Dean Baker

Morning Edition had a segment this morning interviewing David Wessel, the Wall Street Journal’s economics editor, about the state of the economy. At one point Wessel told listeners that economists are hopeful that the December employment report, which will be released next month, will show that the economy added jobs in the month. Actually, there […]

The consumer confidence indexes almost certainly get more attention than they deserve. They are not good predictors of consumer behavior. At best, they reflect current behavior. In this respect, it is worth noting that the current conditions component of Conference Board’s consumer confidence index fell last month, even though the overall index rose. The rise […]

The NYT quotes economist Karl Case as saying that we have no historical basis for analyzing a situation of falling house prices. In fact, we do. Nationwide house prices have historically tracked the overall rate of inflation. House prices hugely outpaced inflation in the decade from 1996 to 2006. To get back to their trend […]

The NYT had a thoroughly confusing article that seemed to imply that proponents of the health care bill were double-counting when they claimed that targeted savings in the Medicare program could both shore up the program and also be used to finance extending care to more people. In fact, as the article at one point […]

A WSJ article reporting on comments by Chinese Premier Wen Jiabao noted his concerns about inflation. Later it discussed the possibility that China would increase the value of the yuan. Remarkably, it never noted that raising the value of the yuan would reduce import prices and therefore offset inflationary pressures. For example, if the yuan […]

The Washington Post discussed the cost of the Obama’s administration’s plans to close the “doughnut hole” gap in the Medicare drug benefit. The piece never mentions the fact that the United States pays far more for prescription drugs than any other country because it gives drug companies unlimited patent monopolies, allowing them to charge whatever […]

Apparently they do. In Washington we have the term “six figure buffoon,” which refers to one of many highly paid individuals in this city who get paid hundreds of thousands of dollars a year but don’t seem to have a clue about their work. On Wall Street it appears that seven figure buffoons are more […]

Ezra Klein has a good piece in the Post’s Sunday Outlook section on the need to change the filibuster rules in the Senate. However, he ends the piece with a bizarre reference to: “a coming budget crisis.” This should have brought out the editor’s red pen and some quick scratch marks. What budget crisis? The […]

The Washington Post still hasn’t heard about the housing bubble. (News takes a long time to get to Washington.) It featured a major article today discussing the prospect of retail sales recovering from depressed levels, explaining that consumers are feeling more confident, therefore sales may now bounce back. The problem in this story is that […]

The NYT reports that Goldman Sachs was selling collaterized debt obligations (CDOs) based on its own mortgage backed securities and then bought credit default swaps (CDS) that were effectively bets that these CDOs would go bad. If this report is accurate, it is a remarkable story. It’s not clear whether it is more incredible that […]