Dean Baker

The plunge in the Pending Home Sales index in November should not have been a surprise to analysts. The Mortgage Bankers Association applications index for purchase mortgages went into a tailspin in late October, as people could no longer be assured of closing by November 30th, the expiration date for the original first-time buyers tax […]

It seems that the line is that everything is good in the economy these days and we won’t take about the things that are not. The Commerce Department reported that nominal construction spending fell by 0.6 percent in November. It also revised down the October data to show a decrease of 0.5 percent after previously […]

The NYT highlighted the slowdown in the growth rate of national health care spending in 2008 to 4.4 percent, compared with 6.0 percent in 2007 and an average of 7.0 percent in the decade from 1998 to 2008. There really is not very much to tout in this story. The slowdown was roughly proportional to […]

The most painful aspect of the economic crisis is that the pain is unnecessary. Ordinarily we think of the economy being limited by the supply of available resources, land, labor, and capital. We can’t all have huge houses with servants. In a world where the economy is limited by supply, pain is understandable, even if […]

The NYT reported on a talk by Federal Reserve Board Chairman Ben Bernanke in which he claimed that the low interest rates set by the Fed were not responsible for the housing bubble, but rather “lax regulation.” This is taken as an exoneration of Mr. Bernanke’s performance at the Fed. It isn’t. The Fed is […]

At the Washington Post it seems that missing the largest financial bubble in the history of the world is a necessary credential to discuss Federal Reserve Board policy. The Post notes that the economy’s horrible performance over the last decade, which was caused by the collapse of the stock and housing bubbles, and then turns […]

Using public money to buy down principle in underwater mortgages is a strategy to help banks. It is likely to do little or nothing to help underwater homeowners. In most cases these homeowners will still pay more in ownership costs each month than they would to rent a comparable unit. This is money that they […]

The NYT begins a lengthy piece discussing efforts to design executive compensation packages for the bankrupt institutions bailed out by the government by contrasting the “equity approach” arguing high pay with the “free-market view” that the executives should get whatever they can. While those who advocate high pay for top executives undoubtedly like to call […]

The NYT reported on the decision of Iceland’s parliament to pay $5 billion to British and Dutch depositors. Since most readers are not familiar with the size of Iceland’s economy, it would have been useful to point out that this is approximately equal to 30 percent of Iceland’s GDP. That would be approximately $4.2 trillion […]

To end the decade, the Washington Post acknowledged that it is no longer a serious newspaper. It ran a piece written by the Peter Peterson Foundation financed Fiscal Times as a regular news article. The piece conveys Peterson’s view that there is a drastic budget crisis which requires circumventing normal congressional procedures. It implies that […]