Morning Must-Read: Vermont Is Kicking Everyone's A-- at Signing Up People for Obamacare
A Debate on the Risks of Quantitative Easing: Stan Fischer and Glenn Hubbard and Ben Bernanke vs. Joe Gagnon: Thursday Focus (December 12, 2013)

Things to Read on the Morning of December 12, 2013


  1. Robert Greenstein: On the Murray-Ryan Budget Agreement: "The budget agreement...represents an improvement... albeit a modest one.... Lawmakers should make every effort to accompany it with an extension of federal emergency unemployment benefits that will otherwise expire the week after Christmas... scale back a number of damaging cuts that they imposed in 2013 in areas ranging from education and Head Start to low-income housing and medical research.... It modestly promotes economic growth by somewhat easing the sequestration cuts in the near term while the economy remains weak and spreading out the offsets over a 10-year period.... It gives appropriators an opportunity to set funding priorities for 2014 and 2015, rather than mechanically extending last year’s funding levels....

    "But the agreement also has limitations...fails to extend emergency jobless benefits... replace less than half of the total sequestration cuts in 2014 and a much smaller share in 2015... leaving non-defense discretionary funding at levels too low.... Its $22 billion in savings that would go for deficit reduction will barely make a dent in our longer-term fiscal challenges, and those savings would have been better used to extend the expiring emergency unemployment benefits or scaling back the sequestration cuts to a greater degree."

  2. Paul Krugman: Upstairs, Downstairs, Outside: "Via Mark Thoma, David Cay Johnston has a great piece noting that today’s service economy is in many ways like the Edwardian-era economy in which a small number of wealthy people employed a large number of servants — except that we tend to outsource the service, relying on restaurants and cleaning services instead of cooks and maids. And our outsourced servants are, he notes, arguably paid and treated worse than the in-house servants of the past, even in absolute terms--let alone relative to per capita GDP. It’s a novel and useful way to think about just how unequal our society has grown."

  3. Robert E. Rubin, Roger C. Altman and Melissa Kearney: Making the poor--and the U.S.--poorer still: "Congress... cut[ting] food stamps. The Senate passed a bill in June mandating $4 billion in cuts over 10 years; the House version, passed in September, imposes nearly $40 billion in reductions.... This negotiation is occurring amid the worst poverty levels in two decades, a weak overall economy and rapidly falling budget deficits...economically and morally unsound.... 15 percent of the population--nearly 47 million people--lives in poverty, including 22 percent of children.... For a family of four, the poverty threshold is $24,000 or less.... Roughly 18 million other people are near-poor, living within 130 percent of the poverty line.... Most Americans living in poverty experience hunger or the pervasive fear of it.... Total federal spending on the Supplemental Nutrition Assistance Program (SNAP), this country’s main hunger prevention program, was $82.5 billion in fiscal 2013... [in a] $16 trillion economy.... It is hard to reconcile traditional American values of hard work and generosity with the levels of poverty and fear of hunger in our country.... It has been a generation since our country last had a robust conversation about combatting poverty. Now is the time to reinvigorate that conversation, not cut needed benefits."

  4. Austin Frakt: To avoid failure, the Affordable Care Act must evolve: "The participation of the young and healthy is supposed to be required, of course, by the individual mandate. But the mandate’s penalty is relatively modest and its enforcement mechanisms relatively weak... its power... depends... on civic duty....Matt O’Brien...'real people', he argued, 'aren’t rational self-maximizers… We don’t like to feel like we’re doing the wrong thing. We like to follow the rules instead. Feel like we’re a good person'. That the viability of the new marketplaces rests on convincing people that it is their civic duty to purchase health insurance is a weak link. I expect it will break in some markets.... Sure, you can call it a 'mandate'. But it’s just a choice. Play or pay.... And yet, within the community rating/guaranteed issue framework, the non-participation by younger and healthier people imposes a cost on others..."


  1. Gabriel Rossman: A Licensing Opportunity/a>: "1st of March, 1600 Anno Domini: To his majesty Felipe Hapsburg III: His majesty Christian den Fjerde, king of Denmark-Norway, sends you greetings and congratulations.... We are writing to alert you that your realm’s 'New Spain' project infringes on methods belonging to the Kingdom of Denmark-Norway. We wish to offer you an opportunity for licensing, including back-royalties for past activities of New Spain. In particular, the kingdom of Denmark-Norway lays claim to various patents and other intellectual property stemming from its 'Vinland' project with various filings contained in the Íslendingasögur... various techniques infringed upon by New Spain... 'Growth in Commerce and Enrichment of the Realm Through Expansion to Lands Across the Ocean'.... New Spain also infringes on... 'A Method for Enslavement of Skrælingjar' and 'Export of Agricultural Commodities Derived From Exotic Plants'.... We would therefore like to offer you the opportunity to license the Vinland patents to cover your activities in New Spain..."

2.Ed Glaeser et al.: Housing Dynamics: "The volatility of housing prices and construction levels is high.... Can these facts be reconciled with a dynamic housing model, where... prices reflect the value of access to an area’s income and amenities? We calibrate a dynamic spatial equilibrium model and find that it can fit some, but far from all, of the key empirical features of America’s housing markets. Long-run mean reversion is compatible with the model, but short-term positive price change persistence is not. Highly volatile prices and construction are compatible with the model if local wage levels follow close to a random walk, but not if there is more mean reversion in wages. Using HMDA income data allows our model to match most observed housing market volatility, but using BEA income data does not."

  1. Austalia Well On Its Way To Hottest Year Ever ThinkProgress Joanna Foster: Australia Well On Its Way To Hottest Year Ever: "Mean temperatures for Australia’s spring... were 1.57°C above the 1961-1990 average. September was especially hot, with an average temperature of 2.75°C or nearly 5°F above normal.... Australia’s record-breaking spring follows a generally wet winter and a summer that was also the country’s hottest on record. Temperatures soared so high in January that the Australian Bureau of Meteorology added new colors to its temperature maps. Deep purple now represents temperatures in excess of 50°C, or 122°F. The new high end of the scale tops out at 129 °F.... Bushfire season in Australia has already gotten off to an early start as four major fires ravaged western Sydney and the surrounding Blue Mountains area of New South Wales in September. The newest record broken in Australia comes just as the Australian Senate is debating the repeal of its carbon tax..."

  2. Taylor Marsh: Gov. Brian Sandoval Implements Obamacare in Nevada, 2nd Highest in Uninsured: 'Governor Brian Sandoval: 'I opposed the Affordable Care Act from its inception.... [But]the Affordable Care Act became the law of the land.'... Jon Ralston: 'Sandoval’s approval numbers are stratospheric, so it’s a very small group of folks who are concerned about it.... [The far right] 'seized on that because they don’t believe Sandoval is conservative enough'... Dina Titus: 'I don’t know what the politics are from his standpoint but I think it’s the right decision. People are signing up, fortunately, in Nevada and the website is working pretty well. We’ve been very aggressive'."

  3. NewImage Aaron Carroll: The kids are actually ok: "Every time I read a story on the 'kids these days'. I roll my eyes. Sexting, Internet porn, grinding, twerking, blah, blah, blah.... The teen birth rate in 2012 was a record low. It’s less than half what it was in 1991. The teen abortion rate is at an all time low. It’s less than half of what it was in the 1970′s, and is now at 38% of its peak in 1988. Even the teen pregnancy rate is at an all time low. It’s only 56% of its peak in 1990. African American teens? All time low. Hispanic teens? All time low. Non-Hispanic White teens? All time low. Will that stop us from going on and on and on about the “good old days”, how sex is ruining everything, and how today’s kids are just the worst? I doubt it. I swear, some day I’m going to get someone to fund me to do my 'the sky isn’t falling' study. Funders? Pretty please?"

Should Be Aware of:

  1. Andrew Jacobs: As Winter Nears, Chinese Capital Is Blanketed in Green [Cabbage]: 'Then there are the piles of cabbage that accrue in communal courtyards, high-rise hallways and window ledges across the city. The vegetal escarpments sometimes tower waist-high in public stairwells, competing for space with rusting bicycles and neatly stacked piles of the honeycomb coal briquettes that still heat countless homes here. 'When you see a mound of cabbage outside your front door, you feel confident that you won’t starve to death during the winter', said Wang Jianrong, 62, a retired government worker standing proudly beside a heap of white-and-jade roughage..."

  2. Paul Krugman: The Punishment Cure: "The G.O.P. answer to the problem of long-term unemployment is to increase the pain of the long-term unemployed: Cut off their benefits, and they’ll go out and find jobs. How, exactly, will they find jobs when there are three times as many job-seekers as job vacancies? Details, details. Proponents of this story like to cite academic research--some of it from Democratic-leaning economists--that seemingly confirms the idea that unemployment insurance causes unemployment. They’re not equally fond of pointing out that this research is two or more decades old, has not stood the test of time, and is irrelevant in any case given our current economic situation. The view of most labor economists now is that unemployment benefits have only a modest negative effect on job search--and in today’s economy have no negative effect at all on overall employment. On the contrary, unemployment benefits help create jobs, and cutting those benefits would depress the economy as a whole..."

  3. Joan McCarter: Daily Kos: Social Security expansion now very real. Thanks, Third Way!: "Rep. Allyson Schwartz (D-PA.), honorary co-chair of Third Way and gubenatorial candidate, is now a cosponsor of a bill to expand Social Security. That's after Third Way president Jon Cowan, Jim Kessler, the group's senior vice president for policy called the legislation 'exhibit A of this populist political and economic fantasy'.... Interesting that Schwartz isn't running on... her pro-austerity, cut Social Security record, but is instead essentially repudiating it. Not just that, she's now embracing that 'populist political and economic fantasy' that Third Way swears is political ruin for any Democrat. Go figure. When Sen. Sherrod Brown signed on to the bill to expand Social Security, it made news. It gave the movement real momentum. When Sen. Elizabeth Warren joined the team it catapulted the issue into what could be a centerpiece.... And that's what put Third Way and the whole world of Wall Street 'Democrats' into panic mode, coordinating a full-frontal assault against her and this issue. That assault has fallen completely flat. Nothing proves that more than Allyson Schwartz's name on the Strengthening Social Security Act. So thanks, Third Way! Now we've got ourselves a real rallying point for real Democrats."


Josh Bivens: Leaving Extended Unemployment Benefits Out of the Budget Deal is Cruel and Stupid | Jeremie Cohen-Setton and Tishani Dorfmeister: PREs, VSPs and the ECB: a response to Paul Krugman | ECB watchers: "Paul Krugman argued that there was indeed a fight inside the ECB between the PRE (pretty reasonable economists) and the VSP (very serious people). We disagree. Our understanding of what is going on at the ECB is different and somewhat more troubling. We think these categories are not relevant because there isn’t an actual debate between PREs and VSPs but rather a common defensive stance in support of a defunct monetary policy doctrine..."| Dirks on academics, athletics, ‘unconventional thinking’| Brady McCombs: Mormon church explains past ban on black priests | Noam Scheiber: Ryan-Murray Budget Deal a Win for Democrats: And the GOP doesn't know it yet | Michelle Goldberg: The Claims That Linda Tirado Is a Hoax Are the Real Hoax | Brad DeLong: I Don't Know What Map Alan Greenspan Has, or What Territory He Is Trying to Cover, But He Seems to Me to Be Lost...| James Wood: Amid the Uproar Over the Health Law, Voices of Quiet Optimism and Relief | John Hagel: Here's How to Keep the Robots From Stealing Our Jobs | Ezra Klein and Evan Soltas: Wonkbook: Washington is reducing the deficit but abandoning the unemployed | Nina Khrushcheva: Putinism as Peronismo | An Artist Counted Every Atomic Explosion On Earth And Shows Them All In A Matter Of Seconds | David Weigel: John Podesta returns to the White House to discover the truth about aliens | John Podesta: "The truth is out there, Dave" |