- John Holbo: It was crime at the time, but the laws, we changed them: "Kevin Drum’s nickel summary works for me, comparing and contrasting the new decision, in Shelby County v. Holder with Crawford v. Marion County Election Board (PDF). 'So here’s your nickel summary. If a law is passed on a party-line vote, has no justification in the historical record, and is highly likely to harm black voting, that’s OK as long as the legislature in question can whomp up some kind of neutral-sounding justification. Judicial restraint is the order of the day. But if a law is passed by unanimous vote, is based on a power given to Congress with no strings attached, and is likely to protect black voting, that’s prohibited unless the Supreme Court can be persuaded that Congress’s approach is one they approve of. Judicial restraint is out the window. Welcome to the 21st century.'"
Mike Konczal: Can the Taper Matter? Revisiting a Wonkish 2012 Debate: "The taper was a test case…. Bernanke meant to keep expectations of future short-term interest rates the same…. But from our first readings, it has been accepted by the market as a major tightening…. This strikes me as a major victory for Gagnon and a loss for the strongest versions of the expectations channel. Of course, the taper could be a signal that Bernanke has lost his coalition or is otherwise going soft on expansionary policy. If that’s the case, then according to the stronger version of the expectations theory, QE3 should never have been started, because it adds no value and is just another thing that could go wrong. Bernanke should just have focused on crafting a more articulate press release instead. This doesn't seem the right lesson when a body of research argues purchases are making a difference."
Nolan McCarty: The New Political Bubble: "Why has financial reform unraveled so dramatically? It is because the reform efforts were too focused on the proximate economic causes of the crisis and completely ignored the more fundamental political causes. In our new book, Political Bubbles: Financial Crisis and the Failure of American Democracy, Keith Poole, Howard Rosenthal, and I argue that behind each financial crisis lurks a 'political bubble' — a set political biases that foster market behaviors leading to financial instability. Rather than tilting against risky behavior, in political bubbles politicians and regulators aid, abet, and amplify the risks created in financial markets. These biases are deeply embedded in the constellation of ideology, institutions, and interests that define the American political system. We not only trace how a political bubble led to the U.S. deregulatory and monetary policies propped up the asset bubbles that generated the 2008 crisis, but how similar dynamics have played out in the recurrent financial crises in U.S. history."
Corey Robin: If Reagan Were Pinochet… Sigh: "I want to highlight two dimensions of that 1981 Mont Pelerin Society (MPS) meeting in Pinochet’s Chile that Hayek helped organize… how hard the meeting’s organizers worked to transmit the notion that the ideas of Hayek and Milton Friedman had found a home in Pinochet’s Chile. One of the ways they did so was by seamlessly interweaving the distinctive vocabulary of Hayek and Friedman into their accounts of Pinochet… with the election of Allende 'we were no longer free to choose: after forty years of socialist recklessness [Allende had been a government minister as early as 1939] only one road remained open to us—“Friedmanism”—always provided that we had a government strong and courageous enough to establish it.'"
Mary C. Daly, Brian Lucking, and Jonathan A. Schwabish: The Future of Social Security Disability Insurance: "Our breakdown of DI caseload growth over the past three decades indicates that between 43% and 56% of it can be attributed to one-time factors that have largely run their course and are unlikely to put pressure on SSDI caseloads in the future. This leaves a significant residual fraction between 44% and 57% that is unaccounted for. This portion of DI growth could increase rapidly and push recipiency well beyond SSA’s projections. Thus, understanding these unexplained factors behind DI’s caseload growth is vital for policymakers seeking solutions to the DI program’s impending insolvency."
Middle Class Political Economist: U.S. Median Wealth Only 27th in World:
- Matt O'Brien: Gold Was a Horrible Investment from 1500 to 1965:
Matthew Yglesias: Obama climate speech: What the GOP should but won’t do in response | Tyler Cowen: The best Chinese restaurant Washington, D.C. has had, ever: Panda Gourmet, Langdon Days Inn, 2700 New York Ave., just east of Bladensburg Road, NE, 202-636-3588 | Jonathan Chait: Greg Mankiw Loves One Percent, Doesn’t Know Why | Fundraising, livetweeted | Menzie Chinn: Econbrowser: Global Spillovers and Domestic Monetary Policy | Scott Lemieux: More on Roberts’s Embarassing Opinion | Paul Campos: This Supreme Court is a disgrace | Justice Ginsburg in Shelby County |