The media apparently just love the story of everyone being a gig worker, and like Donald Trump, they are not going to let the data get in the way. The Washington Post just ran a column telling us that gig workers are everywhere.
While this person and millions of others are struggling to get by with non-standard employment, the most recent survey from the Bureau of Labor Statistics shows there has been no increase in gig-type employment over the last decade. The proliferation of gig economy jobs is a story the media like to tell for some reason. It would be nice if they instead tried to focus on the real economy.
The media apparently just love the story of everyone being a gig worker, and like Donald Trump, they are not going to let the data get in the way. The Washington Post just ran a column telling us that gig workers are everywhere.
While this person and millions of others are struggling to get by with non-standard employment, the most recent survey from the Bureau of Labor Statistics shows there has been no increase in gig-type employment over the last decade. The proliferation of gig economy jobs is a story the media like to tell for some reason. It would be nice if they instead tried to focus on the real economy.
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Justin Gillis argued in an NYT column that higher carbon taxes face too much political resistance to be a serious option in the near future. He points to the difficulties faced by politicians who have proposed such taxes, most recently the rise of the Yellow Vest movement in France in opposition to carbon taxes imposed by French President Emanuel Macron. Gillis instead proposes measures, such as increased public transit options, which will give people an incentive to use less energy.
While Gillis is right about the political opposition to carbon taxes, there are policies that can provide equivalent disincentives. (Gillis does understate the incentive effect. People in Europe use much less energy than in the US, presumably in large part because of the higher prices there.) If we convert car insurance from being largely a fixed cost to a per mile charge, it would have provide a substantial disincentive to driving.
An average insurance policy costs roughly $1,000 a year. If average miles driven per car are 10,000 a year, this would come to 10 cents a mile. For a car that gets 20 miles a gallon, paying 10 cents a mile in higher insurance premiums would provide the same disincentive as a $2.00 a gallon gasoline tax. The nice part about this switch is that it does not mean raising people’s insurance premiums on average, it just changes the way they pay.
We obviously have to do much more than switch to pay by the mile auto insurance to stop global warming, but this is a relatively simple and largely painless measure that could have a substantial impact.
Justin Gillis argued in an NYT column that higher carbon taxes face too much political resistance to be a serious option in the near future. He points to the difficulties faced by politicians who have proposed such taxes, most recently the rise of the Yellow Vest movement in France in opposition to carbon taxes imposed by French President Emanuel Macron. Gillis instead proposes measures, such as increased public transit options, which will give people an incentive to use less energy.
While Gillis is right about the political opposition to carbon taxes, there are policies that can provide equivalent disincentives. (Gillis does understate the incentive effect. People in Europe use much less energy than in the US, presumably in large part because of the higher prices there.) If we convert car insurance from being largely a fixed cost to a per mile charge, it would have provide a substantial disincentive to driving.
An average insurance policy costs roughly $1,000 a year. If average miles driven per car are 10,000 a year, this would come to 10 cents a mile. For a car that gets 20 miles a gallon, paying 10 cents a mile in higher insurance premiums would provide the same disincentive as a $2.00 a gallon gasoline tax. The nice part about this switch is that it does not mean raising people’s insurance premiums on average, it just changes the way they pay.
We obviously have to do much more than switch to pay by the mile auto insurance to stop global warming, but this is a relatively simple and largely painless measure that could have a substantial impact.
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A friend called my attention to this Project Syndicate piece by Kenneth Rogoff, a Harvard economics professor and former chief economist at the IMF. Rogoff argues that Russia will need major economic reform and political reform in order for its economy to get back on a healthy growth path.
In the course of making his argument, Rogoff makes a quick and dirty case that the fact Putin was able to win re-election despite the economic downturn in 2015–2016 resulting from the collapse of world oil prices, shows that the country is not a western democracy.
“The shock to the real economy has been severe, with Russia suffering a decline in output in 2015 and 2016 comparable to what the United States experienced during its 2008–2009 financial crisis, with the contraction in GDP totalling about 4 percent. …
“In a western democracy, an economic collapse on the scale experienced by Russia would have been extremely difficult to digest politically, as the global surge in populism demonstrates. Yet Putin has been able to remain firmly in control and, in all likelihood, will easily be able to engineer another landslide victory in the presidential election due in March 2018.”
First, the IMF data to which Rogoff links does not support his story of an economic collapse in Russia. The reported decline in GDP is 2.7 percent, not the 4.0 percent claimed by Rogoff. And, it is more than reversed by the growth in 2017 and projected growth in 2018. In other words, there does not seem to be much of a story of economic collapse here.
But the idea that a Russian government could not stay in power through an economic downturn, if it were democratic, is an interesting one. According to the IMF, Russia’s economy shrank by more than 25 percent from 1992 to 1996 under Boris Yeltsin, a close US ally. Yet, he managed to be re-elected in 1996 despite an economic decline that was an order of magnitude larger than the one under Putin from 2014 to 2016. By the Rogoff theory, we can infer that Yeltsin should not have been able to win re-election through democratic means.
A friend called my attention to this Project Syndicate piece by Kenneth Rogoff, a Harvard economics professor and former chief economist at the IMF. Rogoff argues that Russia will need major economic reform and political reform in order for its economy to get back on a healthy growth path.
In the course of making his argument, Rogoff makes a quick and dirty case that the fact Putin was able to win re-election despite the economic downturn in 2015–2016 resulting from the collapse of world oil prices, shows that the country is not a western democracy.
“The shock to the real economy has been severe, with Russia suffering a decline in output in 2015 and 2016 comparable to what the United States experienced during its 2008–2009 financial crisis, with the contraction in GDP totalling about 4 percent. …
“In a western democracy, an economic collapse on the scale experienced by Russia would have been extremely difficult to digest politically, as the global surge in populism demonstrates. Yet Putin has been able to remain firmly in control and, in all likelihood, will easily be able to engineer another landslide victory in the presidential election due in March 2018.”
First, the IMF data to which Rogoff links does not support his story of an economic collapse in Russia. The reported decline in GDP is 2.7 percent, not the 4.0 percent claimed by Rogoff. And, it is more than reversed by the growth in 2017 and projected growth in 2018. In other words, there does not seem to be much of a story of economic collapse here.
But the idea that a Russian government could not stay in power through an economic downturn, if it were democratic, is an interesting one. According to the IMF, Russia’s economy shrank by more than 25 percent from 1992 to 1996 under Boris Yeltsin, a close US ally. Yet, he managed to be re-elected in 1996 despite an economic decline that was an order of magnitude larger than the one under Putin from 2014 to 2016. By the Rogoff theory, we can infer that Yeltsin should not have been able to win re-election through democratic means.
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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.)
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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.
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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.
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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.
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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!
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