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Dean Baker

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NYT Is Anxious to Tout Bad News About Europe

Dean BakerApr 01, 2010

That is what the headline of an article on new economic data told readers. The headline is: "Unemployment and Inflation Rise in Europe." The data showed that unemployment increased from 9.9 percent in January to 10.0 percent in February.

This increase is not statistically significant. It is also the same unemployment rate that had originally been reported for November, but was subsequently revised down to 9.9 percent. In other words, the unemployment rate has been essentially unchanged for the last four months.

Offshore Drilling Will Have No Noticeable Impact on Oil Prices

Dean BakerApr 01, 2010

The Post reported on President Obama's lifting of the moratorium on offshore drilling and the response to the decision. While the article noted the reactions of politicians and presented polling data, it neglected to mention the fact that the oil that can potentially be obtained from these areas will have no noticeable impact on oil prices.

Productivity Growth Does Not Explain the Lack of Jobs

Dean BakerMar 31, 2010

The Washington Post repeated a common complaint that the reason that the economy is not creating jobs is because employers are squeezing more productivity out of workers and therefore need fewer workers to produce the same level of output. Productivity growth cannot explain the failure for the economy to generate jobs thus far in this recovery.

Sorkin is Wrong: There Is No Tradeoff Between Growth and Bank Capital Requirements

Dean BakerMar 30, 2010

NYT columnist Andrew Ross Sorkin warned readers that higher bank capital requirements, intended to ensure safety: "would come at the expense of economic growth as banks would make fewer loans.This is not true.

The Federal Reserve Board decides on the level of reserves that it wants to pump into the financial system based on the level of economic activity. If economic activity is too slow, it can increase the volume of loans available to banks by putting more reserves into the system. Contrary to what Sorkin asserts, it is not necessary for the banks to raise their leverage of the same amount of reserves in order to generate more loans for businesses.

--Dean Baker

Surging Homes Sales? Seasonal Adjustments, Please

Dean BakerMar 30, 2010

The NYT told readers that home sales are surging in advance of the April 30th expiration of the extended first-time homebuyers tax credit. While it is reasonable to expect somewhat of a surge, there is actually very little evidence of one this far.

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