That’s what readers of the Sunday Magazine piece on Elizabeth Warren might conclude. At one point it tells readers:
“When pressed on what kind of formidable legislation she would actually pursue in the Senate, Warren’s organization served up a snoozy list of the priorities that Democrats have been talking about for years: she will push for spending on infrastructure, education and renewable energy. She will work to strengthen labor unions and advocate for the reregulation of the big banks while easing regulations that make it difficult for small businesses and community banks to compete with giants.” (emphasis added)
There are few politicians that come out with ideas that are not already common in the public debate. Certainly none of the presidential contenders, with the exception of Ron Paul and Herman Cain, have presented ideas that have not been pushed by Republicans for decades. Nonetheless, the NYT has not suggested that these ideas are sleep inducing.
[Thanks to Greg Wilson.]
That’s what readers of the Sunday Magazine piece on Elizabeth Warren might conclude. At one point it tells readers:
“When pressed on what kind of formidable legislation she would actually pursue in the Senate, Warren’s organization served up a snoozy list of the priorities that Democrats have been talking about for years: she will push for spending on infrastructure, education and renewable energy. She will work to strengthen labor unions and advocate for the reregulation of the big banks while easing regulations that make it difficult for small businesses and community banks to compete with giants.” (emphasis added)
There are few politicians that come out with ideas that are not already common in the public debate. Certainly none of the presidential contenders, with the exception of Ron Paul and Herman Cain, have presented ideas that have not been pushed by Republicans for decades. Nonetheless, the NYT has not suggested that these ideas are sleep inducing.
[Thanks to Greg Wilson.]
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It is easy to get Greece and the United States confused, after all they are both in the northern hemisphere. Okay, this is a case where someone making the comparison puts their ignorance and/or dishonesty in full public view. The three reasons why we are not Greece, in reverse order of importance are:
1) Greece had chronic budget deficits, with a rising debt to GDP ratio even in the upturn. Its government has great difficulty collecting revenue as tax evasion is the major national sport. The United States actually had relatively modest deficits, prior to economic collapse in 2008. The debt to GDP ratio was actually falling. It was the economic collapse that gave us huge budget deficits.
If the economy recovers, ALL projections show that the deficit will return to relatively modest levels. In the longer term we are projected to have serious budget problems, but this is entirely due to our broken health care system. We pay more than twice as much per person as people in other wealthy countries. If we paid a comparable amount for our health care then we would be projecting budget surpluses, not deficits.
2) The United States has a huge diversified economy. If there was a run on the dollar then our goods would suddenly be hyper-competitive in the world economy. For example, if the dollar fell by 20 percent, then it would be equivalent to giving a 20 percent subsidy to all our exports and imposing a 20 percent tariff on all imports. Since the rest of the world would not tolerate this situation, they would have no choice but to support the dollar even in a worst case scenario. (In this respect, our productivity continues to grow by about 2.5 percent annually, so the economy is not going down the drain. We just need demand.)
3) We have our own currency. The ECB could buy Greek bonds and prevent the disaster it is facing. It is choosing not to. In the United States, this decision would be up to us. In a worst case scenario, we could have the Fed buy absolutely as many bonds as we want. There could be problems of inflation at some point, but we are very very far from that world.
In short, the comparison with Greece is utterly baseless. People are making this comparison to advance their agenda for cutting Social Security and Medicare. It absolutely should not be taken seriously.
It is easy to get Greece and the United States confused, after all they are both in the northern hemisphere. Okay, this is a case where someone making the comparison puts their ignorance and/or dishonesty in full public view. The three reasons why we are not Greece, in reverse order of importance are:
1) Greece had chronic budget deficits, with a rising debt to GDP ratio even in the upturn. Its government has great difficulty collecting revenue as tax evasion is the major national sport. The United States actually had relatively modest deficits, prior to economic collapse in 2008. The debt to GDP ratio was actually falling. It was the economic collapse that gave us huge budget deficits.
If the economy recovers, ALL projections show that the deficit will return to relatively modest levels. In the longer term we are projected to have serious budget problems, but this is entirely due to our broken health care system. We pay more than twice as much per person as people in other wealthy countries. If we paid a comparable amount for our health care then we would be projecting budget surpluses, not deficits.
2) The United States has a huge diversified economy. If there was a run on the dollar then our goods would suddenly be hyper-competitive in the world economy. For example, if the dollar fell by 20 percent, then it would be equivalent to giving a 20 percent subsidy to all our exports and imposing a 20 percent tariff on all imports. Since the rest of the world would not tolerate this situation, they would have no choice but to support the dollar even in a worst case scenario. (In this respect, our productivity continues to grow by about 2.5 percent annually, so the economy is not going down the drain. We just need demand.)
3) We have our own currency. The ECB could buy Greek bonds and prevent the disaster it is facing. It is choosing not to. In the United States, this decision would be up to us. In a worst case scenario, we could have the Fed buy absolutely as many bonds as we want. There could be problems of inflation at some point, but we are very very far from that world.
In short, the comparison with Greece is utterly baseless. People are making this comparison to advance their agenda for cutting Social Security and Medicare. It absolutely should not be taken seriously.
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In much of the media it is the rule that both parties are equally to blame regardless of what the facts of the situation are. Hence the lead sentence in the Post’s article on the supercommittee’s deadlock tells readers:
“Congressional negotiators made a yet another push Friday to carve $1.2 trillion in savings from the federal debt, but remained stuck in their entrenched positions on tax policy even as the clock was running down on their efforts to reach a deal.”
It would be interesting to know how the Post decided that the Democrats have an entrenched position. They have offered dozens of plans, many of which would not involve having the rates return to their pre-Bush level, as is specified in current law. By contrast, the Republicans have consistently put forward proposals that would keep the taxes on the wealthy at their current level or lower them further.
Even though the Democrats have shown every willingness to cave, the Post refuses to give them credit for it.
In much of the media it is the rule that both parties are equally to blame regardless of what the facts of the situation are. Hence the lead sentence in the Post’s article on the supercommittee’s deadlock tells readers:
“Congressional negotiators made a yet another push Friday to carve $1.2 trillion in savings from the federal debt, but remained stuck in their entrenched positions on tax policy even as the clock was running down on their efforts to reach a deal.”
It would be interesting to know how the Post decided that the Democrats have an entrenched position. They have offered dozens of plans, many of which would not involve having the rates return to their pre-Bush level, as is specified in current law. By contrast, the Republicans have consistently put forward proposals that would keep the taxes on the wealthy at their current level or lower them further.
Even though the Democrats have shown every willingness to cave, the Post refuses to give them credit for it.
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John Cassidy, the long-time economics writer for the New Yorker, apparently still has not gotten word about the housing bubble: you know, that $8 trillion run-up in house prices that collapsed and caused the financial crisis and the downturn. In a piece telling readers that President Obama has done about as good as could have been expected, he commented:
“And bailing out underwater homeowners on the scale necessary to raise house prices would have been a huge logistical and political challenge.”
Of course there was no reason to expect or want house prices to rise. The bubble has largely deflated. Why on earth would we try to re-inflate a housing bubble as a matter of policy? Do we want the stock of Pets.com and other bankrupt loon tune companies to again sell for billions?
It was both inevitable and good that house prices corrected from their bubble peaks. The unforgivably policy mistake was to allow the bubble to grow so large in the first place and to be so unprepared to provide some support (e.g. Right to Rent and serious countercyclical policy) for the victims of this incompetence.
[Thanks to Keane Bhatt.]
John Cassidy, the long-time economics writer for the New Yorker, apparently still has not gotten word about the housing bubble: you know, that $8 trillion run-up in house prices that collapsed and caused the financial crisis and the downturn. In a piece telling readers that President Obama has done about as good as could have been expected, he commented:
“And bailing out underwater homeowners on the scale necessary to raise house prices would have been a huge logistical and political challenge.”
Of course there was no reason to expect or want house prices to rise. The bubble has largely deflated. Why on earth would we try to re-inflate a housing bubble as a matter of policy? Do we want the stock of Pets.com and other bankrupt loon tune companies to again sell for billions?
It was both inevitable and good that house prices corrected from their bubble peaks. The unforgivably policy mistake was to allow the bubble to grow so large in the first place and to be so unprepared to provide some support (e.g. Right to Rent and serious countercyclical policy) for the victims of this incompetence.
[Thanks to Keane Bhatt.]
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Morning Edition had a piece warning us that the markets will be hard hit if the supercommittee doesn’t reach a deal (sorry, no link yet). It attributed the decline in the stock market in the period around the debt ceiling battle to fears about default, even though bond prices actually rose in this period. Bonds are the asset on which the U.S. government might theoretically default.
So in NPR land, when investors increasingly fear a default on U.S. government bonds, they bid up the price of bonds. However, fears that government bonds will default makes investors less willing to hold stock.
This makes sense as something to say if your agenda is to force Congress to cut programs like Social Security and Medicare. If you’re looking for a more coherent explanation, the markets were responding to the prospects of a meltdown of the euro. This raises the prospect of a post-Lehman type freeze up of the financial system. That would be very bad news for the stock market and is the most obvious explanation for movements in the financial markets.
Morning Edition had a piece warning us that the markets will be hard hit if the supercommittee doesn’t reach a deal (sorry, no link yet). It attributed the decline in the stock market in the period around the debt ceiling battle to fears about default, even though bond prices actually rose in this period. Bonds are the asset on which the U.S. government might theoretically default.
So in NPR land, when investors increasingly fear a default on U.S. government bonds, they bid up the price of bonds. However, fears that government bonds will default makes investors less willing to hold stock.
This makes sense as something to say if your agenda is to force Congress to cut programs like Social Security and Medicare. If you’re looking for a more coherent explanation, the markets were responding to the prospects of a meltdown of the euro. This raises the prospect of a post-Lehman type freeze up of the financial system. That would be very bad news for the stock market and is the most obvious explanation for movements in the financial markets.
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Taking a cue from the Washington Post, the NYT ran an editorial on the budget deficit in its news pages. It told readers:
“At stake is not simply the country’s fiscal health, but also what remains of the government’s credibility. Without an agreement in sight, investors, business leaders and consumers, already worried about the deepening crisis in Europe, have begun to brace for the possibility of yet another blow to a fragile recovery, this time from Washington.”
Is this a fact? The country’s fiscal health is at stake? If the NYT reporters had access to the bond yields printed in their own newspaper they would discover that the yield on 10-year Treasury bonds fell by almost 1 percent on Thursday to 1.96 percent.
It seems pretty hard to maintain that investors are terrified about the fiscal health of the U.S. government if they are prepared to lend the government money long-term at less than 2.0 percent interest. They demanded 6.0 percent interest back in 2000 when we had budget surpluses and ostensibly serious people thought we would pay off the government debt in a decade.
This is not a news article. It is an opinion piece, and in fact a bad one. The writers/editors responsible obviously do not like the budget deficit and are trying to scare readers about its risks. This belongs on the opinion pages, not the news section.
Taking a cue from the Washington Post, the NYT ran an editorial on the budget deficit in its news pages. It told readers:
“At stake is not simply the country’s fiscal health, but also what remains of the government’s credibility. Without an agreement in sight, investors, business leaders and consumers, already worried about the deepening crisis in Europe, have begun to brace for the possibility of yet another blow to a fragile recovery, this time from Washington.”
Is this a fact? The country’s fiscal health is at stake? If the NYT reporters had access to the bond yields printed in their own newspaper they would discover that the yield on 10-year Treasury bonds fell by almost 1 percent on Thursday to 1.96 percent.
It seems pretty hard to maintain that investors are terrified about the fiscal health of the U.S. government if they are prepared to lend the government money long-term at less than 2.0 percent interest. They demanded 6.0 percent interest back in 2000 when we had budget surpluses and ostensibly serious people thought we would pay off the government debt in a decade.
This is not a news article. It is an opinion piece, and in fact a bad one. The writers/editors responsible obviously do not like the budget deficit and are trying to scare readers about its risks. This belongs on the opinion pages, not the news section.
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This is worth mentioning amidst the near hysteria in the media over the prospect of a failed supercommittee. The Post piece began:
“If the congressional ‘supercommittee’ cannot agree on a plan to tame the federal debt by next week’s deadline, as now appears likely, here’s what will happen: nothing.”
This is worth mentioning amidst the near hysteria in the media over the prospect of a failed supercommittee. The Post piece began:
“If the congressional ‘supercommittee’ cannot agree on a plan to tame the federal debt by next week’s deadline, as now appears likely, here’s what will happen: nothing.”
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In its top of the hour news segment Morning Edition mentioned congressional hearings where Secretary of Energy Steven Chu would testify about the loan guarantees for Solyndra, the now bankrupt solar energy firm. The segment said that the guarantees were for $528 billion. In fact, the guarantees were for $528 million. It makes a difference.
In its top of the hour news segment Morning Edition mentioned congressional hearings where Secretary of Energy Steven Chu would testify about the loan guarantees for Solyndra, the now bankrupt solar energy firm. The segment said that the guarantees were for $528 billion. In fact, the guarantees were for $528 million. It makes a difference.
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Way back in 2008 much of the world sank into recession because housing bubbles in the United States, the UK, Ireland, Spain and elsewhere began to deflate. This ended a boom in construction and caused consumption to plunge as the housing wealth that provided its foundation vanished.
Unfortunately, memories at the NYT are apparently weak. It told readers today:
“To the roster of pain inflicted by the , add this: rising and persistent joblessness among young Britons.”
Of course, the European debt crisis is very much secondary in this story. The proximate cause of the high unemployment in the UK is the decision of the government to impose a harsh austerity package involving cuts in spending and higher taxes. This was a decision by the government, it was not in any way a necessary result of the UK’s debt burden as the article implies. Financial markets were willing to lend the UK money at very low interest rates.
Also, the cause of the “debt crisis” was the economic collapse that followed the bursting of the housing bubble. Most of the countries now facing serious problems paying their debt had modest budget deficits or even surpluses in the years prior to the collapse of the bubble.
The NYT also appears to be suffering from the millions/billions confusion that is also afflicting NPR. It told readers:
“Reducing youth unemployment by one percentage point could save £2 million, or $3.2 million, by avoiding youth crime, according to research by the Center for Economic Performance, a research concern at the London School of Economics and Political Science.”
Presumably the numbers in this research were billions, not millions. If in fact they were millions, the results were too trivial to bother writing up.
Way back in 2008 much of the world sank into recession because housing bubbles in the United States, the UK, Ireland, Spain and elsewhere began to deflate. This ended a boom in construction and caused consumption to plunge as the housing wealth that provided its foundation vanished.
Unfortunately, memories at the NYT are apparently weak. It told readers today:
“To the roster of pain inflicted by the , add this: rising and persistent joblessness among young Britons.”
Of course, the European debt crisis is very much secondary in this story. The proximate cause of the high unemployment in the UK is the decision of the government to impose a harsh austerity package involving cuts in spending and higher taxes. This was a decision by the government, it was not in any way a necessary result of the UK’s debt burden as the article implies. Financial markets were willing to lend the UK money at very low interest rates.
Also, the cause of the “debt crisis” was the economic collapse that followed the bursting of the housing bubble. Most of the countries now facing serious problems paying their debt had modest budget deficits or even surpluses in the years prior to the collapse of the bubble.
The NYT also appears to be suffering from the millions/billions confusion that is also afflicting NPR. It told readers:
“Reducing youth unemployment by one percentage point could save £2 million, or $3.2 million, by avoiding youth crime, according to research by the Center for Economic Performance, a research concern at the London School of Economics and Political Science.”
Presumably the numbers in this research were billions, not millions. If in fact they were millions, the results were too trivial to bother writing up.
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The NYT had an interesting piece discussing the large number of college graduates who have moved back home with their parents because they have been unable to find jobs. While this is an important economic and social trend, some of the numbers are clearly not right.
For example, it cites Mark Zandi as saying that the average new household adds $145,000 in output to the economy. The median household income is approximately $50,000. Most new households have incomes that are well below the median, since they are typically young people living alone. Even if the expenses associated with forming a household cause them to spend beyond their income, it would take an enormous burst of spending and a huge multiplier to get to $145,000. (Remember, this only counts the spending associated with moving into a new apartment or house, not spending on food, transportation, or health care that is largely independent of living in a separate household.)
The article also cites Zandi as estimating the pent-up demand for new households at 1.1 million which he puts as roughly equal to the number of vacant units for rent or sale. The Census Bureau reports that there are 7.2 million vacant units for sale or rent, with another 7.2 million vacant units being held off the market for a variety of reasons.
The NYT had an interesting piece discussing the large number of college graduates who have moved back home with their parents because they have been unable to find jobs. While this is an important economic and social trend, some of the numbers are clearly not right.
For example, it cites Mark Zandi as saying that the average new household adds $145,000 in output to the economy. The median household income is approximately $50,000. Most new households have incomes that are well below the median, since they are typically young people living alone. Even if the expenses associated with forming a household cause them to spend beyond their income, it would take an enormous burst of spending and a huge multiplier to get to $145,000. (Remember, this only counts the spending associated with moving into a new apartment or house, not spending on food, transportation, or health care that is largely independent of living in a separate household.)
The article also cites Zandi as estimating the pent-up demand for new households at 1.1 million which he puts as roughly equal to the number of vacant units for rent or sale. The Census Bureau reports that there are 7.2 million vacant units for sale or rent, with another 7.2 million vacant units being held off the market for a variety of reasons.
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