Morning Must-Read: Alice Rivlin: People Who Wanted Market-Driven Health Care Now Have it in the Affordable Care Act
Morning Must-Read: Richard Milne: Central banks: Stockholm Syndrome

Noted for Your Morning Procrastination for November 22, 2014

Screenshot 10 3 14 6 17 PMOver at Equitable Growth--The Equitablog


Must- and Shall-Reads:

And Over Here:

  1. Alice Rivlin: People Who Wanted Market-Driven Health Care Now Have it in the Affordable Care Act: "That all sounds complicated, inconvenient and unfair. What have these 'socialist Democrats' done to us? But wait a minute: Isn't that how markets are supposed to work? The United States never adopted a simple national health plan to cover everyone.... In general, Republicans argued that relying on market forces would give people what they wanted while also putting pressure on the health system to offer more effective care for less money.... In general, Democrats argued that government should set benefits and the prices it would pay, as in a 'Medicare for all' program.... They pointed out that markets didn't work well in health care because consumers didn't know enough to choose what was best for them.... The compromise was to combine markets with regulation, sometimes called 'managed competition,' now called 'the Affordable Care Act.'... Should believers in market forces try to gut the Affordable Care Act? Heavens, no. They should seize this huge opportunity to prove their case by helping to make the law's markets work effectively..."

  2. Steven Teles: Restrain Regressive Rent-Seeking: "the great paradox of the last third of a century is that we have actually had an explosion of regulation in this ‘supposedly deregulatory’ era... regulation that has the effect of redistributing, sometimes dramatically, upward.... Intellectual property protections, especially patents and copyright, have been expanded dramatically.... There is an argument that this expansion has actually reduced innovation, there is no doubt that it has allowed existing firms to use the force of law (rather than the market) to enrich themselves.... The same period has seen a transformation of occupational licensing, from a marginal force in our economic organization to one that is increasingly ubiquitous.... Finally, the incredible growth of the financial sector... also finds its source in government-derived rents... ‘too big to fail.’... By allowing a huge securitized housing finance market.. pushing more and more of American retirement savings into actively managed 401ks and IRAs... the government created the greatest pool of rents in the history of mankind..."

  3. Danny Vinik: Peter Schiff: My Inflation Prediction Was Correct. The Stats Are Lying: "Peter Schiff... might... be the person most wrong about America's economic struggles. In 2009, Schiff not only warned of impending inflation but said it was already upon us.... In the newest issue of Reason, the libertarian magazine, he ‘responds’ to his critics....'It's hard to ignore the victory chants coming from the White House press room, the minutes of the Federal Reserve's Open Markets Committee, the talking heads on financial television, and the editorial pages of The New York Times.... Their claims of victory are premature and inaccurate. Inflation is easy to see in our current economy, if you make a genuine attempt to measure it.' Schiff goes on to cite the Big Mac index... argues that the ‘sandwich, which reflects the average person's direct experience, may be a more accurate yardstick of inflation.’ This is wrong in so many ways.... If Schiff wants a metric that takes into account prices of everyday items—lettuce, tomato, bread, ground beef, etc.—he should look no further than the consumer price index.... The Massachusetts Institute of Technology has created a separate inflation measure: The Billion Prices Project tracks prices online through massive retailers that have significant market share. The project only further confirms the accuracy of the CPI. It’s hard to think of any theory that has been more clearly disproven over the past six years than the right wing’s inflation paranoia. But the fanatics are not giving up. Is there any evidence at all that would convince Schiff—and his many followers—he’s wrong?
  4. Walt Mossberg and Kara Swisher: A Note to Re/code Readers: "The biggest change for some of you, however, will be that we have decided to remove the commenting function from the site. We thought about this decision long and hard, since we do value reader opinion. But we concluded that, as social media has continued its robust growth, the bulk of discussion of our stories is increasingly taking place there, making onsite comments less and less used and less and less useful.... We believe that social media is the new arena for commenting, replacing the old onsite approach that dates back many years..."

  5. Jim Tankersley: Big cities are dominating the recovery, leaving the rest of America behind: "This isn’t how the economy typically worked over the last 35 years. Calculations made earlier this year by state economists in Oregon show that big cities tended to grow at rate similar to other areas of the country after a recession. Only the late 1990s were an exception. Until now.... Rural areas without oil or gas reserves have on average only recovered one-fifth to one-quarter of the jobs they lost during the crisis.... It may be that this geographic jobs gap is a permanent feature in an economy increasingly driven by brainpower and innovation, where clustering smart people in relatively small areas appears to boost labor productivity.... ‘Scale and density concentrate economic inputs like skilled people and R&D, intensify interactions, allow for labor market pooling and matching, allow for access to shared infrastructure,’ said Mark Muro, the metro program’s policy director. ‘This a fact of economic life. Place, scale and density matter.’...

  6. David Schleicher: Things Aren't Going That Well Over There Either: Party Polarization and Election Law in Comparative Perspective by :: SSRN: "One of, if not the, most important change in American political life over the last 30 or so years has been the rise of extreme party polarization. Our two major parties are increasingly ideological distinct and distant from one another, and increasingly willing to abandon long-standing institutional norms and short-term policy compromise in the name of achieving long-run party goals. Efforts to understand why the parties have changed largely have been parochial, largely looking for explanations in American politics, history, media and institutional arrangements. This focus has a logic to it. Politics in most other advanced democracies does not feature the same type of polarization between parties, and therefore the answers for why American politics has gone in this direction seem to lie inward rather than abroad. But it is still a mistake. This short essay argues that a common shift in voter preferences towards more radical and fundamentalist opinion among even a small slice of the electorate can explain polarization in the United States and changes in politics abroad. In many European countries with proportional representation (PR), we have seen the rise of parties so radical that established parties refuse to form coalitions with them. In ‘Westminster’ systems, which due to their use of first-past-the-post vote counting and single-member districts are supposed to tend towards having two parties, we have seen the rise in third-and fourth party voting. Notably, in most Westminster systems, there is little intra-party democracy, leading groups of voters with more radical opinions without the ability to influence mainstream parties, which makes those with radical opinions more willing to waste votes. A plausible story about American political development is that the same voters and interest groups who would form radical parties in PR systems and support spoilers in Westminster systems use intraparty democracy to influence our two-party system and create polarization. Election laws and institutional design shape the way radicalism influences politics. If this is right, several lessons follow. Any effort to understand why American parties have changed must look at factors that are common across many western democracies. Further, the rise of radical parties in PR systems and spoilers in Westminster systems have created governance problems that are of a type with the problems created by our extreme polarization. We should thus be skeptical that there are institutional design reforms that can make American governance work easily in the face of polarization."

Should Be Aware of:


  1. Brian Buetler: Republicans: Obama's Immigration Action Is Illegal Just ... Because: "A few months ago, before President Obama delayed his plan to extend deportation protections to more unauthorized immigrants, a group of conservative opinion journalists—New York Times columnist Ross Douthat, most prominently—weighed in on the idea in unequivocal terms.... Caesarism.... A step into the lawless void. It all sounded incredibly plausible, in no small part because Obama framed his own objective as a response to the fact that Congress hadn't passed a law he wanted Congress to pass. That Obama also insisted, on multiple occasions, that only Congress could solve the deportation problem, further bolstered the right's case. But it turns out that the laws on the books actually don’t say what you might think they say. Other presidents have discovered this, too. And since nobody wants to write a ‘maybe I should’ve asked some lawyers first’ mea culpa column, they shifted the debate from the terrain of laws to the murkier terrain of political precedent, norms, and procedure..."

  2. Kevin Drum: Republicans Finally Admit There Is No Benghazi Scandal: "For two years, ever since Mitt Romney screwed up his response to the Benghazi attacks in order to score campaign points, Republicans have been on an endless search for a grand conspiracy theory that explains how it all happened. Intelligence was ignored because it would have been inconvenient to the White House to acknowledge it. Hillary Clinton's State Department bungled the response to the initial protests in Cairo. Both State and CIA bungled the military response to the attacks themselves. Even so, rescue was still possible, but it was derailed by a stand down order—possibly from President Obama himself. The talking points after the attack were deliberately twisted for political reasons. Dissenters who tried to tell us what really happened were harshly punished. Is any of this true? The House Select Intelligence Committee—controlled by Republicans—has been investigating the Benghazi attacks in minute detail for two years. Today, with the midterm elections safely past, they issued their findings. Their exoneration of the White House was sweeping and nearly absolute..."

  3. Anand Katakana: Immigrants aren't taking your jobs, they're making their own: "Mexicans, Indians, Chinese, Koreans and Cubans make up the bulk of migrant entrepreneurs, with 35 percent. But the entrepreneurship rate among Greek, Israeli, Palestinian and Syrian immigrants was higher than other nationalities. Over the last two decades, immigrant owned businesses have made up 30 percent of the growth in the small business economy, a significant chunk given that immigrants only account for 13 percent of the US population. Their businesses also performed better than your average American. Employees within these small companies earned over $55,000 a year over the median earned income of $41,000 a year, according to the Fiscal Policy Institute's report.... It's worth noting that there's not a single city on that chart where the foreign-born share of business owners doesn't exceed the foreign-born share of the population..."