Blog on the Run: Reloaded

Thursday, January 16, 2014 7:18 pm

You keep using that word. It does not mean what you think it means.

And speaking of invaluable economist Dean Baker, he schools NPR, not that they’ll pay any attention:

This adjective [“enormous” — Lex] appeared in a top of the hour news piece (sorry, no link [this NPR blog post uses the adjective “massive” — Lex] referring to the spending bill approved by Congress on Wednesday evening. It would be interesting to know how it made this assessment. While the government spends more money each year than any of its listeners will see in their lifetime, it spends less relative to the size of its economy than almost any other wealthy country. It is also spending less relative to the size of the economy than it did in the years 2009-2012. The domestic discretionary portion of the budget, which was close to half of the spending bill, is smaller relative to the size of the economy than it has been in decades.

It’s a simple point, but one journalists at even the biggest outlets in the business can’t seem to learn: a number is meaningless — or, worse, misleading — absent context. I bolded the last part because although I want to shout this in all upper-case letters, I have chosen merely to emphasize it instead.

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Friday, July 26, 2013 6:19 pm

Our overburdened corporations

The Washington Post had a chart on how corporate taxes have been rising as a share of GDP in OECD countries (industrialized countries comparable for economic purposes to the United States). The problem is that the piece was a tad misleading in that every country counted the same.

In the U.S. that burden has been generally shrinking since World War II. As of 2009, that burden was 1%, down from its postwar high of 6% just after the Korean War. Here’s a chart showing how it’s gone:

Corporate Income Tax as a Share of GDP 1946 - 2009

Now, corporations are sitting on $2 trillion in cash. If they’re not going to create jobs with it, which they’re not because there’s no demand for their goods and services because too many people have been unemployed for too long, then they ought to pay a bit more of it to the government so that we can set about some badly needed infrastructure projects. Those projects, in turn, will both create jobs in the short term and lay the foundation for future wealth creation in the long term.

This is not rocket science. This is not even rocket economics.

(h/t: Dean Baker)

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