The NYT took the time to point out that if you constructed a price weighted S.& P. 500, instead of the actual capitalization weighted index, it would be about 90 percent above its 2000 peak. This is interesting trivia, but not of any obvious relevance to anything.

It would have been far more reasonable for the NYT to construct an inflation adjusted index, which would show that the S. & P. 500 is still more than 20 percent below its early 2000 peak.

--Dean Baker

The NYT reports that President Bush wants to double the appropriation for treating AIDS in the developing world to $30 billion over the next 5 years. This is an impressive increase, if his successor follows through on it. Of course, its impact will be reduced substantially if the U.S. pushes the use of patent protected brand drugs as opposed to lower cost generics.

It also would be helpful if the article put the numbers in a context that its readers could understand. The $30 billion target is equal to 0.2 percent of projected spending over this period or $20 per person year.

--Dean Baker

That's what David Leonhardt asserted in a column that trashed Lou Dobbs for passing along ridiculous stories about how immigrants are damaging the country. While Leonhardt is right to go after mindless immigrant bashing, that should not be an excuse for a little economic slight of hand.

Economists usually think that an increased supply of an item (e.g. less-educated workers) lowers its price (wage). There is now a large body of economic research that shows that raising the minimum wage has little effect on employment. This means that the demand for labor is relatively unresponsive to changes in wages, which would imply that a relatively small increase in the supply of less-educated workers through immigration would lead to large declines in wages.

The work of George Borjas, a leading expert on immigration, shows wage declines of 7.0 percent, 1.3 percent and 0.5 percent for high school dropouts, high school graduates, and workers with some college, respectively, due to the flow of immigration from Mexico between 1980 and 2000. While Borjas's assessment is disputed by other economists, it is a bit of slight of hand to assert that everyone other than high school dropouts have benefited from immigration.

--Dean Baker

China's government apparently decided that the best way to take some of the air out of its stock market is raise the stock transfer tax from 0.1 percent to 0.3 percent. With the market plunging 6 percent today, it seems like they may be getting what they want.

The idea that stock transfer taxes may be effective bubble therapy is an interesting one. On the face of it, a tax of 0.3 percent on a trade is still very modest. Thirty years ago, before the developments in IT, transactions costs on the NYSE used to average close to 1.0 percent. It's difficult to believe that this had very much effect on share prices. More likely, the decision to raise the tax (like a decision to raise margin borrowing requirements) affects stock prices primarily because it sends a signal to the investors that the government wants share prices to fall and might take other steps to bring about this result.

A stock transfer tax might be a very good idea in any case. Robert Pollin and I did a paper a few years back in which we calculated that a set of financial transaction taxes scaled to a 0.5 percent tax on stock trades (we have scaled taxes on assets like futures and options to avoid gaming), could raise an amount of revenue equal to 1.0 percent of GDP ($140 billion a year). This tax would be hugely progressive, primarily hitting wealthy investors and heavy traders. It would also help redistribute some of the big bucks earned by hedge fund managers. Since the tax would only raise transactions costs back to mid-eighties levels, it's hard to argue that it would cause serious damage to financial markets.

While many prominent economists have endorsed such taxes (e.g. James Tobin, Joe Stiglitz, Lawrence Summers, and of course Keynes), financial transactions taxes almost never get any attention from the U.S. media. The obvious reason is that the big Wall Street folks don't like them and they will never back a political candidate who would support such taxes. In the U.S. political system, the Wall Street crew not only get a veto on what gets considered in Washington, they also get a veto over what the major media will discuss. Too bad the auto workers and the custodians don't have such power.

--Dean Baker

Yep, the good folks at USA Today are it again. They have yet another really scary article on the trillions of dollars of debt that the United States government has incurred.

The article not only fails to put the trillions in any context that would make it meaningful to readers (e.g. express it as a share of future income @ 7 percent), it goes out of its way to use a context that further misleads readers. It tells readers that the debt comes to $516,348 per household. That number would sound somewhat less scary if the article pointed out that by the same methodology, future income comes to more than $6 million per household.

Of course, if the purpose of the article were to convery information, it would point out that the vast majority of this projected burden is attributable to the projected explosion in private sector health care costs. (This fact is noted in a quote from an analyst at the "liberal" Center on Budget and Policy Priorities.) The projections show that if health care costs continue on their projected trend, then it will bankrupt the economy. It will also be really bad for the budget.

There is a powerful lobby (e.g. pharmaceutical companies, insurance companies, and doctors) that don't want to see the health care system reformed. The constituency for retire benefit programs is much less well organized. Therefore USA Today gives us stories like this beating up on retiree benefit programs and largely ignores the incredible inefficiency of the U.S. health care system.

--Dean Baker

Ed Andrews has a very nice piece on efforts by the coal industry to win subsidies for coal liquification. The point is that increased use of coal can make the U.S. more energy independent, but it would also lead to substantial increases in greenhouse gas emissions.

--Dean Baker

A bit more than a decade ago, a group of politicians and economists came up with a backdoor way to cut Social Security. They claimed that the consumer price index (CPI) overstated the annual inflation rate by more than a full percentage point. This mattered for SS because after retirement, benefits are indexed to changes in the CPI. Based on the alleged overstatement, they proposed reducing the annual cost of living adjustment by approximately 1.0 percentage points. This would cut SS benefits by hundreds of billions of dollars over future decades (ignoring compounding, someone who receives benefits for 20 years would see an average benefit cut of approximately 10 percent).

This effort got beaten back for reasons that I have written about elsewhere (see The United States Since 1980) but it seems as though the SS cutting crew may now be missing an opportunity.

The NYT reports that CDs sales are plummeting, down by 20 percent from last year. The reason is that people are getting free music off the web. Well, if people get music for free that they used to pay for, then this is clearly a decline in price. However, the CPI will not pick this up. The CPI is measuring the sale price of CDs, comparing this year's price to last year's price. It is ignoring the fact that people may be getting an even larger amount of music for free than what they buy from the recording industry.

It is possible to design methodologies that would pick up the gains to consumers from getting free music. As a practical matter this would have only a trivial impact on the CPI. (Approximately 0.1 percent of consumer spending goes to buy CDs, so even a 20 percent reduction in purchased music would only imply a 0.02 percentage point overstatement in the CPI.) But a better methodology would make it easier to measure the gains to consumers from the Internet and overcoming the music industry's copyright monopolies. (Similar methodologies could be applied to printed materials, videos, and DVDs.)

--Dean Baker

The Washington Post had a decent article about the budget for the National Institutes of Health is being cut. The article briefly recounts the trend in NiH funding over the last decade and points out that the 2008 appropriation is $28.9 billion.

It would have been far more informative to readers if the article had pointed out that NIH appropriation is equal to approximately 1.0 percent of federal spending or $97 per person.

--Dean Baker

In an editorial calling for companies to voluntarily allow non-binding shareholder votes on CEO compensation packages, the NYT warns that if companies don't allow such votes Congress may force them. It then adds that Congress "is not the place to set corporate salaries."

Of course no one is proposing that Congress would set CEO salaries. Congress is debating a change in the rules under which CEO salaries are set, and in fact Congress is the place that such rules are set. (Sorry NYT editorial writers, they weren't handed down by God.)

The rules of corporate governance are designed to prevent insider abuse. For example, they guarantee the protection of minority shareholders, so that an investor can't gain control of 51 percent of the shares and leave the owners of the other 49 percent with nothing.

Excessive CEO pay is exactly the sort of abuse that rules of corporate governance are intended to prevent. If the current rules are inadequate to accomplish this task, then it is the responsibility of Congress to change the rules so that they do prevent such abuses. This is not interference in corporate governance, it is getting the rules right.

--Dean Baker

It is easy to see what sets the NYT apart from more mediocre publications: its reporters have the ability to read minds.

We see this demonstrated yet again in an article on the Bush administration's opposition to a draft G-8 statement that would call for large reductions in greenhouse gas emissions by 2050. The article tells readers that, "the United States has refused to ratify the Kyoto Protocol because of concerns about damage to the American economy."

It's really great that NYT reporters can know that concerns over the health of the U.S. economy are in fact what motivates the politicians who oppose restrictions on greenhouse gas emissions. Those of us who lack the ability to read minds and must rely on publicly available evidence might think their opposition is attributable to other factors.

For example, the oil, coal, and auto industries, all of whom would see their profits depressed by measures to curb greenhouse gas emissions, are powerful political actors. They give large campaign contributions to members of Congress and presidential candidates. Those of us who don't read minds might believe that the politicians' opposition to reducing greenhouse gas emissions is attributable to a desire to please these powerful special interests.

This explanation seems especially plausible since the same politicians have expressed no concern whatsoever about the lost jobs and damage to the economy resulting from Iraq war spending. Since these politicians don't appear to have any general concern about jobs and the health of the economy it seems peculiar that these factors would suddenly become important in the context of debates over global warming.

Good thing that the NYT reporters can read minds, otherwise people might think that their elected representatives were just tools of special interests.

--Dean Baker

Better late than never, but is it really news that most workers have benefitted little from the country's growth over the last quarter? Apparently, that is what a joint study by the Brookings Institute, Heritage Foundation, Urban Institute and American Enterprise Institute uncovered with funding from the Pew Charitable Trusts. Of course, my former employer, the Economic Policy Instiitute, had been documenting this fact for the last decade and a half in the semi-annual State of Working America.

This distinguished group could get the relationship between productivity growth and wage growth down a bit better if they made a point of adjusting for differences in deflators and using measures of compensation instead of wages.

--Dean Baker

I wonder if the Washington Post would print an article that said that importing shoes and textiles is not about getting lower priced goods, but rather necessary because of domestic shortages. It would make as much sense as its article on H1-B visas in today's paper. This is apparently its anti-market edition, where rising prices (in this case workers' wages) can't be counted on to alleviate labor "shortages."

In spite of its best efforts, the article really does not make much of a case that the purpose of H1-B visas is not to lower wages. Take this quote about H1-B workers from Austin Farshi, an executive at a software company:

"They do the same work Americans do, and they earn the same amount. But they have more technical expertise than many Americans coming out of college, and they see working in this field as a prestigious opportunity instead of taking it for granted. We are getting the best of the best."

Mr. Farshi is saying that he can get Cadillac workers at Chevrolet prices. One can question whether his characterization is accurate, but he is certainly saying that he can get foreign workers through the H1-B program for far less than it would cost him to hire equally productive U.S. workers.

The article also includes the great line that, "contrary to fears that Americans are being displaced, computer and math professions in the United States are at 'virtual full employment,' with jobless rates of 2.4 percent." That 2.4 percent unemployment rate doesn't sound so good when you consider that the unemployment rate for college graduates overall is 1.8 percent. Maybe the techies should have majored in English.

The Post seems determined to try to obscure a relatively simple point. Increasing the supply of skilled workers lowers their wages. This can be explained in exactly the same way as removing tariff barriers on shoes lowers the price of shoes. In both cases there will be benefits to the firms that do the importing/hiring and gains to the economy in the form of lower prices for the goods and services produced. But, it is ridiculous to pretend that the workers who must now compete with lower wage workers do not suffer. That is the way markets work and the Post should stop killing trees to try to convince people otherwise.

--Dean Baker

The Commerce Department reported a 16.2 percent jump in new home sales in April coupled with an 11.1 percent decline in the median price. These data are very erratic, so both numbers should be viewed with considerable skepticism. Most of the news reports seemed to get this fact, although USA Today was perhaps overly cheery with its article headlined. "New Home Sales Jump in April as Prices Dip."

For the record, the sharp fall in prices is the more unusual part of this picture. Clearly part of the story is a regional effect, with the low-cost south reporting a huge 27.8 percent jump in sales. That can have a substantial impact on prices.

--Dean Baker

The Washington Post has a good article about the growing use of earmarks by members of Congress to get funding for pet projects for their states or congressional districts. While the Post is right to draw attention to this abuse of the appropriation process, it badly misleads readers because it fails to put these numbers in a context where they could be understood.

For example, it tells us that Nany Pelosi arranged to get $25 million for a waterfont improvement project for her district. Representative Dana Rohrabacher arranged to get $2.4 billion for 10 Boeing planes that the Pentagon doesn't want. It also notes appropriations of $25 million for spinach, $60 million for salmon fisheries and $5 million for aquaculture.

Whatever the merits of these earmarks, they are not big items in the budget, which the Post could have made clear to readers by putting them in some context. This could be done by either expressing the appropriations as shares of the budget and/or dollars per taxpayers.

So, Speaker Pelosi's waterfront project is equal to 0.001 percent of the budget or 8 cents per taxpayer. If the planes are purchased over a three year period, Representative Rohrbacher's earmark comes to 0.03 percent of projected spending or $8 per taxpayer. The spinach, salmon, and aquaculture are 0.001 percent (8 cents per taxpayer), 0.002 percent (20 cents per taxpayer), and 0.0002 percent (2 cents per taxpayer), respectively.

The public is very badly informed about the budget -- the media bears much of the blame. Is there some reason they refuse to express budget numbers in a way that the typical reader can understand them?

[Correction: This is not a good article. It is good reporting when reporters expose members of Congress of either party abusing their power. On the other hand, it is irresponsible journalism when reporters pass along allegations from obviously partisan sources, without independently verifying them. In this case, the article reports that Pelosi's family stood to directly profit from the waterfromt project based on an assertion that appeared on a Republican website without making an effort to verify its accuracy. Thanks, J.W.]

--Dean Baker

Congratulations to the Wall Street Journal, it was only two months behind CEPR in catching the fact that the Bureau of Labor Statistics' establishment survey is likely overstating job growth, especially in construction.

So, there you have it. You can either read about the economy in CEPR's data bytes, or you can read about it two month's later in the WSJ.

I guess that's why employers are anxious to get Congress to approve the guest worker program. It's so hard to find good help these days.

--Dean Baker

You probably didn't know that Mitt Romney was ill and in need of saving, but of course neither is Social Security, according to the projections from the Congressional Budget Office. But that doesn't stop the Washington Post from talking about "saving federal health and retirement programs from insolvency." The projections show that Social Security will be fully solvent through 2046, with no changes whatsoever. That probably beats Governor Romney's life expectancy at this point. So if the Post is worried about Social Security's insolvency, I guess we all should be worried about Mr. Romney's health.

The article is about Treasury Secretary Henry Paulson's aspirations and accomplishments in his position. In addition to fueling phony fears on Social Security the article also brings back "free trade" and includes warnings of "rising protectionist sentiment." I don't know of any economic theory that shows that protection for items like clothes and cars is more harmful to the economy than the protection that we have for items like physicians' services and lawyers' services, so it's a bit hard to see why the bulk of the public should be concerned if a few other workers are able to secure some of the protection enjoyed by the most highly paid workers.

It would have been useful to point out to readers that Mr. Paulson is apparently quite concerned that some less educated workers might get protection for their jobs, but completely unconcerned about the economic damage caused by the protectionist barriers that keep wages up for highly educated professionals.

--Dean Baker

USA Today decided to get its entry in the summer horror flicks out early, The Return of the Granny Bashers XCIV
tells readers how the affluent elderly are ripping off their children and grandchildren by collecting Social Security and Medicare (ahhhhhhhhhhhhhhhhh!).

This horror story is so chock full of misleading information that it's difficult for this reviewer to know where to begin. Well let's start with the fact that median family income for households between ages 55 and 59 rose by 52 percent over the last 15 years, while median income for families between age 35 and 39 fell by 10 percent. That should make you really mad at the old folks ripping off the young. You'll no doubt get even madder when you find out that high-living old-timers have a median household income of $57,100, while the 35-39 set must struggle by on just $56,900. Is your blood boiling yet?

The main reason for the rise in the income of 55-59 group is a surge in employment rates. This has been driven by the decline in pension coverage and retiree health benefits. Many workers who would have had the option to retire in their late fifties no longer have that option today. USA Today has managed to turn reality on its head.

The older group has seen a larger increase in wealth which is almost entirely due to the housing bubble. This groups owns homes in much higher percentages than younger households and they have held homes through the growth of the bubble, so many have accumulated some equity. Of course, when the bubble bursts, this source of inequality will be largely eliminated.

Outside of their homes, these greedy semi-geezers don't have all that much. According to the Federal Reserve Board's 2004 Survey of Consumer Finance, 53 percent of households between ages 55 to 64 had less than $78,000 in financial assets. This includes all wealth held in defined contribution retirement plans, such as 401(k)s. I doubt that many reporters would view themselves as especially well set for retirement if they had $78,000 in financial wealth to draw upon in addition to their Social Security.

At one point the article warns that Social Security and Medicare have become "a transfer of money from less affluent young people to much wealthier older people." It is true that older people tend to be wealthier than younger people in the sense that they have typically accumulated some wealth, most often in the form of a house, over a lifetime of working. That is how they avoid poverty in their retirement. The median income of the elderly is far lower than for younger households, but the article was clever enough to refer to wealth, not income.

It doesn't look like the crusade against Social Security and Medicare will end any time soon. There are clearly very powerful interests who want these programs gutted. The basic story is very simple. These are very efficient and effective programs that have guaranteed seniors a decent standard of living in their retirement. They have not made anyone rich. Furthermore, they are eminently affordable, if we fix the U.S. health care system. Of course if the political system is too corrupt to reform the health care system, then we will face enormous economic problems, one of which will be paying for Medicare.

Fortunately, the horror story about the U.S. health care system (Sicko) will soon be coming to a theater near you also. That one promises to be a much better and more believable flick.

--Dean Baker

That's the question millions (okay thousands) of NYT readers should be asking of an article that claims employers are now unhappy with immigration bill that they helped craft. The article asserts that employers complain that the bill will not "cure the severe labor shortages they foresee in the coming decade." Unless the reporter who wrote this story has ESP, he does not know what the employers actually foresee. He knows what they claim to foresee, which unfortunately (sorry kiddies) is not always the same thing.

The article could also have benefitted by looking for some independent evidence of these labor shortages. If the kids haven't had food for weeks, then they probably would be pretty skinny. If we have a labor shortage, then we should see rising wages. In fact, in most of the jobs where the country supposedly has labor shortages, wages are stagnant or falling. In other words, we have a lot of really fat kids that haven't eaten for weeks.

It might also have been useful to talk to some representatives of labor, or at least someone who doesn't stand to profit from having an increased supply of cheap labor.

--Dean Baker

On Tuesday I will be giving a couple of talks in the SF area. This is both an advance excuse in case I miss some blogging on Tuesday and Wednesday and also an invitation to any interested BTPers in the area.

At 1:00 on Tuesday I will be speaking on my new book, The United States Since 1980, at Book Passage in Corte Madera in Marin County, at 51 Tamal Vista Blvd, Corte Madera, CA 94925. In the evening (7:30) I will be speaking at the Berkeley Unitarian Universalist Fellowship, 1924 Cedar St. at Bonita, Berkeley. That talk will be about both the new book and the Conservative Nanny State.

--Dean Baker

You can get the latest data on how the U.S. measures up in mandated vacation time and holidays in this new paper by CEPR researcher Rebecca Ray and economist John Schmitt.

--Dean Baker

A NYT article on the opposition to independence among immigrants to Quebec, tells readers that "economists say Quebec has little choice but to embrace the immigrants because of a plummeting native birthrate that would otherwise reduce economic growth." It then cites an economist with the Conference Board of Canada as saying that any growth in the workforce will have to come from immigrants.

There is no obvious reason that Quebec should need growth in the workforce, nor is total GDP growth the normal measure of economic health used by economists. Economists usually consider per capita GDP growth the best first measure of economic growth. If the population grows more slowly, or even shrinks, Quebec residents can still be better off if they have higher per capita GDP growth.

Also, a declining workforce presents no obvious problems because it can be more than offset by even modest rates of productivity growth. It is unlikely that Quebec's demographics will cause the size of the workforce to decline by more than a few tenths of a percent annually. This impact would be dwarfed by the impact of a 1.5 percent annual rate of productivity growth. This means that the province could continue to increase its GDP even if the size of its workforce dwindled.

It is also important to note that Canada is a signatory to the Kyoto agreement which restricts its emissions of greenhouse gases. Meeting its emission targets will be less costly with a smaller population.

--Dean Baker

That's what policy experts say, according to the Washington Post. The context is the proposals that have been put forward to ensure that food products that we import from China and other countries are safe for us and our pets. The point that the article makes is that improved regulation will hurt many importers and probably lead to higher prices.

While that part of the story is accurate, it is ridiculous to conclude that increased regulation will therefore "harm the economy." The economy is harmed when people and their pets get sick or die from eating contaminated food. This harm is real and measurable. People are willing to pay more money for food that will not harm them. For this reason, it is ridiculous to claim that the higher prices resulting from increased regulation will harm the economy, although increased regulation may do serious harm to companies that have profited by importing food of questionable quality.

It is of course possible that regulations go too far -- leading to large costs, with very little benefit in the form of increased safety -- but this article presents no evidence that this is likely to be the case with any new regulations on imported products.

--Dean Baker

The Washington Post had another editorial in which it argued that without immigration, we would face “a critical shortage of low-skilled labor in construction, landscaping, hospitality and other industries.� While I have pointed out the flaws in this reasoning before, clearly the Post’s editorial board is not going to listen to me.

So, Beat the Press has arranged for Thomas Friedman, the New York Times columnist and best-selling author on globalization, to write one of his famous open letters to the Washington Post editorial board, explaining the basic economics at work here.*

Dear Washington Post Editorial Board:

Your lead editorial on the proposed immigration reform (“Trigger-Happy,� 4-19-07;A16) has a serious error in economic reasoning. It notes that the bill contains a set of conditions that must be met before the new guest worker program can be put in place. It then warns that if the flow of undocumented workers is effectively cut off by tightened border measures and other aspects of the legislation, and the guest worker program is not implemented, that there will be “a critical shortage of low-skilled labor in construction, landscaping, hospitality and other industries.�

There is no basis for a concern about shortages in these sectors of the economy. In a market economy like the United States, an inadequate supply of an item (in this case low-skilled labor) leads to an increase in its price. That eliminates the shortage by both increasing the supply and reducing the demand. In other words, if wages for workers in construction, landscaping, and hospitality rose, more people would be willing to take jobs in these sectors. Of course, higher wages would be passed on in higher prices for the goods and services produced by these workers, which would lead to a reduction in demand in these sectors, but there would be no worker shortages.

The logic is the exact same as in any other professional. If we doubled the supply of doctors or journalists though immigration, then we would expect to see the wages in these occupations fall. That would lead to a fall in the price of newspapers and physicians’ services. This in turn would lead to increase in number of newspapers sold and the number of visits to doctors.

As a factual matter, the evidence suggests that there has actually been a glut, not a shortage, of workers in these sectors over the last quarter century. According to data from the Bureau of Labor Statistics the average hourly wage for production workers in construction has fallen by more than 20 percent since 1980, after adjusting for inflation. For retail trade the fall in real wages is more than 19 percent, and for workers in the leisure and hospitality sector the decline has been just under 8 percent. It does not make sense to talk about shortages in sectors in which wages are declining.

I hope that you will be more careful in discussing economic issues in the future.

Sincerely,

Thomas Friedman
Pundit-in-Chief

* Not really.

--Dean Baker

Someone should ask the Post's editorial board that question. The Post's editorial on the new immigration bill comments on the "annual flow of 400,000 to 600,000 low-skilled workers needed to satisfy the demand for labor." Wages in the jobs typically filled by these immigrants (custodians, restaurant workers, nannies) have been stagnant or declining over the last quarter century. To those who believe in markets (which in other circumstances includes the Post's editorial board), this implies that a large flow of immigrants is not needed to fill the demand for labor. Of course, an increased supply of labor will help keep down wages in this sector of the labor market.

--Dean Baker

I was very impressed last week when the Post managed to discuss the trade debate in Congress without once referring to the propsective trade pacts as "free trade" agreements. Unfortunately, the turn to more accurate and neutral descriptions of trade deals has not carried through to other articles. In today's piece on the immigration deal in Congress "free trade" is back.

--Dean Baker

The NYT is apparently on a crusade to tell people that mothers are opting out of the workforce. Three weeks ago it ran an oped by Linda Hirshman warning of the dangers of this trend. Today's paper includes a column that talks about the need for employers to accommodate the growing number of women who opt out and then return to the workforce. This article tells us that "there has been a 6 percent falloff in labor force participation among married mothers, according the Bureau of Labor Statistics []BLS]."

While I see it as a positive development if the workplace becomes more accommodating of the needs of mothers, or families more generally, the basic story about mothers opting out happens not to be true. The BLS did just publish an analysis of the labor force participation of married mothers of infants. This study found a 6 percentage point drop in labor force participation among this group between the 1997 peak and 2005. However, among married mothers overall, the drop was just two percentage points, approximately the same as the decline in labor force participation among women who are not mothers and men.

This topic has been closely examined by my colleague at CEPR, Heather Boushey. The data clearly show that there is nothing here -- there is no trend for mothers, or married mothers, to increasingly drop out of the workforce. Insofar as there has been a decline in labor force participation among mothers it is almost certainly attributable to weakness in the labor market, which has led to a decline in labor force participation for most demographic groups.

Since there is no evidence to support this opting out myth, the question is why does it keep appearing in the pages of the New York Times and other prestigious publications?

--Dean Baker

USA Today treated its readers to a story about the crisis that is coming due to a shortage of utility line workers. According to the article, utility companies won't be able to keep the juice flowing because there aren't enough workers to maintain and repair electricity lines.

Well, in the United States, we have what is called a "market economy." In a market economy, shortages are supposed to lead to an increase in the price of the item that is being inadequately supplied, in this case utillity line workers. This means that we should expect to see sharply rising wages for utlity line workers.

The article tells us that they are relatively well-paid, with an average annual pay of $75,000, but tells us nothing about the rate of increase in this pay. A quick look at pay for utility workers, approximately one-fifth of whom would be line workers, shows that their average hourly pay fell by 1.2 percent in real terms over the last year. It has risen by just 1.0 percent since 2000. While the pay for line workers may be doing somewhat better than the average for utlity workers as a whole, these data imply that line workers' wages can't be rising too rapidly, unless pay for other workers in the sector is plummeting.

In short, there is no shortage of line workers. This sounds like a case where utlity executives have adopted a strategy where they don't want to pay enough to get the necessary workforce, which would lower corporate profit and CEO pay. They will then whine about worker "shortages" when people are forced to go without electricity. The media should be exposing a strategy that is putting the health and well-being of the country in danger, not cooperating with utlity company executives by spreading stories that are clearly not true.

--Dean Baker

I would not suggest that anyone start a hunger strike holding out until the Washington Post prints a column critical of Clinton-Bush trade agenda. Yes, the paper has yet another column pushing this trade agenda today, this one from David Broder, the dean of the Washington press corp.

Broder wants people to move "beyond the old and futile debate between 'free trade' and 'protectionism,'" but not to question why these trade deals subject auto workers' and textile workers' jobs to international competition, but not the jobs of doctors and lawyers. For Broder, trade liberalization means competition for those at the middle and the bottom, while protecting those at the top.

It would be helpful to the Post's readers, and perhaps even more to its columnists and reporters, if it printed a more diverse range of views on this issue.

--Dean Baker

Fareed Zakaria, Robert Samuelson's fellow columnist at Newsweek, joins the choir of trade damage deniers. Zakaria's line is that everything is fine, so why would anyone worry about trade.

To make his case, he tells readers that in the last twenty years "per capita GDP has roughly doubled." (Measured in 2000 dollars, per capita GDP rose from $25,382 in 1985 to $37,241 in 2005, an increase of 46.7 percent.) He notes the "stunningly low" 4.4 percent unemployment rate, and that "the median income of a family of four rose 23 percent between 1985 and 2005." Those less interested in cherry picking family types might have simply noted that the median family income rose by just 17.1 percent from 1985 to 2005. This increase is well below the 31.5 percent gain of the previous twenty years, and way below the 74.6% gain in the last two decades of the golden age, 1953-1973.

Of course, there are issues of family size, and also the fact that much of these income gains result from more workers per household. If Mr. Zakaria wanted a measure of income growth that is independent of these problems, then he could have chosen to look at median wages. The median hourly wage rose 9.8 percent from 1985 to 2005. This is equal to about 5 years of wage growth during the golden age.

If the point is that things could be worse, few would argue otherwise, but to claim that things are going great and that most of the population is seeing substantial benefits from the pattern of growth over the last quarter century is ridiculous. The typical worker has seen less progress in the last quarter century than in any comparable period in U.S. history. If Mr. Zakaria and Newsweek expect to be taken seriously in debates over trade, acknowledging reality would be a good place to start.

--Dean Baker

Washington Post columnist Robert Samuelson tells us that he can't find evidence of large-scale job loss due to offshoring, therefore it must not be there. He cites a study from the Institute for International Economics (IIE) that examined the 1 million jobs reportedly lost in large-scale layoffs in 2004-05. According to Samuelson, the study found that in just 4 percent of the cases was offshoring listed as the reason for the layoffs.

This is truly bizarre. The other reasons given for layoffs were factors like "contract completed," "downsizing," and "financial difficulty." I'm not sure how Samuelson or the author of this study thinks the economy works, but this analysis hardly counts as evidence that offshoring is not causing job loss.

Suppose the company that laid off workers because its contract was completed didn't get a second contract because it lost business to a company that depended on imported goods. Isn't this job loss due to offshoring? Suppose a company is downsizing because it is losing business to imports. Isn't this job loss due to offshoring? Suppose a company is in financial difficulty because it is being outcompeted by foreign producers. Isn't this job loss due to offshoring?

There is a reasonable debate about the plusses and minuses of increased trade over the last quarter century, but to argue that many people have not lost jobs and suffered pay cuts due to trade seems ridiculous on its face. I realize that there are powerful interest groups that don't want to have a serious public debate on trade and they can pay for lots of studies to obscure the issue. (If these folks had been around in Medieval Europe, they would have paid the economist equivalents of the day to write studies showing that the Bubonic Plague was rare and harmless.) But when imports account for 16 percent of GDP, it's ridiculous to argue that trade doesn't have a substantial impact on the domestic labor market.

--Dean Baker

The NYT article on the release of the April CPI notes the moderate 0.2 percent rise in the rental indexes,
prompting the comment from Ken Mayland, President of ClearView Economics, "The question that raises is whether the big cyclical downturn in the housing industry is finally cooling shelter costs.�

This comment is a bit peculiar. Rental prices never rose much more than inflation over the last decade and have generally trailed the overall rate of inflation over the last four years. It was sale prices that had soared. Economists typically expect the two to follow the same general path. The story of the bubble is the sharp divergence between sale prices and rent over the last decade, which indicates that sales prices were not being driven up by fundamental factors in the housing market.

--Dean Baker

Arghhhhhhhhh! Come on folks, isn't it obvious that the National Association of Realtors (NAR) is in the business of selling houses? This means that when their "experts" give their assessment of the housing market, it comes with a certain bias.

David Lereah, the former chief economist of the NAR has moved on to greener pastures, but it seems that the media are still treating statements from the NAR with the exact same lack of scrutiny as before. USA Today ran an AP story in which the only expert cited was Pat Combs, the president of the NAR and the vice-president of Coldwell Banker-AJS-Schmidt.

--Dean Baker

That is not the name of Bono's organization, but perhaps it should be. The NYT devoted an article to the Irish rock star's complaints about “a particular crisis of credibility� among wealthy countries who have not carried though on their commitments to help poor countries. Such words are especially ironic coming from Bono. He became a Dutch citizen a few years back to take advantage of a provision in the Netherlands tax code that applies a very low tax rate to royalty income.

It is good to see the NYT devoting attention to the important issue of helping the world's poor, but there are many individuals and organizations that are engaged in this task who both have more expertise than Bono and don't have the same issues of credibility. The space probably could have been better used presenting the views of Joe Stiglitz or Jeffrey Sachs or Doctors Without Borders, rather than a multi-millionaire rock star who apparently believes that others should pay the taxes for what he considers an important moral committment.

NOTE: I stand corrected on Bono's change of citizenship. He established a Netherlands' based corporation that owns the rights to his music. This allows him to pay a much lower tax rate on royalties. However, he remains an Irish citizen (thanks Steve). Whether this tax evasion scheme makes him ineffective as an anti-poverty pitchman is an empirical matter. Clearly Bono had been very effective. Whether he will be in the future remains to be seen. Note that the article is about his complaints that rich countries aren't carrying through on their commitments. I am not sure that he is helping to increase the probability that they will.

--Dean Baker

http://online.wsj.com/article/SB117910010258001458.html?mod=home_whats_news_usThe Wall Street Journal reports that foreclosure rates have more than doubled between the first quarter of 2006 and the first quarter of 2007 in Los Angeles and several other major California cities. As a result, foreclosed houses are being sold at auction for prices far below recent market levels.

It would have been helpful to include comments from David Lereah the chief economist of the National Association of Realtors and the author of the 2005 best seller, Why the Real Estate Boom Will Not Bust and How You Can Profit From It. Mr Lereah is often cited in articles on real estate as an expert on the housing market.

--Dean Baker

The NYT has an article that seems to express surprise at the fact that the fall in the value of the dollar has helped to lower the size of the trade deficit. It notes that the fall in the value of dollar has helped to boost exports, commenting at one point:

"Rather than hurting many American companies, a weak dollar is actually providing a strong lift. The exchange rate difference stokes profits from earnings generated abroad, countering the adverse effects on importers who must pay more and Americans traveling abroad with a less valuable currency in their wallets.

'The old notion that if the dollar’s bad, corporate profits have to go down is no longer correct,' said Howard Silverblatt, a senior analyst at Standard & Poor’s."

Of course the fall in the dollar is helping the trade deficit. It is hard to believe that any economist would argue otherwise. Conversely, the run-up in the dollar in the late nineties is the reason that our trade deficit exploded. This is all very basic economics. It's not clear what the news in this article is.

--Dean Baker

The Post headlined an article "Venezuelan Oil Losing Share of Key U.S. Market," with the implicit suggestion that this poses a serious problem for the Venezuelan oil industry. The data in the article don't quite fit the headline. The reason that Venezuela has lost market share over the last decade is that U.S. oil imports have risen by almost 50 percent, while Venezuela's exports have been almost flat.

In fact, since the main reason for rising imports has been declining domestic production, the share of Venezuelan oil in U.S. consumption has changed little over the last decade. I'm not sure that anyone in Venezuela is actively thinking of the impact of a cutoff of exports to the U.S. (obviously a cutoff would hurt both countries, but the U.S. can buy oil elsewhere and Venezuela can sell oil elsewhere), but since the relevant factor is the share of Venezuelan oil in U.S. consumption, not imports, the dependence of the U.S. on Venezuelan oil has not changed appreciably.

--Dean Baker

The new data on retail sales should give us grounds for concern. The issue here is the Bureau of Labor Statistics' imputation of jobs for new firms that are not included in the survey. This imputation was was very large in April, 317,000 to be exact. Since the establishment data showed a net gain of 88,000 jobs, this means that survey actually showed a loss of 229,000 jobs.

In fairness, most of this imputation is due to seasonal factors. Many new businesses open or expand in the spring. But, the imputation was 46,000 larger than in April of 2006 when the economy seemed to be growing considerably more rapidly by most measures.

One area that seems especially suspicious is restaurant employment. There was an imputation of 95,000 new jobs for the larger leisure and hospitality sector, which includes restaurants. The restaurant sector itself showed a gain of 25,000 jobs in April. Since the retail sales data from the Commerce Department show a nominal decline in sales of 0.1 percent from March to April, it seems implausible that the sector added 25,000 workers. Over the last year, restaurant sales are up by 4.9 percent in nominal terms, which translates into 1.6 percent real growth. (Inflation for food away from home is reported at 3.3 percent.) This seems hard to reconcile with the 336,400 jobs reportedly added to the sector, a gain of 3.6 percent.

The moral of the story is that it seems likely that the economy has hit a turning point, which causes the new jobs imputation to overstate job growth. Actual job growth is likely somewhat slower than reported growth. Since reported growth is already quite weak, actual job growth may now be close to zero, at least in the private sector. Of course, the good news is that productivity growth is somewhat higher than is being reported.

--Dean Baker

Give the Washington Post an "A." It was able to report on the agreement between President Bush and Congress on the groundrules for future trade pacts without once using the term "free trade" except when referring to the name of trade deals. The New York Times get a "B+," using the term just once in a somewhat lengthy article. The Wall Street Journal gets an "F," trotting out "free trade" in the very first paragraph.

As BTP regulars know, these deals are not about free trade. Professionals like doctors and lawyers will still be protected and the deals increase protectionism in the form of patent and copyright protection.

--Dean Baker

The WSJ article should be encouraging news to those who don't know anything about the record of the experts in forecasting recessions. In the fall of 2000, not one of the Blue Chip 50 forecasters predicted the recession in the next year. In fact, in December of 2000, the average growth forecast for 2001 by the economists surveyed by the Philadelphia Fed was 3.3 percent. Actual growth for the year was 0.8 percent.

As we always say in the nation's capital, better right than expert.

--Dean Baker

That's what the NYT told readers. I am sure there are good grounds for criticizing Tony Blair's economic record. It looks to me like the country has a serious housing bubble, the deflation of which could be very bad news for his successor and the country. But, I can't imagine anyone who doesn't have a high paying job in the financial sector getting worried about inflation that is running at a 3.0 percent annual rate (actually considerably lower in the last quarter).

--Dean Baker

The economics profession has produced endless studies estimating the losses from 10 percent tariffs on shoes and 15 percent tariffs on shirts. They have worked hard to ensure that all right thinking people believe that such barriers to trade are crimes against humanity.

For some reason economists don't show the same zeal in documenting the costs associated with patent protection for prescription drugs. This patent protection typically raises the price of drugs by several hundred percent above the competitive market price, often the price increases are several thousand percent above the free market price.

As economsts know, the monopoly profits created by this sort of government intervention also provide enormous incentives for corruption. For example, they provide incentives for drug companies to give kickbacks to doctors for prescribing their drugs in cases in which they may not be helpful or may even be harmful.

The NYT reports on one such case, in which doctors who prescribe antipsychotics for off-label uses on children were paid substantial fees for giving lectures to other doctors. If would have been helpful if the article had gotten an economist to explain that such behavior is a predictable result of government granted patent monopolies.

--Dean Baker

According to the NYT, Massachusetts has started a new research program that will provide $1 billion over 10 years (@$16 per person per year) to finance stem cell research. The article does not tell readers what will happen to the patents that result from this research.

This is a big issue. If the researchers or the companies that carry through the research are allowed to keep the patents, then Massachusetts has just announced a big give away to these people and corporations. While biomedical researchers and corporations are undoubtedly quite worthy, it's not clear that they need public subsidies more than the custodians and waitresses who pay the taxes.

The article should have told readers whether this funding proposal is yet another welfare program for the wealthy.

--Dean Baker

The economics profession has produced endless studies estimating the losses from 10 percent tariffs on shoes and 15 percent tariffs on shirts. They have worked hard to ensure that all right thinking people believe that such barriers to trade are crimes against humanity.

For some reason economists don't show the same zeal in documenting the costs associated with patent protection for prescription drugs. This patent protection typically raises the price of drugs by several hundred percent above the competitive market price, often the price increases are several thousand percent above the free market price.

As economsts know, the monopoly profits created by this sort of government intervention also provide enormous incentives for corruption. For example, they provide incentives for drug companies to give kickbacks to doctors for prescribing their drugs in cases in which they may not be helpful or may even be harmful.

The NYT reports on one such case with anemia medications in the paper today. A very good article would have been even better if the reporters had gotten an economist to explain that such behavior is a predictable result of government granted patent monopolies.

--Dean Baker

The NYT tells us about the battle among House Democrats over trade policy and some of the comments attributed to the "free trade" side are absolutely bizarre. For example, Washington representative Jim McDermott reportedly "believes many voters are 're-evaluating' the idea that 'everybody wins with trade.'"

Huh? "Everybody wins with trade," who ever said anything as ridiculous as that? This is certainly not the trade theory that economists preach (when they are honest). The theory is that trade producers winners and losers. If we subject our autoworkers to competition with low paid workers in the developing world, then they will be losers. Carbuyers will be winners because cars will cost less. If we subject our doctors to competition with low paid workers in the developing world, then they will be losers. Patients will be winners because healthcare will cost less. The standard trade models claim that the winners will gain more than the losers lose, but it surely does not say that everbody wins. Doesn't an "internationalist" like Jim McDermott know this?

It would have been helpful to include the views of an economist on Mr. McDermott's remarks.

--Dean Baker

BTP is back after the gods of cyberspace silenced it for the weekend. I'll start with leftover business from the weekend. Alan Blinder, a Princeton University professor and former Clinton administration economist, had a lengthy piece in the Washington Post Outlook section that told readers that offshoring "rattles" him. After reading this, and other pieces Blinder has written on the topic, I am still at a loss to understand what he finds rattling.

It is important to keep in mind that Blinder is not retreating an inch from his support of free trade, as he clearly states in the column and the title, "free trade's great, but offshoring rattles me." Offshoring appears to be rattling because it is not just less educated people like manufacturing workers who lose their jobs due to offshoring, but also some highly educated workers like software engineers.

But where is the problem here for a committed free trader? We told the autoworkers and textile workers who lost their jobs or get lower wages because of trade that life's tough, get used to the global economy. Is there any reason that we should treat more highly educated workers differently? After all, who should be better prepared to compete in a global economy than a person with an advanced degree in a cutting edge field?

Blinder's answer on this one is especially peculiar. He wants us to train workers for highly skilled occupations that require face to face contact, like brain surgeons and divorce lawyers. He argues that these workers will not have their wages depressed by direct competition with their counterparts in the developing world. But, this is clearly a policy choice and one that is very hard to justify for any economist committed to efficiency and equality.

After all, we quite deliberately put many workers who do jobs requiring face to face contact into direct competition with low wage workers in the developing world. We do this by bringing in immigrants to work as dishwashers, custodians, and nannies and many other low paying occupations. The economic gains from having well-qualified immigrants from the developing world also work as brain surgeons and divorce lawyers would be enormous, as Mr. Blinder surely knows. So, why would he advocate subjecting workers in low paying occupations to competition from workers in the developing world, while protecting U.S. workers in the most highly paid occupations. That sounds like a policy intended to promote inefficiency and inequality.

BTP eagerly awaits explanations for why this free-trader is so explicitly embracing protectionism.

--Dean Baker

The web wizards at the American Prospect are overhauling the website at present. So save those brilliant insights. A new and improved Beat the Press site will be up and running on Monday morning.

--Dean Baker

The articles reporting on first quarter productivity told us that it was better than it expected, coming in at a 1.7 percent annual rate. Count me among the surprised. I was expecting a number close to 0.5 percent based on 1.4 percent growth in output and a 1.0 percent increase in hours worked.

The Bureau of Labor Statistics now reports that hours worked fell at a 0.3 percent annual rate in the first quarter. This is possiible given their methodology, because BLS takes hours for the self-employed from the Current Population Survey, and this data is extremely erratic. As a practical matter, it is not likely that hours actually fell at a 0.3 percent rate in the quarter, and it would not be good news if they did. Look for a sharp jump in reported hours in the second quarter and a very weak productivity number.

--Dean Baker

The Post editorial on a bill that would authorize drug reimportation suggests that they don't. The Post tells readers that if people in the United States started importing more low priced drugs from Canada, the drug companies would stop selling their drugs to Canada at low prices.

Perhaps, but is that the end of the story? If Post editors followed the news they would know that the Thai government has recently issued compulsory licenses on a number of important drugs, essentially reducing their price to generic levels. Brazil is planing to follow suit with an important AIDS drug. So, if the drug companies tell Canadians that they must now pay twice as much for their drugs, Canadians could just shell out the additional money to Pfizer, Merck and the other big drug companies, or they could follow the lead of Thailand and Brazil and issue complusory licenses for important drugs.

While the Post's editors may think that they know Canadians will just accept higher drug prices, they also thought that there were WMDs in Iraq. I will be a bit rude here. (The Post just printed a letter that implied that CEPR propagandizes on behalf of labor unions in exchange for their financial support. In fact, we do not currently get any funding from unions and union contributions never accounted for more than a tiny share of our budget.) The Post receives hundreds of thousands of dollars (perhaps millions) each year in advertising revenue from the pharmaceutical industry.

Reimporting drugs from Canada is a very backward way to address the problem of high drug prices in the United States. But, it can help undermine an antiquated and inefficient system that badly needs to be reformed. Unfortunately, the industry is so powerful it has effectively kept serious proposals off the table (e.g. the Free Market Drug Act). To change the situation, we will need more facts on the ground (like drug reimportation) that press the case for real reform.

--Dean Baker

There's a small group of people in the United States who follow house prices. According to an obscure discipline known as "economics," an excess supply of an item usually leads to a reduction in price. A little known government agency, the "Commerce Department," reported last week that the vacany rate for ownership units hit yet another record high in the first quarter.

The vacancy rate for ownership units inched up from 2.7 percent in the fourth quarter to 2.8 percent in the first quarter. It had never hit even 2.0 percent until the fourth quarter of 2005. The vacancy rate for rental housing also rose to 10.1 percent, just 0.3 percentage points below the all-time high in the first quarter of 2004.

As best I can tell this release got no coverage at all in the media, probably because the public has so little interest in housing prices.

--Dean Baker

The Post ran a good follow-up story today, telling readers about Circuit City's latest business problems. It seems that its sales of big ticket items have plummeted. Undoubtedly part of the decline is attributable to a general weakening of the economy. But part of the falloff is likely attributable to factors specific to Circuit City, like its decision to fire 3,400 more senior sales clerks and replace them with lower paid new hires.

Circuit City basically advertised to the country that you should not go to Circuit City if you want to talk to a sales clerk that knows anything about the products they are selling. Since one of the main reasons that people go to stores, rather than buy electronic items over the Internet, is to talk to someone who is knowledgeable about the products, the mass firings took away one of Circuit City's main selling points.

While it may be too early to make any final judgments, it will be interesting to see what happens to Circuit City's CEO. Those who say that the huge salaries earned by CEOs are justifed, argue that the returns that a good CEO brings to shareholders dwarf their salary. In this case, a CEO made a decision that not only had a very bad impact on the lives of 3,400 employees, but also may have cost the stockholders lots of money. (It is unlikely that any of the 3,400 fired workers would have made such a foolish decision, if they ran the company.) It will be interesting to see what happens to Circuit City's CEO, and how much money he walks away with, if its current sales path continues. Let's hope the Post stays with the story.

--Dean Baker

Diane Rehm often has very good shows with guests who present clearly distinct political perspectives. However, when it comes to talking about the problem posed by the budget deficit, balance is thrown out the window. Yesterday, she had investment banker Robert Hormat present a diatribe about the need to eliminate the budget deficit. There were no alternative views presented.

In past shows, investment bankers Pete Peterson and Robert Rubin have been given the same opportunity. David Walker, the Comptroller General of the Government Accountability Office, was also given the opportunity to complain about the looming deficit disaster without any dissenting views. I suspect that there have been other solo appearances by deficit hawks, but these are the ones that I have happened to stumble on.

As BTP regulars know, the basic story is that future deficits will be easily manageable if we fix our health care system. The projections for dangerous deficits in future years are driven entirely by projections that private sector health care costs will explode. If this explosion occurs, then the economy will be devastated regardless of what we do with public sector health programs. So, the real moral of the story is that we badly need to fix the health care system, not that we have a budget problem.

Given the basic facts, it is understandable that the deficit hawks would want to appear unchallenged. But this is a bad use of public radio. If the deficit hawks don't think that they can defend their position in open debate, then they should be forced to sharpen their arguments until they gain more confidence, not given the opportunity to spew for an hour without any opposition.

--Dean Baker

Yeah, that would not be news to any economist, but why is the negative impact of military spending on the economy never raised in political debates? President Bush has said that he won't do anything serious to reduce greenhouse gas emissions because it would hurt economic growth, and that was the end of his discussion. But, for some reason, the fact the jobs the growth and jobs that are lost because of his wars is never even raised as an issue.

CEPR commissioned Global Insight (formed by the merger of WEFA and DRI, two of the country's oldest econometric forecasting firms) to simulate the impact of an increase of defense spendning equal to 1 percent of GDP (approximately the increase associated with the wars). The model shows that after an initial stimulus, the impact of higher spending turns negative around the 6th year. By the 10th year, payroll employment is down by 460,000 jobs, By the 20th year, it is down by 670,000. The construction and auto industries are the hardest hit sectors. Higher defense spending is also projected to lead to a larger trade deficit. The cumulative increase in the trade deficit over the 20-year period is more than $1.8 trillion (2000 dollars).

--Dean Baker

I always ask for the impossible. Anne Applebaum had a column in the Washington Post celebrating the fact that Europeans are now freely moving across national borders. She sees this free movement of people as victory over French unions and Polish bureaucrats.

The Europeans can decide for themselves how much freedom of movement across borders they want, but there is something infuriating about someone who benefits from the lack of this freedom in the United States ridiculing those who want similar protection for themselves.

Suppose I set up the Washington True Scoop across the street from the Washington Post, and hired smart English speaking reporters and columnists from the developing world at salaries in the $20k-$30k range. Since this would be a very good wage for a reporter from the developing world, I am sure that I would have no problem staffing it with people who are far smarter and more qualified than the folks currently at the Post.

It may take them a few months to get fully up to speed in Washington, but with the money that I saved on paychecks, I could easily get by with a training period. I could then hugely undercut the Post on ad rates and newspaper prices. Folks like Anne Applebaum would either have to take big pay cuts or look for a new line of work.

But, this won’t happen because I would get thrown in jail for setting up the Washington True Scoop. It is illegal to hire reporters and columnists without some pretext of paying them the prevailing wage. You can only do that if you’re hiring dishwashers and custodians, people like Anne Applebaum are protected from international competition.

It is a bit disgusting to see people like Anne Applebaum, Thomas Friedman, Sebastian Mallaby, David Brooks and hundreds of others, trash workers for wanting the government to protect jobs that offer far more modest income and benefits than this group of columnists receive. When we see the columns and editorials demanding that I be allowed to open the Washington True Scoop and that the protections for highly paid professionals be eliminated, then we can take “free traders” seriously. Until then, everyone should call these folks what they are, “protectionists.”

--Dean Baker