Grasping Reality on TypePad, by Brad DeLong

• James Kwak: The Politics of Intellectual Fashion: "For years now, Anat Admati has been leading the charge for higher capital requirements for banks, especially large banks that benefit from government subsidies, first in a widely cited paper and more recently in her book with Martin Hellwig, The Banker’s New Clothes. Admati’s great service has been clearing the underbrush of misunderstandings and half-truths so that it is possible to have a debate about the benefits of higher capital requirements. Yet even after all this work, the media (and, of course, the banking lobby) continue to repeat claims that are simply false or highly misleading. In another effort to beat back the tides of ignorance, Admati and Hellwig have put out a new document, “The Parade of the Bankers’ New Clothes Continues,” which catalogs and addresses these claims…. This is not a battle that is going to be won solely with truth, light, and logic. The banking lobby has a vested interest in sowing confusion, with masterpieces like the IIF’s 'report' claiming that higher capital requirements would shrink the global economy by 3.2 percent. And as long as bankers say that such-and-such a regulation will hurt growth and kill jobs, they will get a hearing. Ultimately, it’s all about politics, which was roughly the message of 13 Bankers. (Which is another reason why, in the long run, the only things that matter are campaign finance reform and early childhood education.)"

• Aaron Carroll: This is why we vaccinate, HPV edition: "File this under 'holy crap'. 'Reduction in Human Papillomavirus (HPV) Prevalence Among Young Women Following HPV Vaccine Introduction in the United States, National Health and Nutrition Examination Surveys, 2003–2010'…. This study looked at the prevalence of HPV among women and girls in the three years before the HPV vaccine was introduced (2003-2006) and the three years after it was introduced (2007-2010). The results are shocking. Just looking at adolescent girls age 14-19 years old, the prevalence of HPV covered by the vaccine fell from 11.5% before 2006 to 5.1% after. That’s a drop of more than 50%. And before any skeptics weigh in, there was no difference in the racial/ethnicity of the samples before and after the vaccine, nor any differences in sexual activity."

• John Cole: Don’t Ride the White Horse: "I think one of the most irritating aspects about the current status of journamamalism is that it is largely dominated by jackasses like this: 'In an interview with The New Republic, Politico editor-in-chief John Harris admitted that Silver wasn’t one of his lifelines in the 2012 campaign. “I will be drummed out of the profession, but I didn’t [read Silver]. My plate is full here,” Harris said. “I know why people found him interesting and entertaining, and some people found him illuminating. There are people in our gang who think he is overblown and get worked up about Nate Silver. I don’t give a damn.”… Jim VandeHei, Politico’s executive editor who helped found the publication with Harris, also participated in the interview, saying that some of Silver’s “stuff goes on and on” and that he uses “numbers to prove stuff that I don’t think can be proved by numbers alone.” Of course Silver wasn’t the lifeline for Politico--Silver basically said for months that Obama was going to walk away with the election, while the Politico staff needed a horse race so they could write the ten thousand inside baseball faux drama bullshit that they churn out every day just hoping for a link from Drudge or a call from the Morning Joe booking staff. Not only are folks like Harris worthless, they are openly contemptuous of people who know things."

• Stumbling and Mumbling: Recession & work ethics: "Do recessions have longlasting adverse effects upon output? One common answer is that they do, to the extent that young people who are out of work lose experience and training and so are less productive even many years later…. Dennis Snower and Wolfgang Lechthaler point to another mechanism through which such hysteresis can occur. Quite simply, unemployment causes otherwise diligent workers to lose their work ethic…. [W]e can read it alongside Malmendier and Nagel's famous study (pdf) of the longlasting effects on risk appetite of recessions, and the evidence that people who are primed to conform (pdf) to adverse stereotypes really do live down to them. All provide corroboration of Marx's famous claim: 'The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.'"

• Aziz: The “Unemployment Is Voluntary” Myth: "Loyd S. Pettegrew and Carol A. Vance of the Ludwig von Mises Institute ask and answer a question: 'Why does a large portion of the population choose not to work when there are many jobs available? The answer is simple. If you can receive 2-3 times as much money from unemployment, disability, and/or welfare benefits (subsidized housing, food stamps, free cellphones, etc.) as you can from a temporary or part-time job, and live a life of leisure, why work?' So, is it true? Is the reason why unemployment is elevated that millions of Americans are choosing not to work because of cushy government welfare provisions?… Well, if labour was truly slacking off then we would expect to see a shortage of labour. But instead we see an elevated level of applicants per job openings…. This means that the issue causing unemployment is not individuals dropping out of the labour force, but an economy that isn’t creating jobs very rapidly. So welfare is not acting as a disincentive to work in this case. It is acting as supplementary income for those who cannot otherwise find an opening in the economy due to factors like job migration and automation reducing the level of labour desired by employers…. If there were a low number of applicants per opening, then welfare that paid better than the lowest-paid jobs available could be seen as a disincentive to work. But now, with job openings at a very low level? Don’t be ridiculous."

• Miles Corak: Income Inequality, Equality of Opportunity, and Intergenerational Mobility: "The inequality literature has paid little attention to the intergenerational consequences of increasing top income shares…. Relatively less upward mobility of the least advantaged is one reason why intergenerational mobility is lower in the United States than in other countries to which Americans are often compared. But it is not the only reason. Intergenerational mobility is also lower because children of top-earning parents are more likely to become top earners in their turn…. Inequality lowers mobility because it shapes opportunity. It heightens the income consequences of innate differences between individuals; it also changes opportunities, incentives, and institutions that form, develop, and transmit characteristics and skills valued in the labor market; and it shifts the balance of power so that some groups are in a position to structure policies or otherwise support their children’s achievement independent of talent. Thus, those who are concerned about equality of opportunity should also care about inequality of outcomes…. While the imagined prospect of upward mobility for those in the lower part of the income distribution shares little in common with the generational dynamics of the top 1 percent, the latter may well continue to be an important touchstone for those in, say, the top fifth of the US income distribution. After all, this group too has experienced significant growth in its relative standing, which partly reflects an increasing return to the graduate and other higher degrees for which they exerted considerable effort, but is also linked to a background of nurturing families and select colleges…. With effort and a bit of luck, it is not unreasonable for them to believe they may yet cross the threshold into the top 1 percent…. For them the “American Dream” lives on, and as a result they are likely not predisposed, with their considerable political and cultural influence, to support the recasting of American public policy to meet its most pressing need, the upward mobility of those at the bottom."

Wudang Sect | Mark Thoma: 7 Important Examples of How Markets Can Fail | FBarry Eichengreen, the George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California at Berkeley, will present a public talk on U.S. monetary history and its relevance to the current debate on the euro Tuesday, June 25 at Emory University | Richard Green: Could someone explain the market failure that protecting car dealerships solves? | Mark Thoma: Why Politics and Economics Are a Toxic Cocktail | Eduardo Porter Making the Case for a Rise in Inflation | Joshua DuBois: The Fight for Black Men |