The NYT told readers misled readers in its description of the Trans-Pacific Partnership (TPP). It told readers:
“The American plan [the TPP] would require each country to open even some of its most fiercely protected markets to foreign goods and services, which could produce a surge in trade.”
While the agreement is pursuing some trade openings, notably in agriculture, it is not clear how far they will go since there is much political resistance to these openings. On the other hand, it also calls for increased protectionism in the form of stronger patent and copyright monopolies. These will raise prices; they are equivalent to privately imposed taxes.(Generic drugs can sell for less than one percent of the patent protected versions, implying a tax equivalent of more than 10,000 percent on the free market price.)
By raising prices and reducing purchasing power the result can be a reduction in trade. Without seeing the final deal, the NYT has no ability to assess whether the trade increasing aspects to the deal will be larger than the trade impairing aspects of the deal. In other words, the “surge in trade” is just making stuff up.
The NYT told readers misled readers in its description of the Trans-Pacific Partnership (TPP). It told readers:
“The American plan [the TPP] would require each country to open even some of its most fiercely protected markets to foreign goods and services, which could produce a surge in trade.”
While the agreement is pursuing some trade openings, notably in agriculture, it is not clear how far they will go since there is much political resistance to these openings. On the other hand, it also calls for increased protectionism in the form of stronger patent and copyright monopolies. These will raise prices; they are equivalent to privately imposed taxes.(Generic drugs can sell for less than one percent of the patent protected versions, implying a tax equivalent of more than 10,000 percent on the free market price.)
By raising prices and reducing purchasing power the result can be a reduction in trade. Without seeing the final deal, the NYT has no ability to assess whether the trade increasing aspects to the deal will be larger than the trade impairing aspects of the deal. In other words, the “surge in trade” is just making stuff up.
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David Leonhardt had an Upshot piece that discussed the prospects for future wage growth in which the only two “experts” cited were Gene Sperling and Roger Altman, both Clinton administration officials with strong ties to Wall Street. While the piece includes assurances from Gene Sperling that no mix of the policies he advocates are likely to lead to wage growth any time soon, it is worth noting that a policy he likely opposes is likely to offer near-term benefits.
Specifically a lower valued dollar could reduce the trade deficit by making our goods and services more competitive internationally. This could get us back to full employment which would allow workers at the middle and bottom of the wage distribution to share in the gains of economic growth.
The Clinton administration explicitly pursued a high dollar policy which led to a massive trade deficit. This deficit created a gap in demand which could only be filled with the demand generated by the stock and housing bubbles. Wall Street tends to prefer a higher dollar both because it increases its power internationally and reduces inflation.
It is amazing that Leonhardt relied on such a narrow range of sources when so many experts with differing views were readily available to speak on this issue.
David Leonhardt had an Upshot piece that discussed the prospects for future wage growth in which the only two “experts” cited were Gene Sperling and Roger Altman, both Clinton administration officials with strong ties to Wall Street. While the piece includes assurances from Gene Sperling that no mix of the policies he advocates are likely to lead to wage growth any time soon, it is worth noting that a policy he likely opposes is likely to offer near-term benefits.
Specifically a lower valued dollar could reduce the trade deficit by making our goods and services more competitive internationally. This could get us back to full employment which would allow workers at the middle and bottom of the wage distribution to share in the gains of economic growth.
The Clinton administration explicitly pursued a high dollar policy which led to a massive trade deficit. This deficit created a gap in demand which could only be filled with the demand generated by the stock and housing bubbles. Wall Street tends to prefer a higher dollar both because it increases its power internationally and reduces inflation.
It is amazing that Leonhardt relied on such a narrow range of sources when so many experts with differing views were readily available to speak on this issue.
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The NYT might have tried to find someone who could have made this point in a Room for Debate segment on Spotify and streaming music more generally. The question being posed is whether these services help or hurt musicians and recording artists.
As several of the comments indicate, most musicians are finding it increasingly difficult to earn any substantial amount of money from their recordings. While some blame Spotify and other streaming services, because of the difficulty of enforcing copyrights in the Internet Age without repressive laws, it is unlikely that these services make much difference in the amount of money available to recording artists. Without streaming services there would simply be more use of unauthorized copies, from which the artist gets zero. They may sell a few more downloads, but the net is unlikely to be very different.
The most logical path going forward is to develop an alternative mechanism for paying recording artists that gives the money upfront and takes advantage of the Internet, rather than trying to bottle it up. My preferred mechanism is a system of individual vouchers, under which people would effectively have a refundable tax credit of some size (e.g $75) to pay to support musicians, writers, movie makers etc. All the work these people produced would then be freely available without copyright protection.
By making it an individual voucher we wouldn’t have to fight over the people that the Corporation for Public Broadcasting or National Endowment for the Arts or equivalent government agencies were opting to support. People would be able to make this judgement for themselves as they did when they paid for copyright protected work.
The NYT might have tried to find someone who could have made this point in a Room for Debate segment on Spotify and streaming music more generally. The question being posed is whether these services help or hurt musicians and recording artists.
As several of the comments indicate, most musicians are finding it increasingly difficult to earn any substantial amount of money from their recordings. While some blame Spotify and other streaming services, because of the difficulty of enforcing copyrights in the Internet Age without repressive laws, it is unlikely that these services make much difference in the amount of money available to recording artists. Without streaming services there would simply be more use of unauthorized copies, from which the artist gets zero. They may sell a few more downloads, but the net is unlikely to be very different.
The most logical path going forward is to develop an alternative mechanism for paying recording artists that gives the money upfront and takes advantage of the Internet, rather than trying to bottle it up. My preferred mechanism is a system of individual vouchers, under which people would effectively have a refundable tax credit of some size (e.g $75) to pay to support musicians, writers, movie makers etc. All the work these people produced would then be freely available without copyright protection.
By making it an individual voucher we wouldn’t have to fight over the people that the Corporation for Public Broadcasting or National Endowment for the Arts or equivalent government agencies were opting to support. People would be able to make this judgement for themselves as they did when they paid for copyright protected work.
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Washington Post Fact Checker gave President Obama three Pinocchios for claiming in a press conference that the Affordable Care Act was responsible for the slowdown in health care costs overall and the slowdown in Medicare costs in particular. This seems more than a bit harsh.
First, there are some clear misstatements, Obama referred to savings on Medicare and Medicaid, even though he just said “Medicare.” Also, he was referring to projected savings in 2020, even though his comments implied that these were the savings that we are seeing today. However these were off the cuff comments in a press conference, as Kessler notes. In prepared speeches Obama has presented these number accurately.
However Kessler’s main complaint is that Obama seems to be implying that the ACA is responsible for the slowdown in health care cost growth when at most it was an important contributor. The point is reasonable, but the question is whether this is a three Pinocchio misrepresentation.
After all, the vast majority of health economists do believe that the ACA has been an important factor in slowing cost growth. The main competing explanation is the recession. That is a plausible explanation for slowing growth in 2008, 2009, and possibly even 2010, but it really is not plausible in more recent years. People may put off care when they lose their jobs, which would explain a one-time reduction in cost growth. However this can’t explain continued slow growth. After all, we don’t think more people are putting off care in 2014 than in 2010.
Furthermore, health care cost growth has continued to undercut projections even in more recent years when the projections were made with the full knowledge of the recession. In this respect, it is worth noting Kessler’s reference to a projection that health care costs in 2014 would rise 5.6 percent from their 2013 level. In the first three quarters of 2014, spending on health care services (roughly 90 percent of spending) is up by 2.8 percent from 2013 levels. Plausible projections of fourth quarter spending are likely to push the year over year increase slightly above 3.0 percent, but this is still well below the growth rate that was projected last year.
It is fair to call President Obama on the carpet for claiming the ACA did more to contain costs than is actually the case, but can anyone doubt that if health care costs had risen more rapidly than in the past that the ACA would get the blame in the public mind, even if other factors were clearly more important? In the context of modern politics, President Obama’s claims about the cost-savings from the ACA seem like relatively minor exaggerations, not a three Pinocchio offense.
Washington Post Fact Checker gave President Obama three Pinocchios for claiming in a press conference that the Affordable Care Act was responsible for the slowdown in health care costs overall and the slowdown in Medicare costs in particular. This seems more than a bit harsh.
First, there are some clear misstatements, Obama referred to savings on Medicare and Medicaid, even though he just said “Medicare.” Also, he was referring to projected savings in 2020, even though his comments implied that these were the savings that we are seeing today. However these were off the cuff comments in a press conference, as Kessler notes. In prepared speeches Obama has presented these number accurately.
However Kessler’s main complaint is that Obama seems to be implying that the ACA is responsible for the slowdown in health care cost growth when at most it was an important contributor. The point is reasonable, but the question is whether this is a three Pinocchio misrepresentation.
After all, the vast majority of health economists do believe that the ACA has been an important factor in slowing cost growth. The main competing explanation is the recession. That is a plausible explanation for slowing growth in 2008, 2009, and possibly even 2010, but it really is not plausible in more recent years. People may put off care when they lose their jobs, which would explain a one-time reduction in cost growth. However this can’t explain continued slow growth. After all, we don’t think more people are putting off care in 2014 than in 2010.
Furthermore, health care cost growth has continued to undercut projections even in more recent years when the projections were made with the full knowledge of the recession. In this respect, it is worth noting Kessler’s reference to a projection that health care costs in 2014 would rise 5.6 percent from their 2013 level. In the first three quarters of 2014, spending on health care services (roughly 90 percent of spending) is up by 2.8 percent from 2013 levels. Plausible projections of fourth quarter spending are likely to push the year over year increase slightly above 3.0 percent, but this is still well below the growth rate that was projected last year.
It is fair to call President Obama on the carpet for claiming the ACA did more to contain costs than is actually the case, but can anyone doubt that if health care costs had risen more rapidly than in the past that the ACA would get the blame in the public mind, even if other factors were clearly more important? In the context of modern politics, President Obama’s claims about the cost-savings from the ACA seem like relatively minor exaggerations, not a three Pinocchio offense.
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The Washington Post fundamentally misrepresented the issues in a front page piece on the decision by the Supreme Court to hear a case contesting whether people in the federal exchanges created by the Affordable Care Act (ACA) qualify for subsidies. The case stems from awkward wording in one part of the law that describes subsidies going to people in the exchanges created by the states. The opponents of the law argue this means that people enrolled in the exchanges created by the federal government are not eligible for subsidies.
While the piece points out that supporters say that the subsidies are an essential part of the ACA, it should have also pointed out that other parts of the law are clearly written as though subsidies would be paid out to be people in the exchanges created by the federal government. Their point is that when the law is read as a whole there is no ambiguity that subsidies are supposed to go to people in the federal exchanges.
In this respect it is also worth noting that when the Congressional Budget Office and other independent observers tried to project the cost of the ACA they all assumed that people in the federal exchanges would be getting subsidies. It seems that no one had any confusion about the intent of the law in this respect.
The Post should have clearly presented the legal argument of the supporters of the ACA.
The Washington Post fundamentally misrepresented the issues in a front page piece on the decision by the Supreme Court to hear a case contesting whether people in the federal exchanges created by the Affordable Care Act (ACA) qualify for subsidies. The case stems from awkward wording in one part of the law that describes subsidies going to people in the exchanges created by the states. The opponents of the law argue this means that people enrolled in the exchanges created by the federal government are not eligible for subsidies.
While the piece points out that supporters say that the subsidies are an essential part of the ACA, it should have also pointed out that other parts of the law are clearly written as though subsidies would be paid out to be people in the exchanges created by the federal government. Their point is that when the law is read as a whole there is no ambiguity that subsidies are supposed to go to people in the federal exchanges.
In this respect it is also worth noting that when the Congressional Budget Office and other independent observers tried to project the cost of the ACA they all assumed that people in the federal exchanges would be getting subsidies. It seems that no one had any confusion about the intent of the law in this respect.
The Post should have clearly presented the legal argument of the supporters of the ACA.
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The articles reporting on the cuts to Detroit city workers pensions resulting from its bankruptcy have not generally conveyed the true size of the cuts to readers. The pieces usually note an immediate cut of 4.5 percent to pensions and then point out that the agreement ends the cost of living adjustment to pension.
This latter provision is likely to prove far more important. If the workers’ contracts had provided for full indexation, and we assume that inflation averages 2.0 percent in the years ahead, a worker who lives on their pension for twenty years will see a cumulative cut in benefits of around 15 percent as a result of the ending of the cost of living adjustment (COLA). In the twentieth year their pension will be one-third less than in the current year. If they collect their pension for thirty years their pension will be cut by more than 45 percent as a result of the ending of the COLA.
Their sacrifice will be far larger than that demanded of the executives of Wall Street banks, which were effectively bankrupt during the financial crisis.
The articles reporting on the cuts to Detroit city workers pensions resulting from its bankruptcy have not generally conveyed the true size of the cuts to readers. The pieces usually note an immediate cut of 4.5 percent to pensions and then point out that the agreement ends the cost of living adjustment to pension.
This latter provision is likely to prove far more important. If the workers’ contracts had provided for full indexation, and we assume that inflation averages 2.0 percent in the years ahead, a worker who lives on their pension for twenty years will see a cumulative cut in benefits of around 15 percent as a result of the ending of the cost of living adjustment (COLA). In the twentieth year their pension will be one-third less than in the current year. If they collect their pension for thirty years their pension will be cut by more than 45 percent as a result of the ending of the COLA.
Their sacrifice will be far larger than that demanded of the executives of Wall Street banks, which were effectively bankrupt during the financial crisis.
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Catherine Rampell has a nice piece in the Post outlining some of the problems with having workers rely on tips for much of their pay. She comments in passing that because people may underestimate the cost of eating at restaurants they may eat out more often, which would provide a boost to the economy by creating more demand.
If this was really true, then the saving cultists who want people to save more money should all be pushing for an end to tipping. (In an economy where we are faced with inadequate demand, which is certainly true today, less demand would slow growth.) As a practical matter, if people spent less on restaurants it would probably mean for the most part that they spent more on something else, but if this line can get the saving gang to oppose tipping, it’s fine by me.
Catherine Rampell has a nice piece in the Post outlining some of the problems with having workers rely on tips for much of their pay. She comments in passing that because people may underestimate the cost of eating at restaurants they may eat out more often, which would provide a boost to the economy by creating more demand.
If this was really true, then the saving cultists who want people to save more money should all be pushing for an end to tipping. (In an economy where we are faced with inadequate demand, which is certainly true today, less demand would slow growth.) As a practical matter, if people spent less on restaurants it would probably mean for the most part that they spent more on something else, but if this line can get the saving gang to oppose tipping, it’s fine by me.
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It’s too bad that the Post’s political columnist Dana Milbank does not have a very good memory. He devoted his column to complaining that President Obama didn’t offer any change in course yesterday, unlike President Bush after the Republicans lost Congress in 2006. Milbank points out that Obama offered no changes in policy or even in the structure of his cabinet, unlike Bush who dumped Donald Rumsfeld as Defense secretary.
There is an obvious difference between 2006 and 2014. It was clear in 2006 that the war in Iraq was the main issue contributing to the Republican defeat. Therefore it was reasonable for Bush to offer some change in this policy. What issue would Milbank highlight as causing the Democrats’ defeat in 2014 that would warrant a change in course?
Should Obama abandon the push for a higher minimum wage, even though initiatives on this issue won overwhelmingly even in red states? Should he propose repeal of the Affordable Care Act, a position that even Republicans have abandoned? Should he do another push for cuts to Medicare and Social Security, in spite of the fact that most of the Democrats who had pushed cuts got handed their heads on Tuesday? How about getting into a full-fledged land war against ISIS? Perhaps a quarantine on health care workers across the country just in case one of them treated someone with Ebola?
The reality is that the Republicans didn’t win by pushing any issues that appeal in a big way to the public, therefore there is nothing that Obama could take away from their victory to bring his administration more in line with public opinion. Certainly if he could advance policies that would do more to bring the economy to full employment and to reverse the upward redistribution of income over the last three decades it would likely garner popular support. However this would almost certainly mean working against the Republicans elected this week rather than with them.
It’s too bad that the Post’s political columnist Dana Milbank does not have a very good memory. He devoted his column to complaining that President Obama didn’t offer any change in course yesterday, unlike President Bush after the Republicans lost Congress in 2006. Milbank points out that Obama offered no changes in policy or even in the structure of his cabinet, unlike Bush who dumped Donald Rumsfeld as Defense secretary.
There is an obvious difference between 2006 and 2014. It was clear in 2006 that the war in Iraq was the main issue contributing to the Republican defeat. Therefore it was reasonable for Bush to offer some change in this policy. What issue would Milbank highlight as causing the Democrats’ defeat in 2014 that would warrant a change in course?
Should Obama abandon the push for a higher minimum wage, even though initiatives on this issue won overwhelmingly even in red states? Should he propose repeal of the Affordable Care Act, a position that even Republicans have abandoned? Should he do another push for cuts to Medicare and Social Security, in spite of the fact that most of the Democrats who had pushed cuts got handed their heads on Tuesday? How about getting into a full-fledged land war against ISIS? Perhaps a quarantine on health care workers across the country just in case one of them treated someone with Ebola?
The reality is that the Republicans didn’t win by pushing any issues that appeal in a big way to the public, therefore there is nothing that Obama could take away from their victory to bring his administration more in line with public opinion. Certainly if he could advance policies that would do more to bring the economy to full employment and to reverse the upward redistribution of income over the last three decades it would likely garner popular support. However this would almost certainly mean working against the Republicans elected this week rather than with them.
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Charles Lane expresses his pain at the fact that the minimum wage remains hugely popular with large segments of the population. He tells readers:
“It works as a tax on business, whose benefits often accrue to middle-class teenagers, and whose costs — fewer jobs and higher prices — are partly borne by needier intended beneficiaries.”
Imagine that, a policy that might have some consequences we don’t like — sort of like any policy that actually exists in the real world. Thankfully, unlike the Earned Income Tax Credit (EITC), which gains enormous popularity among conservatives when the minimum wage is discussed, the minimum wage doesn’t lower the wages of large groups of workers and act as a subsidy to low wage employers. And, the EITC also must be paid for, and the usual way we pay for government spending is through taxes. So the EITC also works like a tax, since it will be paid for with taxes. Such is life.(Btw, as folks familiar with the research know, the jobs consequences are minimal and mostly mean people spending more time between jobs since there is high turnover in these jobs.)
Anyhow, Lane wants politicians to stop raising the minimum wage so he proposes indexing it to the rate of inflation. The idea of indexation is good, but Lane has the wrong target. Back in the good old days, when we had 4.0 percent growth and 3.0 percent unemployment, the minimum wage rose in step with productivity. If it had continued to rise in step with productivity since its peak level in 1968 it would be more than $17 an hour today.
Raising the minimum wage in step with productivity makes good economic sense. After all, why shouldn’t workers at the bottom of income distribution share in the gains of economic growth. The alternative is an ever-growing gap between minimum wage workers and everyone else. That may be Charles Lane’s dream, but that probably is not the world envisioned by most supporters of the minimum wage.
Charles Lane expresses his pain at the fact that the minimum wage remains hugely popular with large segments of the population. He tells readers:
“It works as a tax on business, whose benefits often accrue to middle-class teenagers, and whose costs — fewer jobs and higher prices — are partly borne by needier intended beneficiaries.”
Imagine that, a policy that might have some consequences we don’t like — sort of like any policy that actually exists in the real world. Thankfully, unlike the Earned Income Tax Credit (EITC), which gains enormous popularity among conservatives when the minimum wage is discussed, the minimum wage doesn’t lower the wages of large groups of workers and act as a subsidy to low wage employers. And, the EITC also must be paid for, and the usual way we pay for government spending is through taxes. So the EITC also works like a tax, since it will be paid for with taxes. Such is life.(Btw, as folks familiar with the research know, the jobs consequences are minimal and mostly mean people spending more time between jobs since there is high turnover in these jobs.)
Anyhow, Lane wants politicians to stop raising the minimum wage so he proposes indexing it to the rate of inflation. The idea of indexation is good, but Lane has the wrong target. Back in the good old days, when we had 4.0 percent growth and 3.0 percent unemployment, the minimum wage rose in step with productivity. If it had continued to rise in step with productivity since its peak level in 1968 it would be more than $17 an hour today.
Raising the minimum wage in step with productivity makes good economic sense. After all, why shouldn’t workers at the bottom of income distribution share in the gains of economic growth. The alternative is an ever-growing gap between minimum wage workers and everyone else. That may be Charles Lane’s dream, but that probably is not the world envisioned by most supporters of the minimum wage.
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