In discussing the oil spill off the coast of Loiusiana the NYT told readers: “the country needs the oil — and the jobs.” The basis for this assertion is not clear.
What is presumably at issue is the prospect of further drilling in currently protected areas. According to the Energy Information Agency, the potential yield from these areas is in the range of 200,000 barrels a day. This is equal to about 1 percent of U.S. oil consumption and around 0.2 percent of world oil consumption.
This amount of oil would have no notable impact on U.S. energy independence. (Actually, in a world where we can freely buy oil on world markets, from the standpoint of concerns about energy indepedence, it would make more sense to leave the oil in the ground so that it can be used if we actually are cut off from world markets.)
This amount of oil would have a trivial impact on oil prices, meaning that no one will notice a lower price at the pump because we open these areas to oil drilling. The jobs created directly by the drilling would also be trivial and would be dwarfed by a few days’ job growth in a healthy economy. (The jobs would only come years down the road, since much exploration would have to precede major drilling.)
So, there is no apparent basis for the NYT’s assertion about the need for drilling.
In discussing the oil spill off the coast of Loiusiana the NYT told readers: “the country needs the oil — and the jobs.” The basis for this assertion is not clear.
What is presumably at issue is the prospect of further drilling in currently protected areas. According to the Energy Information Agency, the potential yield from these areas is in the range of 200,000 barrels a day. This is equal to about 1 percent of U.S. oil consumption and around 0.2 percent of world oil consumption.
This amount of oil would have no notable impact on U.S. energy independence. (Actually, in a world where we can freely buy oil on world markets, from the standpoint of concerns about energy indepedence, it would make more sense to leave the oil in the ground so that it can be used if we actually are cut off from world markets.)
This amount of oil would have a trivial impact on oil prices, meaning that no one will notice a lower price at the pump because we open these areas to oil drilling. The jobs created directly by the drilling would also be trivial and would be dwarfed by a few days’ job growth in a healthy economy. (The jobs would only come years down the road, since much exploration would have to precede major drilling.)
So, there is no apparent basis for the NYT’s assertion about the need for drilling.
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The Post corrected “5 myths about immigration” in the Outlook section today. The first of the myths is that “immigrants take jobs from American workers.” It dismissed this concern by telling us that: “economists also estimate that for each job an immigrant fills, an additional job is created.” It might have been helpful it had included some names here of economists who hold this view. There are certainly some economists, such as Harvard Professor George Borjas, who see immigrant workers as having a substantial downward impact on the wages of less educated workers.
There also is an important question about who gets counted as an “American worker” in this story. Some analyses have concluded that immigrant workers have little impact on the wages of native born workers, however they do have a substantial negative impact on the wages of other immigrants. Of course many immigrants will become American citizens after being in the country for 10-15 years. So, if we count naturalized citizens as “American workers” then the Post’s assertion is completely untrue.
It is worth noting that recent immigrants have had a much more difficult time in catching up with the wages of their native born counterparts than was true in 60s and 70s. This can be partially explained by the larger flow of immigrants in the last two decades.
It is also worth noting that there may be a difference between the marginal impact of more immigrants and the impact of a larger flow over time. In industries like residential construction and meatpacking, native workers have been largely displaced by immigrants over the last three decades. These industries had provided relatively well-paying jobs to workers with little education. They also had a substantial union presence.
This is less true today as wages and conditions in these industries have worsened considerably, as they became almost entirely non-union. At this point, more immigrants are likely to primarily depress the wages of other immigrants working in these sectors, although if there had not been a sharp uptick in immigration over the last three decades it is reasonable to assume that these industries would still employ native born workers at a better wage than they would have been able to receive in other industries.
The Post corrected “5 myths about immigration” in the Outlook section today. The first of the myths is that “immigrants take jobs from American workers.” It dismissed this concern by telling us that: “economists also estimate that for each job an immigrant fills, an additional job is created.” It might have been helpful it had included some names here of economists who hold this view. There are certainly some economists, such as Harvard Professor George Borjas, who see immigrant workers as having a substantial downward impact on the wages of less educated workers.
There also is an important question about who gets counted as an “American worker” in this story. Some analyses have concluded that immigrant workers have little impact on the wages of native born workers, however they do have a substantial negative impact on the wages of other immigrants. Of course many immigrants will become American citizens after being in the country for 10-15 years. So, if we count naturalized citizens as “American workers” then the Post’s assertion is completely untrue.
It is worth noting that recent immigrants have had a much more difficult time in catching up with the wages of their native born counterparts than was true in 60s and 70s. This can be partially explained by the larger flow of immigrants in the last two decades.
It is also worth noting that there may be a difference between the marginal impact of more immigrants and the impact of a larger flow over time. In industries like residential construction and meatpacking, native workers have been largely displaced by immigrants over the last three decades. These industries had provided relatively well-paying jobs to workers with little education. They also had a substantial union presence.
This is less true today as wages and conditions in these industries have worsened considerably, as they became almost entirely non-union. At this point, more immigrants are likely to primarily depress the wages of other immigrants working in these sectors, although if there had not been a sharp uptick in immigration over the last three decades it is reasonable to assume that these industries would still employ native born workers at a better wage than they would have been able to receive in other industries.
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Time Magazine’s Adam Sorenson tells readers that: “Medicare, Medicaid and Social Security costs will catch up to the entirety of federal revenue as a percentage of GDP in coming decades if things don’t change.” However the graph included in the piece shows Medicare and Medicaid costs growing rapidly, while Social Security costs just edge upward slightly. The chart even carries the headline: “Medicare and Medicaid Expected to Grow Rapidly as a Share of the Economy.” But, hey, when you’re on a crusade to cut Social Security, why worry that the facts don’t support your case.
Time Magazine’s Adam Sorenson tells readers that: “Medicare, Medicaid and Social Security costs will catch up to the entirety of federal revenue as a percentage of GDP in coming decades if things don’t change.” However the graph included in the piece shows Medicare and Medicaid costs growing rapidly, while Social Security costs just edge upward slightly. The chart even carries the headline: “Medicare and Medicaid Expected to Grow Rapidly as a Share of the Economy.” But, hey, when you’re on a crusade to cut Social Security, why worry that the facts don’t support your case.
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In an article discussing the first quarter GDP data the NYT told readers that: “Economists are hopeful that families will continue to pick up the pace of purchasing and make the recovery more sustainable.” Economists who know arithmetic (admittedly a tiny subset of economists as evidenced by the failure of almost the entire profession to see an $8 trillion housing bubble) are unlikely to share this perspective.
Tens of millions of baby boomers are at edge of retirement. Because of the collapse of the housing bubble and the resulting destruction of home equity, the vast majority of people in these cohorts has almost nothing saved for retirement. The median net worth for older baby boomers (people aged 55-64) is around $180,000. This means that if they took all their wealth (including their current home equity) they would have approximately enough money to pay off the mortgage on the median home. This would leave them with absolutely nothing to support themselves in retirement other than their Social Security. The median net worth for younger baby boomers (people aged 45-54) is approximately $80,000.
The workers in these age cohorts desperately need to be saving more for retirement, especially in a context where the Peter Petersons and Robert Rubins of the world are devoting enormous resources to try to cut their Social Security and Medicare. For this reason, economists who know arithmetic are not hoping for a consumption led recovery. They are hoping that the government will take further measures to stimulate the economy. These measures could also boost private sector investment. Economists who know arithemtic are also hoping that the Obama administration will take steps to end the dollar’s over-valuation, thereby leading to more net exports.
Unfortunately, because economic policy is dominated by economists who do not know arithmetic, we may be dependent on consumption to drive the recovery.
In an article discussing the first quarter GDP data the NYT told readers that: “Economists are hopeful that families will continue to pick up the pace of purchasing and make the recovery more sustainable.” Economists who know arithmetic (admittedly a tiny subset of economists as evidenced by the failure of almost the entire profession to see an $8 trillion housing bubble) are unlikely to share this perspective.
Tens of millions of baby boomers are at edge of retirement. Because of the collapse of the housing bubble and the resulting destruction of home equity, the vast majority of people in these cohorts has almost nothing saved for retirement. The median net worth for older baby boomers (people aged 55-64) is around $180,000. This means that if they took all their wealth (including their current home equity) they would have approximately enough money to pay off the mortgage on the median home. This would leave them with absolutely nothing to support themselves in retirement other than their Social Security. The median net worth for younger baby boomers (people aged 45-54) is approximately $80,000.
The workers in these age cohorts desperately need to be saving more for retirement, especially in a context where the Peter Petersons and Robert Rubins of the world are devoting enormous resources to try to cut their Social Security and Medicare. For this reason, economists who know arithmetic are not hoping for a consumption led recovery. They are hoping that the government will take further measures to stimulate the economy. These measures could also boost private sector investment. Economists who know arithemtic are also hoping that the Obama administration will take steps to end the dollar’s over-valuation, thereby leading to more net exports.
Unfortunately, because economic policy is dominated by economists who do not know arithmetic, we may be dependent on consumption to drive the recovery.
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New York Times columnist Floyd Norris told readers that: “China ties its currency to the dollar, and despite American jawboning, there is little that the United States can do about that.” Actually, the U.S. government is free to set its own higher exchange rate of the yuan against the dollar.
The Chinese government sets an exchange rate puts the value of the yuan at approximately 14 cents. There is nothing that prevents the Treasury of offerring to buy yuan at a higher price, for example 20 cents. If the Treasury made this commitment and was prepared to stand behind it, it would like raise the value of the yuan to 20 cents. This competing exchange rate would be highly unusual, but there is nothing that literally prevents the U.S. government from doing it.
New York Times columnist Floyd Norris told readers that: “China ties its currency to the dollar, and despite American jawboning, there is little that the United States can do about that.” Actually, the U.S. government is free to set its own higher exchange rate of the yuan against the dollar.
The Chinese government sets an exchange rate puts the value of the yuan at approximately 14 cents. There is nothing that prevents the Treasury of offerring to buy yuan at a higher price, for example 20 cents. If the Treasury made this commitment and was prepared to stand behind it, it would like raise the value of the yuan to 20 cents. This competing exchange rate would be highly unusual, but there is nothing that literally prevents the U.S. government from doing it.
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There were down slightly last week, but the 4-week moving average is still 462,000. Usually claims have to be under 400,000 to be consistent with steady job growth.
This release got no mention in the Post even though it provides far more information about the state of the economy than other data releases that are routinely covered, such as the consumer confidence indexes. Perhaps the Post will give the data more attention when it starts showing fewer claims.
There were down slightly last week, but the 4-week moving average is still 462,000. Usually claims have to be under 400,000 to be consistent with steady job growth.
This release got no mention in the Post even though it provides far more information about the state of the economy than other data releases that are routinely covered, such as the consumer confidence indexes. Perhaps the Post will give the data more attention when it starts showing fewer claims.
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NPR told listeners that the public has supported drilling offshore because they objected to the country’s dependence on foreign oil and the wars in the Middle East.This is very interesting because it shows how badly the media have reported on this issue. There are no projections that show drilling offshore will have any noticeable effect on U.S. dependence on foreign oil. The media (including NPR) have horribly misrepresented the potential impact of offshore oil so that tens of millions of Americans actually believe that it has anything to do with dependence on foreign oil.
It would have been interesting to report the attitudes towards offshore drilling among those who know that it will not have any noticeable impact on U.S. dependence on foreign oil or the price of gas.
NPR told listeners that the public has supported drilling offshore because they objected to the country’s dependence on foreign oil and the wars in the Middle East.This is very interesting because it shows how badly the media have reported on this issue. There are no projections that show drilling offshore will have any noticeable effect on U.S. dependence on foreign oil. The media (including NPR) have horribly misrepresented the potential impact of offshore oil so that tens of millions of Americans actually believe that it has anything to do with dependence on foreign oil.
It would have been interesting to report the attitudes towards offshore drilling among those who know that it will not have any noticeable impact on U.S. dependence on foreign oil or the price of gas.
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This is in the preemptive strike category. It seems from initial reports that no one bothered to notice that half of this quarter’s GDP growth (1.6 percentage points) was driven by inventory accumulation. If we pull out inventories, final demand grew at a 1.6 percent annual rate, almost exactly the same as the 1.7 percent rate in the 4th quarter of 2009 and the 1.5 percent rate in the 3rd quarter of 2009.
In other words, we are still looking at a very weak economy; one far weaker than would be expected coming out of such a severe downturn and one which may not even be growing fast enough to create any jobs at all.
This is in the preemptive strike category. It seems from initial reports that no one bothered to notice that half of this quarter’s GDP growth (1.6 percentage points) was driven by inventory accumulation. If we pull out inventories, final demand grew at a 1.6 percent annual rate, almost exactly the same as the 1.7 percent rate in the 4th quarter of 2009 and the 1.5 percent rate in the 3rd quarter of 2009.
In other words, we are still looking at a very weak economy; one far weaker than would be expected coming out of such a severe downturn and one which may not even be growing fast enough to create any jobs at all.
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It’s possible that he doesn’t know this, but it is what he said. According to the NYT, Volcker said that: “He [Volcker] and other speakers expressed fear that without some action in the next year or two that reduces deficits for decades to come, interest rates could spike, the dollar could lose value or some other financial crisis would occur.”
A drop in the dollar is the only plausible way to get our trade deficit closer to balance. A large trade deficit, by definition, means that the United States must have low national savings (barring an extraordinary and unprecedented uptick in investment). Low national saving means that we must either have large budget deficits or very low private savings, or some combination. So proponents of a high dollar (like Mr. Volcker) want a large budget deficit and/or very low private savings. It would have been helpful to point this fact out to readers.
It’s possible that he doesn’t know this, but it is what he said. According to the NYT, Volcker said that: “He [Volcker] and other speakers expressed fear that without some action in the next year or two that reduces deficits for decades to come, interest rates could spike, the dollar could lose value or some other financial crisis would occur.”
A drop in the dollar is the only plausible way to get our trade deficit closer to balance. A large trade deficit, by definition, means that the United States must have low national savings (barring an extraordinary and unprecedented uptick in investment). Low national saving means that we must either have large budget deficits or very low private savings, or some combination. So proponents of a high dollar (like Mr. Volcker) want a large budget deficit and/or very low private savings. It would have been helpful to point this fact out to readers.
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Just about the whole economics profession missed the housing bubble that sank the U.S. economy. Fortunately for them, economics is not a profession where performance matters. The “experts” who completely missed the largest economic disaster in 70 years are still the sole source for the overwhelming majority of news stories on the crisis.
This is especially painful in coverage of the Greek and now larger euro crisis. Those of us who read Keynes (a group which should include all economists, but apparently excludes nearly all media “experts”) know that the problem is that the European Central Bank has to make more money available to its members to get through this crisis. While many governments hold superstitions about the benefits of rain dances and the causes of inflation, there is no basis for concern that printing money will cause inflation in the current economic situation.
The story that reporters should be writing that is that the superstitions of many European governments (with Germany topping the list) are needlessly inflicting pain on tens of millions of people across Europe. Ironically, these superstitions may ultimately have a severely negative effect on Germany’s economy as well.
Economists who are not clueless about this crisis could explain this situation to readers. It is unfortunate that most major media outlets have chosen to rely exlcusively on economists who are.
Just about the whole economics profession missed the housing bubble that sank the U.S. economy. Fortunately for them, economics is not a profession where performance matters. The “experts” who completely missed the largest economic disaster in 70 years are still the sole source for the overwhelming majority of news stories on the crisis.
This is especially painful in coverage of the Greek and now larger euro crisis. Those of us who read Keynes (a group which should include all economists, but apparently excludes nearly all media “experts”) know that the problem is that the European Central Bank has to make more money available to its members to get through this crisis. While many governments hold superstitions about the benefits of rain dances and the causes of inflation, there is no basis for concern that printing money will cause inflation in the current economic situation.
The story that reporters should be writing that is that the superstitions of many European governments (with Germany topping the list) are needlessly inflicting pain on tens of millions of people across Europe. Ironically, these superstitions may ultimately have a severely negative effect on Germany’s economy as well.
Economists who are not clueless about this crisis could explain this situation to readers. It is unfortunate that most major media outlets have chosen to rely exlcusively on economists who are.
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