Beat the Press is Dean Baker's commentary on economic reporting. Dean Baker is co-director of the Center for Economic and Policy Research (CEPR).

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Paul Krugman comments that Portugal can be a situation where its aging population, combined with a large outflow of younger people due to high unemployment, can lead to an ever worsening financial situation where fewer workers are left to support a larger debt and non-working population. (Note, the key factor here is the migration, not the aging.)

That pretty well describes the picture with Puerto Rico, with a large segment of its working age population moving to the mainland United States, leaving the island with relatively few working people to provide taxable income. The upside for Puerto Rico is that at least it has benefits like Social Security and Medicare covered by the national government, compared with Portugal, which must pay for its equivalents from its own tax revenue.

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Why is it so hard for reporters to simply tell us what people say instead of what they think? I'm sure many of these reporters are very insightful, but the reality is they do not know what people think, it is just their speculation.

Therefore, when a Washington Post article on the prospects in Congress for the Trans-Pacific Partnership (TPP) told readers:

"Obama has said the pact is central to his economic agenda, but it is also viewed inside the administration as an important foreign policy initiative to balance the growing economic clout of China."

The Washington Post does not know that the administration actually views the TPP as an important foreign policy initiative, it knows that people in the administration make this claim. While the claim may actually reflect their thinking, it is also possible that they would seek to sell a deal with few obvious economic benefits for most people in the United States on foreign policy grounds. Politicians sometimes do things like that.

There are a number of other comments in the piece that are not quite right. At one point it refers to proponents of the TPP as "trade supporters." This is not accurate. Trade supporters might well oppose the deal because of the increased protectionism in the form of stronger copyright and patent protections. These will raise the price of drugs and other affected products by several thousand percent above the free market price.

Trade supporters may also be unhappy with the TPP since it does nothing to address currency management by parties to the deal. Through currency management countries can prevent the currency market from adjusting, thereby maintaining large trade surpluses that would otherwise not be possible. Using intervention to keep down the value of a currency, as is currently done by many countries, has the same effect as imposing a tariff on all imports and having subsidies for all exports. The Obama administration chose not to pursue this issue in the TPP.

For these reasons, many supporters of trade may oppose the TPP. It would have been more accurate to describe the people referred to in the piece as "trade deal" or TPP supporters.

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The Washington Post had an article on a commitment by Secretary of State John Kerry that the United States would double its aid to developing countries for dealing with climate change from $400 million annually to $800 million by 2020. Those who are worried about the tax increases needed to pay for this aid may be interested in learning that the additional commitment comes to a bit less than 0.009 percent of the $4.7 trillion the government is projected to spend in 2020.

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Matt O'Brien used his column this morning to take Obama to task for failing to fill vacant postions on the Fed's board of governors. I agree with O'Brien with one major exception.

O'Brien refers to the Taper Tantrum in the summer of 2013, when mortgage and other long-term interest rates soared after Chair Ben Bernanke indicated the Fed would soon begin to taper its quantitative easing program. He sees the market reaction as partly a result of the composition of the Fed's board of governors, which included two Obama appointees not fully committed to growth promoting policies. He argues that the tantrum unnecessarily slowed the housing market and growth.

I would disagree with the first part of this story. As we know, economists have a hard time seeing housing bubbles, but we were starting to see the beginnings of one at the time of the tantrum. House prices were rising very rapidly, especially in the bottom third of the market. According to the Case-Schiller tiered price index, in the period from April of 2012 to August of 2013 house prices in the Phoenix market had risen at a 32.6 percent annual rate. In the Las Vegas market they had risen at 44.0 percent rate and in the Atlanta market at a 47.5 percent annual rate.

These markets were badly depressed as a result of the crash, so large increases were a good thing, but on the other hand, it's not hard to see that a market rising at a 47.5 percent annual rate will soon be in bubble territory. And, we were seeing evidence of bubble behavior. People were giving up their day jobs and buying up homes to fix-up and resell. In many cases this involved maxing out on their credit cards or whatever other type of credit they could use. 

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Guest Blog

by Eileen Appelbaum and Rosemary Batt

Co-authors of Private Equity at Work: When Wall Street Manages Main Street

The usually perceptive Deal Professor, Steven Davidoff Solomon has swallowed CalPERS’ staff’s spin on the more than $3.4 billion the California public employees’ pension fund has paid to private equity firms in performance fees (so-called carried interest) hook, line, and sinker. In Private Equity Fees Are Sky-High, Yes, but Look at Those Returns, Davidoff Solomon accepts uncritically CalPERS report of its return on its risky PE investments — a report that the industry publication, Private Equity International in its November 27 Friday Letter, labeled a private equity public relations coup. Those high fees are worth it in Davidoff Solomon’s view because of CalPERS stellar private equity returns. If only!

Davidoff Solomon failed to note that CalPERS’ staff did not provide information in this report on the risk-adjusted return to its risky private equity investments. The staff provided misleading information because its risk-adjusted PE returns were awful: CalPERS investments in private equity have underperformed its risk-adjusted benchmark over the last 10 years and in 3-year and 5-year sub-periods. The staff no doubt expected to pull the wool over the eyes of public sector workers and taxpayers in California, but has surely succeeded beyond its wildest dreams with this endorsement in The New York Times by someone who should know better. Indeed, over the last 10 years, the pension fund’s PE investments underperformed it stock market benchmark by about 300 basis points. In layman’s language, this means CalPERS would have had exactly the same return over this period if it had invested in the stock market index it uses in its benchmark. Actually, CalPERS would have had a much higher return from investing in this stock market index because it could have invested the $3.4 billion of its members’ retirement savings that it paid PE firms in performance fees. It’s amazing that these ginormous performance bonuses were paid to PE firms for delivering results that did not beat the stock market over 10 years and certainly did not provide a return high enough to compensate the pension fund for the greater risk and lack of liquidity present in PE investments.

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Yesterday the Labor Department released October data from its monthly Job Openings and Labor Turnover Survey (JOLTS). The release got surprisingly little attention in the media.

While there were no big surprises, it does not paint a picture of a robust labor market. The number of job opening was down 150,000 from the September level and was almost 300,000 below the peak hit in July. That is not necessarily a big deal; the monthly data are erratic and a monthly change of this size could just be sampling error. Nonetheless, the number of opening has been essentially flat since April, which means that the relatively strong growth reported in the establishment survey does not seem to be making it difficult for firms to find workers.

Consistent with this story, the quit rate remained at a relatively low 1.9 percent. This is a measure of workers' confidence that they can leave a job they don't like and either quickly get a new job or survive on savings or the earnings of other family members. The 1.9 percent rate is well above the 1.3 percent rate at the bottom of the downturn, but low relative to pre-recession levels. In fact, in the weak labor market following the 2001 recession (we continued to lose jobs until September of 2003) the quit rate never fell below 1.8 percent. The current reading looks much more like a recession than a strong labor market. (The series only goes back to the end of 2000, so we don't have long experience with it.)


Quit Rate


quits rate

Source: Bureau of Labor Statistics.

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By Dean Baker and David Rosnick

Over the last seven years there has been a steady drumbeat of complaints from people who are upset by the Fed’s zero interest rate policy. We first heard that it was going to lead to hyperinflation. Then we were told that low interest rates would fuel asset bubbles. More recently a rate hike has become a matter of the Fed’s credibility.

One of the most persistent complaints is that the zero interest rate policy is unfair to small savers. The argument is that we have all these elderly people who depend on the income from their savings who are being destroyed by getting near zero interest on their CDs and money market accounts.

There are two problems with this story. The first one is a logical problem. Interest rates are low because the economy is extremely weak. In the simple textbook story (very simple), the interest rate is supposed to equate the supply and demand for savings. Ever since the recession began we have had an enormous excess supply of savings. This means that the interest rate should be lower than it actually is. However, interest rates don’t fall further because they will not go below zero, or at least not much below zero. People are not willing to pay banks to borrow their money.

Given the market outcome pushing interest rates to zero, those who want the 2–3 percent short-term interest rates of pre-recession years effectively want the government to pay them interest rates that are above the market clearing rate. That’s fine as a demand from a self-interested group — I’d like the government to pay me twice what my house is worth — but it’s not one that deserves much credence in policy debates. Most of us probably think it’s more important to use the Fed’s monetary policy to get people employed than to subsidize the interest received by savers.

The other problem is that the story of small saver suffering because of low interest rates doesn’t fit the data. There just are not very many people with substantial amount of savings in CDs, money market, saving accounts, or other short-term assets who don’t also have large amounts of money in stocks and bonds. Anyone who has large sums in stocks and bonds has done very well in the last five years, as both markets have soared, so if they aren’t earning much interest on their savings accounts it is difficult to feel too sorry for them.

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Gretchen Morgensen has an excellent piece in the NYT reporting on the revolving door between Wall Street banks and the Obama administration and the lobbying effort to dismantle Fannie Mae and Freddie Mac. These banks hope to be able to take over the business of the two mortgage giants with a system under which the government would guarantee 90 percent of the value of the mortgage backed securities they issued. While the piece does a very good job detailing the financial connections of the individuals behind this push, there are several important points which make the case against "reform" even stronger than presented in the piece.

To start, the piece tells readers:

"For all the problems associated with Fannie and Freddie, some housing experts say, allowing the nation’s largest banks to assume greater control of the mortgage market would most likely increase costs for borrowers."

Actually, just about all housing experts agree that the privatized system would raise costs. Wall Street types get paid more than government employees and shareholders expect a profit. Therefore, we can be pretty safe in assuming a privatized system will have higher costs. The range of estimates in a Washington Post article from last year was that it would increase mortgage interest rates by between 0.5–2.0 percentage points. (I put myself near the bottom of that range.) If the roughly $6 trillion in mortgage debt on Fannie and Freddie's books were all switched to this privatized system, the additional cost would be $30 billion a year, assuming the bottom end of this range. That is more than the federal government spends on the TANF program each year.

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Paul Krugman and Larry Summers both have very good columns this morning noting the economy's continuing weakness and warning against excessive rate hikes by the Fed. While I fully agree with their assessment of the state of the economy and the dangers of Fed rate hikes, I think they are overly pessimistic about the Fed's scope for action if the economy weakens.

While the Fed did adopt unorthodox monetary policy in this recession in the form of quantitative easing, the buying of long-term debt, it has another tool at its disposal that it chose not to use. Specifically, instead of just targeting the overnight interest rate (now zero), the Fed could have targeted a longer term interest rate.

For example, it could set a target of 1.0 percent as the interest rate for the 5-year Treasury note, committing itself to buy more notes to push up the price, and push down the interest rate to keep it at 1.0 percent. It could even do the same with 10-year Treasury notes.

This is an idea that Joe Gagnon at the Peterson Institute for International Economics put forward at the depth of the recession, but for some reason there was little interest in policy circles. The only obvious risk of going the interest rate targeting route is that it could be inflationary if it led to too rapid an expansion, but excessively high inflation will not be our problem if the economy were to again weaken. Furthermore, if it turned out that targeting was prompting too much growth, the Fed could quickly reverse course and let the interest rate rise back to the market level.

Of course, it would be best if we could count on fiscal policy to play a role in getting us back to full employment (lowering supply through reduced workweeks and work years should also be on the agenda), but the Fed does have more ammunition buried away in the basement and we should be pressing them to use it if the need arises.

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A NYT article on cuts to government subsidies for solar and wind energy were put in place by a conservative government, "determined to tighten spending and balance the budget in a program to grow the economy." The piece does not indicate how budget cuts in the current economic situation are supposed to "grow the economy."

As the article points out, Denmark's economy is suffering from a lack of demand.

"Shortly after taking over in June, the new government was forced to cut its forecast for economic growth to 1.5 percent this year and 1.9 percent in 2016, citing a slow recovery in domestic demand."

Cutting spending on clean technologies means less demand, not more. This would mean that the government's plans to reduce its subsidies are in direct conflict with its stated desire to increase growth.

While it is certainly the case that in some contexts lower government spending can lead to lower interest rates, which will spur consumption and investment (the Danish Kroner is tied to the euro, so interest rates have no effect on the exchange rate), this is hardly a plausible story in the case of Denmark. The interest rate on its 10-year government bonds is currently 0.91 percent. By comparison, the rate in the United States is 2.27 percent. In this context, it is unlikely that cuts to government spending can have much of a further effect in lower interest rates, nor that any further reduction in rates would have a noticeable effect on spending.


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The context is Nigeria's economic relationship with China. The NYT complains to readers that China is providing goods at a lower cost than other other countries or the country's domestic industry.

"Chinese goods are so dominant that consumers have few other choices."

The article points out that the goods are of varying quality and some, in the case of electronic items, may pose safety problems. Of course, the reason that consumers have few other choices is that the Chinese products sell for much lower prices than the goods produced by competitors.

The piece also complains that China's firms are willing to accept a lower return on investment in Nigeria:

"The risks [associated with investing in Nigeria] have prompted Western companies to demand very fat profits before putting money into the country — returns on the order of 25 to 40 percent a year. Their Chinese counterparts have been willing to accept 10 percent or less."

The piece points out that low cost Chinese imports have displaced hundreds of thousands of manufacturing workers in Nigeria. While this is likely true, this is an entirely predictable outcome of the removal of trade barriers, a process that the NYT usually celebrates in both its opinion and news pages.

The standard argument is that the gains from consumers in the form of lower prices easily exceed the losses to the workers who lose their jobs. There may be an issue of redirecting some of these gains to help the unemployed workers, but the country as a whole still gains. It is striking that the NYT seems reluctant to accept economic orthodoxy on trade when it comes to China's role in Nigeria and the rest of Africa.

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The Post has an interesting piece discussing Janet Yellen's tenure as Fed chair as she prepares to possibly raise interest rates for the first time since the onset of the recession. The piece discusses Yellen's Republican critics in Congress who want to rein in the power of the Fed to conduct monetary policy. These critics complain that the Fed has been too loose with the money supply and that this will result in runaway inflation.

It would have been worth noting that these critics have been repeatedly proven wrong. They have been complaining about loose monetary policy for over five years yet the inflation rate has consistently been well below the Fed's 2.0 percent target. This information would have been useful to readers trying to evaluate the seriousness of their complaints.

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The state of economics is pretty dismal these days, which is demonstrated constantly in the reporting on major issues. The NYT gave us a beautiful example this morning in a piece on a pledge by China's government of $60 billion in aid to Africa.

The third paragraph told readers:

"Against longstanding accusations that China benefits from a lopsided relationship with Africa, contentions that have recently gained traction as China’s trade deficits with many African nations have widened, Mr. Xi said that 'China has the strong political commitment to supporting Africa in achieving development and prosperity.'"

Okay folks, get those scorecards ready. In standard textbook theory, poor countries are supposed to run trade deficits with rich countries. The story goes that capital is plentiful in rich countries while it's scare in poor countries. Rich countries should therefore lend capital to poor countries where it will get a better return.

The flip side of this flow of capital (it is an accounting identity) is that poor countries run trade deficits with rich countries. These trade deficits allow the poor countries to build up their infrastructure and capital stock while still have enough goods and services to meet the needs of their populations. If relatively better off countries like China are willing to give money, rather than lend it, the developing country trade deficits should be even larger.

This means that folks who believe the textbook trade theory should see the widening of the trade deficits that African nations are running with China as evidence that they are gaining from the relationship, not as evidence that the relationship is lopsided.

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It has become a common practice for reporters to refer to former Secretary of State Hillary Clinton's proposal to spend $275 billion on infrastructure. Is this a lot of money? My guess is that almost no one reading the number has a clue. Certainly Secretary Clinton wants people to think it is a major commitment.

While there is no obvious yes or no answer, it would help first of all if reporters started by giving a time frame. Spending $275 billion over one year is a much larger commitment than $275 billion over 10 years. The proposal would spend this money out over five years, making the annual amount $55 billion a year.

By comparison, the new highway bill calls for spending just over $60 billion annually on infrastructure over the next five years, so Clinton's proposal would nearly double current spending. As a share of the total budget it is still not a huge deal. With government spending projected to average around $4.7 trillion over the first five years of a Clinton administration, the proposal would amount to a bit less than 1.2 percent of projected spending. Measured as a share of projected GDP, it would be roughly 0.2 percent. And, it would come to roughly $170 a year per person in spending. 

There are other ways to measure this sum, including looking at past levels of spending or relative to estimates of the need for new infrastructure. Reporters have much room to pick and choose on this one, but telling us that Clinton wants to spend $275 billion on infrastructure really is not providing information.

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Neil Irwin had a piece in the Upshot section of the NYT raising the possibility that the Fed could have negative interest rates on reserves, rather than its current near zero rate, as a way to provide an additional boost to the economy. The argument is that it is very inconvenient to carry cash, so deposits would not flee banks even if the interest rate were a small negative number.

The problem is that this analysis does not consider the realities of the banked population. Banks have millions (tens of millions?) of customers with relatively low balances. These customers are marginally profitable to the banks. (Often the banks profit on fees from these people, like overdraft charges.)

If banks had to pay interest on reserves then these accounts would be even less desirable for banks, since they now would have to pay interest on the reserves that the small account holders had brought to their bank. For this reason, they may opt to raise their fees for opening and maintaining a bank account. The result would be that more people would be getting by without bank accounts.

Any serious discussion of negative interest rates has to deal with this problem.

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Matt Yglesias is trying to convince people that we should not be mad at Alan Greenspan, the Bush administration economic policy team, and the economics profession for missing the housing bubble that sank the economy. He says that "financial bubbles are much harder to spot than people realize" and argues that the subsequent history shows that I actually was wrong in identifying a housing bubble in 2002.

There are two important points that need to be made here. First, my claim has always been that identifying asset bubbles that move the economy is in fact easy. This both narrows the scope for observation and also gives us more evidence against which to check the assessment. In terms of narrowing the scope, I would not hazard a guess as to whether there is a bubble in the market for platinum or barley. You would need to do lots of homework about these specific industries and also the prospects for related sectors that could provide platinum or barley substitutes, as well as the industries that use these commodities as inputs.

In looking at the housing market in 2002, it was possible to see that sale prices had diverged sharply from rents. While sale prices had already risen by more 30 percent compared with their long-term trend, rents had gone nowhere. Also, the vacancy rate in the housing market was at record highs. This strongly suggested that house prices were not being driven by the fundamentals. (Weak income growth also seemed inconsistent with surging house prices.) If families suddenly wanted to commit so much more of their income to housing, why wasn't it affecting rents and why were so many valuable units sitting empty?

And, the housing market was clearly driving the economy. Housing construction was reaching a record share of GDP. This was not something that would be expected when most of the baby boom cohort was looking to downsize as kids moved out of their homes. Also, the housing wealth created by the bubble was leading to a consumption boom, driving savings rates even lower than they had been at the peak of the stock bubble.

I'll confess that I did not expect the bubble to continue as long as it did. I learned from my experience with the stock bubble that the timing of the bursting is pretty much unknowable, but it never occurred to me that Greenspan and other financial regulators would allow the proliferation of junk mortgages to the level they reached in 2004–2006, the peak bubble years.

Contrary to the "who could have known?" alibis told by the folks setting policy, the abusive mortgages being pushed at the time were hardly a secret. The financial press were full of accounts of NINJA loans, where "NINJA" stands for no-income, no job, and no assets. Anyone who cared to know, realized that millions of mortgages were being issued that could only be supported if house prices continued to rise. 

Anyhow, it was inexcusable for the folks at the Fed, at the Council of Economic Advisers, and other policy posts to have been blindsided by the bubble and the damage that would be caused by its collapse. If dishwashers had failed so miserably at their jobs, they would all be unemployed today. Fortunately for economists, they don't have the same level of accountability.

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The Washington Post has long expressed outrage over the fact that unionized auto workers can get $28 an hour. Therefore it is hardly surprising to see editorial page writer Charles Lane with a column complaining that "the United Auto Workers sell out nonunion auto workers."

The piece starts out by acknowledging that the AFL-CIO opposes tax provisions and trade agreements (wrongly called free trade agreements — apparently Lane has not heard about the increases in patent and copyright protection in these pacts) that encourage outsourcing. He could have also noted that it has argued for measures against currency management and promoted labor rights elsewhere, also measures that work against outsourcing. And, it would be appropriate to note in this context its support for measures that help the workforce as a whole, like Social Security, Medicare, unemployment insurance, and the Affordable Care Act.

But in spite of this seeming support for the workforce as a whole, Lane decides he going to prove to his readers that the United Auto Workers supports outsourcing. His smoking gun is the argument that if the union had agreed to lower pay for its workers at the Big Three, then they might shift fewer jobs to Mexico.

Lane's water pistol here is shooting blanks. As he himself notes in the piece, even the non-union car manufacturers are shifting jobs to Mexico. They have cheaper wages there, companies will therefore try to do this. Essentially, Lane is arguing that unions sellout non-union workers by pushing for higher wages for their workers because if unionized workers got low pay in the United States, there would be less incentive to look overseas for cheap labor. That may be compelling logic at the Washington Post, but probably not anywhere else in the world.

It is worth noting that the Washington Post has never once run either an opinion piece or news article on the protectionist measures that allow U.S. doctors to earn on average twice as much as their counterparts in other wealthy countries. This costs the country nearly $100 billion a year in higher health care costs, or just under $800 a household.

It is probably also worth noting that manufacturing compensation is on average more than 30 percent higher in Germany and several other European countries than in the United States. And unions in general are associated with lower levels of inequality, according to the International Monetary Fund.

But hey, Charles Lane and the Washington Post are outraged that auto workers can earn $28 an hour.

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Eduardo Porter discusses whether a no growth economy is feasible as a solution to addressing global warming. While he is largely right about the practicality of no-growth economy, there are a couple of points worth adding.

As a practical matter, it is just simple arithmetic that a larger world population will require fewer greenhouse gas (GHG) emissions per person. For this reason, a shrinking world population, or least more slowly growing one, would make it easier to hit emissions targets.

The second point is that historically people having taken the dividend of productivity gains in a mix of more lesiure and higher income. Given the strong correlation between income and GHG it would be desirable to structure policy to give people more incentive to take the benefits of productivity growth in leisure.

There has been a huge difference in this area between Europe and the United States over the 35 years. Europeans can almost all count on 4–6 weeks a year of paid vacation, paid family leave and sick days, and often shorter workweeks. As a result, the average work year in Europe has 20 percent fewer hours than in the United States. These countries have much lower levels of GHG per person than the United States. Policies that push the United States in this direction and push Europe further in the direction of more leisure should help to reduce GHG emissions.

As a definitional matter, better software, education, and health care would all be forms of economic growth. It is difficult to see why anyone would be opposed to such gains.

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Most economists argue that the Fed's quantitative easing policy, in which it bought up more than $3 trillion in government bonds and mortgage backed securities, is still helping to keep interest rates down even though the Fed has stopped buying these assets. The argument is that by holding a large stock of bonds the Fed is keeping their price higher than would otherwise be the case. And higher bond price mean lower interest rates.

While economists generally accept this view that the holding of a large stock of assets matters with U.S. interest rates, rather than just the flow of purchases, they don't seem to apply the same logic to currency prices. This NYT article on the Chinese Renminbi becoming an international currency never mentions the fact that China's central bank still holds more than $3 trillion in foreign exchange in discussing whether the renminbi is a freely floating currency.

If we believe that economics works the same way with currency values as with interest rates, then we have to believe that the decision by the Chinese central bank to continue to hold large amounts of dollars and other foreign currencies is raising their value relative to the renminbi compared to a situation where the bank held a more normal amount of reserves. This matters, since the implication is that the renminbi is still well below the level it would be at if the exchange rate was set without central bank interventions.

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Andrew Biggs has a piece in Forbes arguing that the standard estimates of retirees income are flawed because they ignore payouts from defined contribution (DC) accounts like 401(k)s and IRAs. Biggs has a point. There is a fundamental asymmetry in the treatment of traditional defined benefit pensions, which send retirees a check every month, and defined contribution pensions from which retirees must make withdrawals. The checks are generally counted as income on our surveys, the withdrawals often are not.

For this reason Biggs is correct to note that measures derived from the Current Population Survey (CPS), which the Social Security Administration uses for its Income of the Aged report, are likely biased downward. The question is how large the bias is. Based on IRS data, Biggs calculates that the correct number for retiree income might be more than 80 percent higher than the income reported by the CPS, an average understatement of almost $6,000 per person. That would be real money.

There are three reasons to think there might be less here than Biggs suggests.

1) Biggs used 2012 as the basis for his calculations, since this was the most recent year for which the IRS provided data on the over 65 population. It turns out that 2012 is a bad year from which to make extrapolations for reasons that every good tax-hating right-winger should know. The tax rate on high-income households was raised in 2013. This means that if you were one of those households, you would probably have wanted to take more from your IRA in 2012 at the lower tax rate.

If we look at the overall taxable withdrawals from IRAs, there was a drop from $230.8 billion in 2012 to $213.6 billion in 2013. Biggs' extrapolation would have shown an increase in 2013 to roughly $242 billion, an overstatement of more than 13 percent.

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I'm serious, here's how he begins his column (titled "Generational warfare, anyone?") this morning:

"An enduring puzzle of our politics is why there isn’t more generational conflict. By all rights, younger Americans should be resentful. Not only have they been tossed into the worst economy since the 1930s, but also there’s an informal consensus that the government, whatever else it does, should protect every cent of Social Security and Medicare benefits for the elderly. These priorities seem lopsided and unfair."

Yeah, think about that one. We have seen an enormous upward redistribution over the last 35 years. Without this upward redistribution the wages of a typical worker would be more than 40 percent higher today. This money has gone to Wall Street types—you know the folks who sunk the economy and then got us to bail out their banks when the market would have sank them. The money has gone to CEOs who put in their friends as corporate directors. The friends then return the favor by paying the CEOs tens of millions of dollars a year.

The money has gone to drug companies who use their political power to get Congress to give them stronger and longer patent protection and folks like President Obama's trade team to extend this protection around the world. It has gone to doctors and dentists who have used their political power to strengthen the protectionist barriers that ensure them ever higher pay. And it goes to folks like Samuelson's employer, Jeff Bezos, who has pocketed around $4 billion as a result of the exemption of Amazon from the requirement to collect state sales taxes.

But Samuelson and his friends are disappointed and puzzled that they can't get young people angry over their parents' and grandparents' $1,200 a month Social Security check. Life is tough.

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