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Undoubtedly millions of readers are wondering about the NYT’s use of the term when it told readers that one of the goals of the Trans-Pacific Partnership (TPP) is to, “protect intellectual property from theft.” Actually one of the goals of the TPP is to strengthen and lengthen patent and copyright protections.
After this is done, those who do not respect the new laws can be accused of “theft,” however it makes no sense to accuse someone of theft for breaking laws that do not exist. The NYT may want strong and long protections, but a newspaper should not be calling people who do not adhere to its views of intellectual property “thieves.”
Undoubtedly millions of readers are wondering about the NYT’s use of the term when it told readers that one of the goals of the Trans-Pacific Partnership (TPP) is to, “protect intellectual property from theft.” Actually one of the goals of the TPP is to strengthen and lengthen patent and copyright protections.
After this is done, those who do not respect the new laws can be accused of “theft,” however it makes no sense to accuse someone of theft for breaking laws that do not exist. The NYT may want strong and long protections, but a newspaper should not be calling people who do not adhere to its views of intellectual property “thieves.”
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Robert Samuelson used his Monday column to tell readers that the problem with the economy is that we are suffering the psychological fallout of the Great Recession:
“My main explanation for this — as I’ve argued before — is the hangover from the 2008-2009 financial crisis and the Great Recession. These events changed economic psychology, precisely because they were unanticipated and horrific. They transcended the experience of most Americans (that is, anyone who hadn’t lived through the Great Depression). Corporate executives and consumers alike became more defensive; they saved and hoarded a bit more. If a novel calamity struck once, it could strike again. They’d better prepare.”
The problem is that the data refuses to agree with his psychoanalysis. As I pointed out yesterday, consumption is actually higher as a share of GDP than it was before the downturn, indicating that fear is not keeping households from consuming in any obvious way.
Samuelson also points to the rise in temporary employment as evidence that firms are scared to commit themselves to permanent employees. The problem with this one is that temporary employment as a share of total employment is just rising back to the levels of the late 1990s, a time when the economy was booming.
If we look at the narrow category of temporary employment agencies, the Bureau of Labor Statistics (BLS) reports the number stood at 2,880,000 in April. That compares to 2,605,000 in December of 1999. Measured as a share of total employment, it stood at 2.03 percent in December of 1999, compared with 2.04 percent of total employment in April.
If we use the somewhat broader category of employment services, BLS reports the number at 3,547,000 in April. That compared to 3,776,000 in December of 1999. Measured as a share of total employment, jobs at employment service agencies fell from 3.77 percent in December of 1999 to 3.55 percent in April.
In short, if employment in temporary agencies is supposed to be a measure of insecurity, it doesn’t appear to be going in the right direction to make Samuelson’s point.
Addendum:
The most obvious explanation for the continuing weakness of the economy is that there is nothing to fill the gap in demand created by a $500 billion annual trade deficit (@ 3 percent of GDP). In the last decade, the demand generated by the housing bubble filled the gap, while in the 1990s the demand from a stock bubble filled the gap. In the absence of another bubble and a refusal to run large budget deficits, there is no obvious source of demand to fill this gap.
Unfortunately this explanation is far too simple to be used by economists or those writing on economy.
Robert Samuelson used his Monday column to tell readers that the problem with the economy is that we are suffering the psychological fallout of the Great Recession:
“My main explanation for this — as I’ve argued before — is the hangover from the 2008-2009 financial crisis and the Great Recession. These events changed economic psychology, precisely because they were unanticipated and horrific. They transcended the experience of most Americans (that is, anyone who hadn’t lived through the Great Depression). Corporate executives and consumers alike became more defensive; they saved and hoarded a bit more. If a novel calamity struck once, it could strike again. They’d better prepare.”
The problem is that the data refuses to agree with his psychoanalysis. As I pointed out yesterday, consumption is actually higher as a share of GDP than it was before the downturn, indicating that fear is not keeping households from consuming in any obvious way.
Samuelson also points to the rise in temporary employment as evidence that firms are scared to commit themselves to permanent employees. The problem with this one is that temporary employment as a share of total employment is just rising back to the levels of the late 1990s, a time when the economy was booming.
If we look at the narrow category of temporary employment agencies, the Bureau of Labor Statistics (BLS) reports the number stood at 2,880,000 in April. That compares to 2,605,000 in December of 1999. Measured as a share of total employment, it stood at 2.03 percent in December of 1999, compared with 2.04 percent of total employment in April.
If we use the somewhat broader category of employment services, BLS reports the number at 3,547,000 in April. That compared to 3,776,000 in December of 1999. Measured as a share of total employment, jobs at employment service agencies fell from 3.77 percent in December of 1999 to 3.55 percent in April.
In short, if employment in temporary agencies is supposed to be a measure of insecurity, it doesn’t appear to be going in the right direction to make Samuelson’s point.
Addendum:
The most obvious explanation for the continuing weakness of the economy is that there is nothing to fill the gap in demand created by a $500 billion annual trade deficit (@ 3 percent of GDP). In the last decade, the demand generated by the housing bubble filled the gap, while in the 1990s the demand from a stock bubble filled the gap. In the absence of another bubble and a refusal to run large budget deficits, there is no obvious source of demand to fill this gap.
Unfortunately this explanation is far too simple to be used by economists or those writing on economy.
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A NYT article reported on a turn to the right of politics in France and in much of the rest of Europe. Remarkably, the piece never once mentioned the decision by the European Central Bank (ECB) to impose a policy of austerity and high unemployment on the continent. Since the mainstream left parties do not want to challenge the ECB, this means they have few plausible routes for reducing unemployment and restoring wage growth for the bulk of the population.
This opens the stage for right-wing nationalist parties, which promise a better economic situation by blaming immigrants for the weak economy. It also forces the traditional left parties to the center since they must accede to the ECB’s demand for austere budgets and labor market reforms.
The United States will be in the same situation if the Federal Reserve Board starts raising interest rates to slow the economy and keep the labor market so weak that most workers cannot get wage gains.
A NYT article reported on a turn to the right of politics in France and in much of the rest of Europe. Remarkably, the piece never once mentioned the decision by the European Central Bank (ECB) to impose a policy of austerity and high unemployment on the continent. Since the mainstream left parties do not want to challenge the ECB, this means they have few plausible routes for reducing unemployment and restoring wage growth for the bulk of the population.
This opens the stage for right-wing nationalist parties, which promise a better economic situation by blaming immigrants for the weak economy. It also forces the traditional left parties to the center since they must accede to the ECB’s demand for austere budgets and labor market reforms.
The United States will be in the same situation if the Federal Reserve Board starts raising interest rates to slow the economy and keep the labor market so weak that most workers cannot get wage gains.
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As the world awaits the final word on the negotiations between Greece and its creditors, it’s worth a quick flashback to 2010 and the report of Alan Simpson and Erskine Bowles, the co-chairs of President Obama’s deficit commission. (This report is often referred to as a report of the commission. That is not true. The by-laws clearly state that to issue a report it was necessary to have the support of 12 of the 16 commission members. While no formal vote was ever taken, the co-chairs’ report only had the support of 10 members.)
Anyhow, getting back to matters at hand, one of the Simpson-Bowles proposals was to raise the normal retirement age for Social Security to 69 from its current level of 66 (soon to be 67). The report recognized that many people work in physically demanding and/or dangerous jobs where it would be unreasonable to expect people to work this late in life. It therefore proposed having special lower retirement ages for certain occupations.
The reason this is relevant to Greece is that one of the sticking points at the moment is the reform of Greece’s public pension system. One of the main issues is that the current system allows people in many occupations to start collecting benefits well before the normal retirement age. For example, hairdressers are apparently among this group because they are exposed to dangerous chemicals on the job.
While the Greek system was a universal target of ridicule among serious minded people everywhere, many of these same people embraced the Simpson-Bowles report as a gem of thoughtful, non-partisan, policy-making. The ability to ignore the fact that the supposedly thoughtful Bowles-Simpson gang were advocating the adoption of a pension system subject to universal ridicule is yet another example of the lack of seriousness of the serious people.
As the world awaits the final word on the negotiations between Greece and its creditors, it’s worth a quick flashback to 2010 and the report of Alan Simpson and Erskine Bowles, the co-chairs of President Obama’s deficit commission. (This report is often referred to as a report of the commission. That is not true. The by-laws clearly state that to issue a report it was necessary to have the support of 12 of the 16 commission members. While no formal vote was ever taken, the co-chairs’ report only had the support of 10 members.)
Anyhow, getting back to matters at hand, one of the Simpson-Bowles proposals was to raise the normal retirement age for Social Security to 69 from its current level of 66 (soon to be 67). The report recognized that many people work in physically demanding and/or dangerous jobs where it would be unreasonable to expect people to work this late in life. It therefore proposed having special lower retirement ages for certain occupations.
The reason this is relevant to Greece is that one of the sticking points at the moment is the reform of Greece’s public pension system. One of the main issues is that the current system allows people in many occupations to start collecting benefits well before the normal retirement age. For example, hairdressers are apparently among this group because they are exposed to dangerous chemicals on the job.
While the Greek system was a universal target of ridicule among serious minded people everywhere, many of these same people embraced the Simpson-Bowles report as a gem of thoughtful, non-partisan, policy-making. The ability to ignore the fact that the supposedly thoughtful Bowles-Simpson gang were advocating the adoption of a pension system subject to universal ridicule is yet another example of the lack of seriousness of the serious people.
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Economists may not be very good at understanding the economy, but they are quite good at finding ways to keep themselves employed, generally at very high wages. The Washington Post treated us to one such make work project as it reported on a change in consumer psychology due to the recession that has left:
“Americans of all ages less willing to inject their money back into the economy in the form of vacations, clothing and nights out.
“It’s a sharp contrast to the 1990s, when consumers spent freely as their wages rose robustly, and the 2000s, when Americans funded more lavish lifestyles with easy access to credit cards and home-equity loans.”
Really? That sounds like a startling development. Let’s see if we can find it in the data.
The chart shows consumption as a percentage of GDP. I went back to the late fifties so folks can see the longer term picture. People are spending far more today relative to the size of the economy than they did in the sixties, seventies, eighties, or even nineties. In fact, consumer expenditures are higher now relative to the size of economy than they were in the housing bubble days.
So, let’s ask about that psychology story. Apparently the concern is that we fell from a ratio of 68.8 percent in the first quarter of last year all the way down to 68.6 percent in the most recent quarter. My guess is that modest decline is best explained by unusually bad weather in the first quarter that discouraged people from shopping and going out for meals. Also, extraordinarily strong car sales in the second half of 2014 probably let to some falloff in the first quarter since people who buy a new car in the fall generally don’t buy another one in the winter.
But hey, I don’t want to see a lot of unemployed economists. There should be lots of work in looking for a plunge in consumption that isn’t there.
Economists may not be very good at understanding the economy, but they are quite good at finding ways to keep themselves employed, generally at very high wages. The Washington Post treated us to one such make work project as it reported on a change in consumer psychology due to the recession that has left:
“Americans of all ages less willing to inject their money back into the economy in the form of vacations, clothing and nights out.
“It’s a sharp contrast to the 1990s, when consumers spent freely as their wages rose robustly, and the 2000s, when Americans funded more lavish lifestyles with easy access to credit cards and home-equity loans.”
Really? That sounds like a startling development. Let’s see if we can find it in the data.
The chart shows consumption as a percentage of GDP. I went back to the late fifties so folks can see the longer term picture. People are spending far more today relative to the size of the economy than they did in the sixties, seventies, eighties, or even nineties. In fact, consumer expenditures are higher now relative to the size of economy than they were in the housing bubble days.
So, let’s ask about that psychology story. Apparently the concern is that we fell from a ratio of 68.8 percent in the first quarter of last year all the way down to 68.6 percent in the most recent quarter. My guess is that modest decline is best explained by unusually bad weather in the first quarter that discouraged people from shopping and going out for meals. Also, extraordinarily strong car sales in the second half of 2014 probably let to some falloff in the first quarter since people who buy a new car in the fall generally don’t buy another one in the winter.
But hey, I don’t want to see a lot of unemployed economists. There should be lots of work in looking for a plunge in consumption that isn’t there.
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Today’s culprit is National Public Radio. The point here is extremely simple. We know how fast robots and other technologies are replacing workers. In fact the Bureau of Labor Statistics measures it quarterly, it’s called “productivity growth.”
Productivity growth has actually been very slow in the last decade, as in the opposite of robots stealing our jobs. But hey, why should news outlets be limited by data?
By contrast, if the Fed starts raising interest rates, it can prevent millions of people from getting jobs over the next few years. This will also keep tens of millions from getting pay raises since a weak labor market will reduce their bargaining power. But hey, why bother listeners and readers with this stuff, let’s have another piece on those nifty robots.
Today’s culprit is National Public Radio. The point here is extremely simple. We know how fast robots and other technologies are replacing workers. In fact the Bureau of Labor Statistics measures it quarterly, it’s called “productivity growth.”
Productivity growth has actually been very slow in the last decade, as in the opposite of robots stealing our jobs. But hey, why should news outlets be limited by data?
By contrast, if the Fed starts raising interest rates, it can prevent millions of people from getting jobs over the next few years. This will also keep tens of millions from getting pay raises since a weak labor market will reduce their bargaining power. But hey, why bother listeners and readers with this stuff, let’s have another piece on those nifty robots.
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Morning Edition had a segment on computer tablets that many restaurants are now placing on dining tables which allow people to order and pay their bill without needing a waiter or waitress. The point of the piece is that these tablets are likely to cost the jobs of many table servers.
While this is true, we have always seen productivity growth. (That is what it means to displace workers with robots or computers.) Contrary to what you might believe from reports like this on NPR, productivity growth has actually been very slow in the last decade, as in the opposite of robots taking our jobs. Here’s the data on productivity in the restaurant industry over the last three decades.
Productivity in the Restaurant Industry: 1987-2013
Source: Bureau of Labor Statistics.
As can be seen, productivity increased relatively rapidly in the restaurant industry from 1996 to 2006. Since 2006 productivity has actually fallen in the industry. That means that restaurants are getting less money for each hour of their employees’ work. It might be interesting to hear a segment on why we seem to have such low productivity (i.e. negative) growth in sectors like restaurants rather than implying that we are seeing the opposite story.
Morning Edition had a segment on computer tablets that many restaurants are now placing on dining tables which allow people to order and pay their bill without needing a waiter or waitress. The point of the piece is that these tablets are likely to cost the jobs of many table servers.
While this is true, we have always seen productivity growth. (That is what it means to displace workers with robots or computers.) Contrary to what you might believe from reports like this on NPR, productivity growth has actually been very slow in the last decade, as in the opposite of robots taking our jobs. Here’s the data on productivity in the restaurant industry over the last three decades.
Productivity in the Restaurant Industry: 1987-2013
Source: Bureau of Labor Statistics.
As can be seen, productivity increased relatively rapidly in the restaurant industry from 1996 to 2006. Since 2006 productivity has actually fallen in the industry. That means that restaurants are getting less money for each hour of their employees’ work. It might be interesting to hear a segment on why we seem to have such low productivity (i.e. negative) growth in sectors like restaurants rather than implying that we are seeing the opposite story.
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John Delaney, a Democratic congressperson from Maryland, argued against a “left-wing” Tea Party in a Washington Post column today. He gets many things badly wrong, like arguing:
“bipartisan tax reform that would free up the trillions of dollars of trapped overseas cash” which he says could be used for infrastructure spending. Sorry, corporations do have trillions in profits that they record as being overseas to avoid taxes, but the idea that we have some formula that would turn all this money into tax revenue for infrastructure is more than a bit loopy. He also seems to think that a modest expansion of Social Security, as proposed by people like Senators Elizabeth Warren and Bernie Sanders, would impose some impossible tax burden.
But my favorite part is when he denounces the opponents of the Trans-Pacific Partnership (TPP) as protectionists. I must confess to not knowing exactly what is in the agreement (it is secret), but we do know from Wikileaks that an important part of the TPP is increasing protectionism in the form of stronger and longer copyright and patent protection.
Since we already have trade agreements with most of the countries in the TPP, there will not be very much by way of tariff reduction in the TPP. In other words, the trade liberalization parts of the TPP will be relatively minor. Given this fact, it is entirely possible that the increase in copyright and patent protections will have more economic impact than the modest reductions in the remaining tariff barriers. (Remember patent protection can increase the price of a drug by a hundredfold, the equivalent of a 10,000 percent tariff barrier.)
Until it is shown otherwise, it is reasonable to call the TPP a protectionist pact. We know that it will increase protectionism in important areas. We don’t know how much it will liberalize trade and therefore have zero basis for assuming that on net it moves in the direction of freer trade.
So Mr. Delaney, if it’s name-calling time, right back at you. As a TPP supporter, you are a protectionist.
John Delaney, a Democratic congressperson from Maryland, argued against a “left-wing” Tea Party in a Washington Post column today. He gets many things badly wrong, like arguing:
“bipartisan tax reform that would free up the trillions of dollars of trapped overseas cash” which he says could be used for infrastructure spending. Sorry, corporations do have trillions in profits that they record as being overseas to avoid taxes, but the idea that we have some formula that would turn all this money into tax revenue for infrastructure is more than a bit loopy. He also seems to think that a modest expansion of Social Security, as proposed by people like Senators Elizabeth Warren and Bernie Sanders, would impose some impossible tax burden.
But my favorite part is when he denounces the opponents of the Trans-Pacific Partnership (TPP) as protectionists. I must confess to not knowing exactly what is in the agreement (it is secret), but we do know from Wikileaks that an important part of the TPP is increasing protectionism in the form of stronger and longer copyright and patent protection.
Since we already have trade agreements with most of the countries in the TPP, there will not be very much by way of tariff reduction in the TPP. In other words, the trade liberalization parts of the TPP will be relatively minor. Given this fact, it is entirely possible that the increase in copyright and patent protections will have more economic impact than the modest reductions in the remaining tariff barriers. (Remember patent protection can increase the price of a drug by a hundredfold, the equivalent of a 10,000 percent tariff barrier.)
Until it is shown otherwise, it is reasonable to call the TPP a protectionist pact. We know that it will increase protectionism in important areas. We don’t know how much it will liberalize trade and therefore have zero basis for assuming that on net it moves in the direction of freer trade.
So Mr. Delaney, if it’s name-calling time, right back at you. As a TPP supporter, you are a protectionist.
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