Dean Baker

As I mentioned in a prior note, house prices may be dropping in ways that are not picked up by price indices because the indices all use the contracted sale price. Currently sellers are using a variety of kickbacks that reduce the effective price below the sale price. Today’s Washington Post has a good example. […]

Yet again the Post reports on the threat posed by �entitlement� spending, referring to Social Security, Medicare, and Medicaid. To quickly repeat myself, this is dishonest. There are modest and manageable increases in projected Social Security spending due to the aging of the population. There are unmanageable projected increases in Medicare and Medicaid expenditures due […]

The Times had an article examining the prospects of the Fed being able to successfully bring down the inflation rate, without also inducing a recession. While it is a thoughtful piece, the two experts whose views dominate the article, Robert Gordon and Lawrence Meyer, have the distinction of having been proven completely wrong on this […]

The modest drop reported in the trade deficit in June is good news, the current deficit is unsustainable. A declining trade deficit will also help to boost economic growth, as noted in a Times article this morning. However, the article missed an important part of the story. Growth due to a declining trade deficit does […]

It could mean less demand in the housing market. The Mortgage Bankers Association released the results of its weekly mortgage applications survey yesterday. While the weekly number for purchase mortgages was up slightly, the 4-week moving average was down and now stands more than 20 percent below its peaks last year. The refinance index is […]

With the housing market clearly in a slump, the New York Times had a piece this morning asking how fast the housing market is heading down. In presenting the case for a gradual and limited decline the article asserts that �mortgage rates are still relatively low and look to stay well below rates common in […]

This is the first posting as a TAP blog, so I thought I would mark the occasion with a comment on the housing bubble. We have enough data at this point (lower sales, rising inventories, falling median prices) that I feel confident in saying that the crash has begun. We don’t yet know the speed […]

Last quarter the markets were surprised by a stronger than expected number for personal consumption expenditures in March. I commented that the surprise was surprising because March personal consumption expenditures were embedded in the first quarter GDP data that had been released the prior week.Here’s a chance to look for more surprising surprises. The consensus […]

Apparently the reporters at MarketWatch can’t. An article noting the uptick in labor compensation reported in the second quarter Employment Cost Index reported that Fed Chairman Ben Bernanke said that higher labor costs need not lead to inflation, if they are offset by rising productivity. Well, in the very next sentence Mr. Bernanke also said […]

The House came up with the brilliant idea of linking the partial repeal of the estate tax with raising the minimum wage. In the words of West Virginia Representative Shelley Moore Capito, this linkage made sense because, “the sustaining of small businesses by keeping their vital assets will allow those making the minimum wage to […]