Dean Baker

Recent Articles

Beat the Press Coming Home to CEPR's Website

On April 1, 1996, way before anyone heard of a blog, Beat the Press began as a weekly commentary called "Reading Between the Lines" on the Economic Policy Institute's website. I started writing it because I felt that major media outlets were often obscuring rather than explaining major economic issues. Since then BTP has gone through many format and name changes. When Mark Weisbrot and I founded the Center for Economic and Policy Research over 10 years ago, it moved with me and was renamed the "Economic Reporting Review," or ERR (the acronym was not an accident), and in its tenth year BTP got its current name, became a daily blog, and joined the Tapped lineup at The American Prospect. I want to express my gratitude to TAP for hosting Beat the Press and exposing it to its well-informed and thoughtful readership over the past four years. On April 1, 2010, its 14th anniversary, Beat the Press will be coming home to the Center for Economic and Policy Research's website. Again, I'd like to...

Post Uses Xenophobia to Advance Its Budget Agenda

The Post once again used xenophobia to push its budget agenda as editorial page editor Fred Hiatt darkly warned readers that as a result of projected future budget deficits: "the United States would be increasingly at the mercy of China, Saudi Arabia and other lenders." Of course, as every econ 101 student knows, budget deficits do not determine the indebtedness of the U.S. to foreigners, the trade deficit does. The trade deficit in turn is the result of an over-valued dollar. The Post has actually been a supporter of the "strong dollar" policy that has given the U.S. high trade deficits. So, when it comes to the policy that actually puts us "at the mercy of China, Saudi Arabia and other lenders," the Post has been on the wrong side. It is also worth noting that the protectionist policies that the Post supports are a big factor in the deficit. If the U.S. allowed freer trade in health care services, especially the provision of Medicare , it could lead to enormous savings for the...

Did the Federal Government Make Money Bailing Out Citigroup?

The Washington Post is anxious to tell its readers that the government made a profit on its bailout of Citigroup. This claim gives a whole new meaning to the notion of "profit." The government gave enormous amounts of money to Citigroup through various direct and indirect channels. It is only getting a portion of this money back in its "profits," the rest is going to Citigroup's shareholders (e.g. Robert Rubin) and its millionaire executives who are highly skilled at getting the government to hand them money. First, it is worth noting how the government got the shares of common stock which it is now selling for a profit. On November 23, 2008, the government bought $20 billion in preferred shares in Citigroup. It also received another $7 billion in preferred shares in exchange for guarantees on $300 billion in bad assets. At the time, the combined value of the investment in preferred shares and the guarantee on bad assets exceeded the full market value of Citigroup stock on November...

The New York Times Could Not Find Any Economists Who Saw the Housing Bubble to Talk About Financial Regulation

The NYT magazine featured a lengthy piece on financial regulation . Remarkably, it did not quote or cite a single person who saw the housing bubble and recognized its danger. The failure to include the views of someone who actually understood the economy makes the issues surrounding regulation appear far more complex than they are. There was very little problem in recognizing the housing bubble for any competent economist. There was an enormous divergence in house prices from their long-term trend with no remotely plausible explanation. The sort of reckless loans and over-leveraging that one expects in a bubble were also easy to see. The story of failed regulation was one of incredible corruption. The remarkable part of this story is no one is going to jail. In fact, no one is even losing their job (that is among the regulators -- tens of millions of ordinary workers who did nothing wrong are losing their jobs). Given such an outcome, economic theory predicts that when confronted with...

Meaningless Budget Numbers on Health Care

How many NYT readers know how large $500 million is as a share of California's budget? How about $370 million a share of Texas' budget. My guess is that almost no one outside of the people who live in these states (and probably not even many of them) has any clue as to how large these sums are to the state governments. This means that when the NYT tells readers that the health care reform bill will cost the state of California $500 million a year in higher Medicaid costs and Texas $370 million a year, it is giving readers no information whatsoever. The article could have instead told readers that the Medicaid expenses will add approximately 0.5 percent to the budgets of both California and Texas. This would have allowed readers to better assess the impact of the bill on state budgets. --Dean Baker

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