FLASH: Clive Crook and Jack Shafer Upset Because People Informing People Are Claiming to Be Journalists: Non-DeLong Smackdown Watch
Afternoon Must-Read: Yuriy Gorodnichenko , Gérard Roland and Edward W. Walker: Putin’s European Fifth Column

Noted for Your Afternoon Procrastination for February 16, 2015

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


Must- and Shall-Reads:

And Over Here:

  1. William K. Black: Foreshadowing the Three Fraud Epidemics that Drove the Crisis: "[Piskkorski, Seru, and Witkin] were not aware, however, of the answers to these fundamental questions [about mortgage fraud].... ‘These misrepresentations are not instances of the classic asymmetric information problem in which the buyers know less than the seller. Rather, we contend that they are instances where, in the process of contractual disclosure by the sellers, buyers received false information on the characteristics of assets.’ The use of the word ‘classic’ indicates an important (retrograde) movement in economics. The ‘classic’ treatment of asymmetry... George Akerlof’s 1970 article on a market for ‘lemons’... all about ‘buyers receiv[ing] false information on the characteristics of assets’ in the process of ‘contractual disclosure by the sellers.’ Akerlof presented a dynamic process in which the seller makes false disclosures... to maximize the asymmetry of information.... Indeed, Akerlof emphasized the propagation of that fraudulent asymmetry through the industry as a result of what he dubbed a ‘Gresham’s’ dynamic. ‘[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence‘ (Akerlof 1970). The fact that top economists, 40 years later, claimed that fraud does not represent a ‘classic’ pathology of asymmetrical information demonstrates how far economics has fallen..."

  2. Richard Mayhew: Thoughts on a post-King market: "I alternate between being sure that there are five votes on the Supreme Court to throw out a couple of generations of agreed-upon administrative law precedents in order to keep people from getting subsidized health insurance in most states, and being reasonably confident that there are only three.... I see the four liberal judges writing a fairly brief and caustic opinion.... The other two judges in the positive scenario will write a paen to the majesty of cooperative federalism where the law clearly states that subsidies only go to state run exchanges BUT the threat was not clearly communicated therefore, the subsidies have to flow to all states.... But what happens if the Supremes have five sadists?... Quite a few insurers would pull most if not all of their On-Exchange products.... The remaining individual insurance market now looks like the pre-PPACA New York State insurance market.... We get a death spiral where average premiums for a 30 year old would almost double... [and] reasonably-healthy people who otherwise would have qualified for subsidies now sit out of the market because they can’t afford the coverage..."

  3. Matthew Yglesias: Why Politicians Are so Boring (and the MSM Is so Bad): "Gaffe-coverage... signif[ies] nothing and leav[es] nothing behind... distracts from more consequential, but complicated, debates.... In an internet world of limited time but unlimited newshole the 'gaffe' story offers easy content.... Last... the old-time division between 'news' and 'opinion' continues to saddle much mainstream political coverage with a perverse bias toward tactics and process... that a politician gaffed is a fact... while the fact that a politician's agenda might be bad for the world is opinion..."

  4. Paul Krugman: Triumph of the Chart: "The Vox interview with President Obama... reactions... not just from the right, but from centrists are remarkable. Jack Shafer compares it to a Scientology recruitment film; Rich Lowry compares it to Leni Riefenstahl.... What seems to offend the critics is the very idea of covering a politician’s policies.... Back in 2004... you could watch all the network and major cable coverage for two months, and learn literally nothing about, say, the candidates’ health care plans.... That’s the kind of thing the people at Vox are trying to fix--and the response is to accuse them of acting like cultists if not Nazis."

Should Be Aware of: