Beat the Press

Trump Team Resurrects Voodoo Economics Pushing Tax Cuts and Ludicrous Growth Projections

Office of Management and Budget Director Mick Mulvaney had a Wall Street Journal column highlighting the benefits of "MAGAnomics." The piece can best be described as a combination of Groundhog Day and outright lies.

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New York Times Gets Federal Budget Story About Looming Trump-Ryan Clash Almost Completely Wrong

Apparently the paper is confused on this issue since it headlined a front page piece on the budget, "Trump budget sets up clash over ideology within G.O.P." The article lays out this case in the fourth paragraph:

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After DC's Centrists Failed to Shred Safety Nets, Thomas Friedman Calls for Centrist Revival

Thomas Friedman really is a gift to the world. As a long established New York Times columnist and author of many widely touted books, he is a great source of insight into establishment thinking. He comes through brilliantly in his column on Wednesday.

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How a Federal Agency's Data Error Ended Up Boosting the GOP's Assault on Social Security

Yesterday the Congressional Budget Office (CBO) corrected an error that it made in projecting the share of earnings that will be replaced by Social Security for those nearing retirement. In a report published last fall, CBO projected that for people born in the 1960s, the annual Social Security benefit for those retiring at age 65, would be 60 percent of their earnings for middle income retirees and 95 percent of earnings for those in the bottom quintile. The correction showed that benefits would replace 41 percent of earnings for middle income retirees and 60 percent of earnings for those in the bottom quintile.

This mattered a great deal because the originally published numbers were quickly seized upon by those advocating cuts in Social Security benefits. For example, Andrew Biggs, who served in the Social Security Administration under President George W. Bush, used the projections as a basis for a column in the Wall Street Journal with the headline “new evidence on the phony retirement income crisis.” The piece argued that benefits were overly generous and should be cut back, at least for better off retirees. (To his credit, Biggs quickly retracted the piece after CBO acknowledged the mistake.)

While this was a serious error, unfortunately it was not the first time that CBO had made a major error in an authoritative publication. In 2010, in its annual long-term budget projections it grossly overstated the negative effect on the economy of budget deficits. The 2010 long-term projections showed a modest increase in future deficits relative to the 2009 projections, yet the impact on the economy was far worse.

The 2010 projections showed a drop in GDP of almost 18 percent by 2025, compared to a balanced budget scenario. This was more than twice as large as the impact shown in the prior year’s projections. The sharp projected drop in GDP could have been used to emphasize the urgency of deficit reduction. As was the case with the recent Social Security projections, CBO corrected its numbers after the error was exposed.

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Wall Street Journal Says $19,000 a Year Is Adequate Middle-Class Retirement Income

While economic debates can often get into complex questions of theory or statistical methods, many hang on more simple issues, like the right adjective. We got a great example of one such debate in a Wall Street journal column by Andrew Biggs, an economist at the American Enterprise Institute and former Deputy Commissioner of the Social Security Administration under President George W. Bush. 

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5 of the Biggest Economic Lies Pushed by the Washington Post

The Washington Post's Catherine Rampell devoted her Christmas day column to a popular Washington past-time: trying to get young people angry at their parents and grandparents so that they are not bothered by the enormous upward redistribution of income taking place in this country.

She begins the piece by telling readers that college students are wasting their time complaining about diversity issues and sensitivity to racism and sexism, then gets to the meat of the story:

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Speaker In Waiting Paul Ryan Wants To Shut Down The Government Permanently

Everyone has seen the news stories about how Representative Paul Ryan, the leading candidate to be the next Speaker of the House, is a budget wonk. That should make everyone feel good, since we would all like to think a person in this position understands the ins and outs of the federal budget. But instead of telling us about how much Ryan knows about the budget (an issue on which reporters actually don't have insight), how about telling us what Ryan says about the budget?

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Bernanke's Memoir of 2008 Meltdown Shows Fed's Power Is Even Bigger Than He Says

Ben Bernanke just released his memoir which includes his account of the events around the financial crisis. According to Andrew Ross Sorkin, Bernanke claims the decision to not save Lehman in the fall of 2008 was not really a decision. Bernanke claims that the Fed did not have the ability to save Lehman. This is not true. Since the Fed has essentially a limitless ability to lend money, it surely could have provided enough loans at below market interest rates, for a long enough period of time, that Lehman would eventually have been a viable bank.

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Jeb Bush's and Bill Clinton's Boasts of Economic Growth Based on Market Bubbles That Burst

Paul Krugman rightly mocks Jeb Bush for taking credit for the strong growth in Florida during his tenure as governor.

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How NPR Is Doing Right-Wing's Economic Dirty Work on Debt

Billionaire Peter Peterson is spending lots of money to get people to worry about the debt and deficits rather than focus on the issues that will affect their lives.

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Defenders of Wealth Blame Workers For Lousy Recovery, Not Policies Protecting Profits

That seems to be endless demand for economic policy analysis that finds ways to blame workers for the bad economy rather than the folks in Washington with their hands on the policy wheel.

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Why the Love Affair Between Government and Big Finance Must End

In the crazy years of the housing boom the financial sector was a gigantic cesspool of excess and corruption. There was big money in pushing and packaging fraudulent mortgages. The country paid a huge price for the financial sector's sleaze.

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4 Burning Questions for Janet Yellen as She Testifies Before Congress on the Economy

Tomorrow morning, Federal Reserve Chair Janet Yellen will appear for the first time before Congress' Joint Economic Committee. And on Thursday morning, she'll testify before the Senate Budget Committee.

Especially after last week's divergent economic data -- slow 1st quarter economic growth, a robust increase in jobs, and a sharp drop in labor force participation -- the financial markets likely will be hanging on her every word about the nation's current economic outlook and the Federal Reserve's future actions.

In advance of these hearings, here are some pertinent questions that could lead to some very interesting and enlightening responses:

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Texas May Have Job Growth, But the Quality of Life Really Sucks

In recent months conservatives have been boasting about the strong job growth of red state Texas compared to the much weaker job growth of blue state California. They use this comparison to promote their line that low taxes and pro-business regulations are the key to low unemployment and prosperity. It's worth taking a closer look.

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The New York Times' Reporting on Obama's Budget is a Big Joke

RT, the Russian government-owned English-language television network, has been the butt of much humor in recent days. It has mindlessly repeated Russian propaganda surrounding the events in Ukraine. The ridicule is well-deserved. News organizations are supposed to inform readers about the world, not make stuff up. Unfortunately, much of the U.S. media deserve comparable ridicule when it comes to budget reporting.

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Why Obamacare is Scary for the Folks Who Want Their Toilets Cleaned on the Cheap

Now that the talk of death panels and other craziness about Obamacare has faded away, people are looking more seriously at what the program actually will do. A major part of the story is that Obamacare will allow people to get health care outside of the workplace.

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Why the Fear That a Robot Will Take Your Job is Ridiculous

Economists are not very good at economics. We know this because we had a huge housing bubble that collapsed, which almost none of them saw. The pre-crash projections from the Congressional Budget Office imply that this downturn has already cost us more than $7.6 trillion, or $25,000 per person. This could have been prevented if we had economists in policy positions who understood how the economy worked.

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Obama Teams Up with Big Business to Push Through Horrible Secret Trade Deal

With the New Year the corporate lobbyists and the Obama administration are stepping up their drive for passage of the Trans-Pacific Partnership (TPP), the new trade deal being negotiated in secret by the United States and eleven countries in the Pacific region. The key at the moment is Congressional approval of fast-track authority. This would give any agreement a straight up or down vote on an accelerated timetable.

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Government Policy Designed for the One Percent Screws Walmart Workers

There is a large and growing movement to pressure Walmart to raise its workers' wages. This has taken the form of direct action by workers, efforts to pass higher minimum wage or living wage laws, and implicit threats of consumer boycotts if Walmart does not raise wages and benefits.

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Is a Debt Default the Only Way to Get Americans Working Again?

All the usual suspects are giving us all the usual warnings about the disaster that would ensue if the government defaults on its debt. Much of what they say is undoubtedly true; it would create a huge amount of fear and uncertainty in financial markets.

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Celebrate the Defeat of the Granny Bashers! Billionaire-backed Campaign Fails to Cut Social Security and Medicare

It isn't often that progressives in the United States have much to celebrate. After all, the news has swung between bad and worse for most of the last three decades. That is why we should be celebrating the victory over the Campaign to Fix the Debt and its efforts to cut Social Security and Medicare.

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Could Senator Warren's Idea for Cheap Student Loans Help Make Rich Kids Richer?

Last month Senator Elizabeth Warren put forward her first bill as a senator, a proposal to allow students to borrow for college at a 0.75 percent interest rate, the same rate that the Federal Reserve Board charges banks for borrowing reserves. In putting forward the bill Warren noted the rapid run up in student debt at a time when recent graduates face an especially bleak job market.

As much as I think it would be good to help struggling students, I initially did not like the proposal. As a general rule it is best for the government to be transparent in its subsidies, which means appropriating money directly from the budget.

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Why Does The Washington Post Think It's Bad News that the Absurd GOP Budget Strategy is Falling Apart?

That is what readers a front page Washington Post news story on the budget must be asking. The piece notes the sharp decline in the budget deficit, then tells readers:

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Discredited Harvard Austerity-Pushers Reinhart and Rogoff Keep Lying to Protect Themselves

Carmen Reinhart and Ken Rogoff, used their second NYT column in a week, to complain about how they are being treated. Their complaint deserves tears from crocodiles everywhere. They try to present themselves as ivory tower economists who cannot possibly be blamed for the ways in which their work has been used to justify public policy, specifically as a rationale to cut government programs and raise taxes, measures that lead to unemployment in a downturn.

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Erskine Bowles Dismisses Facts on Deficits. Perhaps Because He Collects Millions for Deceiving the Public?

Most of us accept that the earth goes around the sun. This is impressive since we can look up in the sky and see the sun going around the earth. We believe the opposite because we have been told about the research of astronomers over the centuries showing that what we can see with our own two eyes is wrong. Instead we accept that the motion of the stars and planets can be much better explained by the earth going around the sun.

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Senate Unanimously Votes Against Cuts to Social Security, Media Don't Notice

There are few areas where the corruption of the national media is more apparent than in its treatment of Social Security. Most of the elite media have made it clear in both their opinion and news pages that they want to see benefits cut. In keeping with this position they highlight the views of political figures who push cuts to the program, treating them as responsible, while those who oppose cuts are ignored or mocked.

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The Scary Truth About Seniors and Money

I realize that Pew is a very prestigious outfit, but Pew's garbage is still garbage. It's report on wealth by age group, or at least the interpretation that it and others have given this report, fits the bill.

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Minimum Wage: Who Decided That Hard-Working Americans Should Fall Behind?

It was encouraging to see President Obama propose an increase in the minimum wage in his State of the Union address, even if the $9.00 target did not seem especially ambitious. If the $9.00 minimum wage were in effect this year, the inflation-adjusted value of the minimum wage would still be more than two percent lower than it had been in the late 1960s. And this proposed target would not even be reached until 2015, when inflation is predicted to lower the value by another 6 percent.

While giving a raise worth more than $3,000 a year to the country's lowest paid workers is definitely a good thing, it is hard to get too excited about a situation in which these workers will still be earning less than their counterparts did almost 50 years ago. By targeting wage levels that roughly move in step with inflation we have implemented a policy that workers at the bottom will receive none of the benefits of economic growth through time. In other words, if we hold the purchasing power of the minimum wage fixed through time, as the country as a whole gets richer, minimum wage workers will fall ever further behind.

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Whaddya Know? Professional Economy Wrecker Alan Greenspan Is at the Heart of the Insidious 'Fix the Debt' Campaign

Alan Greenspan will go down in history as the person who has done more damage to the U.S. economy and society that anyone who was not a foreign enemy. In fact the destruction he wreaked through his incompetence would also exceed the damage caused by almost all would-be enemies as well.

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