• NYT Attacks Wall Street Protectionism

    For those who think that I hate the NYT, I have a big surprise; some gushing praise. An editorial in today's paper hits a real home run, trashing efforts to water down the corporate accountability rules in Sarbanes-Oxley. The editorial gets it exactly right, putting Wall Street's quest for weaker rules in the context of global competition for business. As the editorial notes, Wall Street is losing market share, not because of accountability rules, but because it charges too much. (Ever wonder where those $100 million paychecks come from?) Corporate management decides where to list shares, arrange mergers and buyouts, and carry through other financial business. Wall Street hopes that by weakening rules that protect investors against management abuses, it can make itself a relatively more attractive market to corporate management. This is a protectionist move in the same vein as the steel industry's efforts to get higher tariffs back in 2001. [I previously had said in this post that...
  • The Post Continues its Attack on Reforming the Medicare Drug Benefit

    The Post had yet another piece attacking plans to reform the Medicare drug benefit, although they at least had the decency to put their latest shot on the editorial page. Recognizing the artistic license that such pieces enjoy, this one still exceeds the bounds. The writer, an economist at a right-wing Italian think tank, warns against Italy's mistakes in regulating drug prices. For example, he claims that the regulation of drug prices makes it difficult for people to get reliable information about drugs. Well, in the United States, the incentives created by unrestrained patent monopolies has created a massive industry designed to deceive patients and doctors about the effectiveness of drugs. We are also told that regulation of drug prices has led to rapid medical care inflation in Italy over the years from 1998-2003. Yep, it's been more rapid in the United States over the same period (about 25 percent, according to the OECD). Then we are told that the pharmaceutical companies have...
  • Protectionism Gone Nuts

    The NYT has an article today about the University of Alabama's efforts to prevent an artist from painting pictures of their football players. Its case includes a request to prohibit his use of the school's "famous crimson and white color scheme." This is intellectual property rules gone crazy. It is also an extreme form of protectionism. Unfortunately, the NYT reporter never mentioned the economic angle here. If you impose a 10 percent tariffs on shoes, the Thomas Friedman crew start foaming. But, if you put an outright ban on a whole form of art (it ain't my bag, but people apparently buy it), they don't even think it's worth mentioning. If only we could require some minimal level of consistency among columnists (and economists). --Dean Baker
  • The Post Continues Its Crusade Against Social Security

    The Washington Post editors, along with most of its columnists, have long advocated cutting and/or privatizing Social Security. Unfortunately, this position infects their news reporting as well, as illustrated with a front page story discussiong the alternative minimum tax. The article lists a set of "ticking time bombs set to explode soon after the 2008 presidential election." Yes, this list includes Social Security. Well, if anyone at the Post had access to the CBO website they would know that the program will be running an annual surplus of more than $200 billion at that point and is projected to continue to running large surpluses for more than a decade after 2008. And, its accumulated surplus is projected to be suffiicient to keep the program fully solvent until 2046 with no changes whatsover. I guess the Post is trying to give new meaning to the word "soon." --Dean Baker
  • Paulson Wants to Fix Social Security, How About an English Language Version of the New York Times?

    The New York Times continues its crusade to cut and/or privatize Social Security by again referring to efforts to restore the long-term solvency of the program. Since the program already has long-term solvency (through the year 2046, according to the Congressional Budget Office), this is a phony problem. Of course it's fine that people want to restructure the program, but it is simply not true that there is any need to do so over any reasonable time horizon. It would be nice if the Times reporters could be a bit more honest in their discussion of the topic. -- Dean Baker
  • Cheap Thoughts on Turning the Peru-U.S. Free Trade Agreement Into a Free Trade Agreement

    You've heard it here before, but those who want to hear my rant again can find it at Lame Duck Hunt . --Dean Baker
  • Possible Correction on NPR on the Democrats on Drugs

    I have been told by people who know such things that the Dems are looking at ways to allow Medicare to negotiate prices with the drug industry, without offering its own plan, that actually would be meaningful. For example, it could negotiate a set of prices that would apply to all the insurance plans included under Part D. This seems unduly complex, but it could lead to lower drug prices. Whether they end up going this route and designing something that actually reduces drug prices, or whether they do something that is purely symbolic, remains to be seen. The moral of the story is that everything will depend on the details of how any reform measure is structured. If the public is not informed of these details, it will not be able to distinguish between a substantive measure and a purely symbolic one until it is time to pay the bills. --Dean Baker

    VETERANS' DAY. Though Laura weighs in below, Tapped is more or less down today in honor of the holiday. But for your TAP Online reading pleasure: Rick Perlstein offers an urgent reminder to Democrats not to let victory lull them into forgetting the dirty tricks operation that the GOP perpetrated on Tuesday -- and will do again in future elections. And Peter Dreier and John Atlas highlight the role that wildly successful minimum wage initiatives in six states played in Tuesday's outcomes. --The Editors
  • "T+1": OR HOW...

    "T+1": OR HOW A BIPARTISAN IRAQ STRATEGY MIGHT EMERGE. From the proverbial well-informed correspondent: The story in the NYT today about Gates bringing in old advisors and critics of Rummy/Iraq policy and cleaning out the 'E Ring' seems to be more evidence that the administration is using the [Gates] nomination to signal and provide a down payment on a change in course. It looks like the administrations plans to meet with the [Baker-Hamilton Iraq Study Group (ISG)] next week (then the Dems will meet with them), and that the ISG will be the focal point for a new strategy, which increasingly looks like it may involve (at least informal) talks with Iran. We'll see how much these meetings actually SHAPE the ISG findings that will be released next month. In other words, it looks like the following process is unfolding: at time 't' the ISG meets with Bush/Dems, floats a few ideas, gets feedback, and integrates the feedback into its sense of what kind of bipartisan strategy is possible; then...
  • NPR on the Democrats on Drugs

    One of the items on the Democrats' "100 hours" agenda is reforming the Medicare prescription drug bill. The bill passed by the Republican Congress prohibited Medicare from offering its own plan. This denied seniors the benefits of Medicare's lower administrative costs (@ $5 billion annually, or $200 per enrollee, according to CBO) and it means that drugs cost almost twice as much as if Medicare bargained directly with the industry and secured the same prices as the Veterans Administration or the Canadian government. The Republicans also added a seemingly gratuitous clause that explicitly prohibited Medicare from negotiating prices with the industry. During the campaign, the Democrats had promised that they would reform the drug bill to allow Medicare to offer its own drug plan. On NPR this morning, it was reported that the Democrats now are just planning to remove the gratuitous clause prohibiting Medicare from negotiating prices with the drug industry, while not allowing Medicare to...