June 10, 2022

10 18:30:00 Junio 2022

It’s pretty hard to be happy about the May CPI report. It means lower real wages for workers and is another big piece of uncertainty in an economy shaking from both the pandemic and the war.

Washington Post Says Most Americans’ Economic Models Project Uptick in Inflation

By Dean BakerDean Baker

June 09, 2022

09 11:34:00 Junio 2022

With the media’s coverage of the economy focusing almost exclusively on inflation, it is not surprising that most people would expect inflation to pick up.

• InequalityLa DesigualdadUnited StatesEE. UU.

Do We Have to Give the Rich All of Our Money? Enforcing the Estate Tax

By Dean BakerDean Baker

June 06, 2022

06 12:35:00 Junio 2022

We need some good old-fashioned “law and order,” the super-rich have to be forced to pay the money they owe on the estate tax.

• Economic Crisis and RecoveryCrisis económica y recuperaciónUnited StatesEE. UU.

Janet Yellen Admits She Didn’t See Later Rounds of COVID-19 and the War in Ukraine

By Dean BakerDean Baker

June 04, 2022

04 17:38:00 Junio 2022

Yellen said she did not anticipate large shocks to the economy. Politico implied from this “admission” that the $1.9 trillion American Recovery Plan Biden was a mistake.

• Economic Crisis and RecoveryCrisis económica y recuperaciónJobsTrabajosUnited StatesEE. UU.

May Jobs Report Should Have Made Inflation Hawks Happy

By Dean BakerDean Baker

June 03, 2022

03 Junio 2022

The May jobs report should have made inflation hawks very happy. It shows moderating wage growth. This is definitely not a wage-price spiral story.

• Economic Crisis and RecoveryCrisis económica y recuperaciónUnited StatesEE. UU.

Contrary to What You Read in the Paper, People Are Not Spending Down Their Savings

By Dean BakerDean Baker

June 01, 2022

01 00:00:00 Junio 2022

The reported decline in the saving rate is deceptive. It is more likely that people have made large gains in the stock market and are cashing out some of these gains and paying capital gains taxes on them.

• Economic Crisis and RecoveryCrisis económica y recuperaciónHousingUnited StatesEE. UU.

Getting Rents Down, Converting Vacant Office Space to Residential

By Dean BakerDean Baker

May 27, 2022

27 Mayo 2022

Remote work is now a fact of life. If the office space is converted to residential space, it will put downward pressure on rents more generally. This is bad news for landlords, but it will mean more money for renters.

• Economic Crisis and RecoveryCrisis económica y recuperaciónEconomic GrowthEl DesarolloUnited StatesEE. UU.

CBO Joins Team Transitory

By Dean BakerDean Baker

May 25, 2022

25 Mayo 2022

The Congressional Budget Office (CBO) sided clearly with those arguing the case for inflation being temporary.

• Economic GrowthEl DesarolloUnited StatesEE. UU.

The Impediment to Productivity Growth: Waste that Makes Some People Rich

By Dean BakerDean Baker

May 24, 2022

24 Mayo 2022

The New York Times ran a piece discussing why innovations in cloud computing and artificial technology have not led to more rapid increases in productivity. It raises a number of possibilities, but leaves out an obvious one, increasing waste associated with rent-seeking. We clearly see an increase in waste associated with rent-seeking, the only question is whether it is large enough to have a notable effect on productivity growth.

The piece actually touches on, without commenting on it, one of the major sources of waste. It discusses the practices of a major health insurer.

Health insurance does not directly contribute to GDP. Health care (actually health) is what we care about. Health insurers determines who has access to health care. In principle we want as few people employed in the health insurance industry as possible, we want people to be able to get health care, not to have insurers block their path.

However, we have over 900,000 people employed in health and life insurance companies. Much of what they do is made profitable by the fact that patent monopolies make many drugs and medical equipment expensive. In the absence of these monopolies, no insurer would look to block patients from getting the drugs or medical care recommended by their physician.

There are similar stories in many other sectors. The financial industry employs hundreds of thousands of people shuffling assets in ways that contribute nothing to GDP. The same is true with the lawyers and accountants devoting their efforts to help rich people and corporations avoid paying taxes.

Eliminating, or at least reducing, this waste would be a great way to increase productivity. Unfortunately, the people get rich and richer off this waste prevent it from being addressed politically, or even discussed in the New York Times.

The New York Times ran a piece discussing why innovations in cloud computing and artificial technology have not led to more rapid increases in productivity. It raises a number of possibilities, but leaves out an obvious one, increasing waste associated with rent-seeking. We clearly see an increase in waste associated with rent-seeking, the only question is whether it is large enough to have a notable effect on productivity growth.

The piece actually touches on, without commenting on it, one of the major sources of waste. It discusses the practices of a major health insurer.

Health insurance does not directly contribute to GDP. Health care (actually health) is what we care about. Health insurers determines who has access to health care. In principle we want as few people employed in the health insurance industry as possible, we want people to be able to get health care, not to have insurers block their path.

However, we have over 900,000 people employed in health and life insurance companies. Much of what they do is made profitable by the fact that patent monopolies make many drugs and medical equipment expensive. In the absence of these monopolies, no insurer would look to block patients from getting the drugs or medical care recommended by their physician.

There are similar stories in many other sectors. The financial industry employs hundreds of thousands of people shuffling assets in ways that contribute nothing to GDP. The same is true with the lawyers and accountants devoting their efforts to help rich people and corporations avoid paying taxes.

Eliminating, or at least reducing, this waste would be a great way to increase productivity. Unfortunately, the people get rich and richer off this waste prevent it from being addressed politically, or even discussed in the New York Times.

• Economic Crisis and RecoveryCrisis económica y recuperaciónInflation

Two Quick Notes: Inflation and the Stock Market Plunge

By Dean BakerDean Baker

May 23, 2022

23 Mayo 2022

Rather than seeing a story of spiraling inflation, actors in financial markets seem to be expecting that the inflation rate will quickly fall back to more moderate levels. That is worth noting.