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Beat the Press

Robert Samuelson Thinks Its Unfair That Rich Bondholders Get Interest Payments from the Government

Dean BakerNov 23, 2009

That is what one can logically conclude from his complaint that 43 percent of federal government expenditures go to Social Security, Medicare, and Medicaid, programs that disproportionately benefit the elderly. The reason that a disproportionate share of government spending goes to these programs is that a disproportionate share of tax revenue is dedicated to these programs.

NYT Publishes Oped by Analyst Who Doesn't Think Debt Affects Share Prices

Dean BakerNov 23, 2009

The NYT published a column by Edward Niedermayer, the editor of the Web site The Truth About Cars, which claimed that the government was unlikely to recoup much of its investment in General Motors. The piece dismisses the idea that GM stock could ever reach the $66.9 billion level needed to recoup the government’s investment: "Sorry, but that’s a pipe dream: G.M. has never been worth more than $57 billion, and that was in the salad days of 2000."

The Public Health Care Plan Will Cost More Because It Will Attract Sicker Patients

Dean BakerNov 23, 2009

The Washington Post told readers that: "according to the Congressional Budget Office, a government plan as outlined in both the Senate and House bills would cost more than private coverage and, as a result, attract few customers." It would have been helpful to point out that the reason CBO projects that the plan will have higher costs is that it will attract less healthy patients.

In Just a Decade the U.S. Interest Burden Could Be as High as It Was in 1992!!!!!!!

Dean BakerNov 23, 2009

That might not sound scary to most people, but this was the punch line of a front page NYT news story that included all sorts of unsupported assertions about the crisis posed by the government debt.

The fourth paragraph asserts that:

"Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages."

Goldman's Fannie Tax Deal Would Have Cost Taxpayers Money

Dean BakerNov 22, 2009

The NYT misled readers about the reason that a deal for Fannie Mae to sell tax breaks to Goldman Sachs was nixed. The NYT said that the deal: "was blocked by the Treasury because it couldn’t be seen to be helping Wall Street benefit once again from the crisis."

Parade Magazine's Propaganda Parade Against Social Security

Dean BakerNov 21, 2009

Parade Magazine decided to subject tens of millions of readers of its Sunday newspaper insert to an anti-Social Security diatribe headlined: "Can We Save Social Security?" Since Social Security is not in any real danger this headline would be like saying "Can We Save Apple or the New York Yankees?" It should not be hard, since all three are quite healthy at moment.

CNN Money Takes Strong Editorial Stand on the Budget in News Section

Dean BakerNov 20, 2009

CNN Money decided to highlight the fact that when the debt increases, interest payments will rise. While those familiar with basic arithmetic probably already understood this fact, CNN Money decided that this is big news.

The People Who Missed an $8 Trillion Housing Bubble and Thought Iceland's Economy Was Thriving Oppose Auditing the Fed

Dean BakerNov 20, 2009

That is what Alan Blinder tells us in a Washington Post column today. Blinder tells us that the vast majority of academic economists and people in the financial industry oppose efforts to make the Fed more accountable to Congress. (He also bizarrely asserts that "very, very few" people support more congressional control of the Fed. This would seem to be inconsistent with the support for the Paul-Grayson bill to audit the Fed.)

Good NYT Piece on Effort to Bankrupt the FHA

Dean BakerNov 20, 2009

The NYT has an excellent piece on how the increase in FHA mortgage limits have made it a subsidy program for relatively affluent families, speculators, and frauds.

--Dean Baker

David Brooks Has Not Noticed the Recession

Dean BakerNov 20, 2009

David Brooks pronounces the government's bailout of Wall Street a huge success. This is an interesting assessment. It is true that the financial sector profits are at a record high as a share of all corporate profits and the financial sector has reached a new record share of private sector income, and the industry stands to pay record bonuses this year, but these may not be the best measures of success to people other than Mr. Brooks.

TARP Money Cannot Be Used to Pay Down the Debt!

Dean BakerNov 19, 2009

Arghhhhhhh! TARP is a loan program, not a spending program. Let's explain the difference so that even a Washington Post editor can understand it.

A loan is expected to be paid back. When Congress appropriates money for a loan, it does not add to the deficit. The government lends out money, but it owns a loan that it expects to be paid back. The only cost to the government is either any subsidy implicit in the loan or the losses on loans that are not repaid.

Commercial Announcement: TARP Congressional Oversight Panel!

cepr1Nov 18, 2009

You can see the hearings live on Thursday, 9:30-11:30 EST. (Yes, I will be testifying).

http://cop.senate.gov/hearings/library/hearing-111909-economists.cfm

Bloomberg: Republicans Have Taken Over the House!!!!!

Dean BakerNov 18, 2009

That is what readers of Bloomberg's discussion of the debate over auditing the Fed must think. After all, Bloomberg refers to a "Republican" bill with more than 300 co-sponsors. In the 435 seat House, the 300 co-sponsors of this bill would give the Republicans a comfortable majority.

In real world land the Democrats still have a comfortable majority of the house. In fact, the bill to audit the Fed is not a Republican bill. One of the two leads sponsors is Alan Grayson, one of the most progressive Democrats in the House. It was co-sponsored by more than 100 Democrats.

Reporting What They Say, Not What They Think

Dean BakerNov 18, 2009

An NYT article does a nice job of simply reporting what politicians say as their reason for opposing a public option, instead of doing the mind-reading exercise of telling readers what they think:

"Senator Thomas R. Carper, Democrat of Delaware, said he was trying to devise such an alternative to meet 'centrist concerns about the public option.' Over and over, Mr. Carper said, the centrists have made clear that they do not want to create an insurance plan that is 'government-run or government-funded.'"

The New York Fed's Ineptitude in the AIG Bailout Is a Front Page Story, but Not in the Washington Post

Dean BakerNov 17, 2009

The special inspector general found that the New York Fed, then under the leadership of current Treasury Secretary Timothy Geithner, badly botched the bailout of AIG. Its mishandling likely cost taxpayers tens of billions of dollars to the benefit of folks like Goldman Sachs.

This story belonged on the front page. The NYT and WSJ both put in the front page, while Market Place radio made it the lead story. It got page 24 coverage in the Post. The Post is very concerned that increased Congressional oversight will interfere with the Fed's independence.

[Correction: I have been told that this was a page C1 article in the WSJ, not A1.]

--Dean Baker

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