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Home Publications Blogs Beat the Press NYT Uses Conservative Talking Points In Its Analysis of Obama's Economic Performance

NYT Uses Conservative Talking Points In Its Analysis of Obama's Economic Performance

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Thursday, 20 January 2011 10:16

The NYT Magazine piece providing the inside story on President Obama's economic team in his first two years is littered with conservative talking points. For beginners we get the hoary myth that businesses are not hiring because they are "uncertain about government policy."

While businesses like to blame uncertainties over tax policy or regulation, there is zero evidence to support this assertion. If firms were seeing demand for labor that would cause them to hire, except for their uncertainty, then we should expect to see large upticks in average hours per worker and increased hiring of temps. In fact, average weekly hours is still down from its pre-recession level. Temp employment is down almost 15 percent from its pre-recession level. This suggests that the problem is lack of demand pure and simple, not uncertainty about regulation and taxes.

It is also worth noting that investment in equipment and software has been rising at almost a 20 percent annual rate over the last four quarters, so it's not accurate to say that businesses are not investing. It is also important to recognize that this component of the economy is only 7 percent of GDP, so if Obama's economic team is counting on business investment to boost the economy out of its slump, they are not very good at arithmetic.

The second business myth is the assertion that trade: "represents one of the 'solutions on the cheap' the president wanted, a way of promoting growth without deficit spending." This comment is made in reference to the South Korea trade agreement. In fact, in both theory and practice these trade deals are projected to have a minimal effect on jobs. U.S. trade deficits have in fact risen with many countries, such as Mexico, following the signing of trade agreements, meaning that they have been in the short-run job losers, not job gainers.

Finally, the piece tells readers that:

"Republicans have made shrinking government the core of their economic message."

Of course they are not really for shrinking government. Most of the Republican leadership supported the bank bailouts. They also support strong patent and copyright protection, which would have the government policing every aspect of people's lives. (One effort at copyright enforcement sought to make the Girl Scouts pay for the songs they sing around camp fires.) The Republicans also supported the 2005 bankruptcy reform that would have the government provide business with a much greater role in acting as a bill collector. The reality is that the Republicans are not interested in shrinking the role of government, even if this is what they say. They are interested in shrinking the government functions that help low and middle income people.

Comments (7)Add Comment
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written by fuller schmidt, January 20, 2011 11:45
Most politicians and media are about as deep as teenage boys.
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written by Chris, January 20, 2011 11:53
Great analysis. As an econ student I particularly like to see when you go into more detail on how we can tell when certain things are causing certain realities. Like your explanation of how to tell if firms want to hire, but don't because of uncertainty. The numbers don't lie, and your analysis is great.

I'll keep reading faithfully (even when I have an econometrics exam to study for :P)
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written by Phil Perspective, January 20, 2011 12:16
Dean:
Did you know that Peter Baker used to work for The Moonie Times? That explains a lot.
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written by WayneL, January 20, 2011 1:40
"They are interested in shrinking the government functions that help low and middle income people."

This is a Dem talking point, and it's wrong. Not only does it send the wrong message and is wrong thinking, but it doesn't help the cause. Repubs are not interested in hurting the poor and middle class. They are interested in shrinking govt which hurts the rich, the powerful, corporations. It's all about keeping the money flowing up, which in the end does hurt the poor and middle class. If they have us all making minimum wage--perhaps the true end game--then it's only to make the rich richer. They don't think about the poor, whether it's making them poorer or they live in the dumpster behind their offices.
Whose Your Nanny Baker Outed By Wikileaks
written by izzatzo, January 20, 2011 1:48
Of course they are not really for shrinking government.


Where have we seen this before Bubba?

It's from one of the Wikileaks files, the one named 'Whose Your Nanny.'

Why was it classified?

It's top secret. If they ever find out who our nanny is, the Shrink Big Government and Privatize Everything Act will be canceled and we'll all be fired as hypocrites.

What should we do now that everyone knows?

Make the 'Whose Your Nanny' file subject to declassification on grounds that thousands of terrabytes of grossly overclassified information by government are wasteful and inefficient.

Then fire all the staff necessary to filter out the wasteful and inefficient files on grounds of wasteful and inefficient excess government staff.

That allows the 'Whose Your Nanny' file to remain in the records as top secret by default, on grounds that it's more efficient and less wasteful just to classify everything.

That way we can still press charges against Whose Your Nanny Baker as a nanny traitor after this all dies down.
You can not subsidize the middle class.
written by Floccina, January 20, 2011 5:18
The reality is that the Republicans are not interested in shrinking the role of government


Boy that is right.

They are interested in shrinking the government functions that help low and middle income people.


Why would you want Government to try and help middle income people. Wouldn't that be middle income people paying for Gov programs to help middle income people. Like robbing Peter to pay Peter.

You can not subsidize the middle class.
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written by Howlin Wolfe, January 21, 2011 2:00
dizzyfatso - do you get paid to put your nonsense and insults here? I hope it pays for your cheetos habit.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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