ES EN
Menu Menú

Publications

Publicaciones

Search Publications

Buscar publicaciones

Filters Filtro de búsqueda

to a

clear selection Quitar los filtros

none

Article Artículo

Glenn Hubbard is Unhappy About the Budget Deficit

Glenn Hubbard, along with Tim Kane, had a column in the NYT today decrying the budget deficit. The column begins by repeating the warnings of that well known economic expert, Admiral Mike Mullen, that the debt is the “single biggest threat to our national security.”

There is more than a bit of irony in Hubbard writing this sort of piece. Hubbard was the chief economic advisor to President George W. Bush when he pushed through his tax cuts in 2001. The tax cuts, along with the recession and the wars in Afghanistan and Iraq, pushed the budget from a surplus of 2.5 percent of GDP in 2000, to deficits of more than 3.5 percent of GDP in 2003 and 2004. While running large deficits was the right move for the economy in response to the recession created by the collapse of the stock bubble (although there were far better uses for the money than tax cuts to rich people and fighting unnecessary wars), there is more than a bit of inconsistency in Hubbard's apparent willingness to use deficits to boost the economy out of a recession in the last decade while at the same time disparaging President Obama's efforts to use deficits to lift the economy out of a far deeper hole.

The double standard in this piece is explicit. It tells readers:

"When Reagan was sworn into office, gross federal debt equaled 32.5 percent of G.D.P. Under President Obama’s leadership, it has risen above 100 percent."

Readers may not have realized that the debt to GDP ratio had been a consistent downward path from the end of World War II, when it was over 110 percent of GDP, until President Reagan took office. It then began to rise quickly in the 1980s and early 1990s, reaching more than 70 percent of GDP when the first President Bush left office in early 1993. (This is the total debt, which includes the bonds held by Social Security and other government trust funds.)

Dean Baker / August 12, 2013

Article Artículo

Washington Post Myths About Its New Owner, Jeff Bezos

In a piece that was ostensibly intended to dispel myths about Jeff Bezos, the new owner of the Washington Post, "Five myths about Jeff Bezos," the paper seemed intent on creating new myths. Its list of myths included two items which are largely true.

Myth # 1 is "Jeff Bezos is destroying independent booksellers." The piece implies that independent booksellers were already well on their way to collapse before Amazon came into existence telling readers:

"The year before, Barnes & Noble and the Borders Group captured nearly a quarter of all revenue from book sales."

With the two big chains getting less than a quarter of revenue, this means that independent stores and smaller chains got more than three quarters of revenue. By contrast, last year on-line sales, the bulk of which went to Amazon, accounted for 48 percent of total sales. While some of this growth came at the expense of the two big chains (Borders has gone out of business), most of it was at the expense of independent book stores.

It is possible to debate whether the loss of independent book stores is a net positive or negative (obviously consumers value buying items at Amazon or they wouldn't do it), but it is absurd to contend that Amazon did not hugely hasten the decline of independent book stores as his newspaper does here.

The other major non-myth on the list is myth #4 that:

"Amazon's key advantage is that it doesn't collect state sales tax."

Dean Baker / August 11, 2013

Article Artículo

Brazil

Latin America and the Caribbean

World

Greenwald Testifies to Brazilian Senate about NSA Espionage Targeting Brazil and Latin America

This past Tuesday, investigative journalist Glenn Greenwald testified before the Brazilian Senate’s Committee on Foreign Relations and National Defense (CRE) at a public hearing on the clandestine surveillance activities of the U.S. National Security Agency (NSA) in Brazil.

Greenwald, who has published many top-secret NSA documents leaked to him by whistleblower Edward Snowden, explained how the agency’s surveillance programs go far beyond gathering intelligence related to terrorism and other national security threats, as the U.S. government has suggested. According to Greenwald, NSA spying has focused on foreign business interests as a means for the U.S. government to gain a competitive advantage in negotiations. Greenwald mentioned that he has information regarding instances of NSA surveillance of the Organization of American States (OAS) and secret intelligence documents on economic agreements with Latin American nations. He explained that this type of surveillance has helped the U.S. to make the agreements appear more appealing to Latin American countries. Brazil’s concern about this economic espionage is particularly understandable given that it is the U.S.’s largest trading partner in South America.

During the hearing, Greenwald made reference to a 2009 letter wherein Thomas Shannon, the former Assistant Secretary of State for Western Hemisphere Affairs (from November 2005 – November 2009) and current U.S. Ambassador to Brazil, celebrated the NSA’s surveillance program in Latin America and how it has helped advance U.S. foreign policy goals in the region. Greenwald wrote a detailed account of his findings in an article entitled “Did Obama know what they were thinking?” in the Brazilian print magazine, Época. In this piece, Greenwald explains that Shannon’s letter, addressed to NSA Director Keith Alexander, discusses how the spy agency obtained hundreds of documents belonging to Latin American delegations detailing their “plans and intentions” during the summit. Shannon asserted that these documents were instrumental in helping the Obama administration engage with the delegations and deal with “controversial subjects like Cuba” and “difficult counterparts” like former President of Venezuela, Hugo Chávez, and Bolivian President, Evo Morales. In the same letter Shannon encouraged Alexander to continue providing similar intelligence as “the information from the NSA will continue to give us the advantage that our diplomacy needs,” especially ahead of an upcoming OAS General Assembly meeting in which he knew discussions on Cuba’s suspension from the OAS would ensue.

CEPR and Mabel Duran-Sanchez / August 10, 2013

Article Artículo

Do We Want High House Prices or Affordable Housing? Lessons on the Government Debt

Matt Yglesias asked this question of President Obama on his twitter feed. It's a very good question and reporters at President Obama's speech in Phoenix would have been asking it if they were awake.

In case folks missed it, President Obama touted immigration reform as one of the actions he would do for housing. He said that this would raise house prices.

There probably is some truth to this. Normalizing the status of 10-12 million immigrants living in the country will allow more of them to be homeowners, which should have some upward impact on house prices.

(Don't get too carried away on this one. The incremental boost to homeownership will be modest. Furthermore, these people were living somewhere. If they had been living in rental units, these units would become vacant. Then rents would fall, other things equal. That would cause some would be homeowners to rent instead and for some rental units to be converted to ownership units. In other words, don't expect to make your fortune on immigration reform sending the price of your home soaring.)

However this raises a basic question, why would we think that high house prices are good? Obviously high house prices are good for people who own homes. But they are bad news for people who are renting and hope to become homeowners or young people just starting their own households.

Saying that we want high house prices is in effect saying that we want to transfer wealth from those who don't own homes to those who do. That looks a lot like upward redistribution, which is not ordinarily an explicit goal of government policy, even if that is often an outcome.

Dean Baker / August 07, 2013