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February 2015

Morning Must-Read: Nicholas Bagley: Cleaning up the Standing Mess in King

Nicholas Bagley: Cleaning up the standing mess in King: "Difficult questions about standing and the viability of the lawsuit...

...The King lawyers have an ethical obligation[:]... ‘[w]hen a development after this Court grants certiorari... could have the effect of depriving the Court of jurisdiction due to the absence of a continuing case or controversy, that development should be called to the attention of the Court without delay.’... Without standing, the federal courts lack jurisdiction.... When standing problems become apparent after full briefing, the Court sometimes chooses to dismiss cases as improvidently granted--to ‘DIG’ them....

There’s a better way... call for... plaintiffs’ lawyers to explain the factual basis for their clients’ standing. Ordering such briefing wouldn’t be unprecedented: in a case decided in 2000, for example, the Court ordered supplemental briefing on standing the day after oral argument. And such briefs often address questions pertaining to mootness.... Doing nothing in the face of continued silence from the plaintiffs is no longer a tenable approach.

http://theincidentaleconomist.com/wordpress/cleaning-up-the-standing-mess-in-king/


Morning Must-Read: Yanis Varoufakis: No Time for Games in Europe

Yanis Varoufakis: No Time for Games in Europe: "The trouble with game theory...

...as I used to tell my students, is that it takes for granted the players’ motives.... In the current deliberations between our European partners and Greece’s new government, the whole point is to forge new motives. To fashion a fresh mind-set that transcends national divides, dissolves the creditor-debtor distinction in favor of a pan-European perspective, and places the common European good above petty politics, dogma that proves toxic if universalized, and an us-versus-them mind-set....

I am convinced that we have one option only: to shun any temptation to treat this pivotal moment as an experiment in strategizing and, instead, to present honestly the facts concerning Greece’s social economy, table our proposals for regrowing Greece, explain why these are in Europe’s interest, and reveal the red lines beyond which logic and duty prevent us from going...

http://www.nytimes.com/2015/02/17/opinion/yanis-varoufakis-no-time-for-games-in-europe.html


Evening Must-Read: John Podesta: Climate Change Progress Is Possible

The proponents of do-nothing on global warming have now fallen back to their third line of defense. The first line of defense was to claim that the science was unsettled. The second line was to claim that it would be too expensive and that future generations would be better able to fix than we are to do our share in helping to prevent and reduce. The third line of defense is that since it is a global problem the United States should sit back and let other countries deal with it and free-ride on their efforts.

And it is definitely progress that John Podesta now feels that he can take aim at line of defense number 3:

John Podesta: Climate Change Progress Is Possible: "Many in today’s Congress are responding to the urgency of the climate threat not with action...

...but with obstruction, skepticism, and outright denial. This week, the Senate held a hearing on the EPA’s proposed Clean Power Plan rule, which would set the first-ever limits on how much carbon pollution power plants can put in our air and vastly improve public health as a result, averting up to 150,000 asthma attacks in children per year. Republicans criticized the proposal from every angle--including by claiming it doesn’t do enough. Since we in the United States cannot solve the complex, global challenge of climate change solely through actions taken within our own borders, their argument goes, we should do nothing. This is a fallacy. Failing to take steps today to curb carbon pollution and other greenhouse gas emissions in the U.S. would endanger our economy, our national security, and our children’s future...

http://www.politico.com/magazine/story/2015/02/climate-change-john-podesta-115169.html


Afternoon Must-Read: Raquel Fernández and Jonathan Portes: Argentina’s Lessons for Greece

If there was one lesson that should have been learned from the 1920s and 1930s--and relearned many times since--it is that the stubborn pursuit of destructive policies in the hope that if only they gain enough credibility they will cease to be destructive is, quite frankly, mad. No policy can be less credible than the repeated claim that you will sustain unsustainable policies:

Raquel Fernández and Jonathan Portes: Argentina’s Lessons for Greece: "The first lesson from Argentina is that...

...if the economics are on your side, you can and should ignore politicians prophesying disaster. The vast majority of economists (outside of Germany) agree that Greece’s debt should be written down and its fiscal policy relaxed. There is also little doubt that this is the view of senior economists within the IMF.... The second lesson of the Argentine crisis is that a short period of political turmoil can cost surprisingly little compared to a long period of mindless pursuit of misconceived policies.... Sacrificing Greek interests in the name of European or systemic financial stability may have once been the correct path for the IMF to pursue, but the crisis there is well past the point at which these policies ceased being justifiable. Now that Greece’s ineffectual and unpopular government has been swept away (another accurate prediction), it is time for the rest of Europe to clean up the financial mess...

http://www.project-syndicate.org/commentary/greece-lessons-from-argentina-by-raquel-fern-ndez-and-jonathan-portes-2015-02


Afternoon Must-Read: Yuriy Gorodnichenko , Gérard Roland and Edward W. Walker: Putin’s European Fifth Column

It is not just the macroeconomic health of the European Union that is at stake in the European Union's failure to find a way to reflate and rebalance its economies. The political destiny of what Muscovy calls its "near abroad"--what happens in those former union republics of the Soviet Union with capitals different from Moscow--hinges on the European Union being a success and being seen to be a success. And perhaps the political destiny of Muscovy hinges on this as well...

Yuriy Gorodnichenko, Gérard Roland, and Edward Walker: Putin’s European Fifth Column: "There can be no doubting [Vladimir Putin's] awareness of the role that European ideals...

...and the possibility of EU membership--has played in motivating the struggle in Ukraine and constraining his actions. The popular desire to join Europe’s community of democratic states was a key force behind the collapse of right-wing dictatorships in Greece, Spain, and Portugal in the 1970s. It also played a critical role in the collapse of communist regimes in Central and Eastern Europe after the fall of the Berlin Wall. And it certainly contributed to the ouster of Ukrainian President Viktor Yanukovych--a key Putin ally--in 2014. Indeed, the existence of a European model continues to guide and encourage those pursuing transparent, democratic governance in many post-communist countries...

http://www.project-syndicate.org/commentary/putin-strategic-ambition-by-yuriy-gorodnichenko-et-al-2015-02


Noted for Your Afternoon Procrastination for February 16, 2015

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

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FLASH: Clive Crook and Jack Shafer Upset Because People Informing People Are Claiming to Be Journalists: Non-DeLong Smackdown Watch

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Let's take a break from the DeLong Smackdowns even though there are now a number in the queue.

No, I don't have the guts to yet read another page of David Graeber's Debt: The First 5000 Mistakes.

But two things did cross my desk last week that offend the shape of reality itself and really do deserve to be smacked down.

The first was from Jack Shafer:

Jack Shafer: All the President’s Explainers: "Klein and Yglesias...

are less interested in interviewing Obama than they are in explaining his policies... insert[ing] infographics and footnotes that help advance White House positions... end[s] up looking and sounding like extended commercials for the Obama-in-2016 campaign. I’ve seen subtler Scientology recruitment films. Explainer journalism... purports to break down complex policy issues into laymen-friendly packages that are issued from the realm of pure reason.... If you’re going to be partisan about your journalism, if you’re going to give the president an easy ride, you’ve got to be clean about it! You can’t pretend... that all you’re doing is making the news ‘vegetables’ more palatable by roasting them to ‘perfection with a drizzle of olive oil and hint of sea salt.’ Klein and Yglesias are like two Roman curia cardinals who want us to believe their exclusive interview with the pope is on the level.... Are there no upsides to interviews with the president, even toadying or hagiographic ones? I suppose durable White House contacts can be made by landing one, but will these contacts be useful in chasing real news? Not likely...

If I have understood what Shafer has to say, it is that:

Continue reading "FLASH: Clive Crook and Jack Shafer Upset Because People Informing People Are Claiming to Be Journalists: Non-DeLong Smackdown Watch" »


Lunchtime Must-Read: Paul Krugman: Triumph of the Chart

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.

http://krugman.blogs.nytimes.com/2015/02/16/triumph-of-the-chart/


Nighttime Must-Read: Richard Mayhew: Thoughts on a Post-King Market

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...

http://equitablegrowth.org/?p=9279


Over at Equitable Growth: Dynamic Scoring Considered Harmful: Focus

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Over at Equitable Growth: I had always thought that dynamic scoring was a bad idea because it leads to a ratchet--Democrats when they are in power claim deficit reduction from a stronger economy if their policies are enacted , and then Republicans when they are in power claim deficit reduction from a stronger economy if they undo what the Democrats did. You have no chance of getting policy-effect forecasts that are unbiased on average if you allow the party in power to shape CBO's estimates of macroeconomic impacts.

The vir clarissimus Robert Lynch has a good look at all the other issues in this can of worms: READ MOAR

Continue reading "Over at Equitable Growth: Dynamic Scoring Considered Harmful: Focus" »


Nighttime Must-Read: Matthew Yglesias: Why Politicians Are so Boring (and the MSM Is so Bad)

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...

http://equitablegrowth.org/?p=9275


Afternoon Must-Read: William K. Black: Foreshadowing the Three Fraud Epidemics that Drove the Crisis

William K. Black: Foreshadowing the Three Fraud Epidemics that Drove the Crisis: "[Piskorski, 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...

http://equitablegrowth.org/?p=9272


Live from La Farine: Vir Spectabilis: Greg Ip

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Wikipedia: Vir illustris - Wikipedia, the free encyclopedia: "The title vir illustris ('illustrious man') is used...

...as a formal indication of standing in late antiquity to describe the highest ranks within the senates of Rome and Constantinople. All senators had the title vir clarissimus ('very famous man'); but from the mid fourth century onwards, vir illustris and vir spectabilis ('admirable man', a lower rank than illustris) were used to distinguish holders of high office....

Continue reading "Live from La Farine: Vir Spectabilis: Greg Ip" »


Noted for Your Lunchtime Procrastination for February 15, 2015

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

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Lunchtime Must-Read: Derek Thompson: The Richest Cities for Young People: 1980 vs. Today

Derek Thompson: The Richest Cities for Young People: 1980 vs. Today: "Today, the ten cities in the country with the highest median income for young people are...

...San Jose, San Francisco, Washington, D.C., Boston, New York, Baltimore, Seattle, Minneapolis, Philadelphia, and Chicago.... Forecast what this list would look like in 20 years, [you] would offer something very much like this.... The agglomeration of talent on the coasts will continue to attract.... But... history has a way of intervening with such crudely extrapolated trends. Five of the ten richest cities from 33 years ago have seen median wages for young people fall by at least 15 percent. The turnover rate of the list is 50 percent.... Extrapolating the present forward isn't the same thing as knowing the future.

The Richest Cities for Young People 1980 vs Today The Atlantic The Richest Cities for Young People 1980 vs Today The Atlantic

http://equitablegrowth.org/?p=9264


Morning Must-Read: Erik Loomis: Class Warfare

Erik Loomis: Class Warfare: "Republican presidential possibilities...

are going to focus on income inequality... as a problem that exists because the rich pay too much in taxes and the poor don’t pay enough.... Reinventing the reasons for income inequality to fit Republican preferences to concentrate resources among the 1 percent is just another front in that party’s class warfare it has declared on working and middle class Americans. Krugman....

So, can anyone show me an example of a prominent Republican politician proposing anything that would reduce after-tax-and-transfer inequality? Bank shots don’t count--saying that slashing food stamps will help the poor by making them less dependent, or that cutting capital gains taxes will bring the confidence fairy to everyone’s door, don’t qualify.... I’m not demanding... every part... I just want to see one significant piece that goes in that direction.... Even when there’s something that sounds like it might be in that direction--say, Paul Ryan proposing that the EITC be extended to childless workers--there’s no talk of an increase in funding, so it’s coming at the expense of current recipients.... This is the acid test... because it’s how you see whether reformicons... are willing to do anything beyond putting the same old pro-plutocratic policies in new bottles. Show me the downward-flowing money!

Of course there’s isn’t any downward-floating money. Nor will there be any. And the same will be the case if a Republican wins in 2016, despite their attempt to co-opt the issue of income inequality."


Weekend Reading: Thomas Piketty vs. N. Gregory Mankiw: I Must Say, I Cannot Think of an Economic Argument That I Score as More One-Sided than This One...

N. Gregory Mankiw: Yes, r > g. So What?: "I am not persuaded by his main conclusions...

...The book documents that the rate of return on private capital r exceeds the economy’s growth rate g.... He reasons that if r > g, the wealth of the capitalist class will grow faster than the incomes of workers, leading to an “endless inegalitarian spiral.”... Piketty’s logic... will seem strange to any economist trained in the neoclassical theory of economic growth.... r > g should be familiar... as a steady-state condition as long as the economy does not save... an excessive amount of capital... [a] dynamically inefficient situation, all generations can be made better off by reducing the economy’s saving rate...

Thomas Piketty: Putting Distribution Back at the Center of Economics: Reflections on Capital in the Twenty-First Century: "The Dynamics of Wealth Inequality and the Role of r > g...

Continue reading "Weekend Reading: Thomas Piketty vs. N. Gregory Mankiw: I Must Say, I Cannot Think of an Economic Argument That I Score as More One-Sided than This One..." »


Morning Must-Read: Robert Litan: What 'Audit the Fed' Really Means--and Threatens

Robert Litan: What 'Audit the Fed' Really Means--and Threatens: "Words matter.... Think of the success tax reformers...

...had when they called the inheritance tax the ‘death tax.’ Or how opponents of the president’s health-care law gathered political strength... calling a medical reimbursements panel the ‘death panel.’ And so it is with Washington’s latest craze, the movement spearheaded by Sen. Rand Paul to ‘audit the Fed,’ an effort launched by the senator’s father, Ron Paul.... The Fed’s financial statements have long been audited by professionals, but Sen. Paul’s bill is not about that... [it's about the] Government Accountability Office... giv[ing] Congress annual reports on monetary policy functions....

The economists employed by the GAO are no match for the economists at the Fed. It is not within their domain of expertise.... It’s fine for Congress to regularly ask the Fed... to report.... But why create... a ‘shadow Fed’ elsewhere within the government?... If backers of the ‘audit the Fed’ movement want to get rid of the agency, they should say so, and let that debate begin. If it does, central banks will win.... If ending the Fed is not the objective... economic evidence makes clear that truly independent central banks keep inflation lower...


Weekend Reading: David Corn: Why Liberals Should Embrace Romney the Progressive Champion

David Corn: Why Liberals Should Embrace Romney the Progressive Champion: "At an investment management conference...

...in Utah this week, Romney told the crowd that a new-and-improved candidate Romney would focus on climate change, poverty, and education.... In a bizarre Freaky Friday sort of way, Romney appears to have been body-snatched—perhaps by the ghost of Ted Kennedy.... What's next? Supporting gay rights, gun control, and abortion rights? (Or, in his case, going back to supporting gay rights, gun control, and abortion rights.)...

Continue reading "Weekend Reading: David Corn: Why Liberals Should Embrace Romney the Progressive Champion" »


Liveblogging World War II: February 14, 1945: FDR

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February 14th, 1945 - FDR: Day by Day:

10:20am: The USS Murphy stood in from the south. The USS Murphy had been sent to Jidda, Saudi Arabia a port on the Red Sea, to provide transportation for Saudi Arabian King Ibn Saud to Great Bitter Lake for his forthcoming conference with FDR. USS Quincy, Egypt

10:30am: Mrs. John Boettiger left the ship to spend the day in Cairo, Egypt. USS Quincy, Egypt

Continue reading "Liveblogging World War II: February 14, 1945: FDR" »


Nighttime Must-Read: Thomas Philippon: Finance vs. Wal-Mart: Why are Financial Services so Expensive?

Thomas Philippon: Finance vs. Wal-Mart: Why are Financial Services so Expensive?: "Despite its fast computers and credit derivatives...

...the current financial system does not seem better at transferring funds from savers to borrowers than the financial system of 1910. The role of the finance industry is to produce, trade and settle financial contracts that can be used to pool funds, share risks, transfer resources, produce information and provide incentives. Financial intermediaries are compensated for providing these services. Total compensation of financial intermediaries (profits, wages, salary and bonuses) as a fraction of GDP is at an all-time high, around 9% of GDP. What does society get in return? Or, in other words, what does the finance industry produce? I measure the output of the finance industry by looking at all issuances of bonds, loans, stocks (IPOs, SEOs), as well as liquidity services to firms and households. Measured output of the financial sector is indeed higher than it has been in much of the past. But, unlike the income earned by the sector, it is not unprecedentedly high. Historically, the unit cost of intermediation has been somewhere between 1.3% and 2.3% of assets. However, this unit cost has been trending upward since 1970 and is now significantly higher than in the past. In other words, the finance industry of 1900 was just as able as the finance industry of 2010 to produce loans, bonds and stocks, and it was certainly doing it more cheaply. This is counter-intuitive, to say the least. How is it possible for today's finance industry not to be significantly more efficient than the finance industry of John Pierpont Morgan?... Technological improvements in finance have mostly been used to increase secondary market activities, i.e., trading. Trading activities are many times larger than at any time in previous history. Trading costs have decreased, but I find no evidence that increased liquidity has led to better (i.e., more informative) prices or to more insurance.

http://equitablegrowth.org/?p=9258


Noted for Your Nighttime Procrastination for February 13, 2015

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

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Evening Must-Read: The Recent Rise and Fall of Rapid Productivity Growth

John Fernald and Bing Wang: The Recent Rise and Fall of Rapid Productivity Growth: "Information technology fueled a surge in U.S. productivity growth...

...in the late 1990s and early 2000s.... The exceptional pace of productivity growth has disappeared, returning to roughly its pre-1995 pace.... The important factor after 2003 is slower growth in innovation.... Fernald (2014a)... finds that the slowdown was in sectors that produce IT or use IT intensively....One slice of the data focuses on the “bubble” industries of the mid-2000s, that is, construction, real estate, finance, and natural resource[s].... The contribution of bubble industries to overall TFP fell--becoming more negative--between the 2000–04 and 2004–07 periods. But the contribution of the remaining three-quarters of the economy fell even more.... The non-bubble industries are divided into three mutually exclusive groups: IT producers, intensive IT-users, and other industries that do not use IT intensively.... The TFP slowdown is concentrated in industries that produce IT or that use IT intensively.... Three out of the past four decades have seen business-sector productivity growth near 1½%. We could well see future growth in that range. Of course, such a forecast would completely discount the fast growth of 1995 to 2003.... Pessimists argue that IT is less important than great innovations of the past that dramatically boosted productivity, such as electricity or the internal combustion engine. Optimists point to the possibilities offered by robots and machine learning...

http://equitablegrowth.org/?p=9254


Live from the Elmwood Cafe: Occasionally, Even Now, the Right-Wing Crazy Leaks into My Comment Section...

Obama taps Great Neck resident for top bureau The Island Now News

And I have to clean it up manually...

Today:

Gutter Dweller has replied to dr2chase’s comment: Here’s the rub: the numbers don’t exist. They are deliberately not tracked by the BLS. The BLS is run by a Chinese American. Fools.

The BLS Commissioner is Erica L. Groshen.

I mean, the statement that "Chinese immigrants are America's new Jews" is a joke! It is not supposed to be taken literally!


Afternoon Must-Read: AFP: 'Mega-Drought' Risk in 21st-Century Western U.S.

Increasingly, not just prairie agriculture but California agriculture looks like toast. Phoenix and Las Vegas look uninhabitable because of an unsolvable water problem. And when prairie agriculture goes and we shift away from carbon energy, there will be no reason to live between the Mississippi and the Rocky Mountain Front Range...

AFP: 'Mega-Drought' Risk in 21st-Century Western U.S.: "Currently the western United States...

...has been experiencing a drought for about 11 of the past 14 years.... 'I was honestly surprised at just how dry the future is likely to be,' said co-author Toby Ault.... 'We are the first to do this kind of quantitative comparison between the projections and the distant past, and the story is a bit bleak,' said Jason Smerdon.... 'Even when selecting for the worst mega-drought-dominated period, the 21st century projections make the mega-droughts seem like quaint walks through the Garden of Eden.'... Researchers applied 17 different climate models to analyze the future impact of rising temperatures on regions from Mexico to the United States and Canada.... 'The results... are extremely unfavorable for the continuation of agricultural and water resource management as they are currently practiced in the Great Plains and southwestern United States,' said David Stahle... who was not involved in the study...

http://equitablegrowth.org/?p=9249


Morning Must-Read: Matthew Buettgens et al.: Health Care Spending by Those Becoming Uninsured if the Supreme Court Finds for the Plaintiff in King v. Burwell

Matthew Buettgens et al.: Health Care Spending by Those Becoming Uninsured if the Supreme Court Finds for the Plaintiff in King v. Burwell: "We estimate that there would be 8.2 million more uninsured people...

...if the court rules in favor of the plaintiff, including 6.3 million people losing tax credits for Marketplace coverage, 1.2 million people purchasing nongroup coverage without tax credits and 445,000 enrolled in Medicaid or the Children’s Health Insurance Program (CHIP), all of whom would become uninsured.... Under the current law, these 8.2 million people will spend an estimated $27.1 billion on health care in 2016, with $11.1 billion spent on hospital care, $4.5 billion for physician services, $5.3 billion for prescription drugs and $6.2 billion for other health care. If these people became uninsured, they would spend $5.3 billion on their own care; another $12.0 billion in uncompensated care for this population would be provided if governments continue to fund such care at historic rates and health care providers continue to make in-kind contributions to the uninsured at the same rates as they have in the past.... This significant decrease in expenditures and the rise in the demand for uncompensated care would adversely affect both the amount of health care received by those losing coverage and health care providers’ revenues. This is particularly true for hospitals because the ACA reduces Medicare and Medicaid disproportionate share hospital (DSH) payments, which are historical sources of funding for uncompensated hospital care...

http://equitablegrowth.org/?p=9243


Liveblogging World War II: February 13, 1945: Firebombing of Dresden

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From Kurt Vonnegut: Slaughterhouse-Five:

Billy [Pilgram] thought hard about the effect the quartet had had on him, and then found an association with an experience he had had long ago. He did not travel in time to the experience. He remembered it shimmeringly—as follows:

He was down in the meat locker on the night that Dresden was destroyed. There were sounds like giant footsteps above. Those were sticks of high-explosive bombs. The giants walked and walked. The meat locker was a very safe shelter. All that happened down there was an occasional shower of calcimine. The Americans and four of their guards and a few dressed carcasses were down there, and nobody else. The rest of the guards had, before the raid began, gone to the comforts of their own homes in Dresden. They were all being killed with their families.

Continue reading "Liveblogging World War II: February 13, 1945: Firebombing of Dresden" »


Over at Equitable Growth: Has David Autor Gotten Himself Hopelessly Confused with Respect to Average and Marginal Products?

Over at Equitable Growth: Something has bothered me ever since I read the highly-eminent and highly-esteemed David Autor's "Polanyi's Paradox and the Shape of Employment Growth":

David Autor (2014): Polanyi’s Paradox and the Shape of Employment Growth: "[The] human tasks that have proved most amenable to computerization...

...are those that follow explicit, codifiable procedures.... Tasks that have proved most vexing to automate are those that demand... skills that we understand only tacitly.... The interplay between machine and human comparative advantage allows computers to substitute for workers in performing routine, codifiable tasks while amplifying the comparative advantage of workers in supplying problem solving skills, adaptability, and creativity. Understanding this interplay is central to interpreting and forecasting the changing structure of employment in the U.S. and other industrialized countries.... READ MOAR

Continue reading "Over at Equitable Growth: Has David Autor Gotten Himself Hopelessly Confused with Respect to Average and Marginal Products?" »


Over at Equitable Growth: The Four Must-Reads You Need to Understand Thomas Piketty and His "Capital in the Twenty-First Century": Focus

Over at Equitable Growth: I have a new list of three articles that bring you up to speed on the current state of the process of assessing and assimilating Thomas Piketty's Capital in the Twenty-First Century:

Thomas Piketty: Putting Distribution Back at the Center of Economics: Reflections on Capital in the Twenty-First Century: "In my view, the magnitude of the gap...

...between r and g is indeed one of the important forces that can explain historical magnitudes and variations in wealth inequality: in particular, it can explain why wealth inequality was so extreme and persistent in pretty much every society up until World War I.... That said, the way in which I perceive the relationship between r > g and wealth inequality is often not well-captured in the discussion that has surrounded my book--even in discussions by research economists.... For example, I do not view r > g as the only or even the primary tool for considering changes in income and wealth in the 20th century, or for forecasting the path of income and wealth inequality in the 21st century. Institutional changes and political shocks--which can be viewed as largely endogenous to the inequality and development process itself.... READ MOAR

Continue reading "Over at Equitable Growth: The Four Must-Reads You Need to Understand Thomas Piketty and His "Capital in the Twenty-First Century": Focus" »


Noted for Your Nighttime Procrastination for February 12, 2015

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

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Hoisted from the Archives: Adam Smith's Economics Once Again Proves Useful...

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Adam Smith's economics is indeed capable of shedding a lot of light on the phenomenon of commodity money:

In comments, the smart and thoughtful Tim Burke writes about:

Tim Burke: Comment: ...the concept of gift economies and status or reputation capital, that in some societies, manufactured goods were wanted less for some sense of their material utility and more because they could be used in existing forms of exchange centering on gifts and status accumulation. To give an African example, liquor was one of the things that some African elites wanted as payment for slaves, and the common assumption on the part of Westerners was that Africans wanted the alcohol in order to drink it. But in many cases, elites just stockpiled it and never consumed it. They weren't interested in its 'real' or material utility: it was a kind of gift-currency. You could give the bottles to clients and at a later date use the circulation of gifts as a way to mobilize your clients for various kinds of labor. The clients didn't usually drink what they were given, either: they had their own stockpiles. A lot of gift exchange in the Pacific worked pretty similarly historically...

Continue reading "Hoisted from the Archives: Adam Smith's Economics Once Again Proves Useful..." »


Liveblogging World War II: February 12, 1945: Manila

February 12, 1945 - YouTube:

Shown during Animo Night 2005, this video is about the February 12, 1945 massacre (of Br Egbert Xavier FSC and 15 other Christian Brothers; members of the Carlos, Cojuangco, Aquino, Uychuico and Vazquez Prada families; and employees of De La Salle College) at the Chapel of the Most Blessed Sacrament. A band of Japanese soldiers massacred the 16 Brothers and the several families who had taken refuge with them in the College Chapel.

The 'I'll Be Seeing You' soundtrack (by Vera Lynn) on this clip was for editing and timing guide purposes only. DLSU alumna Cooky Chua sang the piece during the actual performance (November 18, 2005) with Mel Villena on the saxophone.


Evening Must-Read: Mark Thoma: Erskine Bowles is Back

Mark Thoma: Economist's View: Erskine Bowles is Back: "Erskine Bowles writes a letter to the NY Times....

Mr. Krugman’s assertion that America followed a course of austerity while the economy was still in a deep slump due to the influence of "Bowles-Simpsonism" ignores the fact that one of the key principles set out in the National Commission on Fiscal Responsibility and Reform report was that deficit reduction must not disrupt the fragile economic recovery. Indeed, it is largely due to the failure of our elected leaders to reach agreement on long-term deficit reduction along the lines of our recommendations that we ended up with the mindless austerity of sequestration....

Does anyone remember Bowles or his associates objecting strenuously to the sequester, getting out in public forums and arguing it was a big mistake? Writing letters and op-eds to the NY Times, that sort of thing? I don't.... I don't see them calling for delay until the economy recovers, only for a different type of austerity, e.g.:

simply waiving this sequester--or coming up with some agreement to spend partway between pre- and post-sequester levels--would represent a huge failure... send a message... that Washington is not serious....

Many projections suggest that our major social insurance programs will face financial difficulties in the future.... At some point we may need to cut benefits. But why, exactly, is it crucial that we deal with the threat of future benefits cuts by locking in plans to cut future benefits [now]?...

http://equitablegrowth.org/?p=9225


Tea. Earl Grey. Hot: Live from La Farine

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Why do I like Earl Grey tea so much? Too much time spent watching "Star Trek: The Next Generation" when I was younger? Something magical and psychoactive about the inedible bergamot? Grey himself, however, never got a chance to watch ST:TNG, so it cannot be 100% the first...


Liveblogging World War II: February 11, 1945: Yalta

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Franklin D. Roosevelt, Winston S. Churchill, and Iosif V. Stalin: Joint Statement:

We have considered and determined the military plans of the three Allied powers for the final defeat of the common enemy. The military staffs of the three Allied Nations have met in daily meetings throughout the Conference. These meetings have been most satisfactory from every point of view and have resulted in closer coordination of the military effort of the three Allies than ever before. The fullest information has been interchanged. The timing, scope, and coordination of new and even more powerful blows to be launched by our armies and air forces into the heart of Germany from the East, West, North, and South have been fully agreed and planned in detail.

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Evening Must-Read: Olivier Blanchard (2008): The State of Macro

Olivier Blanchard (2008): The State of Macro: "The so-called new-Keynesian (or NK) model has emerged and become a workhorse.… The model starts from the RBC model without capital, and... introduces monopolistic competition in the goods market.... If the economy is going to have price setters, they better have some monopoly power. It then introduces discrete nominal price setting, using a formulation introduced by Calvo... which turns out to be the most analytically convenient.... [It] has largely replaced the IS-LM model as the basic model of fluctuations in graduate courses.... It reduces a complex reality to a few simple equations. Unlike the IS-LM model, it is formally rather than informally derived from optimization by firms and consumers.... The costs are that... the first two equations of the model are patently false.… The aggregate demand equation ignores the existence of investment, and relies on an intertemporal substitution effect... hard to detect in the data on consumers. The inflation equation implies a purely forward looking behavior of inflation, which again appears strongly at odds with the data.... One striking (and unpleasant) characteristic... is that there is no unemployment! Movements take place along a labor supply curve.... One has a sense... that this may give a misleading description of fluctuations, in positive terms, and, even more so, in normative terms...

http://equitablegrowth.org/?p=9223


Morning Must-Read: Ross Douthat: The Case Against the Case Against the Crusades

Ross Douthat: The Case Against the Case Against the Crusades: "The Crusades as an epoch-spanning phenomenon...

...aren’t in and of themselves a great stain on Christian history: They’re a phenomenon in Christian history that includes many stains and sins and great crimes, but also involves many admirable figures and heroic moments, many great tragedies, and many individuals and incidents that simply resist any kind of manichaean reading. Contemporary Christians should reject and disavow the great crimes that some Crusaders committed as they should reject and disavow the un-Christian hatreds that motivated them. But we are under no obligation to reject and disavow the entire multi-century struggle with an armed and equally-militant foe as merely the manifestation of some irrational religious ‘phobia,’ let alone accede to analogies that cast an entire civilization’s worth of kings and theologians and soldiers as the moral equivalent of Osama Bin Laden..."

Consider Raymond d'Aguilers--an enthusiastic participant in the First Crusade, someone who thought that the Crusades were a wonderful idea, and chaplain during the Crusade to Raymond de Saint-Gilles, the Provencal Crusader leader who was the future Count of Tripoli. Note that he is not criticizing any of what took place. Let's give Raymond d'Aguilers the last word:

Raymond d'Aguilers: Historia Francorum qui Ceperunt Iherusalem: "Finally, our men took possession of the walls and towers...

...and wonderful sights were to be seen. Some of our men (and this was more merciful) cut off the heads of their enemies; others shot them with arrows, so that they fell from the towers; others tortured them longer by casting them into the flames. Piles of heads, hands, and feet were to be seen in the streets of the city. It was necessary to pick one's way over the bodies of men and horses. In the Temple of Solomon, men rode in blood up to their knees and bridle reins. Indeed, it was a just and splendid judgment of God that this place should be filled with the blood of the unbelievers, since it had suffered so long from their blasphemies. Some of the enemy took refuge in the Tower of David, and, petitioning Count Raymond for protection surrendered the Tower into his hands. How the pilgrims rejoiced and exulted and sang a new song to the Lord! On this day, the children of the apostles regained the city and fatherland for God and the fathers...

http://equitablegrowth.org/?p=9215


Noted for Your Nighttime Procrastination for February 10, 2015

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

Plus:

Must- and Shall-Reads:

And Over Here:

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Live from La Farine: Michael Cannon Cites Julie Rovner as an Authority Until She Corrects Him

Ian Millhiser: Top Obamacare Opponent Mansplains Health Reform To Reporter, Gets His Butt Handed To Him: "Thursday, [Michael] Cannon participated in a web debate...

...hosted by the National Institute for Health Care Management Foundation, where he cited reporting by former NPR reporter Julie Rovner that, he claims, supports his understanding of the law. Cannon’s interpretation of Rovner’s reporting, however, did not sit well with the moderator of the debate, former NPR reporter Julie Rovner. After Cannon attempted to use Rovner’s reporting in support of his argument, Rovner, who now reports on health policy for Kaiser Health News, produced a copy of the article Cannon cited and read it aloud to him in order to prove that it does not actually support his claims...

And, rather than apologizing or retracting, Michael Cannon writes:

Note: neither @jrovner, nor @nicholas_bagley, nor @imillhiser, nor @MyConstitution has accepted my challenge...

Maybe @imillhiser or @MyConstitution will lend space to @jrovner, @nicholas_bagley, me to discuss @RepLloydDoggett letter & JR's reporting?

Notice what he did there? He cited Julie Rovner's story as an authority. When she pointed out to him that the story did not say what he had cited it to say, he shifted ground to not citing but challenging her reporting.

I must say, the lies here are just too thick for me...


Over at Equitable Growth: The Federal Reserve and Borg Assimilation: Focus

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Over at Equitable Growth:

Larry Summers: Only raise US rates when whites of inflation’s eyes are visible: "Aborting recovery and risking a further slowing of price rises is potentially catastrophic..."

READ MOAR

Continue reading "Over at Equitable Growth: The Federal Reserve and Borg Assimilation: Focus" »


Evening Must-Read: Claudia Sahm: Is Resistance Futile?

Claudia Sahm: Is Resistance Futile?: "Krugman.... 'So if Larry [Summers] were at the Fed...

would he be saying what he is, or would he have been assimilated by the FedBorg?...

This got me wondering: In the past 7+ years have I, as a staff economist, been 'assimilated by the FedBorg?'... What are some Fed-specific signs that I have changed as an economist?: Fedspeak: My economic writing tends to be more factual and less forceful now.... The staff view: As an economist, I uttered the words: 'we think xyz' much, much less before joining the Fed.... The Fed: More than once I have thought how wonderful it would be if monetary policy in the real world were like in Woodford's textbook.... I am constantly amazed at the array of inputs to and outputs from the policy work at the Fed. And I am pretty sure that most academic economists could learn something from reflecting more on this.... So it seems to me the good part of assimilating is learning new things, the bad part of assimilating is forgetting what you knew...

http://equitablegrowth.org/?p=9206


Evening Must-Read: "There Can Be No Partnership with the King": Regulatory Commitment and the Tortured Rise of England's East Indian Merchant Empire

Dan Bogart: "There Can Be No Partnership with the King": Regulatory Commitment and the Tortured Rise of England's East Indian Merchant Empire: "The English East India Company helped build...

...Britain's colonial empire, but the Company was not a leader in East Asian trade for nearly a century after its founding in 1600. This paper argues that its early performance was hindered by a problem of regulatory commitment. It gives a brief history of the torturous renegotiations over its monopoly trading privileges and the fiscal demands by the monarchy. It also analyzes the effects of political instability, warfare, and 􏰁fiscal capacity on the Company's investment in shipping tonnage. Regressions show the growth of shipping tonnage declined significantly when there were changes in government ministers, when Britain was at war in Europe and North America, and when shipping capacity exceeded central government tax revenues. The findings point to the significance of regulatory institutions in Britain's development and its links with politics and war. They also provide an important case where regulatory uncertainty lowers investment.


Lunchtime Must-Read: Trevon Logan and John Parman: The National Rise in Residential Segregation

Trevon Logan and John Parman: The National Rise in Residential Segregation: "We exploit complete census manuscript files to derive a measure of segregation...

...based upon the racial similarity of next-door neighbors. Our measure allows us to analyze segregation consistently and comprehensively for all areas in the United States and allows for a richer view of the variation in segregation across time and space. We show that the fineness of our measure reveals aspects of racial sorting that cannot be captured by traditional segregation indices. Our measure can distinguish between the effects of increasing racial homogeneity of a location and the tendency to segregate within a location given a particular racial composition. Analysis of neighbor-based segregation over time establishes several new facts about segregation. First, segregation doubled nationally from 1880 to 1940. Second, contrary to previous estimates, we find that urban areas in the South were the most segregated in the country and remained so over time. Third, the dramatic increase in segregation in the twentieth century was not driven by urbanization, black migratory patterns, or white flight to suburban areas, but rather resulted from a national increase in racial sorting at the household level. The likelihood that an African American household had a non-African American neighbor declined by more than 15 percentage points (more than a 25% decrease) through the mid-twentieth century. In all areas of the United States--North and South, urban and rural--racial segregation increased dramatically.


Today's Greek Crisis: A Non-Platonic Dialogue: The Honest Broker for the Week of February 22, 2015

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Readings:

Sokrates Son of Sophroniskos: You are out of your century, and out of your country...

Titus Pomponius Atticus: I claim this to be my country, and here by the docks of the Piraeus to be my place. I am not called "Atticus" for nothing, you know...

Axiothea: Why are you called "Atticus"? It doesn't sound like a very Roman name...

Atticus: I made it up. My father had only two names--good old Titus Pomponius, no claims to triple-barreled noble senatorial-class names he, just an equestrian.

Continue reading "Today's Greek Crisis: A Non-Platonic Dialogue: The Honest Broker for the Week of February 22, 2015" »