Dean Baker's Blog, page 88

Amazon Does not Require Its Affiliates to Collect Sales Taxes

This is an important point left out of the Washington Post's piece on the Supreme Court decision allowing states to require Internet sellers to collect sales taxes.The piece told readers that Amazon already collects state sales taxes. While this is true on its direct sales, it does not require its affiliates to collect sales taxes. Affiliates account for 30 to 40 percent of Amazon's sales.

Wall Street Journal Runs Piece Decrying Generational Inequality: Young People Will Have Far Higher Wages Than Their Parents

Well, the Journal did run a piece decrying generational inequality, but naturally, it went the other way. The issue is the projected rise in the cost of Social Security and retiree pensions, due to the aging of the population. Our population has always been aging due to tragic fact that better living standards and improved health care coverage allow people to live longer lives.

The Journal attempted to hide this simple fact from its readers by beginning its chart of old age dependency ratios...

The Immediate Impact of Trump's Trade Wars Is To Raise Taxes

An NYT article that touted the strength of the US economy as a defense against the negative effects of a trade war included an assertion from Spencer Dale, the chief economist at BP, that "trade wars won’t sharply curtail economic activity, unless they cause businesses to lose confidence." Actually, the most immediate effect of the tariffs being touted by Donald Trump is to raise taxes, which would reduce consumption, other things equal.

For example, if Trump imposes a 20 percent tariff...

NYT Says Conservative Think Tanks Like Heritage Promote Separating Food Stamp Program from Agriculture to Better Appeal to Racist Sentiments

No, they would never attribute such motives to political actors, but for some reason, the paper feels it can tell us that they want to separate the food stamp program from agricultural appropriations "in hopes of cutting costs." While it is certainly possible that the motives of the Koch-related entities referred to in this piece is really to save the government money, there are reasons for questioning this view.

The government is projected to spend $73 billion on the food stamp program this...

Correction for Morning Edition: Everyone Does Not Lose When the Market Goes Down

In an interview with NPR reporter John Ydstie discussing President Trump's latest round of tariffs on China, host Rachel Martin noted the decline in stock markets worldwide in response to tariffs and asserted that when the markets are down, everyone loses. This is not true.

If the market is down because participants accurately recognize there will be less economic growth, which also means less profits, then it is reasonable to assume that most people will lose. However, this is only one reaso...

Will China Go Nuclear on Patent and Copyrights?

Since Donald Trump has apparently discovered that the US imports more than it exports from China, we can put tariffs on more goods than China can. This means that China has to look to other measures to counter Trump's trade war. Most coverage of this issue has neglected to mention China's strongest alternative measure.

The nuclear option, in this case, would be to stop honoring US patents and copyrights. This would be hugely costly to US corporations, especially if they began to export i...

When Both Men and Women Drop Out of the Labor Force, Why Do Economists Only Ask About Men?

That’s what New York Times readers were wondering when they saw Harvard Economics Professor Greg Mankiw’s column, “Why Aren’t Men Working?” The piece notes the falloff in labor force participation among prime age men (ages 25 to 54) for the last 70 years and throws out a few possible explanations.

We’ll get to the explanations in a moment, but the biggest problem with explaining the drop in labor force participation among men as a problem with men is that since 2000, there has been a drop in...

It Looks Like Washington Post Reporters Really Are Prohibited from Talking About Currency Values and Trade

A couple of weeks ago, I joked that it seemed as though Washington Post reporters are not allowed to mention the importance of the value of the dollar in trade after reading a lengthy article on how low farm prices are hurting farmers which never once mentioned the rise in the value of the dollar over the last four years. The basic story is that, other things equal, the higher the value of the dollar against the euro, yen, and other major currencies, the lower the dollar price of wheat, corn,...

Manufacturing Production Falls In May and No One Notices

The Federal Reserve Board's monthly reports on industrial production used to get a fair bit of attention in the business press, but May's 0.7 percent decline in manufacturing activity seems to have passed largely unnoticed. These data are erratic and subject to large revisions, so this is hardly an end of the world kind of number, but it certainly is not a figure consistent with the investment boom promised by proponents of the tax cut.

It is also consistent with the reported fall in the leng...

NYT Gets Trumpian In Its Criticism of Trump Tariffs

Donald Trump's trade wars seem to lack any logic and are likely to end up badly for both the United States and our trading partners, but that is not a good reason for serious people to start making up numbers to bolster their arguments. That is the route the NYT took in its latest editorial attacking Trump's tariffs.

While the piece makes many valid points, it includes many assertions that can at best be called "truthful hyperbole." For example, the piece tells readers that Trump's steel tari...