Dean Baker

Ellen Schultz has given us a fascinating account of the ways in which corporate America has been able to game legal and accounting rules to emasculate the private pension system. It was only a few decades ago that a secure pension was a staple of middle class life. Workers in middle class jobs, whether in offices, construction, or manufacturing expected to have a pension in retirement to supplement their Social Security income. In many cases, the pension would provide the larger portion of their income, with the Social Security benefit being the supplement.

Steven Rattner remains convinced that handing future generations trillions of dollars of government bonds imposes a burden on them and is very unhappy that I don’t see things that way. Let’s try this one more time.

The true statement here, that Rattner either does not understand or is trying to obscure is that the debt itself is not an inter-generational burden. Since ownership of the debt will ultimately be passed on to future generations (ignoring the portion that is held by foreigners — which a function of the trade deficit), the debt itself is not a generational burden.

Private equity companies absolutely do not have to increase the value of a company to make a profit. They can end up making a profit on their investment even if they take the company into bankruptcy and leave it much worse off than it was before the takeover.

Economists tend not to be very good at economics. We know this because almost none of them were able to see the $8 trillion housing bubble that was driving the economy from 2002 to 2007. This was an oversight of astonishing importance, sort of like a physicist not noticing gravity.

It is very useful to the One Percent to pretend that their wealth and the near stagnation in living standards for everyone else is just the result of “the further development of technology and globalization.” However this has nothing to do with reality.

Last summer news reports were filled with ill-informed predictions of a double-dip recession. Now there seem to be many accounts that misrepresent recent economic data to make a case for substantially stronger growth.

The Washington Post used a front page, above the fold article, to complain that Congress and President Obama had not done as much as it would have liked to reduce the deficit. What the Post failed to reports is that many people around Washington and across the country applauded this failure as a great victory.

For the most part David Brooks’ column is a confused diatribe against the Obama administration’s economic policies with a lecture on moral rectitude thrown in for good measure. He starts by condemning the efforts to stimulate the economy, which he misrepresents. Then it gets worse.

Standard economic models show that tariffs cost jobs. The reason is that they make consumers pay more money for the protected product. This pulls money away that could be spent in other areas. If the spending took place elsewhere, it would create more jobs than the additional money earned by the protected industry.

The same logic applies to increasingly stringent protections for copyright, except the economic waste and resulting job loss is likely to be much larger. Tariffs rarely raise the price of products by more than 15-20 percent. Copyright can make items very costly that could otherwise be available for free or nearly free. This implies a tariff of several thousand percent or higher.