Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión
When the columnist with the longest tenure at the country’s leading newspaper has no clue on the biggest issues facing the world, then it is a good sign that the elites, in general, have no idea what they are doing. He notes the disaffection of large numbers of middle class people in both Europe and the United States with the status quo.
Friedman correctly observes that “average work no longer returns an average wage that can sustain an average middle-class lifestyle.” However, he absurdly blames this on “rapid accelerations in technology and globalization.”
This is the big lie. Bill Gates is not incredibly rich because of rapid accelerations in technology and globalization, he is incredibly rich because the government gives Microsoft patent and copyright monopolies on Windows and other software. It will arrest people who make copies without his permission. In fact, it negotiates trade deals (wrongly called “free trade” deals) that require other countries to arrest people too. Patent and copyright monopolies may transfer as much as $1 trillion a year from average workers to people who have these forms of property in the United States alone. That’s 5 percent of GDP or 60 percent of after-tax corporate profits.
The reason there are very rich people in finance, who can bid up property prices in major cities to make them unaffordable to the middle class, is that we coddle the financial industry. Remember when the market was about to work its magic on Goldman Sachs, Citigroup, and the rest back in 2008? The leaders of both parties could not run fast enough to rescue these bloated turkeys from being destroyed by their own greed and stupidity.
And the reason globalization puts downward pressure on the pay of factory workers, but not doctors and dentists, is that we have protection for doctors and dentists. We make it very difficult for foreign professionals to practice their professions in the United States.
There is a longer list, but the point is that we have screwed middle class workers by deliberate policy, it was not just something that happened, as in “rapid accelerations in technology and globalization.” The fact that our elites refuse to acknowledge this reality and treat the plight of the middle class as a result of personal failings, as in not the right skills, will inevitably cause many to be angry, like yellow vest protestors in France. As long as this is the standard line in policy debates, their anger is not likely to go away.
(Yes, this is the theme of my [free] book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.)
When the columnist with the longest tenure at the country’s leading newspaper has no clue on the biggest issues facing the world, then it is a good sign that the elites, in general, have no idea what they are doing. He notes the disaffection of large numbers of middle class people in both Europe and the United States with the status quo.
Friedman correctly observes that “average work no longer returns an average wage that can sustain an average middle-class lifestyle.” However, he absurdly blames this on “rapid accelerations in technology and globalization.”
This is the big lie. Bill Gates is not incredibly rich because of rapid accelerations in technology and globalization, he is incredibly rich because the government gives Microsoft patent and copyright monopolies on Windows and other software. It will arrest people who make copies without his permission. In fact, it negotiates trade deals (wrongly called “free trade” deals) that require other countries to arrest people too. Patent and copyright monopolies may transfer as much as $1 trillion a year from average workers to people who have these forms of property in the United States alone. That’s 5 percent of GDP or 60 percent of after-tax corporate profits.
The reason there are very rich people in finance, who can bid up property prices in major cities to make them unaffordable to the middle class, is that we coddle the financial industry. Remember when the market was about to work its magic on Goldman Sachs, Citigroup, and the rest back in 2008? The leaders of both parties could not run fast enough to rescue these bloated turkeys from being destroyed by their own greed and stupidity.
And the reason globalization puts downward pressure on the pay of factory workers, but not doctors and dentists, is that we have protection for doctors and dentists. We make it very difficult for foreign professionals to practice their professions in the United States.
There is a longer list, but the point is that we have screwed middle class workers by deliberate policy, it was not just something that happened, as in “rapid accelerations in technology and globalization.” The fact that our elites refuse to acknowledge this reality and treat the plight of the middle class as a result of personal failings, as in not the right skills, will inevitably cause many to be angry, like yellow vest protestors in France. As long as this is the standard line in policy debates, their anger is not likely to go away.
(Yes, this is the theme of my [free] book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.)
Read More Leer más Join the discussion Participa en la discusión
That’s what New York Times readers are likely to believe after seeing this op-ed by Gracy Olmstead. The piece is an argument against farm subsidies, or at least their current form, which primarily benefit wealthy farmers.
It referred to these subsidies in 2018, as being “nearly $900 billion worth.” The link provided in the piece is to an article on the new farm bill. It covers ten years. More importantly, the vast majority of the money in the bill is not for farm subsidies but for the Supplemental Nutrition Assistance Program or food stamps. The amount going to farm subsidies is around $20 billion a year. Instead of being 20 percent of the budget, as this piece implies, farm subsidies are actually less than 0.5 percent of the federal budget.
There is zero excuse for allowing such a grossly mistaken number into the paper. The piece is an op-ed, not a news story, but the paper does fact check op-eds. (I can vouch for that. I have had several columns very carefully fact-checked.)
A newspaper’s job is to inform its readers. In this case, the NYT flunked badly.
That’s what New York Times readers are likely to believe after seeing this op-ed by Gracy Olmstead. The piece is an argument against farm subsidies, or at least their current form, which primarily benefit wealthy farmers.
It referred to these subsidies in 2018, as being “nearly $900 billion worth.” The link provided in the piece is to an article on the new farm bill. It covers ten years. More importantly, the vast majority of the money in the bill is not for farm subsidies but for the Supplemental Nutrition Assistance Program or food stamps. The amount going to farm subsidies is around $20 billion a year. Instead of being 20 percent of the budget, as this piece implies, farm subsidies are actually less than 0.5 percent of the federal budget.
There is zero excuse for allowing such a grossly mistaken number into the paper. The piece is an op-ed, not a news story, but the paper does fact check op-eds. (I can vouch for that. I have had several columns very carefully fact-checked.)
A newspaper’s job is to inform its readers. In this case, the NYT flunked badly.
Read More Leer más Join the discussion Participa en la discusión
Two commenters on my previous post on a New York Times op-ed, which asserted that one-fifth of the federal budget went to farm subsidies pointed out the error can be partly attributed to a linked article in the Washington Post. (The actual figure is less than 0.5 percent.)
That piece includes the sentence:
“At close to $1 trillion a year, the farm bill’s price tag is high.”
Incredibly, the next sentence directly contradicts this assertion correctly pointing out that:
“But the bill’s drafters used the baseline set by the Congressional Budget Office under existing spending levels of $867 billion over the next 10 years, meaning it will not increase the federal deficit from prior projections.”
Fans of arithmetic would catch that $867 billion over ten years is less than one-tenth of the $1 trillion a year claimed in the prior sentence. Unfortunately, the Post’s copy editors apparently didn’t catch this one. It is again important to note that the vast majority of this money is for nutrition programs, not farm subsidies.
Anyhow, it would be nice if the Post and Times both took their responsibility to inform the public seriously. Dishwashers and truck drivers get fired when they don’t do their jobs. Unfortunately, we don’t have the same standards of accountability for the people who write for newspapers.
Two commenters on my previous post on a New York Times op-ed, which asserted that one-fifth of the federal budget went to farm subsidies pointed out the error can be partly attributed to a linked article in the Washington Post. (The actual figure is less than 0.5 percent.)
That piece includes the sentence:
“At close to $1 trillion a year, the farm bill’s price tag is high.”
Incredibly, the next sentence directly contradicts this assertion correctly pointing out that:
“But the bill’s drafters used the baseline set by the Congressional Budget Office under existing spending levels of $867 billion over the next 10 years, meaning it will not increase the federal deficit from prior projections.”
Fans of arithmetic would catch that $867 billion over ten years is less than one-tenth of the $1 trillion a year claimed in the prior sentence. Unfortunately, the Post’s copy editors apparently didn’t catch this one. It is again important to note that the vast majority of this money is for nutrition programs, not farm subsidies.
Anyhow, it would be nice if the Post and Times both took their responsibility to inform the public seriously. Dishwashers and truck drivers get fired when they don’t do their jobs. Unfortunately, we don’t have the same standards of accountability for the people who write for newspapers.
Read More Leer más Join the discussion Participa en la discusión
The NYT ran a piece on China’s economy implying that it is reeling from the tariffs that Donald Trump has imposed on imports from China. The article outlined China’s economic problems and then told readers that China’s President Xi:
“…has been forced to make concessions to the United States as President Trump’s trade war intensifies.”
The problem with the claim that Xi has been “forced” is that China’s trade surplus with the United States is actually considerably larger in 2018 than it was in 2017. For the first ten months of this year, its surplus in goods has been $344.5 billion. That compares to surplus last year of $309.2 billion. While it is possible that China’s surplus would be even larger without the trade war, it doesn’t make much sense to say that a trade surplus that is up by 11 percent over the last year is a major cause of China’s current economic problems.
Addendum:
In comments, Ibout rightly takes me to task for not putting the trade surplus figure in context. China’s 2018 GDP measured in dollars (the appropriate denominator for this issue) is a bit more than $14 trillion. This means the surplus this year, which is likely to be a bit over $400 billion, would be a bit less than 2.8 percent of China’s GDP. If this were to fall sharply it would surely be a hit to China’s economy, but the surplus fell by much more following the 2008 recession and China’s economy continued to grow rapidly.
The NYT ran a piece on China’s economy implying that it is reeling from the tariffs that Donald Trump has imposed on imports from China. The article outlined China’s economic problems and then told readers that China’s President Xi:
“…has been forced to make concessions to the United States as President Trump’s trade war intensifies.”
The problem with the claim that Xi has been “forced” is that China’s trade surplus with the United States is actually considerably larger in 2018 than it was in 2017. For the first ten months of this year, its surplus in goods has been $344.5 billion. That compares to surplus last year of $309.2 billion. While it is possible that China’s surplus would be even larger without the trade war, it doesn’t make much sense to say that a trade surplus that is up by 11 percent over the last year is a major cause of China’s current economic problems.
Addendum:
In comments, Ibout rightly takes me to task for not putting the trade surplus figure in context. China’s 2018 GDP measured in dollars (the appropriate denominator for this issue) is a bit more than $14 trillion. This means the surplus this year, which is likely to be a bit over $400 billion, would be a bit less than 2.8 percent of China’s GDP. If this were to fall sharply it would surely be a hit to China’s economy, but the surplus fell by much more following the 2008 recession and China’s economy continued to grow rapidly.
Read More Leer más Join the discussion Participa en la discusión
This is Dawn Niederhauser, CEPR’s Development Director, taking over Beat the Press to say thanks to all of you who have signed up to support Dean and BTP on Patreon. We really appreciate it! If you haven’t signed up to become a patron yet, please click here to join. Dean often posts extra content on Patreon, but primarily it’s a way for CEPR to fund Dean’s work (he tends to speak his mind in case you haven’t noticed. Which is great for you, but it can make my job very difficult).
We purposely set the minimum pledge at the lowest amount allowed, just $1 per month. That’s in keeping with Dean’s other position that makes my job very difficult — just about all of his work is available for FREE. Hopefully, $12 per year is affordable to all, but for those of you who can, adding just a few more dollars per month to your pledge would be a big help to us, and would enable Dean to continue to Beat the Press for years to come.
And now back to your regularly scheduled program. As Dean would say, don’t believe everything you read in the papers. Happy holidays from all of us at CEPR!
This is Dawn Niederhauser, CEPR’s Development Director, taking over Beat the Press to say thanks to all of you who have signed up to support Dean and BTP on Patreon. We really appreciate it! If you haven’t signed up to become a patron yet, please click here to join. Dean often posts extra content on Patreon, but primarily it’s a way for CEPR to fund Dean’s work (he tends to speak his mind in case you haven’t noticed. Which is great for you, but it can make my job very difficult).
We purposely set the minimum pledge at the lowest amount allowed, just $1 per month. That’s in keeping with Dean’s other position that makes my job very difficult — just about all of his work is available for FREE. Hopefully, $12 per year is affordable to all, but for those of you who can, adding just a few more dollars per month to your pledge would be a big help to us, and would enable Dean to continue to Beat the Press for years to come.
And now back to your regularly scheduled program. As Dean would say, don’t believe everything you read in the papers. Happy holidays from all of us at CEPR!
Read More Leer más Join the discussion Participa en la discusión
The New York Times reported on an analysis of returns on the endowments of the Ivy League schools over the last decade. It found that all the schools’ endowments lagged a portfolio that was 60 percent stock index funds and 40 percent bond funds. (The gap with index funds would be even larger if the mix were 70 percent stock, 30 percent bonds.)
The Ivies invest heavily in hedge funds, which typically charge fees equal to 2 percent of the money invested plus 20 percent of returns over a benchmark. It seems that this pattern of investment is not doing very well for the schools, although some of the richest people in the country run hedge funds.
On the plus side for these schools, by promoting upward redistribution, they are creating more opportunities for their economics, sociology, and other programs, that try to design policies to reduce inequality and increase mobility.
The New York Times reported on an analysis of returns on the endowments of the Ivy League schools over the last decade. It found that all the schools’ endowments lagged a portfolio that was 60 percent stock index funds and 40 percent bond funds. (The gap with index funds would be even larger if the mix were 70 percent stock, 30 percent bonds.)
The Ivies invest heavily in hedge funds, which typically charge fees equal to 2 percent of the money invested plus 20 percent of returns over a benchmark. It seems that this pattern of investment is not doing very well for the schools, although some of the richest people in the country run hedge funds.
On the plus side for these schools, by promoting upward redistribution, they are creating more opportunities for their economics, sociology, and other programs, that try to design policies to reduce inequality and increase mobility.
Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión
Okay, that’s not exactly what it said. Instead, the headline of an article on the protests in France told readers “Unrest in France hinders Macron’s push to revive economy.”
The policies in question include ending a wealth tax on the rich, cutting retirees’ Social Security benefits, and a series of measures designed to reduce the power of unions. While it is possible that Macron has taken these steps because he really does believe that this is the best way to boost economic growth, it is also possible that he has taken these steps because he wants to give more money to rich people.
In this respect, it is worth noting that Macron is a former investment banker. Therefore he is likely to be very rich and to have rich friends.
Okay, that’s not exactly what it said. Instead, the headline of an article on the protests in France told readers “Unrest in France hinders Macron’s push to revive economy.”
The policies in question include ending a wealth tax on the rich, cutting retirees’ Social Security benefits, and a series of measures designed to reduce the power of unions. While it is possible that Macron has taken these steps because he really does believe that this is the best way to boost economic growth, it is also possible that he has taken these steps because he wants to give more money to rich people.
In this respect, it is worth noting that Macron is a former investment banker. Therefore he is likely to be very rich and to have rich friends.
Read More Leer más Join the discussion Participa en la discusión
