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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That was the claim in the headline of a New York Times editorial. It is clearly wrong for the simple reason that we are not currently giving hungry kids anywhere near enough money to pay for the tax cuts.

The budget for food stamps, the program being targeted for cuts, is $73 billion a year or 1.7 percent of total spending. The tax cuts are projected to cost roughly $150 billion a year, an amount equal to 3.4 percent of current spending. Even if we cut the food stamp budget by a quarter, it would cover less than 15 percent of the cost of the tax cut.

The reality is that the amount of money at stake in the food stamp debate is relatively small in terms of the federal budget. The Republicans like to beat up on the program for political purposes. They want people to believe that all of their tax dollars are going to pay for food stamps, with the idea that the people who receive these benefits are all African American, Hispanics, or immigrants from various "shithole countries."

The New York Times is helping the Republicans in this effort by implying that real money for the federal government is at stake. While these benefits may make a huge difference in the well-being of tens of millions of low- and moderate-income people, they make very little difference in the federal budget. It is unfortunate that the NYT is so intent on obscuring this simple fact.

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This is an important point left out of the Washington Post's piece on the Supreme Court decision allowing states to require Internet sellers to collect sales taxes.The piece told readers that Amazon already collects state sales taxes. While this is true on its direct sales, it does not require its affiliates to collect sales taxes. Affiliates account for 30 to 40 percent of Amazon's sales.

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Well, the Journal did run a piece decrying generational inequality, but naturally, it went the other way. The issue is the projected rise in the cost of Social Security and retiree pensions, due to the aging of the population. Our population has always been aging due to tragic fact that better living standards and improved health care coverage allow people to live longer lives.

The Journal attempted to hide this simple fact from its readers by beginning its chart of old age dependency ratios in 1980 when all the baby boomers were in the workforce. If it had begun the chart in 1950, it would have shown a sharp rise in the old-age dependency ratio between 1950 and 1980 from 0.138 to 0.196. This was associated with (horrors) large increases in Social Security taxes over this period. These tax increases did not prevent workers in this period from seeing rapid gains in living standards because the benefits of growth were widely shared.

Real wages are projected to continue to rise in the decades ahead. Average wages are projected to be more than 35 percent higher in twenty years than they are today. The WSJ apparently did not have room to mention this fact in its piece on generational inequality.

It is true that most workers have not been sharing in wage gains in recent decades. This is due to the fact they have been concentrated at the top, with folks like corporate CEOs, Wall Street types, and doctors getting a disproportionate share of growth. This is a huge problem for today's young, but it is a story of intra-generational inequality, not inter-generational inequality.

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An NYT article that touted the strength of the US economy as a defense against the negative effects of a trade war included an assertion from Spencer Dale, the chief economist at BP, that "trade wars won’t sharply curtail economic activity, unless they cause businesses to lose confidence." Actually, the most immediate effect of the tariffs being touted by Donald Trump is to raise taxes, which would reduce consumption, other things equal.

For example, if Trump imposes a 20 percent tariff on $500 billion of imports from China, this would be a $100 billion annual tax increase (roughly $1 trillion over a 10-year budget horizon or 0.5 percent of GDP). This would be pulling a substantial amount of money out of consumers' pockets. The lost demand would be offset insofar as it leads to a reduction in the trade deficit, however, there would be little gain if the result were to replace imports from China with imports from Vietnam or other countries. While the prospect of a trade war could have a dampening impact on investment in the longer term, the most immediate impact is likely on consumption.

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No, they would never attribute such motives to political actors, but for some reason, the paper feels it can tell us that they want to separate the food stamp program from agricultural appropriations "in hopes of cutting costs." While it is certainly possible that the motives of the Koch-related entities referred to in this piece is really to save the government money, there are reasons for questioning this view.

The government is projected to spend $73 billion on the food stamp program this year, or 1.7 percent of total spending. Even large cuts to this program would have only limited effects on the federal budget. These Koch-related entities have mostly been little troubled by the $716 billion that the federal government will spend on the military this year. They also seem little troubled by privatizing public services like prisons, or student loan debt collection, which both have been shown to raise costs.

On the other hand, we know that many people get enraged over spending on programs like food stamps, with the idea that the beneficiaries are all African American and Hispanic, and that a large portion of there tax bill is going to them. Many Republican politicians have sought to highlight spending on such programs in election campaigns, so it is certainly plausible that the Koch-related entities want to make this process easier for their political allies.

The best solution here is to not ascribe motives, which the NYT reporters do not know. This is supposed to be the policy of the paper (it will not say that Donald Trump "lied," but for some reason, it seems unable to practice it consistently).

The piece also refers to the "$3 billion Community Development Block Grant Program." For those not very familiar with the federal budget (i.e. 99.9 percent of NYT readers) this program costs us a bit less than 0.07 percent of the federal budget.

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In an interview with NPR reporter John Ydstie discussing President Trump's latest round of tariffs on China, host Rachel Martin noted the decline in stock markets worldwide in response to tariffs and asserted that when the markets are down, everyone loses. This is not true.

If the market is down because participants accurately recognize there will be less economic growth, which also means less profits, then it is reasonable to assume that most people will lose. However, this is only one reason for the market to decline.

The market could fall because investors are less optimistic for no real reason. In that case, people like Bill Gates and Elon Musk have less money, but the bulk of the population who own little or no stock are not directly affected. If wealthy stockholders spend less money in response to their loss of stock wealth, then there is less demand in the economy.

If the Fed is concerned about excess demand, this reduction in demand will allow for it to put off interest rate hikes it might otherwise have made. That would mean people would be able to pay lower interest rates on mortgages and other loans. In effect, the lower stock prices are allowing more consumption for the bulk of the population by reducing the consumption or luxury spending (Elon Musk's or Jeff Bezos' space dreams) of the wealthy. Most people would not consider themselves hurt in this scenario. 

Of course, the stock market may drop because income is shifting from profits to wages or from profit to taxes, both cases in which most people would fairly directly benefit. In the first case, they would get higher pay, in the second there would be more revenue for the government to spend on public goods.

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Since Donald Trump has apparently discovered that the US imports more than it exports from China, we can put tariffs on more goods than China can. This means that China has to look to other measures to counter Trump's trade war. Most coverage of this issue has neglected to mention China's strongest alternative measure.

The nuclear option, in this case, would be to stop honoring US patents and copyrights. This would be hugely costly to US corporations, especially if they began to export items, like prescription drugs, to the rest of the world. This would likely violate WTO rules, but I suspect China will care about violating WTO rules as much as Trump does.

Anyhow, given this can mean massive savings on drugs and other items for billions of people and a big hit to shareholders in Apple, Pfizer, Microsoft and other high-flying companies, it would go far towards reversing the upward redistribution of income. Like Trump said, it's easy to win a trade war.

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That’s what New York Times readers were wondering when they saw Harvard Economics Professor Greg Mankiw’s column, “Why Aren’t Men Working?” The piece notes the falloff in labor force participation among prime-age men (ages 25 to 54) for the last 70 years and throws out a few possible explanations.

We’ll get to the explanations in a moment, but the biggest problem with explaining the drop in labor force participation among men as a problem with men is that since 2000, there has been a drop in labor force participation among prime-age women also.

In we take the May data, the employment to population ratio (EPOP) for prime-age women stood at 72.4 percent.[1] That is down modestly from a pre-recession peak of 72.8 percent, but the drop against the 2000 peak of 74.5 percent is more than two full percentage points. That is less of a fall than the drop in EPOPs among prime men since 2000 of 3.2 percentage points, but it is a large enough decline that it deserves some explanation. In fact, the drop looks even worse when we look by education and in more narrow age categories.   

In a paper last year that compared EPOPs in the first seven months of 2017 with 2000, Brian Dew found there were considerable sharper declines for less-educated women in the age groups from 35 to 44 and 45 to 54, than for men with the same levels of education. The EPOP for women between the ages of 35 and 44 with a high school degree or less fell by 9.7 percentage points. The corresponding drop for men in this age group was just 3.4 percentage points.

The EPOP for women with a high school degree or less between the ages of 45 and 54 fell by 6.7 percentage points. For men, the drop was 3.3 percentage points. Only with the youngest prime-age bracket, ages 25 to 34, did less educated men see a larger falloff in EPOPs than women, 8.2 percentage points for men compared to 6.9 percentage points for women.

Looking at these data, it is a bit hard to understand economists’ obsession with explaining the drop in EPOPs for men. It is also worth noting that there are also drops in EPOPs for many groupings of more educated workers.

For example, there was a drop of 0.9 percentage points in the EPOP for women between the ages of 35 and 44 with college degrees.  The drop in EPOPs among women with college degrees between the ages of 45 to 54 was 1.6 percentage points.

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A couple of weeks ago, I joked that it seemed as though Washington Post reporters are not allowed to mention the importance of the value of the dollar in trade. This was after reading a lengthy article on how low farm prices are hurting farmers which never once mentioned the rise in the value of the dollar over the last four years.

The basic story is that, other things equal, the higher the value of the dollar against the euro, yen, and other major currencies, the lower the dollar price of wheat, corn, and other farm commodities. The relatively high dollar has been an important factor depressing prices received by US farmers in recent years, but for some reason, the Post never mentioned this fact.

Steven Mufson gives perhaps an even more egregious example of not talking about currency in his discussion of US trade relations with China over the last three decades. Incredibly, the piece never once mentions the explicit decision by China to keep down the value of its currency against the dollar in order to maintain and expand its trade surplus. This practice, sometimes called "currency manipulation" led China to run a trade surplus that peaked at just under 10 percent of GDP in 2007. This is especially striking since economists would ordinarily expect a rapidly growing developing country like China to be running a large trade deficit, since it would be an importer of capital.

While China's currency is probably less under-valued today than a decade ago (which explains the large decline in its trade surplus), it is still deliberately held down by the government which is holding more than $4 trillion either as direct central bank reserves or in its sovereign wealth fund. As the CIA World Factbook notes:

"note: because China's exchange rate is determined by fiat rather than by market forces, the official exchange rate measure of GDP is not an accurate measure of China's output; GDP at the official exchange rate substantially understates the actual level of China's output vis-a-vis the rest of the world; in China's situation, GDP at purchasing power parity provides the best measure for comparing output across countries."

The continued under-valuation of China's currency is a major factor in the US trade deficit. A president who was committed to more balanced trade would have currency values at the top of their agenda.

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The Federal Reserve Board's monthly reports on industrial production used to get a fair bit of attention in the business press, but May's 0.7 percent decline in manufacturing activity seems to have passed largely unnoticed. These data are erratic and subject to large revisions, so this is hardly an end of the world kind of number, but it certainly is not a figure consistent with the investment boom promised by proponents of the tax cut.

It is also consistent with the reported fall in the length of the average workweek in manufacturing reported in the May employment report from the Bureau of Labor Statistics. This decline in hours led to a 0.3 percent decline in the index of aggregate hours for the month.

These are the sort of drops that are expected when there is an unusual weather event like a big snowstorm or a hurricane hitting a major population center. However, there were no obvious events in this category in May, which does raise the possibility that we may be seeing a turning point in manufacturing with the brief upturn over the last couple of years petering out.

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Donald Trump's trade wars seem to lack any logic and are likely to end up badly for both the United States and our trading partners, but that is not a good reason for serious people to start making up numbers to bolster their arguments. That is the route the NYT took in its latest editorial attacking Trump's tariffs.

While the piece makes many valid points, it includes many assertions that can at best be called "truthful hyperbole." For example, the piece tells readers that Trump's steel tariffs "meant a 40 percent increase since January in the cost of steel for their customers who use it in their finished products, according to the US Chamber of Commerce."

It's not clear where the Chamber of Commerce came up with this number, but the Bureau of Labor Statistics (BLS) reports that the price of steel mill products are up 10.4 percent over the last year. BLS is likely a more reliable source on this issue than the Chamber of Commerce which has been known to produce studies showing massive job loss from policies like minimum wage hikes or mandated family leave.

The piece also warns us about the impact of aluminum tariffs on domestic beer producers.

"Brewers are forecasting that they’ll pay $347.7 million more for aluminum cans. That has small craft-beer makers such as Melvin Brewing in Alpine, Wyo., which packages 75 percent of its products in cans, fretting about impending prices rises and the risks of passing them along to consumers."

It would have been useful to put this $347.7 million figure in context. Beer sales in the U.S. were over $34 billion in 2016, which means that the increased cost of aluminum is equal to roughly 1.0 percent of what the public spends on beer. We are supposed to believe that people paying $10 a six-pack for their craft beer, will get seriously bent out of shape if the six-pack now costs $10.10? (I actually would have thought most craft-beer is sold in bottles, but whatever.)

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We all know about the problem of people who expect handouts from the government because they are too lazy or incompetent to make it on their own. The Washington Post wrote about a cattle rancher in Oregon who fits this bill, but so badly represented the facts most readers probably did not understand what is at stake.

The piece is about two ranchers in Southeastern Oregon, Dwight Hammond Jr. and his son, Steven, who were convicted of committing arson on federal property. According to the article, they also threatened federal employees. Donald Trump is apparently considering granting the two men pardons.

The article asserts that the Hammonds "advocating public use of federal lands — especially for grazing of livestock." This statement is self-contradictory. The Hammonds are advocating that they be able to use federal land for their private purpose — grazing of livestock — they are not arguing that it should be open to the public for general use.

Their use of the land for grazing will limit its use for other purposes and, of course everyone cannot use the land for grazing. This is a case where the Hammonds apparently feel the government owes them a handout in the form of free access to public land. The value of this handout almost certainly swamps the value of the benefits that a family might receive from food stamps, TANF, or other anti-poverty programs that set many people into a frenzy. 



BillB in the comments section informs us that these two ranchers have a history of making violent threats against federal employees and their families. They would seem to fit the definition of "terrorists," the sort of characters conservatives usually talk about locking up for very long periods of time. It is striking that Donald Trump seems interested in pardoning them.

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In a Washington Post analysis, Philip Bump assessed the evidence as to whether the Republican tax cuts passed last year are leading to the promised wage growth. He notes promises from Donald Trump about how the tax cut would lead to more hiring, which would push up wages.

While this is in fact what Trump promised on many occasions, this is likely due to the fact he didn't understand the logic of his own tax cut. His economists justified the promised wage gains not by any immediate hiring effect, but rather by the effect the tax cut would have on investment. The tax cut was supposed to induce a flood of new investment. This would, in turn, lead to more rapid productivity growth. The big wage dividend would come from the workers' share of this increased productivity.

For this reason, the key factor to watch at this point is investment, not month-to-month wage movements. By this measure, the tax cut is striking out badly. There is zero evidence of any uptick in investment, or investment plans, over the pre-tax cut pace.

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The Federal Reserve Board yesterday raised interest rates. According to comments from Chair Jerome Powell and other Fed board members, they believe that the unemployment rate is approaching, if not below, levels where it could trigger inflation. The hike yesterday, along with prior hikes and projected future hikes, was done with the intention of keeping the unemployment rate from getting so low that inflation would start to spiral upward.

This is not the same as "express[ing] confidence that raising borrowing costs now won’t hurt growth," which is the view attributed to Fed officials in the NYT's "Thursday Briefing" section. The point of raising interest rates is to slow growth, so they absolutely believe that higher interest rates will hurt growth. The point is that the Fed wants to slow growth because it is worried that more rapid growth, and the resulting further decline in unemployment, will trigger inflation.

Chair Powell did say that he didn't expect higher borrowing costs to choke off growth, but that is not the same as saying that he doesn't believe it will slow growth.

Thanks to Robert Salzberg for calling this to my attention.

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Neil Irwin had an interesting piece discussing various proposals that would ensure that workers share in productivity gains if we start to see massive job displacement due to robots (not much to date). At one point, he says this list would imply more activist government. This is not true. Most of the proposals (which can be found in my 2016 [free] book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer ) involve different ways in which the government would structure the market, not necessarily more intervention.

For example, weaker and shorter patents and copyrights actually imply less government intervention in the market. Patents and copyrights are of course government granted monopolies that raise the prices of protected items by several thousand percent, sometimes tens of thousands of percent. Reducing this protection is a move towards a freer market.

Monetary policy that targets full employment is no more "activist" than monetary policy that focuses on keeping inflation down, it is simply a question of priorities. The question is whether the government is working towards ensuring that workers can get jobs or whether it is focused on protecting the wealth of the wealthy.

Work sharing is an alternative to unemployment insurance. With standard unemployment insurance, the government is effectively paying workers half their salary to be completely unemployed. By contrast, work sharing involves half of the wages lost from being partially unemployed due to a cutback in hours. While this is arguably better for workers and employers, since it keeps workers attached to the labor force, this arrangement does not in any obvious way imply more activist government.

It is striking that the rules that set in place the current market structure and the resulting upward redistribution are somehow regarded as natural and that efforts to alter them are regarded as "activist." In fact, the upward redistribution of the last four decades was engineered by a series of policy shifts, not any natural process of market evolution.

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Donald Trump's tendency to make things up as he goes along naturally prompts a strong reaction from people who try to approach issues in a serious way. But serious people can sometimes get carried away in this reaction.

Glenn Kessler, the Washington Post's fact checker, got a bit carried away in trying to set readers straight on Trump's bizarre claim we have a $100 billion trade deficit with Canada. (We do have a trade deficit, but it is closer to $20 billion.) In his Fact Check piece, Kessler asserts:

"If overall trade increases between nations, people in each country gain, no matter the size of the trade deficit."

This is not necessarily true. Let me go through two cases, one in which the countries are below full employment and one in which they are at full employment.

Suppose in the first case one country, let's say Denmark, decided to subsidize $100 billion of exported cars to the United States, displacing $100 billion of domestic production. The immediate effect of the increased imports from Denmark is a loss of output and employment in the United States.

In principle, the Danes have another $100 billion to buy goods and services from the United States, but suppose they don't like anything we sell. In the textbook story, they would dump their $100 billion on world currency markets, driving down the value of the dollar. This would make US goods and services relatively cheaper, thereby causing us to export more and import less, possibly fully offsetting the $100 billion in increased imports.

But suppose the evil Danish central bank used these dollars to buy up US government bonds, as many countries have done over the last two decades. This would keep the dollar from falling. The purchase of US bonds would have some effect in lowering US interest rates, but this would be just like the Fed's quantitative easing policy. The lower interest rates would boost demand, but not nearly enough to offset the $100 billion increase in our trade deficit.

So, in this below full employment story we end up with a situation where trade has increased by $100 billion, but the US is left with lower employment and output. It sure looks like it has been hurt by more trade.

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No, this one is not at all a joke. Harvard Professor and former AIG director (yes, the one the government bailed out in 2008) Martin Feldstein wants the Fed to stop worrying about unemployment and just focus on inflation. His Wall Street Journal column argues for ending the Fed's dual mandate and instead just having an inflation target.

Before getting to the substance, it is worth a short digression on Feldstein's track record. Feldstein was sitting on AIG's board of directors as the insurer issued hundreds of billions of dollars worth of credit default swaps on mortgage-backed securities at the peak of the housing bubble. Mr. Feldstein apparently saw no problem with this. While the company had to be saved from bankruptcy by a massive government bailout, Feldstein was pocketing well over $100,000 a year for his oversight work as a director.

While Feldstein missed the bubble that sank the economy, he did manage to finger a bubble that didn't exist. Four years ago he wrote a column with former Citigroup honcho (yes, the one the government bailed out in 2008) Robert Rubin, his Democratic counterpart as a purveyor of wisdom from the financial sector. The column urged the Fed to raise interest rates in order to deflate the bubble they saw building in financial markets. (Here is my comment at the time.) Had the Fed taken their advice, the unemployment rate would almost certainly be several percentage points higher today and tens of millions of workers would not have seen the modest real wage gains they've experienced in the last four years.

The fact that someone with a track record as consistently bad as Martin Feldstein can get a column in the country's leading financial paper (he also argued in the 1993 that Clinton's tax increase wouldn't raise any revenue) shows what a great country we have. But let's get to the substance.

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Not deliberately of course, but he once again used his column to demand that Congress take steps to cut Social Security and Medicare. He denounced the politicians who don't share his agenda of making the lives of seniors harder as "cowards." Okay, nothing unusual here.

But let's take a step back into reality. The economy is hugely poorer today than it would have been if in the wake of the Great Recession we had effective stimulus. (Of course, we would be even better off if the folks running in the economy in the last decade knew some economics. Then they could have taken steps to counter the growth of the housing bubble, so we never would have had the Great Recession.)

The weak stimulus meant that unemployment was higher for a longer period of time than necessary. Many people lost skills and some ended up permanently unemployed. We also saw much less investment than we would have otherwise. As a result, the economy is more than 10 percent smaller today than had been projected back in 2008, before the depth of the crisis became apparent. 

This loss in output comes to more than $6,000 per person annually. People who have taken Econ 101 know that it doesn't make a difference to a person's take-home pay if you tax their income by 10 percent or whether we cut their before-tax income by 10 percent. Robert Samuelson and his deficit hawk friends cut workers' before-tax income by 10 percent with their push for austerity, which helped to put a check on effective stimulus. Now, they are deriding politicians as cowards for not wanting to go along with the other half of this agenda, cutting back the Social Security and Medicare benefits that these workers are counting on in their retirement.

It is also worth noting the warped logic in Samuelson and other deficit hawks arguments. Their measure of inter-generational equity is exclusively taxes. So if we hand down a wrecked environment, decrepit infrastructure, and shut down our schools, Samuelson would still have us scoring well on inter-generational equity as long as we haven't raised taxes.

Samuelson and his Washington Post gang also are denialists in refusing to acknowledge that taxes are not the only way the government pays for things. The government grants patent and copyright monopolies, which effectively allow their holders to apply taxes on a wide range of items like prescription drugs, medical equipment, and software. In the case of prescription drugs alone, the gap between the patent prices we pay and the free market price comes close $400 billion a year (2 percent of GDP).

Presumably, Samuelson and the other deficit hawks don't like to talk about patent and copyright monopolies because the beneficiaries are their friends. But people who actually care about economics and society's well-being can't be so selective in deciding to ignore such enormously important implicit taxes.

Note: Typos corrected from an earlier version, thanks Robert Salzberg.

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The NYT had a good piece highlighting new research by Gabriel Zucman, Thomas Torslov, and Ludvig Wier indicating that multinationals may be shifting as much as 40 percent of their profits to tax havens. This is a pretty serious problem if we actually expect companies to pay their taxes.

As I have pointed in the past, there is actually a very simple mechanism that would pretty much block this sort of tax avoidance. If companies were required to give the government non-voting shares in an amount equal to the targeted tax rate, then it would be virtually impossible for them to escape their income tax liability without also defrauding their shareholders. But I realize this is probably too simple to be taken seriously.

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OMG! It's the Mother of All Credit Bubbles!. That's not my line, Steven Pearlstein is beating the drums in the Washington Post telling us we should be very afraid because a number of corporations are taking on too much debt.

His basic story is that corporate America is getting heavily leveraged, with many companies likely finding themselves in a situation where they can't repay their loans. I wouldn't dispute the basic story, but there are few points worth noting.

First, companies have an incentive to borrow a lot because interest rates remain at historically low levels even though as Pearlstein tells us that the Republican tax cut is "crowding out other borrowing and putting upward pressure on interest rates." The interest rate on 10-year Treasury bonds is under 3.0 percent. By contrast, it was in a range between 4.0 to 5.0 percent in the late 1990s when the government was running budget surpluses.

Much of his complaint is that many companies are borrowing while buying back shares. I'm not especially a fan of share buybacks, but I don't quite understand the evil attached to them. Would we be cool if these companies paid out the same money in dividends? There are issues of timing, where insiders can manipulate stock prices with the timing of buybacks, but they actually can do this with announcements of special dividends also. Anyhow, to me the issue is companies are not investing their profits, I don't really see how it matters whether they pay out money to shareholders through buybacks or dividends.

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It's well-known that intellectuals have a hard time dealing with new ideas. And, for better or worse, the NYT's editorial writers are intellectuals.

This made it painful to read its editorial criticizing the Food and Drug Administration's (FDA) efforts to hasten the approval of new drugs. The piece makes many important points about the problems with an accelerated drug approval process. This increases the risk that drugs will be approved that are of little benefit and possibly even harmful.

While it notes the inevitable tradeoff between the desire to quickly make new drugs available to patients who can be helped and ensuring their safety and effectiveness, it misses the fundamental problem with having the testing done by a company with a financial interest in pushing drugs whether or not they are safe and effective.

This is an especially serious problem given the enormous asymmetry in the information available to the drug company doing the testing and both the FDA and the larger community of researchers. The decision to conceal or misrepresent test results has proven enormously harmful to the public in recent decades, most notably in reference to evidence that the new generation of opioid drugs are addictive.

The obvious solution to this problem would have the government take responsibility for funding clinical testing. The government could still contract out the testing process, but if it took possession of all rights to the drugs, so that they would be available as generics when they were approved, there would be no one with an interest in misrepresenting the research results. (This would not preclude drug companies for paying for their own tests on drugs to which they maintained patent monopolies, but these drugs would be subject to much greater scrutiny for approval. They would also face the risk of competing with drugs that are every bit as effective selling at generic prices.)

While publicly funded drug testing would seem an obvious way to deal with a serious health issue, it would require the sort of new thinking that intellectuals find very difficult.

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