Archive

  • Medicare Drugs and What Politicians "Think"

    There should be a simple rule written in huge neon signs in every newsroom: �You don�t know what politicians �think.�� The reason is simple. Politicians do not generally say what they think. They say what will advance their political careers. This is their job. (That is a bi-partisan comment.) If a reporter believes that she knows what a politician actually thinks then she is probably too close to this person to be able to cover them objectively. Reporters best serve the public by reporting what politicians say, and leave it to their readers to determine what the politicians might actually believe (if anything). For this reason, it was very annoying to read a book review in the Washington Post that tells us that Bill Thomas, the chairman of the House Ways and Means Committee, prohibited Medicare from offering its own drug plan that would negotiate directly with the drug industry because he �thought pitting private insurance companies against one another would inject competition into...
  • The Cost of Protectionism in Russia: Counterfeit Drugs

    The NYT had an interesting piece on counterfeit drugs in Russia. It reports that counterfeits may account for as much as 30 percent of total sales. This is what happens when the government creates an artificial monopoly with patent protection. Just as the Soviet Union couldn't prevent black market sales of blue jeans, Russia can't prevent sales of unauthorized versions of patented drugs. A little economic analysis would have been very useful in this article. --Dean Baker
  • Tim Russert Bashes Social Security, Yet Again

    If Social Security was a private corporation, Tim Russert would be unemployed and NBC would be out of business. (When you misrepresent the financial state of a private business in the way that Russert misrepresents the financial state of Social Security, you get sued for libel.) Note how the fact that Social Security, Medicare, and everything else that fits under �entitlements� becomes a Social Security problem, as Russert points out that entitlements account for 52 percent of the budget, approaching 70 percent. (I believe that these percentages exclude interest payments, but it's not clear where Russert is getting these numbers.) Note that Mr. Russert ignores the fact that Social Security is funded by a designated tax that will keep the program fully funded until 2046, according to the most recent projections of the Congressional Budget Office. Many people, including me, have tried to call Russert�s attention to the actual numbers on Social Security � he obviously does not care. He...
  • LABOR DAY SPECIAL.

    LABOR DAY SPECIAL. Tapped will be closed for Labor Day -- but have no fear, there's still TAP Online content you can enjoy today at the barbeque. Today we're kicking off a debate that tackles two related questions -- just how is the middle class actually faring in the contemporary economy, and how should Democrats and progressives adjust their middle-class appeal accordingly? Labor economist Steve Rose has been making waves in the past year with a critique of the Democratic economic message as being both overly gloomy and overly concerned with a set of government programs that does not actually directly benefit large parts of the middle class. (See here and here for his argument.) An exchange of letters between Rose and our own Bob Kuttner in the latest print issue of the Prospect set the stage for this Labor Day week debate, and kicking things off today are two new pieces: EPI president Lawrence Mishel offers a thorough response to Rose's recent work and argues that a populist...
  • From the NYT�s Europe Bashing Desk

    The NYT�s Europe-bashing desk pulled out the stops today in going after Germany . Readers would have learned about Germany�s �chronic double-digit inflation.� This surely would be news to most readers, since the OECD puts Germany�s inflation rate over the last year at just over 2.0 percent. Perhaps the article meant to say �chronic double-digit unemployment.� Well that�s a bit closer, but still no cigar. The OECD puts Germany�s unemployment rate at 8.2 percent. [The web version has replaced "inflation" with "unemployment."] (Even this number should be qualified � former East Germany still has an unemployment rates in the high teens, which means that the unemployment rate in the areas that comprise former West Germany is around 6.5 percent.) Then the article warns about �a health care system that is going bankrupt because of rising costs and an aging population.� Well, we all hate health care systems that are going bankrupt � but yes that�s right BTP fans, Germany�s costs are not...
  • "I'm Hoping For Prices to Drop"

    No, that's not me rooting for a quick end to the housing bubble; those are the words of David Lereah, the chief economist of the National Association of Realtors, as quoted in the Wall Street Journal . Yes, this is the same economist who until recently was assuring buyers that house prices will never fall. The new data on pending sales of existing homes show a year over year drop of 16 percent, yet more evidence that the bubble is bursting. --Dean Baker
  • The Last Throes of the Housing Bubble

    The standard story of financial bubbles has that financing gets progressively more tenuous as the bubble expands. BusinessWeek has a nice piece about the latest and most pernicious financial innovation of the current bubble, the option ARM. It's too bad that no one in a position of authority was awake before the bubble grew to such proportions. --Dean Baker
  • Monthly Wage Growth Data: Hours of Pain

    Regular users of government data (like reporters) should know its limitations. Many of the series are highly erratic, meaning that any individual number contains a considerable amount of error and a limited amount of information. The hourly wage data very much fit this bill. In the real world, hourly wage growth doesn�t change very much from month to month. (How could it? � not that many people change jobs in a month; and wages don�t suddenly plunge or soar for workers keeping their jobs.) However, the monthly wage series does show large fluctuations in the rate of hourly wage growth. For example, in April, the average hourly wage reportedly increased by 10 cents, a 0.6 percent increase. Similarly, it reportedly rose by 8 cents in July, a 0.5 percent increase. Before anyone gets too concerned that these wage increases will lead to inflation, let me point out that wages rose by just 1 cent in May and 2 cents in August. The smart folks out there already guessed that the slow wage growth...
  • THE PARADOX. So,...

    THE PARADOX. So, on the one hand, we have a nation that does not take poverty seriously (as per E.J. Dionne ), and on the other, a public that thinks Democrats are excessively focused on the poor at the expense of the middle class (as per Elizabeth Warren ). I have my own thoughts about how these two phenomena might be related, but I'm curious to hear reader's explanations. --Garance Franke-Ruta
  • DOES THE NEW...

    DOES THE NEW POVERTY AGENDA UNDERMINE THE MIDDLE-CLASS MESSAGE? Elizabeth Warren lays out some provocative food for thought over at The Democratic Strategist : When I talk with families about politics, I often hear a variation on this theme: "Democrats care most about the poor. They tell me I'm better off than the poor, and that I should give up more of my money to help the poor. Well, I'm stretched to the breaking point, and I just can't do it any more." Whenever a Democrat stands up and says, "I'll help every child go to college," then cuts off benefits at $20,000 a year, the message just burns deeper. Democrats thought that the tax cuts would cause a national uprising because they so disproportionately benefited the rich. But they missed a key point: the cuts also benefited the middle class. The middle class might make less-heck, they might make a whole lot less on the tax breaks-than the rich folks, but they would make something. And that something would stay in their pockets and...

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