No, I Do Not Know What Is Going on at Minneapolis Fed Research...
Live from **La Farine** the Roasterie XXXXII: November 27, 2013

Noted for Your Evening Procrastination for November 26, 2013

Over at the WCEG Equitablog:


  1. Kevin Drum: Janet Yellen Is Now a Litmus Test for Right-Wing Sanity: "Steve Benen notes that the increasingly shrill and hyperbolic Heritage Foundation has decided to make opposition to Janet Yellen a 'key vote'. That is, they'll count it on their end-of-the-year scorecard that tells everyone just how conservative you are.... 'It now seems likely that most Senate Republicans will oppose the most qualified Fed nominee since the institution was founded.' That's true, which means this has become sort of a litmus test for wingnuttery. There's simply no serious reason to oppose Yellen, who is outstandingly qualified to be Fed chair by virtually any measure. So opposition to Yellen is now a pretty simple proposition: you oppose her if you're some kind of hard money lunatic or if you feel like you have to pander to the hard money lunatics. That's it. Everyone else votes to support her confirmation. Should be an interesting roll call..."

  2. Kevin Drum: Obamacare is a Done Deal: "Ezra Klein gives us a progress report.... 'A spin through HealthCare.Gov this morning went smoothly. The site loaded quickly. The process progressed easily. There were no error messages or endless hangs.... My experience isn't rare.... Reports from inside the health care bureaucracy are also turning towards optimism.... A political system that's become overwhelmingly oriented towards pessimism on Obamacare will have to adjust as the system's technological infrastructure improves.' I think the best translation of that last sentence is, 'Republicans will soon have to find something else to gripe about'. But it won't work. Conservatives have always known that once Obamacare is up and running, it will become a popular program.... In a few months, it will be nearly as enshrined in the American social welfare firmament as Social Security and Medicare. Republicans have run out of time, and they know it. Their fixation on Obamacare already looks sort of balmy--this weekend's deal with Iran was designed to draw attention away from Obamacare? Seriously?--and it's only going to look loopier as time goes by. Getting Obamacare to the end zone wasn't easy, and Obama almost fumbled the ball at the one-yard line, but he's finally won..."

  3. Roy Edroso: Youth Culture Stole His Chainsaw: "Victor Davis Hanson... in his latest essay regales his readership with the kind of kids-today yap that used to pad out middlebrow magazine.... Hanson blames aesthetes: 'Once classical canons of artistic, literary, or musical expression were torn down... once you have rebelled against hexameters, quarter notes, or realistic representation, and after you have rebelled against that rebellion... what are you left with?...' I think the general idea is that the Moderns ruined everything, but it's hard to be sure; the rebellion against "hexameters," for one thing, would seem to mean most poetry after the ancients--when Shakespeare wrote in iambic pentameter, was "Party in the U.S.A." the inevitable result? Also, if culture fell when 'realistic representation' ceased to be an aspiration, where does that leave Agamemnon? It's less representational than Abbott and Costello Meet Frankenstein. Maybe everything really went downhill after ring shouts and cave paintings. I wondered why Hanson was even bothering with this Andy Rooney schtick, and then found to my horror that he thinks it has something to do with Obamacare.... Well, in a way he's got a point--would stuff like Hanson's even be tolerated if we hadn't been inured to it by decades of absurdism?"

  4. Jonathan Chait: Only Play GOP s Playbook Makes No Sense Daily IntelligencerThe GOP’s Obamacare Playbook Has One Football Play, and It Makes No Sense: "Today's New York Times reports, somewhat breathlessly, that Republicans in Congress are carrying out, with military-like precision, a brilliantly conceived strategy to drive opposition to Obamacare. The Times even obtains a copy of the "House Republican Playbook," complete with an actual football-play diagram.... The diagram... implies that it is run by idiots. Here is the play: NewImage A number of serious problems present themselves. 1. The offense is only fielding ten players... only six are on the line, which would result in an illegal formation penalty.2. The defense only fields eight players. 3. Compounding the problem, this defense is weirdly misaligned, with five defensive linemen, three defensive backs, and zero linebackers, with one of the defensive backs sitting out in the left flat guarding nobody. Designing a play against a badly aligned defense with three missing players ought to be extremely easy.... [But] the play is a naked bootleg to the left, running straight into the defensive back who isn't guarding anybody. That is to say, imagining they'll face an outnumbered and horribly misaligned defense, the offense proposes to attack the only part of the field where the defense has an unblockable defender. This is literally the only play I can imagine that could not work against this defense."

  5. Paul Krugman: Nowhere Near The Exit: "Greg Mankiw... suggesting that the time for a Fed exit strategy may be drawing near. Dean focuses mainly on Greg’s use of what he considers a [single] misleading wage number.... We have multiple measures of wage developments.... One of these numbers, wages of production and nonsupervisory workers, shows a modest uptick, the others not. All three remain well below their pre-crisis rates of increase. Is this the kind of evidence on which you want to base a major policy change? Not in my world.... [And] it makes no sense at all to tighten until we see wage inflation rise, not just from its current level, but several points higher.... Arguments that the full-employment rate of unemployment has risen tend to rely on the claim that sustained high unemployment, even if it starts out cyclical, eventually becomes structural. But if that’s true, there are very high costs to premature policy tightening... this adds up to a strong argument for waiting to see overwhelmingly clear evidence of an overheated economy before beginning any kind of policy exit..."

  6. Tim Jost: Implementing Health Reform: State Exchange Enrollment: ""Covered California, the California exchange, reported that as of November 19, 2014, almost 80,000 Californians had selected a health plan through the exchange. Almost 31,000 had enrolled in October.  Of these, almost 5,000 were subsidy-eligible while 26,000 were not, suggesting that the Californians at the front of the line were higher-income applicants, who likely understand the need for insurance and may well need it for immediate health needs.  Almost 83 percent of enrollees were English speaking, while fewer than 5 percent spoke Spanish. Twenty-two percent of enrollees were between the ages of 18 and 34, roughly equal to the percentage of the total population in this age group. But 34 percent of enrollees were between the ages of 55 and 64, compared to 11 percent of the total population.  Adverse selection is thus a concern..."

  7. Matthew Yglesias: Bay Area: If you want to talk housing, you have to talk zoning: "Another day, another frustrating article about rising housing prices in the Bay Area that doesn't mention the supply-side at all.... The high-tech economy is booming... affluent skilled workers want to move to the Bay Area... naturally the prices that people are willing to pay for housing are skyrocketing.... The city of San Francisco... [has] many low-rise districts of the city [that] could and should be redeveloped as denser high-rise areas. I'm often accused of wanting every city to turn itself into my native Manhattan, but San Francisco has about half the population density of Brooklyn.... But the even more egregious issues are in the suburban areas stretching south of San Francisco.... The reasonable thing to do would be to use the land intensively—some more apartment buildings, some more rowhouse neighborhoods, some more detached houses on slightly smaller plots—-but Valley politics have been relentlessly hostile to real-estate development. The shortage of both houses and commercial office space that results from this dynamic is a substantial driver of economic problems in the Bay Area... [and] also throughout the country. The supercharged growth in the high-tech sector ought to be creating massive spillovers of prosperity.... Instead, it's mostly creating windfall profits for a relatively small number of people and cost-of-living spirals for others...

  8. Scott Lemieux: Four Reasons the Nuclear Option Was a Liberal Win: "Here are some of the major arguments being made against the deal from a Democratic perspective--and why they're wrong. 1. Democrats Will Be Sorry, Because This Means Republicans Will Keep Doing What They've Been Doing Since the Reagan Administration.... 2. Pretending that the Filibuster Is the Only Political Constraint on the President.... 3. But Isn't the House of Representatives Terrible?.... 4. Liberal Sentimentality about the Filibuster..."

  9. Sy Mukherjee: Stubborn Opposition To Medicaid Expansion Is Forcing Hospitals In The Poorest States To Shut Down: "At least five public hospitals have shuttered their doors and many more are cutting staffing and services in non-Medicaid expansion states, according to Bloomberg. Three such hospitals have shut down in Georgia, while North Carolina and Virginia are experiencing similar closures.... The closures are tied directly to Republicans’ refusal to accept generous federal funding to expand Medicaid. And experts warn that even more closures may be on the horizon in poor states... that have also refused the Medicaid expansion. Safety-net hospitals... depend on federal money to make up for the uncompensated care costs.... The health law reduced payments to these so-called “disproportionate share hospitals”.... Lawmakers figured that Obamacare’s Medicaid expansion... would mitigate the cuts’ effects.... But... the Supreme Court ruled Obamacare’s Medicaid expansion to be optional, and about 26 states with GOP chief executives or legislatures have have refused to expand the program. Congress also rejected the Obama administration’s proposal to delay DSH payment cuts by a year to give safety net hospitals some breathing room..."

  10. John Cole: Resentment: "Just read this on facebook from a guy I know from the military: 'After having to spend almost $200 on work boots,the hell happened to the America I grew up with. Are people and ceo’s that stupid. We are selling out at an alarming rate. Try finding american made anything without paying arm an leg.We need to make a stand an take our country back/ I use to wear only Levis’s. After buying some that ripped in 2 weeks I bought something else.The country we have sent our manufactoring jobs to also owns most of out debt.I remember when made in USA meant something. I remember when I joined military an heard star spangled banner, it had a whole differnt meaning. I also think you need to be a citizen to own a buisness. Take a look who owns motels,subways,gas stations and even kfc. This is America or it was. There should be no second langauge. People use to think it was honor to come here. Now we hand money out at airport.There should be a limit to time in office. Also no trust fund babies.' This guy isn’t a white supremacist, but there are a whole lot of people who feel that way."

  11. Nick Rowe: The usefulness of AS-AD, an example: "Here is a model I saw recently. Except I am the one who has used the AS-AD framework to illustrate that model. NewImage The AD curve is drawn under the assumption that the central bank holds the nominal interest rate fixed. According to that model: 1. If wages are sticky (so we are on the SRAS) a decrease in AD (the leftward shift from the red to the pink AD curve) will cause a fall in output and employment. OK. 2. But if wages are perfectly flexible (so we are on the LRAS) the same decrease in AD will cause an increase in inflation. The author notes that this result is 'counterintuitive', and says that more research is needed into the question of wage-determination. Anyone familiar with the AS-AD framework would immediately see the problem and start asking questions about the stability of the equilibrium under flexible wages, and would recognise that you usually get counterintuitive comparative statics results if the equilibrium is unstable.... Here we go again. God this is depressing. This is why we must continue to teach AS-AD and make sure that nobody gets out of an economics PhD program without seeing it and understanding it. Otherwise they might end up running US monetary policy, and pulling the levers the wrong way."


Paul Krugman: Bubblephobia and Monetary Policy | Izabella Kaminska: Non-monetary effects of research evolution | Dean Baker: Technology didn't kill middle class jobs, public policy did | Sahil Kapur: Reid Laughs At Claim That Filibuster Reform Will Worsen Gridlock | Doktor Zoom: The 'Hyperbole And A Half' Book Is Here And We Will Guilt You Into Buying It | Ann Marie Marciarille: RUC's Secrecy: Double Secret Probation | Ann Marie Marciarille: Physician Boundary Crossing in the Face of Health Care System Failure | Martin Longman: High on Their Own Supply | Ryan Avent: Monetary policy: Low rates forever | Jeff Spross: Rapid Plankton Decline Puts The Ocean's Food Web In Peril | Kevin Drum: Lara Logan Taking Leave of Absence From "60 Minutes" | Julia Ioffe: A 31-Year-Old Is Tearing Apart the Heritage Foundation: Think Republicans have been making fools of themselves? Blame Michael Needham | ProGrowthLiberal: Dean Baker v. Greg Mankiw on Wage Inflation: I may have been too nice to Greg Mankiw... | Kim Barker: New Tax Return Shows Karl Rove’s Group Spent Even More On Politics Than It Said | David Keohane: Let a hundred moles be whacked | Unofficial Transcript of Larry Summers's Speech at the IMF Economic Forum, Nov. 8, 2013 | Lawrence Summers: Edited Transcript: IMF Fourteenth Annual Research Conference in Honor of Stanley Fischer |