Beat the Press is Dean Baker's commentary on economic reporting. He is a Senior Economist at the Center for Economic and Policy Research (CEPR). To never miss a post, subscribe to a weekly email roundup of Beat the Press.

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Well, it is the era of Donald Trump in Washington, but this turning reality on its head pre-dated Trump. Anyhow, the Washington Post was in its full trade deal promotion mode when it announced the signing of the Trans-Pacific Partnership (TPP) by the other eleven countries who had been negotiating the pact with the United States.

The headline of the piece tells readers, "as Trump imposes tariffs, allies sign on to free-trade pact — without US" The first sentence proclaims:

"As the Trump administration took another step away from free trade on Thursday, 11 nations bordering the Pacific Ocean made an equally loud statement in favor of free trade."

The piece reads largely like an editorial in favor of the TPP. It includes no comments from critics of the pact and ignores the fact that the TPP did little to actually reduce trade barriers since most of these were already low. The United States already had trade pacts with six of the other eleven countries in the pact.

The TPP was mostly about locking in a business-friendly structure of regulation, including special tribunals (investor–state dispute settlement tribunals) which would only be open to foreign investors. These tribunals would effectively override US or state and local laws, imposing penalties for actions that the tribunal ruled to be in violation of the TPP.

A major thrust of the deal was also longer and stronger patent and copyright protections, with higher prices for prescription drugs being a major goal. This is of course 180 degrees at odds with free trade, but apparently, the paper likes the beneficiaries of these protections, so it simply turns reality on its head to promote them.

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That's the question NYT readers are asking after reading the lead sentence of an article on the signing of an agreement by the other eleven countries that had been part of the Trans-Pacific Partnership (TPP). The sentence tells readers:

"A trade pact originally conceived by the United States to counter China’s growing economic might in Asia now has a new target: President Trump’s embrace of protectionism."

If the point of the trade pact was to counter China's influence then it may not have been wise to turn over the structuring of the deal to corporate interests who dominated the working groups that crafted the individual chapters of the TPP. As a result of turning the crafting of the deal to industry groups, provisions such as longer and stronger patent and copyright protections will raise the prices of drugs and other items for the countries in the TPP.

It is not clear how making it more difficult for countries to pay for health care would be expected to counter China's growing economic might. The provisions on e-commerce could make it more difficult for countries to regulate Facebook and other social media companies so that they would have a harder time preventing the sort of fake postings that have been an important factor in U.S. politics. It is also not clear how such rules would help counter China's growing economic might.

The piece also includes projections from the Peterson Institute, a strong proponent of the TPP, that might mislead readers. It tells readers:

"Once it goes into effect, the agreement should generate an additional $147 billion in global income, according to an analysis by the Peterson Institute for International Economics. Its backers say it also will bolster protections for intellectual property and include language that could prod members to improve labor conditions."

This projection for growth, which is more than twice the projection issued by the United States International Trade Commission, will be equal to roughly 0.08 percent of GDP in 2032, the point where these gains are expected to be realized. This is roughly equal to one week of growth.

The projection from the Peterson Institute also does not take account of any losses from the longer and stronger patent and copyright-related protections in the pact. These protections, which can raise the price of drugs and other protected items by more than a hundred-fold, are equivalent to tariffs of many thousand percent. It is entirely possible that the distortions from these protections more than offset any gains from reducing already low trade barriers. 

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Ruchir Sharma had an NYT column warning about the risks of a trade war from the tariffs Trump is imposing on steel and aluminum imports. At one point the piece tells readers about rising protectionism across the world and says that as a result, "trade has yet to recover to its pre-crisis level."

The measure of trade the article gives is merchandise trade as a percent of world GDP. This measure is misleading since a major factor reducing this ratio is a fall in oil and other commodity prices. Before the crisis oil prices rose sharply, peaking at $150 a barrel in 2008. Other commodity prices also were very high in the years just before the recession.

The reduction in prices for commodities is a major factor in reducing the ratio of trade to GDP. In the case of oil, with more than 40 million barrels trade daily, a drop of $50 a barrel in the price would reduce the volume of world trade by more than $750 billion a year, or roughly one percent of world GDP. There is a similar story with other commodities.

It is also worth noting that weaker and shorter patent and copyright protections would also lead to a lower ratio of trade to GDP. If drugs are traded across borders at generic prices rather than patent-protected prices, this ratio will fall even though the volume of trade can be rising.

Royalties and licensing fees are not picked up in this measure since it is explicitly merchandise trade, which would exclude payments for services. This is another factor that would tend to depress the ratio. As the world economy shifts from goods production to services, it is pretty much inevitable that the ratio of merchandise trade to GDP drops over time.

This doesn't mean that Sharma is necessarily wrong about a rise in trade barriers over the last decade (certainly patent and copyright protections are getting stronger), only that the measure he uses to back up this assertion is not very useful.

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Yes, I am on vacation, but I had to take a break from my vacation to call attention to the amazing act of mind reading in a Washington Post article on the Trump administration's effort to nix federal funding for a new transit tunnel between New York City and New Jersey. While the piece notes the possibility that Trump's opposition to the project may be an act of political vengeance directed at Senate Minority Leader Charles E. Schumer, it tells readers:

"But Trump and his aides have come to take a different view of the project, seeing it as a potential boondoggle that should be funded by New York and New Jersey taxpayers."

Wow, isn't it fantastic that we have Washington Post reporters who can tell us how Trump and his aides actually "see" the project? After all, it might otherwise be hard to believe that anyone who wants to spend $25 billion on a wall along the Mexican border could see anything as a boondoggle.

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I'm on vacation until Thursday, March 8. Remember, don't believe anything you read in the newspaper until then.

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Neil Irwin wrote the piece I have been waiting for pretty much forever. He points out that economists estimates of the "non-accelerating inflation rate of unemployment (NAIRU)" have been repeatedly shown to be hugely wrong. In the 1990s, the accepted wisdom was that this number was close to 6.0 percent, with estimates falling on both sides of this number. Yet, the unemployment rate fell to 4.0 percent as a year-round average in 2000 without any noticeable uptick in the inflation rate.

More recently, most economists had put the NAIRU between 5.0 and 5.5 percent. With the unemployment rate now at 4.1 percent, we still see little evidence of any inflationary pressures in the economy and the inflation rate remains below the Fed's 2.0 percent target. The unemployment rates in Japan and Germany are also both well below estimates of their NAIRUs from just a few years ago.

In short, economists have this hugely important number wrong. It is hugely important because the Fed and other central banks use it as a metric to tell them when they should start raising interest rates to slow the economy.

As the piece points out, in the 1990s, prominent economists (including Janet Yellen) pushed for the Fed to raise interest rates to keep the unemployment rate from falling much below 6.0 percent. It was only because Fed Chair Alan Greenspan was not an orthodox economist that the Fed didn't raise rates and we saw the low unemployment of the late 1990s. This was the only period of sustained broad-based real wage growth since the early 1970s.

The failure of the economics profession to get this one right would be like sports analysts picking the Cleveland Browns as Superbowl winners at the start of 2017 season or music critics in the mid-70s pronouncing Bruce Springsteen as a no-talent bum who will never go anywhere.

Great to see the piece by Irwin. He was much more polite than I would have been.

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The Commerce Department released data on capital goods orders for January yesterday. As I noted, this is a hugely important early measure of the success of the Trump tax cuts. The ostensible rationale for the big cut in the corporate tax rate that was at the center of the tax cut is that it will lead to a flood of new investment.

Since the outlines of the tax cut had been known since September, businesses had plenty of time to plan how they would respond to lower tax rates. If lower rates really produce a flood of investment we should at least begin to see some sign in new orders once the tax cut was certain to pass.

The January report showed orders actually fell modestly for the second consecutive month. The drop occurs both including and excluding volatile aircraft orders. While this is far from conclusive, it is hard to reconcile with the view that lower taxes would lead to a flood of new investment.

Remarkably, these new data have gotten almost no attention from the media. Both the NYT and the Washington Post ran an AP story that just noted the drop in passing. Doesn't anyone care if the tax cut works?

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News must travel slowly to corporate headquarters these days. How else can we explain the fact that corporate America isn't rushing out to invest in response to the big tax cut Congress voted them last year?

According to data released by the Commerce Department, orders for non-defense capital goods fell by 1.5 percent in January after dropping 0.4 percent in December. We get the same story even if we pull out volatile orders for aircraft: a drop of 0.2 percent in January after a fall of 0.6 percent in December.

While these declines would not be a big story in normal times (the economic impact is very limited), they are huge in the context of the tax cuts. The main rationale for the cut in corporate tax rates was that it was supposed to lead to a surge in investment.

While investment takes time to put in place, these data are showing us orders. Orders can be made over the Internet or an old-fashioned landline telephone. They don't take a lot of time.

And keep in mind, while the bill just passed in late December, the basic outlines had been known since early September. Fast-moving companies will begin to make plans from the day the bill seemed likely to pass, they aren't going to wait until Donald Trump puts his pen to it and then start asking what they should do.

The businesses in Pyeongchang didn't just start making plans for the Olympics the week the games opened, the hotels and restaurants began their expansion plans as soon as they knew Korea had landed the Olympics. We should expect the same story with corporate investment.

If the tax cuts matter for investment, then companies like GE, Microsoft, and Amazon were making plans as soon as it became clear that the Republican majority in Congress was serious about passing a tax bill. The fact that we are seeing zero evidence of an uptick in investment suggests that tax cuts don't have much impact on investment. 

Rather than being about promoting economic growth that would lead to productivity gains and higher wages for ordinary workers, the tax cuts were actually just another way to redistribute more money upward. As Speaker Ryan always says: #RichPeopleNeedTaxCuts.

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For those following such things, the strike by West Virginia school teachers, with an average annual pay of $45,700, is rather impressive. Yes, they want decent pay for themselves, but this is also about the quality of education for students in West Virginia.

We know that rich people think that teachers should be willing to educate children for nothing, but that is not the way the world works, at least in an economy where the government has not acted to ensure that unemployment is very high. Good teachers will look to the better-paying jobs in other states, or leave the profession altogether.

Even someone very committed to teaching would like to be able to have a decent home, be able to pay for their own kids upbringing, and also have some money for retirement. If the pay in West Virginia is not enough to allow for this, they won't stay. This will leave the state with high turnover and teachers who don't care much about educating children.

It is also worth noting that this strike is taking place at the same time the Supreme Court is hearing the Janus case, which is a right-wing effort to deny public employees' freedom of contract. (If Janus wins, they will not be able to have contracts that require everyone who is represented by a union share in the cost of representation.) This is yet another effort to tilt the playing field so that workers have less power, and presumably, will have to accept lower pay and benefits.

For those who like to make such comparisons, the average West Virginia teacher makes less than 20 percent of the average doctor, less than 10 percent of what many highly paid specialists earn, and probably around 1 percent of the salary of the hedge fund and private equity crew that get paid to lose money for university endowments. There's nothing like a system where people are rewarded on merit. 

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That is the implication of an NYT article reporting on the fact that the returns on university endowments trailed a simple index mix of either 60 percent stock and 40 percent bonds or 70 percent stock and 30 percent bonds. According to the article, university endowments had an average nominal return over the last decade of 4.6 percent. This compares to a return of 5.3 percent for a 60–40 stock/bond index mix and 5.4 percent for a 70–30 stock/bond index fund.

This means that universities were throwing billions of dollars in the toilet in order to invest with hedge funds and private equity funds rather than going with a simple index. It is worth noting that the managers of these funds routinely earn salaries of millions of dollars a year. Paychecks in the tens of millions and even hundreds of millions are not uncommon.

It will be interesting to see if universities will continue with an investment strategy that has the effect of losing them money while making a tiny group of people incredibly rich, especially in a context where so many have refused demands to divest holdings in fossil fuel corporations, claiming the need to maximize returns. This article implies there is less concern about maximizing returns when it comes to investing with hedge funds and private equity.

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We would usually expect that a 12-year-old kid would be taller than a 6-year-old kid. However, if a 12-year-old had only grown one inch over their last six years, we would probably be somewhat worried.

David Brooks devotes his most recent column, "the virtue of radical honesty" to presenting data from Steven Pinker's new book, Enlightenment Now, which purports to show that things are better than ever. Most of the data has the character of boasting over our 12-year-old's one inch of growth over the last six years.

Brooks tells us:

"For example, we’re all aware of the gloomy statistics around wage stagnation and income inequality, but Pinker contends that we should not be nostalgic for the economy of the 1950s, when jobs were plentiful and unions strong. A third of American children lived in poverty. Sixty percent of seniors had incomes below $1,000 a year. Only half the population had any savings in the bank at all.

"Between 1979 and 2014, meanwhile, the percentage of poor Americans dropped to 20 percent from 24 percent. The percentage of lower-middle-class Americans dropped to 17 from 24. The percentage of Americans who were upper middle class (earning $100,000 to $350,000) shot upward to 30 percent from 13 percent."

The problem with the Brooks–Pinker story is that we expect the economy/people to get richer through time. After all, technology and education improve. In the fifties, we didn't have the Internet, cell phones, and all sorts of other goodies. In fact, at the start of the fifties, we didn't even have the polio vaccine.

The question is not whether we are better off today than we were sixty years ago. It would be incredible if we were not better off. The question is by how much. In the fifties, wages and incomes for ordinary families were rising at a rate of close to two percent annually. In the last forty-five years, they have barely risen at all.

This fact can be seen even looking at the numbers that Brooks is bragging over. While it's not clear where they got their poverty data, the child poverty rate comes closest to the numbers in the article. This was at 22.3 percent in 1983. It was down to 21.1 percent in 2014 and fell further to 18.0 percent in 2016.

Should we celebrate this reduction in poverty rates over the last 33 years? Well, the poverty rate had fallen from 27.3 percent in 1959 (the first year for this data series) to 14.0 percent in 1969. That's a drop of 13.3 percentage points in just ten years. The net direction in the last 47 years has been upward.

It's true that a larger share of the population is earning over $100,000 a year. This is due to some growth in hourly wages, but also due to more work per family. A much larger share of women are working today than fifty years ago and a larger share of the women working are working full-time. If family income had continued growing at its pace from 1967 to 1973 (the last years of the Golden Age), median family income would be almost $150,000 today.

There are a whole a range of other measures which leave real enlightenment-types appalled by the state of the country today. While Brooks–Pinker tell us "only half the population had any savings at all" in the 1950s, a recent survey found that 63 percent of the country could not afford an unexpected bill of $500. The homeownership rate is roughly the same as it was sixty years ago. Life expectancy for those in the bottom 40 percent of the income distribution has barely budged in the last forty years.

In short, a serious analysis of data shows that most people have good grounds for complaints about their situation today since they have not shared to any significant extent in the economic growth of the last four decades. But apparently, there is a big market for the sort of dog and pony show that Brooks and Pinker present trying to argue the opposite.

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When it comes to talking honestly about the impact of trade on the labor market few papers flunk the test as badly as the Washington Post. It is a consistent and unreflective supporter of the pro-business trade policy that has been pursued by administrations of both parties for the last four decades.

Regular Beat the Press readers know how in an editorial defending NAFTA the paper absurdly claimed that Mexico's GDP quadrupled between 1987 and 2007. According to the I.M.F., the actual growth figure was 84.2 percent. More than ten years later the paper still has not corrected this error.

Given the paper's bias, it was not surprising to see a headline in the print edition that noted the loss of jobs over the last two decades and told readers, "it's the robots." The reason why this headline is out of line is that the article actually said the opposite. (The headline of the online version is identical, but excludes the reference to robots.)

The article is reporting on new research by Katharine Abraham and Melissa Kearney which examines the factors that might have led to the drop in employment rates since 2000. (I have not yet read the paper, but Katharine Abraham is one of the best labor economists anywhere, so I take seriously anything she does.) The article lists the factors in order of importance. It reports Abraham and Kearney's assessment:

"Abraham and Kearney estimate that this competition [from Chinese imports] cost the economy about 2.65 million jobs over the period."

The next paragraph is about robots:

"...the duo estimated that robots cost the economy another 1.4 million workers."

So Abraham and Kearney very clearly see robots as being considerably less important in causing job loss than trade. In fact, their assessment implies the impact of trade was almost twice as large as the impact of robots.

To put it as simply as possible, the Post's headline directly contradicts the information presented in the article. I suppose that Washington Post headline writers are not allowed to say anything that might reflect negatively on our patterns of trade.

And, just to be clear, this is not about pushing some seemingly noble goal like "free trade." The Post has no problem with protectionist barriers that raise the pay of doctors and keep drug prices high. This is about pushing trade policies that redistribute income upward.

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That's a bit of background that might have been helpful for people reading this Washington Post article on Disney's threat to withhold a $1,000 bonus from union workers unless they accept a contract offer from the company. According to the article, the company will be paying out a total of $125 million in one-time bonuses.

Last year, the company paid $4,422 million in taxes on $13,788 million in pre-tax income for an effective tax rate of 31.9 percent. If the new tax law lowers Disney's tax rate to 21 percent (this assumes it pays the statutory rate, without being able to benefit from various special provisions in the tax code), it would save just under $1.5 billion based on its 2017 income. It would presumably save comparable or larger amounts in future years as its profits grow. By contrast, the bonuses are being offered to workers are a one-time event which may not be repeated.

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In the last six months, Republicans gave up being a party that pretends to care about budget deficits as they happily pushed through large tax cuts (roughly 0.7 percent of GDP over the next decade) and big increases in spending (roughly 0.7 percent of GDP over the next two years). The deficit picture looks much worse today than it did a year ago.

While the few remaining deficit hawks at the Washington Post and the Peter Peterson–funded organizations are screaming, the question serious people should be asking is: why don't the markets don't share their concerns? In particular, the bond market, where the "bond vigilantes" live, should be going nuts with much larger deficits now being projected for as far as the eye can see.

It is true that rates have gone up. At just under 2.9 percent, the interest rate on 10-year Treasury bonds is almost half a percentage point higher than it was a year ago. But a 2.9 percent rate is still very low by any reasonable standard. After all, it was over 3.0 percent at the end of 2013 and it was over 5.0 percent in the late 1990s as the deficits were turning to surpluses.

The current 2.9 percent rate is also well below what the Congressional Budget Office (CBO) had projected just a couple of years ago when it expected deficits to stay on their prior no tax cut path. In January of 2016, CBO projected that the interest rate on 10-year Treasury bonds would be 3.7 percent by now. This means that even with the recent run-up, long-term interests are still 0.8 percentage points below what CBO had projected without any major increases in the budget deficit.

This might suggest that the concerns that deficits would send interest rates through the roof have little basis in reality. After all, long-term interest rates are driven by expectations, and unless investors in the bond market have hugely different expectations about the size of deficits than folks in Washington, they apparently don't believe that the larger deficits we are now looking at are that big a deal.

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It is amazing how frequently we hear people asserting that the massive inequality we are now seeing in the United States is the result of an unfettered market. I realize that this is a convenient view for those who are on the upside of things, but it also happens to be nonsense.

Today's highlighted nonsense pusher is Amy Chua, who warns in an NYT column about the destructive path the United States is now on where a disaffected white population takes out its wrath on economic elites and racial minorities. The key part missing from the story is that disaffected masses really do have a legitimate gripe.

We didn't have to make patent and copyright monopolies ever longer and stronger, allowing folks like Bill Gates to get incredibly rich. We could have made Amazon pay the same sales tax as their mom and pop competitors, which would mean Jeff Bezos would not be incredibly rich. We could subject Wall Street financial transactions to the same sort of sales taxes as people pay on shoes and clothes, hugely downsizing the high incomes earned in this sector. And, we could have rules of corporate governance that make it easier for shareholders to rein in CEO pay.

None of the rules we have in place that redistribute upward were given to us by the market. They were the result of deliberate economic policy. (Yes, this is the topic of my [free] book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.) It is understandable that the losers from this upward redistribution would be resentful and they likely are even more resentful when the beneficiaries of the rigging just pretend that it was just a natural outcome of the market.

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An NYT Magazine piece does a very nice job laying out the argument as to how platform monopolies like Google could be engaging in anti-competitive practices.

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An NYT article discussed a plan being pushed by Ivanka Trump and several Republicans in the Senate which would allow for new mothers to take up to twelve weeks of paid family leave. This would be paid for by delaying their Social Security retirement benefits beyond age 67, which would be when they would now be able to collect full benefits.

The piece quotes Carrie Lucas, the President of the Independent Women's Forum saying:

"Sixty-seven is really late middle age, and many people are really happy to continue working."

We actually have data on the percentage of women age 65 to 69 who are now in the labor force and continuing to work, happy or not. In the most recent data, less than 28 percent of women in the age group were in the labor force. The share is considerably lower for less-educated workers, who would be the ones most in need of paid leave. The share falls off rapidly as women age so that the labor force participation rate for women between the ages of 70 and 74 is less than 16.0 percent.

It also worth noting that a large percentage of these women work at physically demanding jobs like housekeepers or table servers. These women are likely to find it quite difficult to add another six months or year to their working careers.

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This is an assertion in a major Post article on infrastructure, but it doesn't fit with the evidence. Trump is actually only proposing to put up $200 billion (0.09 percent of GDP) over the next decade towards his infrastructure initiative.

The rest is supposed to come from state and local governments and private investors. As the piece notes, many are dubious whether anything like this amount will be forthcoming. Also, Trump is proposing large cuts to Amtrak and a wide range of other areas of infrastructure spending, so his proposed increase in spending is far less this $200 billion figure.

While the Post wants to assure readers that Trump really expects that his proposal might lead to an increase in infrastructure spending of $1.5 trillion (0.7 percent of GDP) over the next decade, let me suggest an alternative possibility. Trump made big promises about infrastructure spending during the campaign. It is likely that many of his supporters took these promises seriously.

However, Trump really doesn't give a damn about infrastructure and the Republicans in Congress are not willing to increase the deficit, give back part of their tax cut, or reduce military spending to accommodate additional infrastructure spending. Therefore, Trump goes out and touts a plan that everyone knows doesn't add up but still allows him to pretend to be meeting his commitment to his base.

I have no idea if my alternative scenario is accurate, but I would argue that it is at least as plausible as the Post's claim that Trump or anyone else actually expects this plan to produce $1.5 trillion in additional infrastructure spending. Since neither the Post nor I know what is in the heads of Trump and his top aides, how about they just report the plan and what Trump's people say about it, and not claim to know what anyone's real "aims" are.

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As the saying goes, writing for Washington Post means never having to say you're sorry. Hence, the paper never apologized for saying NAFTA had caused Mexico's GDP to quadruple when the true growth was just 84.2 percent. And Robert Samuelson needs never apologize for silly warnings about run away inflation.

The latest line is that we are supposed to be scared about the 0.5 percent inflation rate shown in the Consumer Price Index (CPI) for January. He begins his piece telling readers:

"Anyone looking for good economic news will be disappointed by the latest inflation report, which showed the consumer price index (CPI) advancing by 0.5 percent in January. By itself, this isn’t especially alarming — prices jump around month to month — but it has troubling implications for the future. To some economists, it suggests the possibility of another financial crisis on the order of the 2008-2009 crash.

"Until recently, inflation seemed to be dead or, at least, in a prolonged state of remission. It was beaten down by cost-saving technologies and a caution against raising wages and prices instilled by the Great Recession. From 2010 to 2015, annual inflation as measured by the CPI averaged about 1.5 percent, often too small to be noticed. In 2016 and 2017, the annual rates inched up to 2.1 percent. On an annualized basis, January’s 0.5 percent would be 6 percent."

Sound scary?

Actually, monthly CPI data are pretty erratic. If we are supposed to be scared by January's 0.5 percent figure, we should also have been bothered by the 0.5 percent figure for last September as well the 0.5 percent rate for January of 2017. We also hit 0.5 percent in February of 2013 and again in September of 2012, which followed a 0.6 percent rise in August. In short, the 0.5 percent CPI inflation rate for January really doesn't provide us much basis for concern about rising inflation.

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It seems that bad guys (Russians and others) are using Facebook to spread all sorts of nonsense under false identities. Mark Zuckerberg, Facebook's CEO and very rich person, tells us that he is very concerned about the problem but doesn't know exactly what to do. Congress can help out Facebook and Zuckerberg.

Back in the late 1990s, when the Internet was rapidly becoming an important means of communication, the entertainment industry became concerned about people transferring copies of copyrighted music without permission. It got Congress to pass the Digital Millennium Copyright Act of 1998 (DMCA).

There are many aspects to the DMCA, but the key part is that it imposes harsh punitive damages for anyone who allows copyrighted material to be transferred through their site. If a copyright holder notifies the owner of the site that they have posted their material without authorization, the owner of the site must remove it within 48 hours or face steep penalties.

The site owner is liable for damages even if a third party posted the infringing material. This means that if someone were to post a copyrighted song in the comments section to this blog, CEPR would be liable if it was not removed after notification.

It is important to note that the damages are punitive, not just actual. Suppose someone posts a minor hit from thirty years ago that 20 people download from this site. Given the prices commanded for downloads of old music, the actual damages would be a few cents. Nonetheless, under the DMCA, CEPR could be liable for thousands of dollars in damages. This can be a great model for Facebook and other potential purveyors of fake news.

Here's how it would work. Imagine that I get a posting on my Facebook feed from something that looks dubious. I send a note to Facebook indicating that I don't think that this posting is from a real source. Facebook then has 48 hours to investigate and determine if the source is real. If it determines that it is not real it must notify every person who received the posting, either directly or through its sharing system, that the source was fake.

Just as is the case with the DMCA, Facebook could face stiff penalties, say $10,000 a shot, for failing to act within the 48-hour time frame. This would ensure that Facebook would have a powerful incentive to move quickly to prevent the spread of fake news and false stories.

My guess is that Facebook has the technical expertise to meet this requirement. But if it doesn't, who gives a damn? This is a reasonable expectation of a system like Facebook and if Mark Zuckerberg and his crew lack the competence to meet it, then a better run competitor will take its place.

See, this is all fun and easy. It just requires a Congress that cares as much about protecting democracy as the copyrights of Disney and Time-Warner.

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Donald Trump is proposing to eliminate the National Endowments for the Arts and Humanities, as noted in an NYT column today. Each agency received just under $150 million in the 2017 budget, an amount that is equal to just under 0.004 percent of total spending. Another way to think about the money the government spends promoting the arts and the humanities is comparing it to spending on Donald Trump's golfing trips.

According to calculations from the Center for American Progress Action Fund, we were on a path to spend $59.25 million on Donald Trump's golfing for each year he is in the White House. This means that by ending funding for either the Endowment for the Arts or the Endowment for the Humanities we can pay for two and a half years of Donald Trump's golf trips. If both are shut down, it would cover the cost of five years of Donald Trump's golf trips.

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Source: See text.

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