Beat the Press

If the Politicians Say It, It Must Be True

That's the word from the Washington Post when it comes to the WTO negotiations. Today's article on the prospects for the Doha round asserts that "unlike previous negotiations with similar aims, this set of talks has an ambitious twist: The main goal is to change rules that have put poor countries at a disadvantage in the global marketplace." Yes, and we know that because...

The Problem of Rising Wages in China

The Times had one of the most convoluted articles yet on demographics. Apparently, China's slowing population growth may lead to a shortage of cheap labor, no kidding the headline is "As China Ages, a Shortage of Cheap labor Looms."

Do Mexican Voters Care About the Economy?

The New York Times apparently doesn't think so. In an article assessing the Mexican presidential campaign in its final days, there is no mention of the economic performance of the current administration. Since one of the two leading candidates is from the same party as the incumbent president, and pledges to continue the same policies if elected, the recent economic record would appear to be relevant.

Good Piece in the NYT on the Evils of Protectionism (drug patents)

When the government imposes restrictions that artificially raise prices above the competitive market level, economic theory predicts that producers will engage in anti-social rent-seeking behavior to maximize their rents. Drug patents, which raise drug prices by several hundred percent above the competitive market price (sometimes several thousand percent), lead to all sorts of corruption, just as economic theory predicts.

What Is $16 Billion to the Federal Governemnt?

The Times ran an informative article on the Bush administration's new rules requiring states to impose more stringent work requirements on welfare recipients. However, the piece fell short in telling readers the cost of welfare. It reports that welfare is blockgranted at $16 billion annually between 2007 and 2010. It would have been helpful to tell readers that the cost of the program will fall from 0.6 percent of total spending in 2007 to 0.5 percent of spending by 2010.

When Numbers Don't Add Up at the New York Times

I have complained in the past about reporters' willingness to accept corporate numbers uncritically. My favorite example is the widely reported claim that the compensation of Delphi's unionized workers averaged $65 an hour. This implied a benefits package worth more than $70,000 a year. Anyone believe that?

We have another example from the Times today. Its article on GM's buyout offer to workers reports that getting rid of 35,000 workers will save GM $8 billion a year. Hmmmm, my calculator puts that at a savings of just under $230,000 per worker.

New Homes Sales, the Rest of the Story

The May data for new home sales came in somewhat higher than expected. It is important to keep in mind that the home sales data record contracts, not completed sales. In the boom period a year ago, broken contracts were rare. Now that prices are weakening in many of the formerly hot markets, broken contracts are becoming common.

To my knowledge, no one keeps data on the percentage of contracts that are broken, but there have been reports from some builders in California and Florida of cancellation rates in the range of 20-30 percent. If the nationwide rate of cancellation is even 5 percentage points higher than last year, it would conceal a sharp falloff in actual sales.

Trade Nonsense in the NYT

For reasons that I will not pretend to understand, newspaper editorial boards are huge proponents of trade agreements as a remedy to world poverty. They endlessly promote these agreements on their editorial and oped pages. Papers like the New York Times and Washington Post are as likely to print an oped critical of recent trade agreements, as Pravda would have been to print an anti-communist diatribe back in the days of the Soviet Union.

The Minimum Wage and Doctors' Pay

Since there have been some interesting comments on two separate posts from last week, I thought I would pull them together. To get up to speed, NPR ran a piece last week which decried (slight exaggeration) the low pay of doctors. I also commented on the failure of reporting on a minimum wage hike to note the extensive research showing that modest increases in the minimum wage (like the ones being debated) have no significant effect on employment.

The responses have raised issues about the appropriate wages for doctors and people who work at the type of jobs that get the minimum wage. The point that I wanted to make is that these two are linked. The wages of people working at low paying jobs are a cost to doctors, and doctors' pay is a cost to those earning low wages.

NPR's Sob Story for Struggling Doctors

NPR did a piece this morning on doctors' pay that leaves you wondering why they get taxpayers dollars. The basic point was that doctors, especially primary care physicians, are struggling. The news hook was a new survey that showed that doctors' net (after malpractice) pay is not keeping pace with inflation.

Reporting Nonsense on the Minimum Wage

Suppose that the senators who support a quick withdrawal from Iraq got in the habit of saying that the United States should get out of Iraq because losing 100 U.S. soldiers a day is an unacceptable price for the occupation. Would the media simple report this claim without comment? Or, would they point out that these senators apparently don't realize that the fatality rate is approximately 2 per day?

My guess is that every story that noted the claim that 100 soldiers a day are being killed would correct this assertion based on an authoritative source on the causality count. The media would probably also run numerous stories that reported on the fact that the proponents of a hasty withdrawal have no idea what they are talking about. This would be good journalism.

Dollars Down the Drain

The Washington Post reported on former Treasury Secretary, and soon to be former Harvard President, Larry Summers' suggestion that the foreign central banks of developing countries begin to unload some of their huge dollar holdings. As someone who has been writing on this issue for almost five years (see here, here, and here), I am glad to see that it is now getting attention from some prominent economists.

Rich Countries Provide $300 Billion Annually in Subsidies to the Pharmaceutical Industry

You won't see this headline in the newspapers. You should ask why. Newspapers have repeatedly reported on the hundreds of billions of dollars that the rich countries give to the agricultural industry. (See the Financial Times for the latest example.) While the wording of the headlines, and often the articles themselves, would lead readers to believe that this money is being paid directly from rich country governments to farmers, the vast majority of this money takes the form of higher prices that result from trade barriers of various types.

From the Times Europe Bashing Desk

The NYT had a piece this morning reporting on how Europe is heavily dependent on coal, despite its "green image." While the article had much useful information, it never mentioned the fact that Europe emits approximately 50 percent as much greenhouse gas per capita as the United States. In the numerate world, this is an important piece of information.