taking all the jobs. Hey, no one ever said you had to have a clue to write for the New York Times. Here's the punch line:

"From 1960 to 2000, Quartz reported, U.S. manufacturing employment stayed roughly steady at around 17.5 million jobs. But between 2000 and 2010, thanks largely to digitization and automation, 'manufacturing employment plummeted by more than a third,' which was 'worse than any decade in U...

The Media's Peculiar Need to Attribute Thoughts and Motives

It is absolutely bizarre that reporters so often feel the need to tell us what really "concerns" politicians, or what they "believe," or in other ways make assertions about their innermost thoughts. The reality is that these reporters almost certainly do not know the person's innermost thoughts, and in the unlikely event they do, they are probably too close to that person to be reporting on them.

While exercises in mind reading are especially inappropriate with regards to politicians, since t...

What Trump "Says" Are Unfair Trade Practices, Not "Sees"

NPR's Morning Edition had a segment interviewing economics reporter Jim Zarroli on Harley Davidson's announcement that it would shift some production to Europe to get around tariffs imposed by the European Union in response to Trump's tariffs. At one point, Zarroli comments that Trump imposed the tariffs in response to what he "sees" as unfair trade practices.

Actually, no one has any idea what Trump "sees," meaning what he actually thinks. We do know what he says. It's best to just report wh...

Innovation and Knowledge: Who Has More to "Steal," the United States or China?

The Washington Post repeated a standard theme in reporting on Trump's trade war with China, that our main concern is not the trade deficit but rather China's alleged theft of our intellectual property. I have written about this issue before, but there is an important aspect that seems to have gone largely unmentioned, China is likely to have more at risk in this story than the United States.

Using the purchasing power parity measure (clearly the appropriate one for this issue), China's econom...

China Trade War: Our Elites Think Apple and Boeing Are Less Capable of Defending Their Interests Than an Ordinary Worker

We know that the folks who run major corporations are not terribly competent, but are they really less able to defend their companies' interest in signing contracts than an ordinary worker who may not even have a high school degree? That apparently is the view of our elites as indicated by this Washington Post article.

The piece tells us that the Trump administration is demanding an end to Chinese "policies that force foreign companies to surrender trade secrets in return for access to the Ch...

Tariff Waivers: Another Source of Welfare for Donald Trump and His Family and Friends

Donald Trump may not be very good at running the government for the benefit of the people who live in the country (or the world), but he sure knows how to use it to enrich himself and his friends. The NYT apparently forgot to mention this fact in a piece on companies applying for exemptions to tariffs.

When countries impose tariffs or other import restrictions they usually allow for some exemptions in special cases. One of the reasons that economists generally are opposed to tariffs is that t...

There They Go Again, Attributing Motives to Donald Trump

While the NYT insists that its policy is to not read people's minds and attribute motives (therefore it will never say Donald Trump "lied"), for some reason it keep reading minds and attributing motives. A piece in today's paper on Trump's plan to reorganize the government told readers:

"The core of Mr. Trump’s safety net policy is an expansion of work requirements to foster self-sufficiency among recipients of food assistance, Medicaid and housing subsidies to reduce dependence on the gover...

NYT Is Badly Mistaken Republicans Do Not "Want Hungry Kids to Fund Tax Cuts"

That was the claim in the headline of a New York Times editorial. It is clearly wrong for the simple reason that we are not currently giving hungry kids anywhere near enough money to pay for the tax cuts.

The budget for food stamps, the program being targeted for cuts, is $73 billion a year or 1.7 percent of total spending. The tax cuts are projected to cost roughly $150 billion a year, an amount equal to 3.4 percent of current spending. Even if we cut the food stamp budget by a quarter, it w...