Dean Baker

Recent Articles

Surging Homes Sales? Seasonal Adjustments, Please

The NYT told readers that home sales are surging in advance of the April 30th expiration of the extended first-time homebuyers tax credit. While it is reasonable to expect somewhat of a surge, there is actually very little evidence of one this far. The Mortgage Bankers Association mortgage applications index has been running substantially below last year's depressed levels. The vast majority of homebuyers will be taking out mortgages, so if this index is depressed, it suggests that there is not yet any surge in buying. The evidence presented in the article is that home sales in several cities were considerably higher in February than January. This is not evidence of an upturn in sales. This is a normal seasonal pattern, as home sales bottom out in the winter. (It is possible that the data presented in the article is seasonally adjusted, although the piece does not indicate that it is.) --Dean Baker

Exploding Health Care Costs: Can Someone Tell the NYT About Something Called "Patents"?

The NYT discussed concerns that the new health care bill will do little to address the problem of overuse of certain medical procedures that drive up costs. Remarkably, the article never discusses patent monopolies, which are a major factor driving up costs and excess use. Patents lead to excess costs for two reasons. First, by granting monopolies, patents push up the price of many drugs and medical equipment by several thousand percent above their marginal cost. This is especially true of drugs, almost all of could be profitably sold for just a few dollars a prescription in a free market. The other reason that patents drive up costs and lead to misuse is that the rents provided by patent monopolies provide an enormous incentive for manufacturers to mislead patients and doctors and push their products in cases where they may be inappropriate. In pursuit of patent rents manufacturers spend an enormous amount of money marketing their products and often conceal information that reflects...

Beat the Press Coming Home to CEPR's Website

On April 1, 1996, way before anyone heard of a blog, Beat the Press began as a weekly commentary called "Reading Between the Lines" on the Economic Policy Institute's website. I started writing it because I felt that major media outlets were often obscuring rather than explaining major economic issues. Since then BTP has gone through many format and name changes. When Mark Weisbrot and I founded the Center for Economic and Policy Research over 10 years ago, it moved with me and was renamed the "Economic Reporting Review," or ERR (the acronym was not an accident), and in its tenth year BTP got its current name, became a daily blog, and joined the Tapped lineup at The American Prospect. I want to express my gratitude to TAP for hosting Beat the Press and exposing it to its well-informed and thoughtful readership over the past four years. On April 1, 2010, its 14th anniversary, Beat the Press will be coming home to the Center for Economic and Policy Research's website. Again, I'd like to...

Post Uses Xenophobia to Advance Its Budget Agenda

The Post once again used xenophobia to push its budget agenda as editorial page editor Fred Hiatt darkly warned readers that as a result of projected future budget deficits: "the United States would be increasingly at the mercy of China, Saudi Arabia and other lenders." Of course, as every econ 101 student knows, budget deficits do not determine the indebtedness of the U.S. to foreigners, the trade deficit does. The trade deficit in turn is the result of an over-valued dollar. The Post has actually been a supporter of the "strong dollar" policy that has given the U.S. high trade deficits. So, when it comes to the policy that actually puts us "at the mercy of China, Saudi Arabia and other lenders," the Post has been on the wrong side. It is also worth noting that the protectionist policies that the Post supports are a big factor in the deficit. If the U.S. allowed freer trade in health care services, especially the provision of Medicare , it could lead to enormous savings for the...

Did the Federal Government Make Money Bailing Out Citigroup?

The Washington Post is anxious to tell its readers that the government made a profit on its bailout of Citigroup. This claim gives a whole new meaning to the notion of "profit." The government gave enormous amounts of money to Citigroup through various direct and indirect channels. It is only getting a portion of this money back in its "profits," the rest is going to Citigroup's shareholders (e.g. Robert Rubin) and its millionaire executives who are highly skilled at getting the government to hand them money. First, it is worth noting how the government got the shares of common stock which it is now selling for a profit. On November 23, 2008, the government bought $20 billion in preferred shares in Citigroup. It also received another $7 billion in preferred shares in exchange for guarantees on $300 billion in bad assets. At the time, the combined value of the investment in preferred shares and the guarantee on bad assets exceeded the full market value of Citigroup stock on November...

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