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Author Archive | Dean Baker

Martin Feldstein Strikes Out Again: Big Time

Harvard economics professor Martin Feldstein, who made himself famous by predicting in 1993 that Clinton tax increases would not raise any revenue, strikes out big time in his proposal for the housing market in the New York Times.  He tells readers: House prices are continuing to fall because of the wave of foreclosures; That consumers […]

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Growth in Healthcare as Percent of Total Job Growth, 2006-2011

Health Care Employment Drives Weak Job Growth

The Labor Department reported that the economy added 103,000 jobs in September.  This increase, together with upward revisions to the prior two months’ data brought average job growth over the last three months to 99,000 per month, almost exactly the number needed to keep pace with the growth of the labor force.  Consistent with this […]

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Overall Vacancy Rate, 1991-2011

House Prices Have Another Strong Increase in July

The Case-Shiller 20-City index rose 0.9 percent in July after rising by 1.1 percent in June.  It has now increased at a 13.1 percent annual rate over the last three months; although it is still down by 4.1 percent over the last year.  Eighteen of the 20 cities had prices increases, with only Phoenix and […]

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Why Do the Bankers Decide How Many People Will Be Unemployed?

The Federal Reserve Board’s Open Market Committee (FOMC) met today and decided on a modestly expansionary monetary policy.  It decided to unload $400 billion worth of short-term assets over the next 9 months and replace them with longer-term government bonds.  The idea is that this would place some downward pressure on long-term interest rates. The […]

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Work Sharing Should Be Part of the President’s Job Program

It is encouraging that President Obama recognizes his obligation to take steps to restore the economy to full employment.  The government alone has the power to lift the economy out of this downturn.  Eventually, the private sector will be able to absorb the unemployed, but there are no remotely plausible projections that show private sector […]

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The Canadian Oil Pipeline: Good for 2 Days’ Worth of Jobs

Robert Samuelson urged President Obama to support the building of an oil pipeline to Canada which would facilitate the import of oil from Canadian oil sands.  One of his arguments is that: “TransCanada, the pipeline’s sponsor, says the project should result in 20,000 construction and manufacturing jobs.  Most would be American, because 80 percent of […]

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The Morality of the Other Side in the Class War

The Washington Post and Robert Samuelson did their part in publicly passing along the marching orders from the rich and powerful to Ben Bernanke and the Federal Reserve Board.  The word from these folks is “No Inflation!”  If that means millions more people will suffer unemployment for a few more years, that’s a price that […]

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What Does S&P’s Downgrade of Japan’s Debt Mean?

The New York Times reported on S&P’s downgrade of Japanese government debt to the 4th highest level.  It explained the downgrade by noting Japan’s continued weak growth, political problems, and concerns about deflation.  These are factors that might concern the Japanese public when they vote for their leaders, but it is difficult to see what […]

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Shorter Weeks, Longer Vacations

The United States is suffering the enduring effects of a collapsed housing bubble, not a financial crisis.  This is an important distinction, because it points to the necessity of relying on shorter workweeks and longer vacations to return to full employment. The financial crisis is largely irrelevant to the economy’s current weakness.  The problem is […]

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Productivity Growth, 1995-2011

Productivity, Profits, and Job Growth

An AP article on the latest productivity data from the Bureau of Labor Statistics (BLS) was a bit confused on the relationship between productivity, profits, and job growth.  The article noted the 0.3 percent decline in productivity reported for the second quarter.  This followed a decline of 0.6 percent in the first quarter.  It suggested […]

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On the S&P Downgrade

The decision by Standard & Poor’s to downgrade U.S. government debt reflects its own failings as a credit rating agency.  It says nothing about the creditworthiness of the U.S. government. The Treasury Department revealed that S&P’s decision was initially based on a $2 trillion error in accounting.  However, even after this enormous error was corrected, […]

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