Eduardo Porter used his NYT column to discuss how Mexico could put pressure on Donald Trump in a renegotiation of NAFTA. After discussing different pressure points he then turns to the ways in which the deal could be modernized. High on the list was fully opening long-distance trucking, which would put truckers in the United States even more directly into competition with much lower paid Mexican truck drivers. (NAFTA already allows Mexican truck drivers to carry many loads into the United States.)
It is interesting that Porter has no interest in removing the protectionist barriers that help our most highly paid professionals. Under current law, even well established Mexican doctors would get arrested if they practiced in the United States. To be eligible to practice they must complete a U.S. residency program.
If we had free traders involved in this negotiation process, surely they would be able to design an evaluation system that would ensure Mexican doctors met U.S. standards, and then could be allowed to practice in the United States. In the same vein, Mexican dentists are also prohibited from practicing in the United States unless they graduate from a U.S. dental school. (Recently, graduates of Canadian schools have also been allowed.)
Doctors in the United States are paid on average more than $250,000 a year, roughly twice the average in other wealthy countries. Dentists are paid on average $200,000 a year, also twice the average in wealthy countries like Germany and Canada. This protectionism costs patients in the United States more $100 billion a year in higher health care costs (more than $700 per family, per year).
It is striking that the debate over NAFTA is so dominated by protectionists that measures that would reduce the barriers that privilege our most highly paid workers are never even discussed. It should not be surprising that truck drivers and manufacturing workers who do have to face competition would not be happy about trade deals.
Eduardo Porter used his NYT column to discuss how Mexico could put pressure on Donald Trump in a renegotiation of NAFTA. After discussing different pressure points he then turns to the ways in which the deal could be modernized. High on the list was fully opening long-distance trucking, which would put truckers in the United States even more directly into competition with much lower paid Mexican truck drivers. (NAFTA already allows Mexican truck drivers to carry many loads into the United States.)
It is interesting that Porter has no interest in removing the protectionist barriers that help our most highly paid professionals. Under current law, even well established Mexican doctors would get arrested if they practiced in the United States. To be eligible to practice they must complete a U.S. residency program.
If we had free traders involved in this negotiation process, surely they would be able to design an evaluation system that would ensure Mexican doctors met U.S. standards, and then could be allowed to practice in the United States. In the same vein, Mexican dentists are also prohibited from practicing in the United States unless they graduate from a U.S. dental school. (Recently, graduates of Canadian schools have also been allowed.)
Doctors in the United States are paid on average more than $250,000 a year, roughly twice the average in other wealthy countries. Dentists are paid on average $200,000 a year, also twice the average in wealthy countries like Germany and Canada. This protectionism costs patients in the United States more $100 billion a year in higher health care costs (more than $700 per family, per year).
It is striking that the debate over NAFTA is so dominated by protectionists that measures that would reduce the barriers that privilege our most highly paid workers are never even discussed. It should not be surprising that truck drivers and manufacturing workers who do have to face competition would not be happy about trade deals.
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The NYT ran a front page story on the drop in women’s labor force participation rates (LFPR) since 2000. The decline in LFPR for women is noteworthy because many economists have sought to blame the decline in LFPR for men on various problems unique to men. The fact that the LFPR for women has declined also suggests that the problem is on the demand side of the labor market, not the pathologies that afflict the men who are dropping out.
The NYT ran a front page story on the drop in women’s labor force participation rates (LFPR) since 2000. The decline in LFPR for women is noteworthy because many economists have sought to blame the decline in LFPR for men on various problems unique to men. The fact that the LFPR for women has declined also suggests that the problem is on the demand side of the labor market, not the pathologies that afflict the men who are dropping out.
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In his column today Thomas Friedman was reasonably arguing for stronger supports for workers who are transitioning between jobs. However, the fundamental premise of his piece, that:
“every worker today will most likely have to transition multiple times to multiple jobs as the pace of change accelerates,”
…directly contradicts the economic assumptions used by the Congressional Budget Office (CBO) and other official forecasters.
While Friedman is asserting that pace of change in the economy will accelerate, in its most recent budget projections, which were highlighted in a front page story in the New York Times, CBO assumed that the pace of change in the economy would slow over the next decade. CBO assumed potential productivity growth will average just 1.3 percent annually over the next decade. This is down from an average of 1.7 percent over the period from 1950 to 2016, and a peak of 2.4 percent annual growth from 1950 to 1973 (Table 2-3).
Of course, it is possible that Friedman will be right and we may see a pace of change equal to the 1.6 percent long period average or even the 2.4 percent rate of the 1950s and 1960s. However, if this is true, then CBO has hugely over-estimated the size of the budget deficits we will be seeing in the next decade. Higher productivity growth will mean more economic growth and more tax revenue and therefore low budget deficits. In other words, if Friedman’s claims about accelerating productivity growth are taken seriously, we have no reason to be worried about budget deficits.
In his column today Thomas Friedman was reasonably arguing for stronger supports for workers who are transitioning between jobs. However, the fundamental premise of his piece, that:
“every worker today will most likely have to transition multiple times to multiple jobs as the pace of change accelerates,”
…directly contradicts the economic assumptions used by the Congressional Budget Office (CBO) and other official forecasters.
While Friedman is asserting that pace of change in the economy will accelerate, in its most recent budget projections, which were highlighted in a front page story in the New York Times, CBO assumed that the pace of change in the economy would slow over the next decade. CBO assumed potential productivity growth will average just 1.3 percent annually over the next decade. This is down from an average of 1.7 percent over the period from 1950 to 2016, and a peak of 2.4 percent annual growth from 1950 to 1973 (Table 2-3).
Of course, it is possible that Friedman will be right and we may see a pace of change equal to the 1.6 percent long period average or even the 2.4 percent rate of the 1950s and 1960s. However, if this is true, then CBO has hugely over-estimated the size of the budget deficits we will be seeing in the next decade. Higher productivity growth will mean more economic growth and more tax revenue and therefore low budget deficits. In other words, if Friedman’s claims about accelerating productivity growth are taken seriously, we have no reason to be worried about budget deficits.
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Richard Gonzales, NPR’s ombudsman, addressed the question of why NPR does not say that Donald Trump is lying when he says something that is clearly not true. The immediate point of reference was Trump’s assertion to an audience at the CIA that the media had invented the feud between Trump and the intelligence agencies, even though Trump had repeatedly made harsh public comments directed at them.
Gonzales commented:
“On Morning Edition, Kelly [NPR reporter Mary Louise Kelly] explains why. She says she went to the Oxford English Dictionary seeking the definition of ‘lie.’
“‘A false statement made with intent to deceive,’ Kelly says. ‘Intent being the key word there. Without the ability to peer into Donald Trump’s head, I can’t tell you what his intent was. I can tell you what he said and how that squares, or doesn’t, with facts.’
“NPR’s senior vice president for news, Michael Oreskes, says NPR has decided not to use the word ‘lie’ and that Kelly got it right by avoiding that word.”
While it is a good practice for reporters not to attempt to tell their audiences what is in a politician’s head, this is not standard practice at either NPR or other news outlets. It is in fact quite common for reporters to tell us that politicians “believe” or are “concerned” about a particular issue or event.
For example, just yesterday NPR ran a segment on the budget which told us what Republicans “believe:”
“The House GOP’s plan, as outlined, would add to the deficit in that it would very likely result in less revenue coming in, but Republicans believe their tax overhaul would generate significant economic growth to make up the difference.”
I frequently complain about this sort of mind reading in Beat the Press (e.g here, here, and here). As Ms. Kelly and Mr. Oreskes said, reporters lack the ability to peer in politicians heads to determine what they are really thinking. Unfortunately, they have a tendency to claim that they do in their reporting.
It is understandable that NPR does not want to claim that it knows the state of Donald Trump’s mind. It would be a huge step forward if it would apply this standard in its reporting more generally.
Thanks to Keane Bhatt for calling this to my attention.
Richard Gonzales, NPR’s ombudsman, addressed the question of why NPR does not say that Donald Trump is lying when he says something that is clearly not true. The immediate point of reference was Trump’s assertion to an audience at the CIA that the media had invented the feud between Trump and the intelligence agencies, even though Trump had repeatedly made harsh public comments directed at them.
Gonzales commented:
“On Morning Edition, Kelly [NPR reporter Mary Louise Kelly] explains why. She says she went to the Oxford English Dictionary seeking the definition of ‘lie.’
“‘A false statement made with intent to deceive,’ Kelly says. ‘Intent being the key word there. Without the ability to peer into Donald Trump’s head, I can’t tell you what his intent was. I can tell you what he said and how that squares, or doesn’t, with facts.’
“NPR’s senior vice president for news, Michael Oreskes, says NPR has decided not to use the word ‘lie’ and that Kelly got it right by avoiding that word.”
While it is a good practice for reporters not to attempt to tell their audiences what is in a politician’s head, this is not standard practice at either NPR or other news outlets. It is in fact quite common for reporters to tell us that politicians “believe” or are “concerned” about a particular issue or event.
For example, just yesterday NPR ran a segment on the budget which told us what Republicans “believe:”
“The House GOP’s plan, as outlined, would add to the deficit in that it would very likely result in less revenue coming in, but Republicans believe their tax overhaul would generate significant economic growth to make up the difference.”
I frequently complain about this sort of mind reading in Beat the Press (e.g here, here, and here). As Ms. Kelly and Mr. Oreskes said, reporters lack the ability to peer in politicians heads to determine what they are really thinking. Unfortunately, they have a tendency to claim that they do in their reporting.
It is understandable that NPR does not want to claim that it knows the state of Donald Trump’s mind. It would be a huge step forward if it would apply this standard in its reporting more generally.
Thanks to Keane Bhatt for calling this to my attention.
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The NYT did not bother conceal its enthusiasm for the Trans-Pacific Partnership (TPP) in a news article reporting on President Trump’s decision to kill the pact. It repeatedly referred to the TPP as a “free trade” pact, an inaccurate term chosen by its proponents to help promote the deal.
In fact, the TPP is largely protectionist, calling for stronger and longer patent and copyright related protections. While the article notes this fact, it doesn’t acknowledge that these incredibly costly forms of protection (which redistribute income upward) are in conflict with principles of free trade and open markets.
The piece also repeats claims from proponents of the TPP that the defeat of the agreement will be a big gain for China at the expense of the United States. It would have been helpful to point out that all of these proponents of the TPP favored bringing China in the WTO with few conditions. This act helped to expand China’s economic power enormously.
The NYT did not bother conceal its enthusiasm for the Trans-Pacific Partnership (TPP) in a news article reporting on President Trump’s decision to kill the pact. It repeatedly referred to the TPP as a “free trade” pact, an inaccurate term chosen by its proponents to help promote the deal.
In fact, the TPP is largely protectionist, calling for stronger and longer patent and copyright related protections. While the article notes this fact, it doesn’t acknowledge that these incredibly costly forms of protection (which redistribute income upward) are in conflict with principles of free trade and open markets.
The piece also repeats claims from proponents of the TPP that the defeat of the agreement will be a big gain for China at the expense of the United States. It would have been helpful to point out that all of these proponents of the TPP favored bringing China in the WTO with few conditions. This act helped to expand China’s economic power enormously.
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Both the Washington Post and New York Times had pieces about declining support for the left in France and the rise of a nationalist right in both Italy and France. Both pieces attributed the rise in support for the right to people losing from globalization, implying that this is some impersonal process that is causing these people to be losers.
In fact, the losers are suffering because of the insistence of the European Union that its members pursue austerity policies. These policies have led to almost a full decade of near zero per capita GDP growth in France and a drop of more than 10 percent in per capita GDP in Italy. There is nothing inevitable about these policies; they are conscious choices of the political leaders in Europe.
It is incredible that both the Post and Times would neglect to mention the role of austerity in hurting workers. The disgust with elites is understandable.
Both the Washington Post and New York Times had pieces about declining support for the left in France and the rise of a nationalist right in both Italy and France. Both pieces attributed the rise in support for the right to people losing from globalization, implying that this is some impersonal process that is causing these people to be losers.
In fact, the losers are suffering because of the insistence of the European Union that its members pursue austerity policies. These policies have led to almost a full decade of near zero per capita GDP growth in France and a drop of more than 10 percent in per capita GDP in Italy. There is nothing inevitable about these policies; they are conscious choices of the political leaders in Europe.
It is incredible that both the Post and Times would neglect to mention the role of austerity in hurting workers. The disgust with elites is understandable.
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The NYT reported that the people at the gathering of the super rich at Davos are concerned because the population of major democracies no longer buy the lies they tell to justify upward redistribution of income. It told readers:
“At cocktail parties where the Champagne flows, financiers have expressed bewilderment over the rise of populist groups that are feeding a backlash against globalization. ….
“The world order has been upended. As the United States retreats from the promise of free trade, China is taking up the mantle. …..”
“The religion of the global elite — free trade and open markets — is under attack, and there has been a lot of hand-wringing over what Christine Lagarde of the International Monetary Fund has declared a ‘middle-class crisis.'”
Of course, the Davos elite do not have a religion of free trade. They are entirely happy with every longer and stronger patent and copyright protections, which is a main goal of the Trans-Pacific Partnership and other recent trade pacts.
The Davos elite also have no objections to protectionist measures, like the U.S. ban on foreign doctors who have not completed a U.S. residency program. This protectionist barrier adds as much as $100 billion a year (@ $700 per family) to the country’s health care bill.
Since these measures redistribute income upward to people like them, the Davos elite is perfectly happy with them. They only object to protectionist measures which are intended to help ordinary workers.
The concern in Davos is that the public in western democracies no longer buys the lie that they are committed to the public good rather than lining their pockets. It is nice that the NYT is apparently trying to assist the elite by asserting that they have an interest in “free trade,” but it is not likely to help their case much.
Yeah, I am plugging my book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer (it’s free).
The NYT reported that the people at the gathering of the super rich at Davos are concerned because the population of major democracies no longer buy the lies they tell to justify upward redistribution of income. It told readers:
“At cocktail parties where the Champagne flows, financiers have expressed bewilderment over the rise of populist groups that are feeding a backlash against globalization. ….
“The world order has been upended. As the United States retreats from the promise of free trade, China is taking up the mantle. …..”
“The religion of the global elite — free trade and open markets — is under attack, and there has been a lot of hand-wringing over what Christine Lagarde of the International Monetary Fund has declared a ‘middle-class crisis.'”
Of course, the Davos elite do not have a religion of free trade. They are entirely happy with every longer and stronger patent and copyright protections, which is a main goal of the Trans-Pacific Partnership and other recent trade pacts.
The Davos elite also have no objections to protectionist measures, like the U.S. ban on foreign doctors who have not completed a U.S. residency program. This protectionist barrier adds as much as $100 billion a year (@ $700 per family) to the country’s health care bill.
Since these measures redistribute income upward to people like them, the Davos elite is perfectly happy with them. They only object to protectionist measures which are intended to help ordinary workers.
The concern in Davos is that the public in western democracies no longer buys the lie that they are committed to the public good rather than lining their pockets. It is nice that the NYT is apparently trying to assist the elite by asserting that they have an interest in “free trade,” but it is not likely to help their case much.
Yeah, I am plugging my book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer (it’s free).
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They said it couldn’t be done. It would be like the Pope converting to Islam, but the Washington Post did the impossible. It headlined an article on reports that Donald Trump wants to privatize the Corporation for Public Broadcasting and eliminate altogether the National Endowments for the Arts and Humanities:
“Trump reportedly wants to cut cultural programs that make up 0.02 percent of federal spending.”
This is an incredible breakthrough. The Post has religiously followed a policy of reporting on the budget by using really big numbers that are virtually meaningless to the vast majority of their readers. One result is that people, including well-educated and liberal people, tend to grossly over-estimate the portion of the budget that goes to things like TANF (@ 0.4 percent), foreign aid (@ 0.7 percent), and food stamps (@1.8 percent).
The fact that it uses really big numbers rather than express these items in some context feeds the claims of right-wingers that we are being overtaxed to support these programs. It also contributes to the absurd belief that large numbers of people are not working but rather surviving comfortably on relatively meager benefits.
It’s too bad it took getting Donald Trump in the White House to get the paper to do some serious budget reporting.
They said it couldn’t be done. It would be like the Pope converting to Islam, but the Washington Post did the impossible. It headlined an article on reports that Donald Trump wants to privatize the Corporation for Public Broadcasting and eliminate altogether the National Endowments for the Arts and Humanities:
“Trump reportedly wants to cut cultural programs that make up 0.02 percent of federal spending.”
This is an incredible breakthrough. The Post has religiously followed a policy of reporting on the budget by using really big numbers that are virtually meaningless to the vast majority of their readers. One result is that people, including well-educated and liberal people, tend to grossly over-estimate the portion of the budget that goes to things like TANF (@ 0.4 percent), foreign aid (@ 0.7 percent), and food stamps (@1.8 percent).
The fact that it uses really big numbers rather than express these items in some context feeds the claims of right-wingers that we are being overtaxed to support these programs. It also contributes to the absurd belief that large numbers of people are not working but rather surviving comfortably on relatively meager benefits.
It’s too bad it took getting Donald Trump in the White House to get the paper to do some serious budget reporting.
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It seems being great again ain’t what it used to be. On its first day in office, the Trump administration is pushing an “America First Energy Plan,” which it tells us will “increasing wages by more than $30 billion over the next 7 years.”
For those who don’t happen to know offhand how large $30 billion is relative to projected wages over this period, the Congressional Budget Office tells us that we can expect the cumulative wage bill to be roughly $69,700 billion over the years 2018–2024. This means that the $30 billion wage dividend from removing all those nasty environmental restrictions amount to 0.04 percent of projected wages over this period. For a person earning $50,000 a year, this means Trump’s plan will get them another $20 a year, according to the Trump administration’s projection.
Of course, this doesn’t factor in any costs that might be associated with things like increasing incidences of asthma, heart disease, cancer, or other diseases associated with pollution. Nor does it factor in any losses that workers may experience as result of natural areas being destroyed or made unsuitable for hiking, hunting, fishing or other types of recreation.
It seems being great again ain’t what it used to be. On its first day in office, the Trump administration is pushing an “America First Energy Plan,” which it tells us will “increasing wages by more than $30 billion over the next 7 years.”
For those who don’t happen to know offhand how large $30 billion is relative to projected wages over this period, the Congressional Budget Office tells us that we can expect the cumulative wage bill to be roughly $69,700 billion over the years 2018–2024. This means that the $30 billion wage dividend from removing all those nasty environmental restrictions amount to 0.04 percent of projected wages over this period. For a person earning $50,000 a year, this means Trump’s plan will get them another $20 a year, according to the Trump administration’s projection.
Of course, this doesn’t factor in any costs that might be associated with things like increasing incidences of asthma, heart disease, cancer, or other diseases associated with pollution. Nor does it factor in any losses that workers may experience as result of natural areas being destroyed or made unsuitable for hiking, hunting, fishing or other types of recreation.
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