Month: April 2014

In The Baffler, Kathleen Geier recently attempted a roundup of conservative criticism of Thomas Piketty’s new book Capital in the Twenty-First Century. The astonishing thing to me is how weak the right’s appraisal of Piketty’s arguments has turned out to be.

Continue reading “(Late) Tuesday Focus and Daily Piketty: The Poverty of Right-Wing Piketty Criticism: Over at Project Syndicate; April 29, 2014” →

Peter Orszag notes that health-care expenditures grew nearly four times as fast in the first quarter of 2014 than over the previous three years…

If this is a signature of ACA implementation–of people who are newly-eligible for insurance actually getting to the doctor–it is a very good sign indeed…

Mike Konczal: Studying the Rich: “Piketty’s book warns that capital and inequality are likely…

…to make even greater strides in the next few decades; the influence of wealth and inheritance could make our economy look a lot more like the nineteenth century, with its dominance of dynastic fortunes, than the joint prosperity we have come to assume is the natural state of advanced economies…. Piketty’s argument is convincing and well-supported. So what is the debate over?… Generally, critics have come at him from two different directions…. By not locking his own argument tightly to a model he also leaves himself vulnerable to criticism that there are trends towards equality…. Some… have argued… the more capital there is… the rate of return should fall. If it falls rapidly, the capital share of national income will not increase….

Continue reading “Daily Piketty Afternoon Must-Read: Mike Konczal: Studying the Rich” →

Matthew Yglesias: Our Vacant Homes Aren’t Where People Need Houses: “I argued… zoning regulations are holding back a potential construction boom….

One key challenge to that view comes from… housing vacanc[ies]… which… remains stubbornly high…. Banks who’ve foreclosed on homes prefer to keep these houses vacant and preserve their paper value as assets than to sell the houses at current market rates and acknowledge the extent of their financial losses. But… if rents are rising nationwide… why aren’t these empty houses increasing in value and being brought back to the market?… Vacancies are in the wrong places. People can’t move into vacant homes in Florida, Detroit, and Las Vegas and commute to jobs in Silicon Valley, Manhattan, or Washington DC…. The markets in the San Francisco Bay… have super-low vacancy rates… so do the suburbs of the three major cities of the Northeast Corridor, and… the two highest-wage cities in the interior of the country, Denver and Minneapolis. The places where people could find the most economic opportunities, in other words, don’t have the housing supply…. Rents are rising in these areas, but they’re also the toughest markets to get permission to build. So we’re left with the worst of both worlds–high rents and empty houses…

Should-Reads:

1. Eric Monnet: A Monetarist History of the Fed: “The monetarist prism through which [Allan] Meltzer sees the history of monetary policy is also the cause of certain errors and oversights…. The history of ideas and… political relations… supplants administrative history…. His analyses of decision-making and administrative processes are nowhere near as extensive as his history of monetary theory. For instance, he never mentions the number of people employed by the Fed; little detail is offered about the operation of the twelve regional federal banks; and there is no discussion of the relation between these banks and regional economies. The… primacy accorded to the monetary prism… prevent[s] the author from considering Fed decisions in any framework other than one of simple… price stability…. It is hard to deny that in a democracy the representatives of the people are entitled to make the law, which cannot be set aside in the name of economic efficiency defined in a highly theoretical manner. This of course raises the question of the political legitimacy of Fed policy, which Meltzer dismisses with the assertion that the Fed must be credibly committed to price stability…. In the end, it is difficult to overlook a certain gap between the history that Meltzer recounts and the conclusions he draws…. Even if the decisions of the Fed draw on a framework of economic theory, that framework cannot fully determine the outcome because it is never comprehensive enough to yield unambiguous solutions to problems as they arise in real time…. Despite this cognitive complexity, Meltzer simply reiterates his belief in the need for price stability as a long-term goal, along with a credible rule for anchoring expectations, and he regards any deviation from such a rule as a failure of monetary policy…. His interpretation… does not really do justice to the complexity of the phenomena…. He shares… the old monetarist dream of an ‘automatic monetary policy’…. Despite Meltzer’s own position on the issue, his absorbing history of more than seventy years of Fed activity will convince many readers that such a rule is absolutely impossible to define…”

2. Duncan Black: Whatever Pisses Off Liberals: “The reverse isn’t true. I really don’t see liberals supporting or opposing things because they imagine it’ll piss off conservatives…. ‘Increased MPG standards will sure piss off Limbaugh! Let’s vote for that!’ It’s somewhat unrelated, but I’m reminded of when the Last Honest Man In Washington, Joe Lieberman, briefly floated Medicare buy-in at 55 as a kind of compromise for the public option in the ACA. I pleaded with everyone I knew to STFU about it, because of course liberals would have taken that deal. I knew that the instant the greatest man who ever lived got wind of the fact that liberals would actually love that deal he’d back off supporting it, because liberals. And he did…”

Should Be Aware of:

Continue reading “Things to Read on the Morning of April 29, 2014” →

Ezra Klein: The Republican replacement for Obamacare is Fauxbamacare: “Scott Brown… called Obamacare a ‘disaster’…

…Then he was asked what he’s for  — and he went on to describe Obamacare.

I’ve always felt that people should either get some type of health care options, or pay for it with a nice competitive fee. That’s all great. I believe it in my heart. In terms of preexisting conditions, catastrophic coverages, covering kids, whatever we want to do… [it could] include the Medicaid expansion [for] folks who need that care and coverage…

Continue reading “Morning Must-Read: Ezra Klein: The Republican replacement for Obamacare is Fauxbamacare” →

Rob Wile: Brad Delong On Piketty: Below is a Q&A with Brad Delong…

…economics professor at Berkeley. The topic was Thomas Piketty’s new book “Capital in the Twenty-First Century.” This Q&A went out to subscribers of our “10 Things You Need To Know Before The Opening Bell” newsletter on Monday morning. Sign up here to get the newsletter and more of these interviews in your inbox every day.

I have expanded my answers a bit:

BUSINESS INSIDER: What one comment or idea has stuck with you most from Berkeley’s “Piketty Day?” ​

BRAD DELONG: That Piketty has a very uphill climb to get modern American economists to believe his story. Their–our–default models were built for an age in which there was very little movement in inequality and in the capital share of income, and thus the models assume that virtually nothing has a big effect on income and wealth inequality or the capital share of income. Thus our knee-jerk reaction is to reject Piketty’s story because it does not fit our standard models. But, then, no story that accounted for the rise would fit our standard models.

Continue reading “Over at Business Insider: Five Questions and Answers About Thomas Piketty’s “Capital in the Twenty-First Century”: Monday Focus; April 28, 2014″ →