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May 2015

"Establishing" Health Exchanges: Ways Out of the King v. Burwell Trap

Over at Equitable Growth: The trouble that is the King v. Burwell case arises because of one sub-sub-section of the law which says "established by the state" rather than "established in the state" or "established for the state". The purpose of "established by the state" in its context:

...the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311... READ MOAR

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Must-Read: Where the smart young whippersnapper Ashok Rao shies at the jump here is in failing to specify where he thinks the market failure is, and how to correct it. Is the demand by foreigners for safe dollar-denominated assets an improper one? And why today is it only the U.S. government--rather than, say, Apple or Wal-Mart--that can tap this funding source? Or is there a deeper problem in that Apple and Wal-Mart could tap this funding source but really do not want to--that they already have all the capital and funding that they think they can use? These are the questions that people are worrying...

Ashok Rao: How Do Net International Positions Matter?: "Capital is supposed to flow from rich countries to poor countries...

Continue reading "" »


Liveblogging World War iI: May 12, 1945: Battle of Slivice

Wikipedia: Battle of Slivice:

The Battle of Slivice was the last large World War II battle in the area of the Czech lands. During 11–12 May 1945, German troops, trying to surrender to nearby American troops, defended themselves against local partisans and the Soviet Army. The Germans eventually capitulated during early hours of May 12. About 6,000 men were captured by the Soviet troops.

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The Brookings-Okun Event: "As Our Case Is New, We Think Anew, and Act Anew..."

Over at Equitable Growth: The Brookings-Okun Event

UPDATE: Oh, excellent! Here is the transcript.

Heather Boushey and Larry Summers posted their prepared thoughts for last week's Brookings-Okumn event. They are very good, and are well worth reading. The others--Wessel, Mankiw, Kearney, Wolfers--alas, did not. I am told that they were very good in the panel discussion. But where am I going to find the hour and a half to listen to it? And there appears to be no transcript. Serious bummer.

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After the Social Studies Problematic?

Over at Equitable Growth: Suppose, for a moment, you were teaching your college students social theory—but that you were back in 1750.

Who would you want your students to have at hand to read?

We will not do the boring think of confining you to assigning solely authors who had written before 1750. Assume that the appropriate time machine is available. But, equally, we will not do the boring thing of allowing you to assign historical accounts of what in 1750 was then the future. This is an intellectual exercise: we are interested in analytical perspectives on societies and how they work. READ MOAR

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Noted for Your Lunchtime Procrastination for May 11, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog

Plus:

And Over Here:

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Today's Economic History: Arthur Burns: Secret Diary, 1969

Arthur Burns (August 21, 1969): "The recently announced [Nixon administration] welfare reform [plan] was to do away with food stamps (in order to keep costs down)...

...but then it was discovered--the President didn't know this--that the recent welfare benefit plus promised food stamps would yield larger benefits to many than the new plan. This came as a shock to the administration (certainly to the President and to Ehrlichman; and to Moynihan who cares neither for truth nor for public money), and at once the cry went up that nobody would be worse off. The additional cost, on account of the food stamp fiasco, is still being calculated. It will probably be $1 billion [a year] or so...

http://delong.typepad.com/arthur-burns--secret-diary-1969.pdf

Arthur Burns: Secret Diary (1969) (ed. Robert Ferrell): http://www.amazon.com/gp/product/0700617302/ref=as_li_tlie=UTF8&camp=1789&creative=390957&creativeASIN=0700617302&linkCode=as2&tag=brde-20&linkId=VPOV3DID2PHOFJ2W


Across the Cassini Division: Richard M.: Ken MacLeod Seminar: "A short index of Ken MacLeod books...

...by political ideology promoted:

  • The Star Fraction: Revolutionary Communism
  • The Stone Canal: Anarcho-Capitalism
  • The Cassini Division: State Communism
  • The Sky Road: Barbarism
  • Engines of Light Trilogy: Feudalism
  • Learning the World: Neoliberalism
  • Night Sessions: Secularism
  • Restoration Game: Gnosticism
  • The Execution Channel: Liberalism
  • Intrusion: Libertarianism....

I went with the one that either was shown as working better than you might expect (the semi-utopias), or was the most obvious counter to the the dominant ideology of the dystopias. Of course, YMMV as to which is which…


Must-Read: My view was always--and subsequent research over the past generation has only confirmed my view, at least as I read the research--that the disemployment effects of safety-net programs were vastly oversold. Those who are discouraged appeared to me to be people who also had so many family responsibilities that their participation was of zero or negative societal value in the first place. The underlying subconscious logic behind overselling disemployment effects seemed to me to be one of punishing the poor, and and punishing women who either became pregnant without marriage or who could not keep a man...

Jason Furman: Smart Social Programs: "Anna Aizer [et al.]... 16,000 children whose families applied for a temporary income-support program...

Continue reading "" »


Must-Read: The thing that I think Bruce Bartlett misses is that Rupert Murdoch in company primarily regard FOXNews as a moneymaking opportunity rather then as policy or political intervention. The idea is to terrify your viewers, thus keep their eyeballs glued to the screen, and then sell those eyeballs to advertisers. The United States seems to me to be the only major country in the north Atlantic core politics has been moving left since 1996--and some of that, I think, is due to the effect of FOXNews on the political ecology.

Bruce Bartlett: How Fox News Changed American Media and Political Dynamics: "The creation of Fox News in 1996 was an event of deep, yet unappreciated, political and historical importance...

Continue reading "" »


Liveblogging World War II: May 11, 1945: Minutes of the Second Meeting of the Target Committee

Minutes of the Second Meeting of the Target Committee:

TOP SECRET Auth: C.O., Site Y, N.M. Initials: Date: 12 May 1945

This document consists of 7 Page(s). No. 1 of 4 Copies, Series A. U-13-XIX-1A

Memorandum For: Major General L. R. Groves
Subject: Summary of Target Committee Meetings on 10 and 11 May 1945

(1) The second meeting of the Target Committee convened at 9:00 AM 10 May in Dr. Oppenheimer's office at Site Y with the following present: General Farrell Dr. C. Lauritsen Colonel Seeman Dr. Ramsey Captain Parsons Dr. Dennison Major Derry Dr. von Neumann Dr. Stearns Dr. Wilson Dr. Tolman Dr. Penney Dr. Oppenheimer

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Best Comment on the 2015 British Election

The Conservative-LDP coalition right goes from 59% to 45%. The Labour-SNP left goes from 31% to 35%. And the split within each grouping is such as to raise the number of Conservative seats from 306 to 331, while reducing Labour seats from 258 to 232. So Britain now shifts from a 59%-supported government to a 37%-supported government? And this is supposed to be a good system?


Hoisted from the Archives Monday Smackdown: Niall Ferguson: Jumping the Gun on the Great Inflation of the 2010s

And in my tickler file is a note to remember this, from four years ago. Never mind that Niall Ferguson was totally wrong wrong wrong WRONG imbecilic in his claim that "true" consumer price inflation in 2011 was 10%/year. How has his prediction that "the great inflation of the 2010s" was underway (or about to get underway) fared?

Not well:

May 1, 2011:

Niall Ferguson: The Great Inflation of the 2010s: "‘I can’t eat an iPad.’ This could go down in history...

...as the line that launched the great inflation of the 2010s.... William Dudley... former chief economist at Goldman Sachs, put it this way: ‘Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful. You have to look at the prices of all things.’ Quick as a flash came a voice from the audience: ‘I can’t eat an iPad.’ Dudley’s boss, Ben Bernanke, was more tactful.... But... if we’ve avoided rerunning the 1930s only to end up with a repeat of the 1970s, the public will judge him to have failed.

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Liveblogging World War II: Ian Buruma: The End of 1945

Ian Buruma: The End of 1945:

?On May 8, 1945, when World War II in Europe officially ended, much of the world lay in ruins. But if the human capacity for destruction knows few limits, the ability to start over again is just as remarkable. Perhaps that is why mankind has so far managed to survive.

No doubt, millions of people at the end of the war were too hungry and exhausted to do anything much beyond staying alive. But, at the same time, a wave of idealism swept across the wreckage, a collective sense of determination to build a more equal, peaceful, and safer world.

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Weekend Reading: Albert Burneko: I Don't Think David Brooks Is Okay, You Guys

Albert Burneko: I Don't Think David Brooks Is Okay, You Guys: "You could just about set your calendar by it...

...In a month of Brooks, you’d get the call to begin or continue a war with Iraq or Iran, the grasping attempt to paint some cretinous Senator or presidential hopeful as the intellectual heir to Edmund Burke, and then, at last, the decline-and-fall column. You’d see a headline like ‘The Slow Virtues’ or ‘The Hollow Century’ or ‘Why the Teens Are Despicable,’ and you’d know ol’ Dave’s coffee shop was out of plain croissants a week ago and the barista had a nose-ring.... I got too comfortable automatically deploying this familiar way of understanding.... I think that is why I missed a change in Brooks’s work....

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Liveblogging World War II: Address to the Bundestag by Yehuda Bauer

Yehuda Bauer: Address to the Bundestag:

Professor Yehuda Bauer, Ph.D., is the past Director of the International Research Institute at Yad Vashem :: January 27, 1998

Mr. Speaker of the House of Representatives (Bundestag); Mr. President of Germany; Mr. President of the Bundesrat; Mr. Chancellor; Ladies and Gentlemen; dear friends:

On January 27, 1945, the Soviet Army conquered the Auschwitz complex of camps. Still, only some 7000-8000 people were liberated, of which the majority were ailing people whose lives had been miraculously spared by the S.S. The other 58,000 had left a few days earlier on the Death March.

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Noted for Your Nighttime Procrastination for May 8, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog

Plus:

And Over Here:

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Rent-Seeking, Price-Taking Competition, Paul Romer, and the History of Economic Thought

Over at Equitable Growth: Mark Thoma directs us to Paul Romer. And Paul Romer gets remarkably exercised about George Stigler's long and successful war against the use of the theory of monopolistic competition in economics, with its consequence that even today we have "scientifically unacceptable" people who say:

We will never, as a matter of principle, consider a model in which there are ever any monopolies. We will dogmatically stick only to models of price-taking competition...

From my perspective it is not the contemporary implications of this train of thought for growth theory that are important--for as best I can tell there are people who write growth models where every market has price-taking competition but there is nobody outside who reads them--but rather the historical implications of this train of thought for industrial organization, antitrust, and the rise of the rent seeking sector in the American economy.

I eagerly want to read and hope to see more work in this area. READ MOAR

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Must-Read: Nancy Lebovitz: Men Hunting Things: "Drake writes (I'm sure it was in one of the Things/Men anthologies)...

...about the ways in which war has become worse for soldiers--continuous through the night, continuous through the year, louder, the danger is more random... and the punchline was that some have compared war to hunting, but for soldiers in a modern war, it's more like being prey.


Today's Economic History: JM Keynes: Concluding Notes on the Social Philosophy Towards which the General Theory Might Lead

John Maynard Keynes: Concluding Notes on the Social Philosophy Towards which the General Theory Might Lead: "THE outstanding faults of the economic society in which we live...

...are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes. The bearing of the foregoing theory on the first of these is obvious. But there are also two important respects in which it is relevant to the second.

Since the end of the nineteenth century significant progress towards the removal of very great disparities of wealth and income has been achieved through the instrument of direct taxation — income tax and surtax and death duties — especially in Great Britain. Many people would wish to see this process carried much further, but they are deterred by two considerations; partly by the fear of making skilful evasions too much worth while and also of diminishing unduly the motive towards risk-taking, but mainly, I think, by the belief that the growth of capital depends upon the strength of the motive towards individual saving and that for a large proportion of this growth we are dependent on the savings of the rich out of their superfluity.

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Can Anyone Explain to Me How This Narrative from the FT's Kiran Spacey Makes Any Sense at All?

United Kingdom Election:

  • CON 37% votes 331 seats up from 36%/306
  • LAB 30% votes 232 seats up from 29%/258
  • SNP 5% votes 56 seats up from 2%/6
  • LDP 8% votes 8 seats down from 23%/57
  • Others 20% votes 23 seats up from 10%/23

I see: LAB-SNP up from 31% to 35%.

I see: CON-LDP down from 59% to 45%.

I see: CON up from 36% to 37%.

So I read things like:

Kiran Stacey: UK election: How Cameron killed his coalition: "David Cameron... and George Osborne... were determined to learn from the mistakes of the 2010 election campaign...

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Live from the Tar Sands: Alberta Provincial Election Blogging: The voters of Alberta are less enamored of their traditional conservative political masters, but the voters are not behind the new left-wing NDP provincial government to be led by Rachel Motley.

The seats and votes:

  • NDP: 53 seats 41% votes
  • WRP: 21 seats 24% votes
  • PCP: 10 seats 28% votes
  • LIB: 1 seat 4% votes
  • AP: 1 seat 2% votes
  • GRN: 0 seats 1% votes

Continue reading "" »


Live from Peet's Coffee: Digby: The scariest words you will hear all week: "I wrote about them for Salon today:

With these thirteen simple words GOP presidential candidate Jeb Bush struck terror into the entire world yesterday. He said, 

If you want to know who I listen to for advice, it’s him. 

To whom was he referring? As hard as it is to believe, he was talking about his brother, George W. Bush. 

Now it’s true that the question referred to Israel and the Middle East specifically, but it doesn’t really matter.

There isn’t any area of policy or interest in which it would be smart to make such an admission.

Continue reading "" »


Marking the 70th Anniversary of V-E Day 1945 Tweeting

Live from Peets Coffee: https://twitter.com/delong/status/596707833267159041

  • Very true! —>RT “@pdjeliclark: Don't forget: Soviet Union saved world from Hitler http://t.co/0MV9tOALBJ” & lend-lease saved SU from Hitler
  • @HuhWellwhatever: @delong @pdjeliclark Is it obvious that the Soviet Union was better than Hitler? Or fighting each other to a mutually weakening draw?
  • YES! —> RT @HuhWellwhatever: “@delong @pdjeliclark Is it obvious that the Soviet Union was better than Hitler?”
  • .@HuhWellwhatever Hitler wanted to exterminate population of Eastern Europe, fill land from the Oder to the Volga with Germans. Stalin did not want to exterminate population of Western Europe cc: @pdjeliclark
  • @pdjeliclark: @delong how many folk throwin in their analysis on WWII & the Eastern front for next few hrs u think will bother to read the article?
  • .@pdjeliclark 0.1%? The North Atlantic still owes an immense and largely unacknowledged debt to the tankers of the Red Army, the workers of Magnitogorsk who built their machines, and the peasants of the steppe who starved to feed the tankers...

Liveblogging World War II: May 8, 1945: Richard von Weizsacker

Liveblogging World War II: BundesRepublik President Richard von Weizsacker Tries to Master the Unmasterable Past:

As delivered, May 8, 1985:

Many nations are today commemorating the date on which World War II ended in Europe. Every nation is doing so with different feelings, depending on its fate. Be it victory or defeat, liberation from injustice and alien rule or transition to new dependence, division, new alliances, vast shifts of power--May 8, 1945, is a date of decisive historical importance for Europe.

We Germans are commemorating that date amongst ourselves, as is indeed necessary. We must find our own standards. We are not assisted in this task if we or others spare our feelings. We need and we have the strength to look truth straight in the eye--without embellishment and without distortion.

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Optimal Control, Fiscal Austerity, and Monetary Policy

Over at Equitable Growth: I find myself perseverating over the awful macroeconomic policy record of the Conservative-Liberal Democrat government of the past five years in Britain, and the unconvincing excuses of those who claim that the austerity policies it implemented were not a disaster--and that the austerity policies it ran on would not have come close to or actually broken the back of the economy.

Leaving to one side the fact that it is ludicrous that a depression that originates in overbuilding in the desert between Los Angeles and Albuquerque and overleverage in New York has a larger impact shock on the UK than on the US: READ MOAR

Graph Gross Domestic Product by Expenditure in Constant Prices Total Gross Domestic Product for the United Kingdom© FRED St Louis Fed

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"States' rights"--or "federalism"--was the line that Republicans took to trying to win votes in those states where strong majorities wanted to discriminate against African-Americans without losing votes in state for such discrimination was anathema.

Now we have a Republican Party that is committing itself nationally to the Expanded and Rewritten (by John Roberts) Religious Freedom Restoration Act providing a license to discriminate to businesses not in individual states that have passed RFRAs but nationally. The calculus of thus look much more hazardous:

Across the Wide Missouri:

Elizabeth Stoker Brunig: Mike Huckabee Announces 2016 Presidential Run: Why He'll Lose: "Mike Huckabee... when he inevitably bows out of the Republican primaries...

Continue reading "" »


Today's Economic History: Montagu Norman and the Czech Gold

Phillip Aldrick (2013): "Was Montagu Norman a Nazi sympathiser?" Torygraph http://www.telegraph.co.uk/finance/bank-of-england/10214541/Was-Montagu-Norman-a-Nazi-sympathiser.html: "Norman was Britain’s first modern central banker and Governor...

...for a remarkable 24 years until 1944, amassing powers at Threadneedle Street that turned what was a cosy City institution into an arm of the state. But he was also an economic dinosaur, whose determination to put Britain back on the gold standard in 1925 destroyed industry and condemned Britain to a more severe recession than necessary. Adam Posen, a former Bank’s rate-setter, has said that when he could not decide which way to vote he would look at the giant portrait of Norman hanging in the Monetary Policy Committee’s meeting room and ask himself ‘What would Montagu do?’. Then do the opposite.

Continue reading "Today's Economic History: Montagu Norman and the Czech Gold" »


In the Shadow of the Grand Tetons:

Paul Krugman: The Worst Ex-Fed Chairman Ever: "Now I have in my inbox a notice that as the Fed[eral Reserve Bank of Kansas City] holds its annual meeting in Jackson Hole...

...[Alan] Greenspan will address a counter-conference organized by a group called the American Principles Project. The group combines social conservatism — it’s anti-gay-marriage, anti-abortion rights, and pro-‘religious liberty’ — with goldbug economic doctrine. The second half of this agenda may be appealing to Greenspan, a former Ayn Rand intimate — as Paul Samuelson remarked, ‘You can take the boy out of the cult but you can’t take the cult out of the boy.’ But the anti-gay stuff? And helping these people attack his former colleagues? Awesome.


Must-Read: Ben Thompson: Twitter and What Might Have Been: "Google is... knows what I want.... Facebook knows who I am, and who I know....

Twitter... knows exactly... what I’m interested in... from what I tweet about... [and] who I follow. If an advertiser wants to reach someone like me... Twitter is by far the best way to find me.... What makes Twitter the company valuable is... the interest graph that is nearly priceless.... If one starts with that sort of understanding... the graph, not the app... the clear priority would not be increasing ad inventory on the Twitter timeline... but rather ensuring as many people as possible have and use a Twitter identity. And what would be the best way to do that? Through 3rd-parties, of course! And by no means should those 3rd-parties be limited to recreating the Twitter timeline: they should build all kinds of apps that have a need to connect people with common interests: publishers would be an obvious candidate, and maybe even an app that streams live video... anything to get more people using the Twitter identity and the interest graph...


The Problems with Our Press Corps Run Deep: Eugene Stern Explains That Nick Kristof of the New York Times Is Not Smarter than an 8th Grader

Over at Equitable Growth Much of the dysfunction of the American press corps is driven by the ideological commitments of its bosses, the cultural flaws of its journalists' communities, or the desperate need to scare its readers and viewers and thus keep them reading and viewing so that their eyeballs can be sold to advertisers.

Some of the dysfunction is not. Some of the dysfunction is unmotivated and completely pointless, even on its own terms.

Here we have Eugene Stern warning readers that reading Nick Kristof of The New York Times will not make you better informed: READ MOAR

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Noted for Your Nighttime Procrastination for May 6, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog

Plus:

And Over Here:

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Richard Thaler Misbehaves--or, Rather, Behaves

Over at Equitable Growth: A good review by Jonathan Knee of the exteremely-sharp Richard Thaler's truly excellent new book, Misbehaving. The intellectual evolution of the Chicago School is very interesting indeed. Back in 1950 Milton Friedman would argue that economists should reason as if people were rational optimizers as long as such reasoning produce predictions about economic variables--prices and quantities--that fit the the data. He left to one side the consideration even if the prices and quantities were right the assessments of societal well-being would be wrong. READ MOAR

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