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Dr. Dean Baker is a macroeconomist and Co-Director of the Center for Economic and Policy Research in Washington, D.C. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He received his Ph.D in economics from the University of Michigan.
New York State's Big Middle Finger to the Republican Tax Plan
It is likely that the employer-side payroll tax device will catch on quickly, even though it is not mandatory. It would be great if other liberal states adopted similar workarounds to preserve most of the SALT deduction for their residents. We would get a situation where the only people who lose the benefit of the SALT deduction would be higher-income people living in Republican states.
Disagreeing With Krugman: Is China Stealing Knowledge?
These rules were about forcing developing countries to pay more money to companies like Pfizer and Microsoft for everything from drugs and medical equipment to seeds and software. It shouldn't be surprising that developing countries like China might not like these rules.
Monday, April 2, 2018(3 comments)
Why Should the Poor Pay High Drug Prices?
We have seen a lot of hyperventilating in political circles over Donald Trump's recently proposed tariffs on steel and aluminum. While these do not seem like well-considered policies, and are likely to do more harm than good even from the narrow standpoint of increasing manufacturing employment, they are not by themselves the horror story being presented.
Sunday, April 1, 2018
Roger Lowenstein, F**k Your Stock Portfolio
Congress should pass fiscal stimulus and the Fed should lower interest rates to sustain demand. The destruction of the counterfeiters' money should allow us to have demand in areas that meet the needs of the rest of us rather than the counterfeiters.
Friday, March 30, 2018(1 comments)
Will Interest Payments Take Up the Entire Federal Budget?
The deficit hawks hyperventilate endlessly about the former route of paying for things, but completely ignore the latter, even though it poses a much larger burden. In the case of prescription drugs alone the burden is more than $370 billion a year (we pay more than $450 billion for drugs that would likely cost less than $80 billion in a free market).
Wednesday, March 28, 2018(3 comments)
High CEO Pay: It's What Friends Are For
The explosion in the pay of corporate CEOs is well documented. While the heads of major corporations were always well paid, we saw their pay go from 20- to 30-times the pay of ordinary workers in the 1960s and 1970s to 200- or 300-times the pay of ordinary workers in recent years. Paychecks of more than $20 million a year are now standard.
Thursday, March 22, 2018
CON: Kudlow's fossilized beliefs could lead Trump further astray
Kudlow is an ideologue. This could be a serious problem with a president who often shoots from the hip without seriously considering the ramifications of his policies. Rather than trying to get Trump to consider various perspectives, Kudlow may just reinforce Trump in his ill-considered plans.
Monday, March 19, 2018(2 comments)
Are the Trump Tax Cuts Working and Does Anyone Care?
If the tax cuts actually did produce the sort of investment boom promised by proponents, there would be a good case for cutting the corporate tax rate. We now have good preliminary evidence that the investment boom exists only in the realm of political propaganda. Workers will not be getting any big dividends from this tax cut.
Thursday, March 15, 2018
If Trump wants to get reelected, he should rethink his Federal Reserve picks
Most Americans don't pay much attention to the Fed. People usually perceive its decisions about interest rates and inflation as affecting only Wall Street and big investor types. But the Fed has an enormous impact on the lives of ordinary workers. When it chooses to raise interest rates, as it has been doing for the last 15 months, it is making a conscious decision to slow the economy.
Monday, March 12, 2018(2 comments)
Steel Tariffs and Doctors: A Teachable Moment?
Over the last four decades our trade policy had been quite explicitly designed to put steelworkers and other manufacturing workers in direct competition with low-paid workers in the developing world. Trade deals made it as easy as possible for US corporations to locate factories in Mexico and other developing countries and import their production back into the United States.
Sunday, March 11, 2018
Down on the Farm: More Hysteria About Steel Tariffs
Changes in the dollar's value have much larger impacts on the fate of agriculture. There is essentially a world price for products like wheat, corn, and soy beans. If the dollar rises in value by 10 percent against the currencies of our trading partners, then the price of these goods in dollar terms will fall by roughly 10 percent.
A Note to Media: Don't Tell Us Republicans Care About Deficits
There is one point that should be very clear by now: Republicans do not act like people who are concerned about budget deficits. Given the opportunity, they pursue policies that increase budget deficits. This is not just true in the present; it was also true when George W. Bush and Ronald Reagan were in the White House.
Saturday, February 17, 2018
The Washington Post's Long-Running Attack on Unions
The immediate issue before the court is whether the government can sign a contract with a union that requires that everyone who benefits from union representation has to share in the cost of the representation. Under current law, companies can impose all sorts of conditions on their workers, such as wearing stupid hats, and even having insurance that comports with the boss's religious beliefs.
Wednesday, February 14, 2018(1 comments)
Jeff Bezo's Quest to Find America's Dumbest Mayor
America eagerly awaits the next big event: the announcement of the winner in Jeff Bezos' contest to determine which combination of state and local governments is prepared to give him the most money to be home to Amazon's new headquarters.
Thursday, February 8, 2018(5 comments)
Taking Issue with Paul Krugman, We're Still Not at Full Employment
Labor markets can get considerably tighter before we start to see serious problems with inflation. This is an important issue because if we allow the Fed to crack down when there is still room for the economy to expand further we could be needlessly keeping millions of people from getting job and tens of millions from getting pay increases.
Tuesday, February 6, 2018
More Thoughts on the Stock Crash
People who have invested heavily in the stock market have nothing to complain about. If they didn't understand that it doesn't always go up then they should keep their money in a savings account or certificates of deposit. In short, calm down. The economy is not going to collapse.
Monday, February 5, 2018(1 comments)
Donald Trump as Mr. Magoo
Donald Trump will undoubtedly continue to boast about his great economy. He is right about the economy looking comparatively good, but the credit belongs to Federal Reserve Board Chair Janet Yellen and President Obama, not to Mr. Magoo in the White House.
Monday, January 29, 2018(6 comments)
It's Still the Yellen-Obama Economy
In the State of the Union address we are likely to hear Donald Trump boast about the great economy. He has a case, except he will be boasting about the economy of his fired Federal Reserve Chair Janet Yellen and President Obama, not one that he has yet been shaped by his policies.
Tuesday, January 23, 2018(1 comments)
The Corporate Tax Cut Bonanza
Corporate America is clearly putting on a public relations show to thank the Republicans who pushed through the tax cut. They are trying to convince people that the Republicans in Congress were doing something that was good for the country, not just rewarding big donors to their campaigns. But this is not the sort of stuff that the public should take seriously.
Monday, January 8, 2018
Big Tax Game Hunting: Employer-Side Payroll Taxes
this tax increase was explicitly designed to make it more expensive for progressive states to provide services like health care and education to their people. In this context, it's time to take the gloves off. These states absolutely should look to fight back by finding ways to avoid the tax increase.
Tuesday, January 2, 2018
Rubbing SALT in the Wounds of Republicans
Fortunately, there are ways to undermine the Republican effort. An obvious one is to partially replace the state income tax with an employer side payroll tax. This can lead to a situation in which the state tax on wage income ends up being fully deductible against federal income taxes even for people who do not itemize on their tax forms.
Tuesday, January 2, 2018
The Trump Investment Boom: Is It Really His Fault Oil Prices Jumped by 40 Percent
The investment in the mining and oil sector is almost certainly far more attributable to the rise in world oil prices than anything Trump has done in office. Oil prices collapsed in 2015 and 2016, falling from close to $100 a barrel in 2014 to a low of $32 a barrel last year. This slump led to a plunge in investment in oil and mining in 2016.
Monday, January 1, 2018(4 comments)
Dumb and Dumber: Trump on Amazon and the Postal Service
The loss claimed by the Citigroup study is clearly wrong and Donald Trump is wrong to be using it to attack the Postal Service, Amazon, and Jeff Bezos. On the other hand, Amazon has gotten a subsidy worth tens of billions of dollars since its creation as a result of not being required to collect sales taxes in most states for most of its existence. So people do have serious cause to complain about Amazon.
Wednesday, December 27, 2017(1 comments)
Diverting Class Warfare Into Generational Warfare: Round LVIII
We're not supposed to talk about any of the items that will hurt the living standards of our children and grandchildren. The generational warriors insist that our children's problem is their parents' Social Security and Medicare. Their argument doesn't make much sense, but you can get lots of money for saying it, and you can count on getting your stale recycled arguments printed in the nation's leading publications.
Friday, December 22, 2017(1 comments)
Corporations Are Trying To Sell The GOP's Narrative On Tax Cuts
The Republican lawmakers have sold the corporate portion of their tax cuts with the claim that it is actually about helping workers. Their argument is that the corporate tax cut will lead to so much growth that the increase in wages will actually be considerably larger than the tax cut itself.
Tuesday, December 19, 2017
Bubbles: Are They Back?
Should we be concerned about a bubble now? Stock prices and housing prices are both high by historical standards. House prices are also high by historic standards. Inflation-adjusted house prices are still well below their bubble peaks, but are about 40 percent above their long-term average.
Wednesday, December 13, 2017
Mick Mulvaney and the Bad Actors Club
Mick Mulvaney openly holds the CFPB in contempt. When he was still in the House of Representatives he referred to it as a "joke." Mulvaney has made it clear that he would be happier if the CFPB did not exist. Appointing him as acting director is a bit like selecting a hard--core atheist as the next pope.
Sunday, December 10, 2017
Why Not Make the Rich Compete?
The Right has managed to use its control of the rule-setting process to engineer an enormous upward redistribution of income. The process involved the leadership of both political parties, so it's certainly not a story in which right-wing Republicans exclusively can be seen as the villains.
Tuesday, November 28, 2017(7 comments)
Janet Yellen and Barack Obama's Economy Is Looking Good
It is important that people recognize that the economy is going in the right direction for now. This is the economy that Janet Yellen and Barack Obama's policies gave us. We will have to see what the impact of the new regime's policy will be.
An Honest Approach to Simplifying Corporate Income Taxes
The Republicans are trying to pitch their tax cut plan as being a major step toward simplifying the tax code. While there is little doubt the plan will mean large tax cuts for corporations and their shareholders it is not clear that there will be much simplification. Corporations will still be able to have large tax savings by hiding profits overseas and other tricks.
Monday, November 6, 2017
Productivity Growth Is Up, Are the Robots Finally Coming?
Higher pay also gives employers more incentive to invest in technology in order to reduce their need for workers. And we have seen an uptick in equipment investment over the last year, which is consistent with businesses trying to economize on labor.
Friday, November 3, 2017(2 comments)
Blaming Inequality On Technology: Sloppy Thinking For The Educated
Technology never produces inequality; it is policy on technology that leads to inequality. Once we recognize this basic fact we can have a more serious debate on how best to structure technology policy going forward. If technology, not policy, is the culprit, it means inequality is something that happened, not something we did.
Tuesday, October 31, 2017(1 comments)
The Tax Scam We Know and the Tax Scam We Don't Know
Any tax cut will have to go through Congress with representatives and senators having to cast a vote that in principle they can be held accountable for. The other scam requires no vote; it is about Donald Trump appointing a crony tax avoider as temporary head of the Internal Revenue Service. For the rich, paying taxes could become a voluntary contribution to the government rather than something they are required to do.
Saturday, October 28, 2017(15 comments)
The Problem of Doctors' Salaries
If we want to stop paying a $100 billion premium for health care that doesn't make us healthier, we're going to need to overcome political barriers. Getting U.S. health care costs down is a herculean task; getting doctors' pay in line is a big part of the solution. It's time we broke up the doctor cartel.
Tuesday, October 24, 2017(8 comments)
The Democratic Party Must Part Ways with Wall Street
Many view the waste and corruption of Wall Street as being an obstacle to a more efficient productive capitalist economy. Given the enormous damage caused by the collapse of the last two Wall Street driven bubbles, there is a pretty good case here.
Saturday, October 14, 2017
The Republican Tax Plan To Slow Growth
Capital in intellectual property is responsible for a large and rapidly growing share of U.S. corporate profits. Tracking down the real source of these profits would be a herculean task in the best of circumstances and one almost certainly beyond the means of a neutered I.R.S.
Tuesday, October 10, 2017
Kevin Warsh As Fed Chair: The Art Of Marrying Rich And Falling Upward
While there are considerable grounds for criticizing the Fed's performance in recent decades, the people who were appointed as chair all had clear credentials that would justify their selection. That is not the case with Kevin Warsh. More importantly, when he has been in a position to weigh in on the key economic policy issues of the time, he has a near perfect track of being almost 100 percent wrong.
Monday, October 9, 2017
Employment Falls for the First Time in Seven Years
Employment fell by 33,000 in September, according to Bureau of Labor Statistics establishment survey, the first decline since September of 2010. The drop was due to the effects of the hurricanes in Texas and Florida. This is shown clearly from the loss of 104,700 jobs in restaurants.
Monday, September 18, 2017(1 comments)
Janet Yellen and the Fed: Progressives Should Pay Attention
There is a long list of reasons that Trump should not get another term in office, and the list will surely lengthen in the next three years. This should be the basis for unseating him, not the sabotage of the economy. We should all hope that Janet Yellen gets another term as Fed chair.
Sunday, September 17, 2017(2 comments)
Adults in the Room: The Sordid Tale of Greece's Battle Against Austerity and the Troika
There is no reason to question Varoufakis' commitment. He left a comfortable life as an academic in Austin, Texas, to take up what he certainly knew to be an incredibly difficult job as Greece's finance minister in the middle of a financial crisis. The newly elected populist government was despised by most of the business and political establishment in Greece and across Europe.
Saturday, September 16, 2017(3 comments)
No: Corporate taxes should be reformed, not cut
as a matter of simple arithmetic, if our corporations pay less in taxes, the rest of us will have to pay more. Yes, Republicans promise us tax cuts will lead to a surge of investment and growth, but we've heard this one before. It didn't happen when we had big tax cuts under Ronald Reagan and it didn't happen when we had big tax cuts under George W. Bush.
Monday, September 11, 2017
Welfare for Wall Street: Fees on Retirement Accounts
Whether it comes from religious belief or a sense of basic decency we feel are an obligation to provide the basic necessities of life for the poor. But how would we feel about being taxed $1,000 a year to provide six figure salaries to people in the financial sector? Although no candidate to my knowledge has ever run on this platform, this is the nature of the retirement system the federal government has constructed for us.
Tuesday, September 5, 2017(1 comments)
Houston, Bangladesh, and Global Warming
The emissions from the United States and other wealthy countries will result in a lot of Harvey-like disasters in Bangladesh and elsewhere in the developing world. We should be moving quickly to try to limit the harm. We should also be giving these countries the assistance they need to deal with the disasters that we have caused them.
Friday, September 1, 2017
Job Growth Weakens in August
The Bureau of Labor Statistics reported that the economy added 156,000 jobs in August, somewhat less than most economists had expected. This figure, combined with downward revisions of 41,000 to the prior two months data, brought the average over the last three months to 185,000.
Monday, August 28, 2017(1 comments)
Should South Korea Worry About Donald Trump?
The list of absurdities surrounding Trump is literally endless. He has his staff prepare him two briefing books a day, one in the morning and one in the afternoon, of positive news stories about him. He is convinced he is widely adored and all his speeches are resounding successes even when they are in fact profound embarrassments.
Tuesday, August 22, 2017
Social Security: Still The Most Efficient Way To Provide Retirement Income
If we want to supplement the income provided by Social Security, we should look to the program as a model. Keep it simple and keep the costs low. If people want to speculate in financial markets they are welcome to do so, but retirement policy means simple and cheap, and if that reduces profits for the financial industry, that's good too.
Tuesday, August 15, 2017(2 comments)
Ten Years After Financial Crisis, Our Elites Have Learned Nothing
The economic disaster that cost millions of people their jobs and/or their homes, and forced tens of millions to accept lower wages, was 100 percent avoidable if the people responsible for making economic policy had been awake. Turning the story of the housing bubble into a story about the financial crisis is an effort to make issues that are quite simple seem very complicated.
Friday, August 11, 2017(2 comments)
Do Corporate Media Need to Lie to Promote Trade Deals?
people can have reasonable differences of opinion on trade deals like the Trans-Pacific Partnership (TPP), but why is it that the proponents have to insist, with zero evidence, that not doing the deal was an economic disaster? The political argument, which seemed to arise late in the game, that US standing in the world has collapsed because we didn't follow through on the TPP.
Monday, July 31, 2017(1 comments)
A Better Deal Than What?
The Democrats have set a very low bar for themselves. Nonetheless, the agenda does offer some basis for hope that the Democrats may be prepared to reverse some of the upward redistribution of the past four decades, if they ever regain power.
Mulvaney's MAGAnomics Mix of Groundhog Day and Flat Out Lies
Mulvaney apparently missed the fact that energy prices have plummeted in the last three years. Oil had been over $100 a barrel; today it is less than $50. While it is always possible that it could fall still further, any boost to the economy from further declines will be trivial compared to what we have seen already.
Monday, July 17, 2017
ObamaCare is Only "Exploding" in the Red States
Where Republican governors have sought to sabotage the program, they have largely succeeded. Where Democratic governors have tried to make the ACA work, they too have largely succeeded. Republicans have been so successful in keeping many of their residents from getting insurance, they think the country should trust them to overhaul the ACA.
How Rich Would Bill Gates Be Without His Copyright on Windows?
Even without copyright protection Mr. Gates would probably still be doing fine -- he seems reasonably bright, works hard and comes from a wealthy family -- but he would not have amassed his huge fortune if he could not get government-granted monopolies on his software.
Tuesday, July 4, 2017
Republicans Craft Health Care Plan to Screw Trump Voters
The costs for older insurees should be especially important for Trump voters, because this is the group where he had the biggest vote margin. While Trump lost the under-40 vote by double digit margins, he carried the 50 to 64 age group by a margin of 52 to 44 percent. So it looks like the Republicans are prepared to make these people pay a real price for their votes.
Thursday, June 29, 2017
Thomas Friedman Whines About His Lost TPP
If the TPP had been approved by Congress last year we would be dependent on the Trump administration to enforce these parts of the agreement. Even the most egregious violations could go completely unsanctioned, if the Trump administration opted not to press them. Given the past history with both Democratic and Republican administrations, this would be a very safe bet.