Archive

  • Do the Washington Post Editors Know How Markets Work?

    The Post has a piece this morning about the non-enforcement of laws against hiring undocumented workers. The article includes several statements, including one from Homeland Security Secretary Michael Chertoff, to the effect that native born citizens will not do the jobs that are filled by undocumented workers. Believers in markets would say that if wages rose, then plenty of native-born citizens would be willing to fill the jobs. Interestingly, meat processing is one of the industries discussed in the article. Thirty years ago, this was an industry with relatively high-paying (albeit extremely unpleasant) jobs. It was also relatively highly unionized. Plenty of native born citizens wanted these jobs. The Times had a much more insightful piece on the same topic. It reports on the growing use of undocumented workers as custodians and how this has been associated with a decline of wages in the occupation. --Dean Baker
  • Wasting Public Funds on Destroying the Planet

    It is remarkable that ostensibly intelligent people can be made to fear the possibility that Europe and Japan will be less crowded places in the years ahead. The Financial Times has an article that reports on a warning from "top fertility experts" over "Europe's chaotic response to its demographic crisis." It is hard to find the evidence for the crisis in the story. The article reports that health care spending as share of GDP is projected to rise from a Europe-wide average of 6 percent at present to 8 percent by 2050. Since the U.S. currently spends 15 percent of its GDP on health care, it is difficult to get too concerned about this prospect. The article gives the usual hype about the rise in dependency ratios, there will be fewer workers for every dependent. Those who have mastered arithmetic know that the projected increases in productivity swamp the impact of rising dependency ratios on living standards. For example, if productivity growth averages a very modest 1.5 percent...
  • Interesting News On China

    The New York Times reported on Saturday that China's central bank is adopting a more contractionary monetary policy in order to slow its economy and reduce inflation. If China's central bank is concerned that inflation is getting out of control, then it would be an ideal time for the country to begin to raise the value of its currency against the dollar. This would have two beneficial effects from the bank's standpoint. First, a more valuable Chinese currency will make Chinese exports more expensive. This will slow China's export growth, and thereby help to slow its economy. The other effect is that a higher valued currency will make imports cheaper. Lower priced imports will help to alleviate domestic inflation by making cheap goods available as inputs into production, and also by allowing workers to consume more without pay increases. A higher valued Chinese currency will be a mixed story for the United States. On the one hand, it will make U.S. goods more competitive, both in the...
  • Strong Words on the Fed

    "The Fed chairman may be appointed by the president and confirmed by the Senate, but his real bosses are on Wall Street." This isn't the ranting of some crazed radical; it is a line from a column in the Washington Post 's Outlook section, by Richard Yamarone, an investment analyst. While I probably never would have phrased it so bluntly, I think that Mr. Yamarone is largely correct. It is worth reflecting on this one. The interests of Wall Street investors are not necessarily the same as the interests of the public as a whole. For example, big wage increases, that come out of corporate profits, would be very welcome news to the vast majority of the population, since they depend on wages for the bulk of their income. Needless to say, lower profits are not welcome news on Wall Street. The fact that we have an arm of the federal government that answers to the special interests on Wall Street, rather than the larger public, should be cause for concern in a democracy. --Dean Baker
  • JUST POSTED ON...

    JUST POSTED ON TAP: HARD SELL. Garance Franke-Ruta reports on the icy reception Mark Warner received at this year�s Yearly Kos convention. --The Editors
  • PRACTICALITY. I...

    PRACTICALITY. I recommend that folks read Garance 's sharp analysis of Mark Warner 's impact at YearlyKos. Most interesting to me was news that the famously pragmatic, nonideological Markos is scornful of a potential meeting with Team Hillary . When a Hillary staffer reached out to him a year ago, Markos ignored the invitation. Indeed, he offers a willingness to take it a step farther, saying that if Clinton requested a meeting today, �I�d probably say no � I don�t think she has anything to say to me.� Fair enough, though snubbing the party's likely nominee isn't exactly a "pragmatic" move. But neither was it the first time: in 2004, Markos swiftly rebuffed Cam Kerry 's efforts at outreach after his brother secured the nomination. At least, it wasn't on first blush. But upon further thought (second blush?), both moves are perfectly, even ruthlessly, pragmatic. Clinton doesn't need Kos -- his netroots won't prove a major force in her fundrasing machine, her victory won't be attributed...
  • UNFOUNDED CONFIDENCE. ...

    UNFOUNDED CONFIDENCE. Responding to claims that America's apathy towards soccer adds to international irritation with us, Jerry Taylor wonders whether the world would really be happier "if America took this game seriously and, as a consequence, cut through their footballers like a hot knife through butter?" That's just silly. Our record in international competitions ain't exactly so hot. Baseball, a sport we theoretically dominate, just held the World Baseball Classic, a sort of World Cup for our national pastime. We lost to Korea, Mexico, and Canada, getting eliminated before the finals. We're just lucky we didn't play Cuba, who would've delivered a rather embarrassing whupping. And we all remember the 2004 Olympics, where the Dream Team was summarily demolished by Puerto Rico -- our very own colony ! So comforting American exceptionalism aside, it's not clear to me how a national focus on soccer would lead to us tearing through the Brazilians. Do we, as a country, pay insufficient...
  • BUT WHAT WILL...

    BUT WHAT WILL BE THE CAUSE OF DEATH? I spent this morning at a Brookings/New America Foundation event on the future of employer-based health care. The consensus? The system, captain, she canna' take anymore! The morning's most interesting speech came from Andy Stern , head of the SEIU and catalyst for last year's union split (which gets a dim review from Harold Meyerson in the upcoming issue of The American Prospect ). And make no mistake, the guy can talk. Despite having a look and speaking style unsettlingly similar to Bill Maher 's (if Maury Povich ever has a "Long Lost Brothers" show, and Maher or Stern is waiting uneasily on stage, you can be sure that the other is set to stride out from the wings), he gave a ripsnorting condemnation of the current system -- a decaying, dying structure -- and called on the room's business leaders and policy wonks to show some damn leadership and hasten what comes next. It was powerful stuff, and Stern knew how to deliver it. His union, after all...
  • IDEALISM AND SUCH....

    IDEALISM AND SUCH. Writing like this from Richard Just makes me suspicious. Ostensibly, the argument is that "there are plenty of ways short of military action that America can oppose tyranny in Iran and elsewhere" and that we should do so. The post doesn't, however, name any such ways, cite any arguments that such ways would be effective, or debunk any counterarguments against any such proposals. Instead, the actual weight of the post is just dedicated to bashing liberals. I'd be interested in hearing about what these ways are -- really! My read, though, is that the tragedy of the situation in Iran is that there's actually very little we can do to affect internal Iranian developments -- we have almost no leverage over the situation. We might be able to do more vis-�-vis friends and allies, like Saudi Arabia and Tunisia, but even there I'm not sure, in practice, what can really be done. I think it would probably be somewhat helpful if countries that don't have suspect geopolitical...
  • THE WAR: IT'S...

    THE WAR: IT'S HERE, IT'S REAL, GET USED TO IT. Yesterday's scummy GOP political stunts over Iraq were, of course, scummy. At the same time, though, Democrats are paying the price for the ostrich-like attitude they've taken to the war ever since the 2004 election. There's been this persistent hope that either the Bush administration would declare victory and go home, or else that the mounting casualties, costs, and unpopularity of the venture would somehow allow a bipartisan truce to prevail letting Democrats wage a campaign that's all about ethics and prescription drugs. There's a lesson in yesterday's events that Democrats need to learn, and quickly: The Republicans are confident -- very confident -- about the politics of national security. Confident enough to try and sell a war based on bogus intelligence. Confident enough to, in the wake of the intelligence's evident wrongness, simply revise history and say it was about something else. Confident enough to try and make the war a...

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