Most of us know that politicians don’t say what they really believe about the world. Unfortunately, the folks who write for the Washington Post haven’t learned this basic fact. This explains why in an article on Donald Trump’s plan to cut large parts of the domestic budget:
“To the president and his supporters who see a bloated bureaucracy with lots of duplication and rules that choke jobs, the budget cuts are a necessary first step to make government run more efficiently.”
Of course, this is what the president and his supporters say. It may have nothing to do with what they “see.” For example, it is well known that reducing enforcement at the Internal Revenue Service will amount to a net loss for the government, as the savings on salaries will be more than offset by a loss of revenue.
Given this fact, we can believe, apparently like the Post, that Trump’s people are dumber than rocks, or we can believe that they want to make it easier for their friends to cheat on their taxes. Both are possible, but apparently the Post wants readers to rule out the latter possibility.
This logic applies to the cuts more generally. For example, the reason Republicans may want to cut funding for the Environmental Protection Agency is so that their friends have the option of dumping waste in their neighbors’ drinking water rather than having to pay the cost of cleaning it up. They may support reductions in financial regulation so that their friends can make more profits ripping off unsuspecting customers.
It would be best if the paper did not try to tell us people’s motives when they have no basis for their assessment.
Most of us know that politicians don’t say what they really believe about the world. Unfortunately, the folks who write for the Washington Post haven’t learned this basic fact. This explains why in an article on Donald Trump’s plan to cut large parts of the domestic budget:
“To the president and his supporters who see a bloated bureaucracy with lots of duplication and rules that choke jobs, the budget cuts are a necessary first step to make government run more efficiently.”
Of course, this is what the president and his supporters say. It may have nothing to do with what they “see.” For example, it is well known that reducing enforcement at the Internal Revenue Service will amount to a net loss for the government, as the savings on salaries will be more than offset by a loss of revenue.
Given this fact, we can believe, apparently like the Post, that Trump’s people are dumber than rocks, or we can believe that they want to make it easier for their friends to cheat on their taxes. Both are possible, but apparently the Post wants readers to rule out the latter possibility.
This logic applies to the cuts more generally. For example, the reason Republicans may want to cut funding for the Environmental Protection Agency is so that their friends have the option of dumping waste in their neighbors’ drinking water rather than having to pay the cost of cleaning it up. They may support reductions in financial regulation so that their friends can make more profits ripping off unsuspecting customers.
It would be best if the paper did not try to tell us people’s motives when they have no basis for their assessment.
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That would be news for Republicans in Congress. The vast majority of the tax cuts they are pushing would go to the richest ten percent of the population, with close to half going to the richest one percent. It is very misleading to describe them as proponents of a big middle-class tax cut.
That would be news for Republicans in Congress. The vast majority of the tax cuts they are pushing would go to the richest ten percent of the population, with close to half going to the richest one percent. It is very misleading to describe them as proponents of a big middle-class tax cut.
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The Washington Post left a very important fact out of an article on Republican efforts to ban voluntary state sponsored retirement plans. The Republicans are trying to make such plans impractical by reversing a Labor Department ruling that exempted employers with workers contributing to the plans from being subject to ERISA provisions. The basis for the Labor Department ruling is that the employers are simply mailing in a check on a worker’s behalf, not running a plan.
The Republicans in Congress who want to insist that ERISA rules apply to employers, making it a substantial burden on them, say that they are doing it to protect workers’ savings. These are the same people who are trying to reverse the Fiduciary Rule, which requires investment advisers act in the best interest of their clients, and to gut the Consumer Financial Protection Bureau.
Anyhow, the Post neglected to mention the difference in fees between 401(k)s and the state-sponsored plans. The average fee on 401(k) is around 1.0 percent of the money in a worker’s account. Many plans charge more than 1.5 percent. By contrast, state sponsored plans are likely to have fees in the range of 0.2–0.3 percent.
The difference can easily come to $30,000 over the course of a middle-income worker’s career. This is money that is being transferred from workers to the financial industry. Most people would likely consider this a substantial sum of money. It should have been noted in this piece.
The Washington Post left a very important fact out of an article on Republican efforts to ban voluntary state sponsored retirement plans. The Republicans are trying to make such plans impractical by reversing a Labor Department ruling that exempted employers with workers contributing to the plans from being subject to ERISA provisions. The basis for the Labor Department ruling is that the employers are simply mailing in a check on a worker’s behalf, not running a plan.
The Republicans in Congress who want to insist that ERISA rules apply to employers, making it a substantial burden on them, say that they are doing it to protect workers’ savings. These are the same people who are trying to reverse the Fiduciary Rule, which requires investment advisers act in the best interest of their clients, and to gut the Consumer Financial Protection Bureau.
Anyhow, the Post neglected to mention the difference in fees between 401(k)s and the state-sponsored plans. The average fee on 401(k) is around 1.0 percent of the money in a worker’s account. Many plans charge more than 1.5 percent. By contrast, state sponsored plans are likely to have fees in the range of 0.2–0.3 percent.
The difference can easily come to $30,000 over the course of a middle-income worker’s career. This is money that is being transferred from workers to the financial industry. Most people would likely consider this a substantial sum of money. It should have been noted in this piece.
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The NYT wants us to mourn the plight of business people in Denmark. As the headline tells readers, “Danish companies seek to hire, but everyone is working.” The article then gives the assessment of several business owners and managers, as well as the director of labor market policy at the Confederation of Danish Industry, that the country simply doesn’t have enough workers.
They all explain that they can’t find workers with the skills they need and that this is causing them to lose business, thereby curtailing growth. It even tells us why raising wages won’t work, recounting the experience of Peter Enevoldsen, a manager at a company that make precision tractor parts:
“He offered a salary bump of more than 2 percent, but raising wages further would crimp his margins.”
Actually, this is the way an economy is supposed to work. If Mr. Enevoldsen can’t pay the market wage and still get business, then he should not get that business. Firms that can pay the market wage and still make a profit obviously can use the labor more productively.
This is why most of the U.S. workforce is not still employed in agriculture. Workers had the opportunity to get better paying jobs in manufacturing. If farmers could not pay a comparable wage, then they lost workers and might have to shut down. This is the same sort of story that some Danish firms apparently now face. This is hardly a crisis, it is capitalism.
It also is of little significance that a limited supply of labor might limit growth. There is little reason for people to be concerned about aggregate growth, what they care about is improvements in their standard of living and for most people this will happen more quickly in a tight labor market.
The piece also includes the information that the current 4.3 percent unemployment rate “is about as low as it can go without provoking inflation.” It doesn’t tell readers where it got this information. It is worth noting that estimates of the non-accelerating inflation rate of unemployment (NAIRU) are hugely unreliable, so there is little reason to assume the source for this number is correct.
The piece also invents some new history to back up this story.
“During an economic boom a decade ago, joblessness fell as low as 2.4 percent, igniting an unsustainable spiral of higher wages and prices that the government desperately wants to avoid today.”
According to data from the International Monetary Fund, the inflation rate never got above 2.5 percent in the last decade. It seems a bit hard to describe this as an “unsustainable spiral of higher wages and prices.”
I suppose this piece is at least better than some of the NYT’s past coverage of Denmark. A few years ago it was warning that no one was working in Denmark because of its overly generous welfare state. An earlier piece warned that Denmark could slip into a Greece-like crisis. So, at least seems to be looking up a bit for the country.
The NYT wants us to mourn the plight of business people in Denmark. As the headline tells readers, “Danish companies seek to hire, but everyone is working.” The article then gives the assessment of several business owners and managers, as well as the director of labor market policy at the Confederation of Danish Industry, that the country simply doesn’t have enough workers.
They all explain that they can’t find workers with the skills they need and that this is causing them to lose business, thereby curtailing growth. It even tells us why raising wages won’t work, recounting the experience of Peter Enevoldsen, a manager at a company that make precision tractor parts:
“He offered a salary bump of more than 2 percent, but raising wages further would crimp his margins.”
Actually, this is the way an economy is supposed to work. If Mr. Enevoldsen can’t pay the market wage and still get business, then he should not get that business. Firms that can pay the market wage and still make a profit obviously can use the labor more productively.
This is why most of the U.S. workforce is not still employed in agriculture. Workers had the opportunity to get better paying jobs in manufacturing. If farmers could not pay a comparable wage, then they lost workers and might have to shut down. This is the same sort of story that some Danish firms apparently now face. This is hardly a crisis, it is capitalism.
It also is of little significance that a limited supply of labor might limit growth. There is little reason for people to be concerned about aggregate growth, what they care about is improvements in their standard of living and for most people this will happen more quickly in a tight labor market.
The piece also includes the information that the current 4.3 percent unemployment rate “is about as low as it can go without provoking inflation.” It doesn’t tell readers where it got this information. It is worth noting that estimates of the non-accelerating inflation rate of unemployment (NAIRU) are hugely unreliable, so there is little reason to assume the source for this number is correct.
The piece also invents some new history to back up this story.
“During an economic boom a decade ago, joblessness fell as low as 2.4 percent, igniting an unsustainable spiral of higher wages and prices that the government desperately wants to avoid today.”
According to data from the International Monetary Fund, the inflation rate never got above 2.5 percent in the last decade. It seems a bit hard to describe this as an “unsustainable spiral of higher wages and prices.”
I suppose this piece is at least better than some of the NYT’s past coverage of Denmark. A few years ago it was warning that no one was working in Denmark because of its overly generous welfare state. An earlier piece warned that Denmark could slip into a Greece-like crisis. So, at least seems to be looking up a bit for the country.
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The NYT had a front page article reporting on Donald Trump’s plan to increase military spending and to make cuts in other areas to cover the costs. The piece told readers:
“Mr. Trump will demand a budget with tens of billions of dollars in reductions to the Environmental Protection Agency and State Department, according to four senior administration officials with direct knowledge of the plan. Social safety net programs, aside from the big entitlement programs for retirees, would also be hit hard.”
It’s not clear what information the piece intended to convey by referring to “tens of billions of reductions” to the EPA and State Department. The annual budget of the EPA is just over $8 billion, so this figure presumably refers to its budget over the next ten years. Since “tens of billions” presumably means at least two, Trump apparently wants a cut in the size of the agency (which is supposed to do things like ensure that the kids in Flint aren’t getting lead in their drinking water) by at least a quarter. (The budget of the State Department for 2017 was $51 billion.)
It would be helpful if papers like the NYT expressed numbers in a context that made them meaningful to readers, almost none of whom has any idea of what the budgets of the EPA or State Department will be over the next decade. When she was the public editor at the NYT, Margaret Sullivan made exactly this point. She got then Washington editor David Leonhardt to agree. Apparently, this has not affected the NYT’s reporting on budget issues.
This piece also asserts as a matter of fact that President Obama faced “the prospect of a second Great Depression” when he took office. While many people have made this assertion, no one has explained what would have prevented Congress from passing a large stimulus at any future point if the unemployment rate did in fact soar to the double digit levels that we would associate with a depression.
This is a very strong assertion about a decade of political behavior from people who almost without exception could not even predict the winner of the 2016 election. It would be best to qualify the assertion by noting that many people claim the country faced the prospect of a second Great Depression, rather than asserting it as a matter of fact.
The NYT had a front page article reporting on Donald Trump’s plan to increase military spending and to make cuts in other areas to cover the costs. The piece told readers:
“Mr. Trump will demand a budget with tens of billions of dollars in reductions to the Environmental Protection Agency and State Department, according to four senior administration officials with direct knowledge of the plan. Social safety net programs, aside from the big entitlement programs for retirees, would also be hit hard.”
It’s not clear what information the piece intended to convey by referring to “tens of billions of reductions” to the EPA and State Department. The annual budget of the EPA is just over $8 billion, so this figure presumably refers to its budget over the next ten years. Since “tens of billions” presumably means at least two, Trump apparently wants a cut in the size of the agency (which is supposed to do things like ensure that the kids in Flint aren’t getting lead in their drinking water) by at least a quarter. (The budget of the State Department for 2017 was $51 billion.)
It would be helpful if papers like the NYT expressed numbers in a context that made them meaningful to readers, almost none of whom has any idea of what the budgets of the EPA or State Department will be over the next decade. When she was the public editor at the NYT, Margaret Sullivan made exactly this point. She got then Washington editor David Leonhardt to agree. Apparently, this has not affected the NYT’s reporting on budget issues.
This piece also asserts as a matter of fact that President Obama faced “the prospect of a second Great Depression” when he took office. While many people have made this assertion, no one has explained what would have prevented Congress from passing a large stimulus at any future point if the unemployment rate did in fact soar to the double digit levels that we would associate with a depression.
This is a very strong assertion about a decade of political behavior from people who almost without exception could not even predict the winner of the 2016 election. It would be best to qualify the assertion by noting that many people claim the country faced the prospect of a second Great Depression, rather than asserting it as a matter of fact.
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It might have been helpful if the Post made this point in a piece reporting on Republican efforts to replace the Affordable Care Act (ACA). The piece noted an article by National Economic Council aide Brian Blase, written before he joined the administration, that referred to the “need to reduce government bias towards comprehensive coverage.”
This bias is hardly an accidental. The vast majority of people are relatively healthy with low medical expenditure. These people would be well-served in most cases with very high deductible policies that cost little. However, this would make the policies purchased by the roughly 10 percent of the population (33 million people) with high expenses extremely expensive.
The major goal of the ACA was to make it possible for people who really need health insurance because of serious medical conditions to be able to afford it. Eliminating the requirement for comprehensive insurance for healthy people will make health insurance unaffordable for tens of millions of people.
It might have been helpful if the Post made this point in a piece reporting on Republican efforts to replace the Affordable Care Act (ACA). The piece noted an article by National Economic Council aide Brian Blase, written before he joined the administration, that referred to the “need to reduce government bias towards comprehensive coverage.”
This bias is hardly an accidental. The vast majority of people are relatively healthy with low medical expenditure. These people would be well-served in most cases with very high deductible policies that cost little. However, this would make the policies purchased by the roughly 10 percent of the population (33 million people) with high expenses extremely expensive.
The major goal of the ACA was to make it possible for people who really need health insurance because of serious medical conditions to be able to afford it. Eliminating the requirement for comprehensive insurance for healthy people will make health insurance unaffordable for tens of millions of people.
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One of the candidates for Treasurer in North Carolina is proposing to the dump the investment advisors, private equity fund managers and hedge managers who all control a portion of the state’s $100 billion public pension funds. Instead he proposes to do simple indexing of the pension fund assets. The lower costs could raise returns by as much as 1.0 percentage point a year.
This is huge money for the state. It is also huge money for Wall Street. That 1.0 percent comes to $1 billion a year of pure waste that goes into the pockets of Wall Street types. Add this up across all the state and local pension funds and we are talking about somewhere on the order of $60 billion a year being drained from taxpayers’ pockets to make the Wall Street crew richer.
This is the sort of thing that would concern economists if they were interested in efficiency, instead of just redistributing upward.
One of the candidates for Treasurer in North Carolina is proposing to the dump the investment advisors, private equity fund managers and hedge managers who all control a portion of the state’s $100 billion public pension funds. Instead he proposes to do simple indexing of the pension fund assets. The lower costs could raise returns by as much as 1.0 percentage point a year.
This is huge money for the state. It is also huge money for Wall Street. That 1.0 percent comes to $1 billion a year of pure waste that goes into the pockets of Wall Street types. Add this up across all the state and local pension funds and we are talking about somewhere on the order of $60 billion a year being drained from taxpayers’ pockets to make the Wall Street crew richer.
This is the sort of thing that would concern economists if they were interested in efficiency, instead of just redistributing upward.
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