That is the only possible conclusion that an informed reader can reach. After all, we all know that Representative Ryan is a huge champion of fiscal responsibility, balanced budgets, and sound money. We also remember how he denounced Ben Bernanke and the Fed for their policy of quantitative easing. He issued strong warnings about the debasement of the currency and hyperinflation.
There is no way that this celebrated fiscal hawk and sound money proponent could praise a country for running large deficits and printing money like there is no tomorrow. But there it is on the Washington Post’s oped page, someone claiming to be Paul Ryan is praising Japan for having a large stimulus and the fact that they “cranked up the printing presses” in reference to the policy of quantitative easing by Japan’s central bank.
For those keeping score, Japan’s ratio of net debt to GDP is more than 50 percent higher than in the United States. The ratio of gross debt to GDP is more than twice as high. The I.M.F. projects that Japan’s deficit for 2015 will be 6.2 percent of GDP, which would be more than $1.1 trillion in the United States.
To say this applause for Japan’s economic policy is inconsistent with Ryan’s past pronouncements on economic policy would be the understatement of the century. If we had a serious press corps in the United States, reporters would be pressing Ryan over this colossal flip flop. Of course Ryan wrote this column in the hope of advancing the Trans-Pacific Partnership, and we know that the media have a policy that inanities in the advancement of trade pacts are not subject to scrutiny.
That is the only possible conclusion that an informed reader can reach. After all, we all know that Representative Ryan is a huge champion of fiscal responsibility, balanced budgets, and sound money. We also remember how he denounced Ben Bernanke and the Fed for their policy of quantitative easing. He issued strong warnings about the debasement of the currency and hyperinflation.
There is no way that this celebrated fiscal hawk and sound money proponent could praise a country for running large deficits and printing money like there is no tomorrow. But there it is on the Washington Post’s oped page, someone claiming to be Paul Ryan is praising Japan for having a large stimulus and the fact that they “cranked up the printing presses” in reference to the policy of quantitative easing by Japan’s central bank.
For those keeping score, Japan’s ratio of net debt to GDP is more than 50 percent higher than in the United States. The ratio of gross debt to GDP is more than twice as high. The I.M.F. projects that Japan’s deficit for 2015 will be 6.2 percent of GDP, which would be more than $1.1 trillion in the United States.
To say this applause for Japan’s economic policy is inconsistent with Ryan’s past pronouncements on economic policy would be the understatement of the century. If we had a serious press corps in the United States, reporters would be pressing Ryan over this colossal flip flop. Of course Ryan wrote this column in the hope of advancing the Trans-Pacific Partnership, and we know that the media have a policy that inanities in the advancement of trade pacts are not subject to scrutiny.
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Yeah, that was a joke. However that would be the case if the paper was consistent. Its lead editorial today complained about the people arguing that currency rules should be included in a trade deal. It told readers:
“And, yes, the International Monetary Fund has developed criteria for currency manipulation — including prolonged current account surpluses and excessive foreign exchange reserve accumulation — that could, in theory, be incorporated into the agreement.
“The problem is that the definitions of these terms are subject to endless lawyerly disputation, and they could well be interpreted to rule out legitimate economic measures, including some — such as the Federal Reserve’s recent quantitative easing — that the United States itself might pursue. As Kemal Dervis of the Brookings Institution has argued, pretty much any aspect of macroeconomic policy could be construed to affect a country’s trade balance and, by extension, its exchange rate. It is therefore far better to keep such sensitive matters out of trade deals and leave them to existing, separate, diplomatic processes.”
Guess what? Almost any policy that we might put forward to improve the economy to help the economy can be seen as an unfair export subsidy. This list would include items such as vocational training to give workers more skills, improved infrastructure to facilitate the transportation of goods to ports, low interest loans (i.e. the export-import bank), implicit government backing for too big to fail banks (i.e. TARP), and publicly funded research like the $30 billion a year that finances the National Institutes of Health and provides many of the breakthroughs eventually harnessed by our drug companies.
Similarly, a wide range of consumer and environmental policies can be seen as restrictions on imports. And labor policies that applied to foreign investors can be seen as unfair takings under the TPP or TTIP. As the Post editorial says, “the definitions of these terms are subject to endless lawyerly disputation.”
If the Post’s editorial board were being consistent it would reject trade pacts in general as too complicated. But as we know, when it comes to trade policy, the Post cares little for consistency — or the facts.
Remember, this is the paper that claimed Mexico’s GDP had quadrupled between 1987 and 2007 in a lead editorial condemning the Democratic presidential candidates for pledging to renegotiate NAFTA. According to our good friends at the I.M.F, the actual increase was just over 83 percent.
One more point, the Post was upset at the fast-track critics for complaining about the trade deal’s secrecy. There is a very simple point here. President Obama could release a draft text of the deal indicating where issues are still being negotiated. The Post’s editors are probably too young to remember, but President George W. Bush did this back in 2003 before asking Congress to vote for fast-track authority on the Free Trade of the Americas Agreement.
Yeah, that was a joke. However that would be the case if the paper was consistent. Its lead editorial today complained about the people arguing that currency rules should be included in a trade deal. It told readers:
“And, yes, the International Monetary Fund has developed criteria for currency manipulation — including prolonged current account surpluses and excessive foreign exchange reserve accumulation — that could, in theory, be incorporated into the agreement.
“The problem is that the definitions of these terms are subject to endless lawyerly disputation, and they could well be interpreted to rule out legitimate economic measures, including some — such as the Federal Reserve’s recent quantitative easing — that the United States itself might pursue. As Kemal Dervis of the Brookings Institution has argued, pretty much any aspect of macroeconomic policy could be construed to affect a country’s trade balance and, by extension, its exchange rate. It is therefore far better to keep such sensitive matters out of trade deals and leave them to existing, separate, diplomatic processes.”
Guess what? Almost any policy that we might put forward to improve the economy to help the economy can be seen as an unfair export subsidy. This list would include items such as vocational training to give workers more skills, improved infrastructure to facilitate the transportation of goods to ports, low interest loans (i.e. the export-import bank), implicit government backing for too big to fail banks (i.e. TARP), and publicly funded research like the $30 billion a year that finances the National Institutes of Health and provides many of the breakthroughs eventually harnessed by our drug companies.
Similarly, a wide range of consumer and environmental policies can be seen as restrictions on imports. And labor policies that applied to foreign investors can be seen as unfair takings under the TPP or TTIP. As the Post editorial says, “the definitions of these terms are subject to endless lawyerly disputation.”
If the Post’s editorial board were being consistent it would reject trade pacts in general as too complicated. But as we know, when it comes to trade policy, the Post cares little for consistency — or the facts.
Remember, this is the paper that claimed Mexico’s GDP had quadrupled between 1987 and 2007 in a lead editorial condemning the Democratic presidential candidates for pledging to renegotiate NAFTA. According to our good friends at the I.M.F, the actual increase was just over 83 percent.
One more point, the Post was upset at the fast-track critics for complaining about the trade deal’s secrecy. There is a very simple point here. President Obama could release a draft text of the deal indicating where issues are still being negotiated. The Post’s editors are probably too young to remember, but President George W. Bush did this back in 2003 before asking Congress to vote for fast-track authority on the Free Trade of the Americas Agreement.
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That’s what millions are asking after reading the front page piece in the NYT on the state of the National Health Service in the United Kingdom in the context of upcoming elections there. The piece discusses the widespread public support for the system, but notes some of the issues that have been raised concerning the quality of care in recent years.
It would have been useful to tell readers that the U.K. spends 9.1 percent of its GDP on health care. By comparison, the United States spends 17.1 percent of its GDP on health care. The difference in costs between the U.S. and U.K. comes to $5,900 per person per year, or $23,600 for a family of four. This information should have been included in the piece to give readers a better understanding of the relative efficiency of the two systems.
That’s what millions are asking after reading the front page piece in the NYT on the state of the National Health Service in the United Kingdom in the context of upcoming elections there. The piece discusses the widespread public support for the system, but notes some of the issues that have been raised concerning the quality of care in recent years.
It would have been useful to tell readers that the U.K. spends 9.1 percent of its GDP on health care. By comparison, the United States spends 17.1 percent of its GDP on health care. The difference in costs between the U.S. and U.K. comes to $5,900 per person per year, or $23,600 for a family of four. This information should have been included in the piece to give readers a better understanding of the relative efficiency of the two systems.
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The Washington Post has long been known for its willingness to ignore the distinction between news and editorial pages in pushing the case for deficit reduction in the United States. Today it took its drive for austerity overseas. In an article on public attitudes on the eve of national elections in the United Kingdom it discussed the likelihood that military spending would be cut to “pay down a still-burdensome deficit.”
The Post doesn’t explain how it has determined that the deficit [it may mean “debt,” since countries can’t really pay down an annual deficit] is burdensome. The usual signs of a debt being burdensome are not present. The interest rate on 10-year government bonds is just 1.65 percent, much lower than at any point in the four decades before the collapse of the U.K.’s prior housing bubble in 2007. Its overall inflation rate over the last year has been virtually zero.
Given that it has extremely low interest rates and zero inflation, it would seem that neither the deficit or debt in the U.K. is now burdensome. A real newspaper would have referred to a deficit that “politicians claim is burdensome.”
The Washington Post has long been known for its willingness to ignore the distinction between news and editorial pages in pushing the case for deficit reduction in the United States. Today it took its drive for austerity overseas. In an article on public attitudes on the eve of national elections in the United Kingdom it discussed the likelihood that military spending would be cut to “pay down a still-burdensome deficit.”
The Post doesn’t explain how it has determined that the deficit [it may mean “debt,” since countries can’t really pay down an annual deficit] is burdensome. The usual signs of a debt being burdensome are not present. The interest rate on 10-year government bonds is just 1.65 percent, much lower than at any point in the four decades before the collapse of the U.K.’s prior housing bubble in 2007. Its overall inflation rate over the last year has been virtually zero.
Given that it has extremely low interest rates and zero inflation, it would seem that neither the deficit or debt in the U.K. is now burdensome. A real newspaper would have referred to a deficit that “politicians claim is burdensome.”
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The Washington Post had a front page story in the Sunday business section headlined, “The Great Unraveling of Globalization,” which told readers that the overseas profits of U.S. corporations are not growing in line with their expectations from two decades ago. Among the main complaints is that consumer markets have not developed as expected.
“Those vast new consumer markets in globalized nations have not emerged either. For example, Chinese household consumption accounts for about 34 percent of GDP — down four points in the past decade — compared to a healthier 70 percent in the United States. And Chinese consumer diffidence is not an outlier.”
Okay, we will need Mr. Arithmetic to help with this one. Mr. Arithmetic points out that a relatively small share of the pie in China goes to consumption, but because of its rapid growth, this is now a very large pie. Since 1994 China’s economy has grown by more than 520 percent. By comparison Mexico’s economy, which was the beneficiary of NAFTA and the basis for many Post articles on a rising middle class, has grown by just 66 percent over this same period. Mr. Arithmetic tells us that if China’s economy had grown at the same rate as Mexico’s, but its consumers spent 70 percent of GDP instead of the current 34 percent cited in the article, its consumer market would be just over half the current size.
This means that even if consumption is a relatively small share of GDP in China, because of the economy’s extraordinary growth, the consumer market has probably increased by at least as much as anyone could have reasonably expected. It is also worth noting that the small share of consumption in GDP is directly related to growth. In general, countries that invest more grow more rapidly. (In addition, some of the companies discussed in this piece, like Caterpillar and IBM, largely sell investment goods. They would be helped by the large share of investment in China’s GDP.
If U.S. companies are not faring well in international markets it likely means that they are losing ground to foreign competitors. This could reflect the quality of the highly paid CEOs at U.S. companies. Perhaps some of the much lower paid CEOs at companies in Europe and Asia are better at their jobs.
The Washington Post had a front page story in the Sunday business section headlined, “The Great Unraveling of Globalization,” which told readers that the overseas profits of U.S. corporations are not growing in line with their expectations from two decades ago. Among the main complaints is that consumer markets have not developed as expected.
“Those vast new consumer markets in globalized nations have not emerged either. For example, Chinese household consumption accounts for about 34 percent of GDP — down four points in the past decade — compared to a healthier 70 percent in the United States. And Chinese consumer diffidence is not an outlier.”
Okay, we will need Mr. Arithmetic to help with this one. Mr. Arithmetic points out that a relatively small share of the pie in China goes to consumption, but because of its rapid growth, this is now a very large pie. Since 1994 China’s economy has grown by more than 520 percent. By comparison Mexico’s economy, which was the beneficiary of NAFTA and the basis for many Post articles on a rising middle class, has grown by just 66 percent over this same period. Mr. Arithmetic tells us that if China’s economy had grown at the same rate as Mexico’s, but its consumers spent 70 percent of GDP instead of the current 34 percent cited in the article, its consumer market would be just over half the current size.
This means that even if consumption is a relatively small share of GDP in China, because of the economy’s extraordinary growth, the consumer market has probably increased by at least as much as anyone could have reasonably expected. It is also worth noting that the small share of consumption in GDP is directly related to growth. In general, countries that invest more grow more rapidly. (In addition, some of the companies discussed in this piece, like Caterpillar and IBM, largely sell investment goods. They would be helped by the large share of investment in China’s GDP.
If U.S. companies are not faring well in international markets it likely means that they are losing ground to foreign competitors. This could reflect the quality of the highly paid CEOs at U.S. companies. Perhaps some of the much lower paid CEOs at companies in Europe and Asia are better at their jobs.
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Lydia DePillis had a short piece in the Post on the workers who currently make the federal minimum wage. This is interesting, but it should not be confused with an analysis of who would be affected by an increase in the minimum wage. Because the minimum wage has fallen so far behind inflation in the last four decades, there are relatively few workers who earn exactly the federal minimum wage.
John Schmitt and Janelle Jones did an analysis a few years ago of the workers who earned less than what the minimum wage would have been if it had kept pace with inflation since its peak in 1968. This much larger group workers is far more educated, older, and more likely to be supporting children than the group who earn exactly the minimum wage. Of this larger group, 33.3 percent have at least some college, and an additional 9.9 percent are college grads. If the federal minimum wage were raised back enough so that it had the same purchasing power as it did in 1968, all of these workers would see pay increases, as would many others who currently earn just above the new minimum.
Lydia DePillis had a short piece in the Post on the workers who currently make the federal minimum wage. This is interesting, but it should not be confused with an analysis of who would be affected by an increase in the minimum wage. Because the minimum wage has fallen so far behind inflation in the last four decades, there are relatively few workers who earn exactly the federal minimum wage.
John Schmitt and Janelle Jones did an analysis a few years ago of the workers who earned less than what the minimum wage would have been if it had kept pace with inflation since its peak in 1968. This much larger group workers is far more educated, older, and more likely to be supporting children than the group who earn exactly the minimum wage. Of this larger group, 33.3 percent have at least some college, and an additional 9.9 percent are college grads. If the federal minimum wage were raised back enough so that it had the same purchasing power as it did in 1968, all of these workers would see pay increases, as would many others who currently earn just above the new minimum.
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I apologize to those disgruntled over Beat the Press’s new format. I adhere strongly to the view that website makeovers are everywhere and always for the worse. But CEPR had to change its website because the old one was becoming increasingly dysfunctional at the back end. One of the great things about software innovation is that it forces people to upgrade their software simply to preserve compatibility. That was the main motivation for the change.
Being forced to get a new website, we did try to make it as user friendly as possible. There are many kinks that our crew here is still working on and hopefully will get resolved soon. And then those reporters will really have to worry about a beating.
I apologize to those disgruntled over Beat the Press’s new format. I adhere strongly to the view that website makeovers are everywhere and always for the worse. But CEPR had to change its website because the old one was becoming increasingly dysfunctional at the back end. One of the great things about software innovation is that it forces people to upgrade their software simply to preserve compatibility. That was the main motivation for the change.
Being forced to get a new website, we did try to make it as user friendly as possible. There are many kinks that our crew here is still working on and hopefully will get resolved soon. And then those reporters will really have to worry about a beating.
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