Beat the Press

Jobs From the Jobs Bill: NYT Gives the Full He Said She Said

The House just approved a $15 billion jobs bill that was already passed by the Senate. Will it help the economy? The NYT told readers that Representative Bob Etheridge, "estimated that the measure could create one million jobs." It then quoted Republican Representative Steven LaTourette saying that: "This is a no-jobs bill, this is a faux-jobs bill, this is a snow-jobs bill."

Later we are told that: "But lawmakers said that given the dismal unemployment picture, they were willing to give it a try, and estimated the tax breaks would put 300,000 people to work." It's not clear where this 300,000 jobs number came from or which lawmakers it is associated with.

Defense Spending: 4.7 Percent Is Closer to 5 Percent Than 4 Percent

The NYT told readers the defense spending in the United States is equal to 4.0 percent of GDP. The Congressional Budget Office reports that it was 4.6 percent of GDP in fiscal 2009 and will be 4.7 percent of GDP in fiscal years 2010 and 2011.

--Dean Baker

The Fed Can Control Long-Term Interest Rates

The Washington Post had another piece pushing deficit scare stories. This time it tells readers that Greece's problems could spillover to the U.S. According to the piece, fears of a Greek default could lead investors to become more worried about a U.S. default, pushing up interest rates on U.S. government bonds.

David Brooks Is Worried About the Invasion of Martians

Okay, he said "runaway federal spending," but as long as you're making stuff up, you might as well make it invading Martians. It's no less true and a hell of a lot more exciting.

As those of us here on planet earth know, there is no credible story of runaway federal spending. The budget deficit exploded because of the recession, which in turn was caused by the collapse of an $8 trillion housing bubble. But, Brooks needed copy for his NYT column, so runaway federal spending it is. I still think he should have talked about invading Martians.

--Dean Baker

Good News From Ireland?

The NYT contrasts the resistance to austerity measures in Greece with the enthusiastic embrace of budget cutbacks by the Irish government. It is worth noting that Ireland's unemployment rate has increased from 4.6 percent before the crisis to 13.0 percent in the most recent data. It is unlikely that many of the economists and policymakers who promoted policies that lead to the crisis, or the bankers who profited from these policies, are among the 13.0 percent of the labor force who are unemployed.

--Dean Baker

Secret Data Source Overlooked by the Media

On Wednesday of every week the Mortgage Bankers Association releases its index of mortgage applications which provides data on applications for mortgages for both purchase mortgages and refinancing. For some reason this index is almost completely ignored by economic reporters.

What Percent of Stimulus Financed Wind Turbines Come From Overseas?

That is undoubtedly the question that many would have after reading a Post article on an effort to stop stimulus spending on wind energy because some of the turbines are built in China. The point of stimulus was of course to create jobs in the United States. If it turned out that spending in a particular area was not creating jobs in the United States, then it doesn't fit very well in a stimulus package (although it may still be useful spending).

The Bush Tax Cuts Did Not Lower the Budget Deficits

The Post tells us that reconciliation: "is a procedure created in 1974 to help lawmakers advance politically difficult budget legislation, particularly measures that reduce the deficit." It then tells us that it has been used 22 times. Two of these 22 uses were to pass President Bush's major tax cuts.

--Dean Baker

The NYT Mind Reading: Tells Readers That Financial Markets Don't Like the UK's Budget Deficit

The NYT told readers that:

"The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in nearly 10 months. The yield on 10-year government bonds, known as gilts, slid as investors fretted that Parliament would be too fragmented after a crucial election in May to whip Britain’s messy finances back into shape."

That's pretty good that the NYT can read concern about this complex scenario into the market's 1-day movement. It is especially impressive since the yield on the 10-year bonds seemed to go the wrong way for this story. A lower bond yield usually means that investors are less concerned about the country's prospects and therefore require a lower risk premium.

Post Gets the Whitewash Out for Bernanke

After Alan Greenspan, Ben Bernanke is more responsible for the economic downturn than any other person in the country. He was a Fed governor from 2002 to 2005 and then chairman of President Bush's Council of Economic Advisors from the summer of 2005 until he took over as Federal Reserve Board chairman in January of 2006. During this whole time he insisted that there was no housing bubble and that everything in the housing market was just fine. He fully supported Alan Greenspan in allowing the bubble to grow to ever more dangerous levels.

More Repression Over Copyrights: When "Creative" People Lack Creativity

The NYT reviewed a new book by Jaron Lanier, who we are assured is a very creative person and one of the early pioneers of the web. According to the review, Mr. Lanier is very upset about people getting material at no cost over the web. His preferred solution is harsher punishments for copyright violation.

Of course, another possible direction would be to devise alternative mechanisms for financing creative work. But that would require creativity.

--Dean Baker

E.J. Dionne Spins Fairy Tales About Political Parties

He told readers that: "Democrats on the whole believe in using government to correct the inequities and inefficiencies the market creates, while Republicans on the whole think market outcomes are almost always better than anything government can produce."

Robert Samuelson's Cheap Budget Tricks

Robert Samuelson apparently doesn't believe that he has much of a case for his budget deficit scare stories. How else can we explain the fact that he expresses budget deficits in dollar terms rather than as share of GDP. Yes, the budget deficit is a REALLY BIG NUMBER. That would be true even if it were a tiny number relative to the size of the economy.

More Demographic Crises at the Washington Post

The Post told readers that South Korea and other East Asians governments are worried that their countries will become less polluted and that wages will rise in coming years. Of course that is not exactly how the Post described the situation. The Post said that "collapsing birthrates are alarming East Asian governments, which in coming years will face a demographic crunch as the proportion of pensioners rises and the number of working-age adults declines."

Fighting Foreclosures Without Talking About the Bubble Is a Waste of Time

Because Alan Greenspan and Ben Bernanke would not talk about the $8 trillion housing bubble, close to 30 million people are now either unemployed or underemployed. For some bizarre reason, policy people still have trouble talking about the bubble. For example, the NYT has an editorial discussing remedies for foreclosure which never mentions the housing bubble.