Noted for Your Lunchtime Procrastination for June 18, 2014

Should-Reads:

1. Jason Gubbles sends us to Esther Duflo: Patronizing The Poor: “We tend to be patronizing about the poor in a very specific sense, which is that we tend to think, “Why don’t they take more responsibility for their lives?” And what we are forgetting is that the richer you are the less responsibility you need to take for your own life because everything is taken care [of] for you. And the poorer you are the more you have to be responsible for everything about your life…. Stop berating people for not being responsible and start to think of ways instead of providing the poor with the luxury that we all have, which is that a lot of decisions are taken for us. If we do nothing, we are on the right track. For most of the poor, if they do nothing, they are on the wrong track…”

2. Aaron Carroll: Health Care in Singapore:

Should Be Aware of:

• Dean Baker, J. Bradford DeLong, and Paul Krugman (2005): Asset Returns and Economic Growth
• Katrina Stierholz: FRED®: the St. Louis Fed’s Force of Data
• Matt Levine: “The most important lesson is, if you’re an investment bank, maybe ban e-mail? It always works out so poorly. At least, take it easy on e-mailed pitches. Do your pitching via Snapchat. You should never put your opinions on the record for prospective clients to use however they like. Save your opinions for the clients who are paying you…”
• Barry Bosworth: Interest Rates and Economic Growth: Are They Related?
• Joshua Freedman and Sherle R. Schwenninger: America’s Debt Problem: How Private Debt Is Holding Back Growth and Hurting the Middle Class
• Mark Thoma: The Latest Inflation Worry Is, As Usual, Overblown
• Mark Carlson and David Wheelock: Navigating Constraints: The Evolution of Federal Reserve Monetary Policy, 1935-59
• By Erik Brynjolfsson, Andrew McAfee, and Michael Spence: Our New Robot Overlords
• Poetica
• CEPR: Eurozone Mired in Recession Pause

And:

1. Sanford Grossman and Joe Stiglitz (1980): “In general the price system does not reveal all the information about ‘the true value’ of the risky asset.… The only way informed traders can earn a return… is if they can use their information to take positions in the market which are ‘better’ than the positions of uninformed traders. ‘Efficient Markets’ theorists… claimed… ‘at any time prices fully reflect all available information’…. If this were so then informed traders could not earn a return…. As soon as the assumptions of the conventional perfect capital markets model are modified to allow even a slight amount of information imperfection and a slight cost of information, the traditional theory becomes untenable…. Because information is costly, prices cannot perfectly reflect the information which is available, since if it did, those who spent resources to obtain it would receive no compensation. There is a fundamental conflict between the efficiency with which markets spread information and the incentives to acquire information…”

2. Joseph Cotterill: The Pari Passu Saga: “The ‘trial of the century’ in sovereign debt restructuring, in our humble opinion. The story of Argentina, its holdout creditors, the grande finale (or is it?) of their battle in US courts…”

3. Juan Cole: 7 Myths about the Radical Sunni Advance in Iraq | Informed Comment: “‘The US should be concerned about Iranian influence in Iraq.’… Shiite Iraqis and Shiite Iranians don’t always get along, but warning Iraq against Shiite Iranian influence is like warning Italy against Vatican influence. Iran has an interest in seeing radical Sunnis rolled back in Iraq, and if ISIS is in fact a danger to US interests, then the obvious thing for the US to do would be to improve relations with Iran and cooperate with Tehran in defeating the al-Qaeda affiliates in the region. In fact, this has been the obvious course since 2001, when president Mohammad Khatami of Iran staged pro-US candle light vigils throughout Iran after 9/11. Instead, Neocons like David Frum maneuvered the Bush administration into declaring Iran part of an imaginary Axis of Evil on behalf of right-wing Israeli interests. This stance has all along been illogical. The Obama administration is said to be considering consultations with Iran about Iraq. Even Bush did that at one point. It is only logical…”

4. Buce: Shakespeare’s “Gentlemen”: “‘And gentlemen in England now-a-bed/Shall think themselves accurs’d they were not here,/And hold their manhoods cheap whiles any speaks/That fought with us upon Saint Crispin’s day.’ So Henry V on the eve of Agincourt, in the play of his name, Act IV, Scene 3. But then, where else would you expect to find a ‘gentleman’ when there is work to be done?”

Already-Noted Must-Reads:

1. John Fernald: Productivity and Potential Output Before, During, and After the Great Recession: “U.S. labor and total-factor productivity growth slowed prior to the Great Recession. The timing rules out explanations that focus on disruptions during or since the recession, and industry and state data rule out “bubble economy” stories related to housing or finance. The slowdown is located in industries that produce information technology (IT) or that use IT intensively, consistent with a return to normal productivity growth after nearly a decade of exceptional IT-fueled gains. A calibrated growth model suggests trend productivity growth has returned close to its 1973-1995 pace. Slower underlying productivity growth implies less economic slack than recently estimated by the Congressional Budget Office. As of 2013, about 3⁄4 of the shortfall of actual output from (overly optimistic) pre-recession trends reflects a reduction in the level of potential.”

2. Mike Konczal (2011): Examining the Limitations of a Neoliberal Safety Net: “What are the differences between our current [social democratic] approach and the Romney [neoliberal] approach? The first difference is that the unemployment insurance savings accounts don’t actually involve what the liberal government does best: social insurance. There’s no risk pooling…. Whether or not you view the ideology of insurance as sound actuarial reasoning or as a form of solidarity doesn’t matter because the actual mechanisms of insurance don’t exist…. The second is that redistribution in the Romney suggestion is quietly upwards, towards the richest, instead of obviously towards those in need…. The third is that it weakens the power of the unemployed…. A fourth is that it is hard to scale outwards in cases of emergency…. And the fifth and last point is that it removes the idea of the government from the equation of people dealing with economic risks. Like much of the ‘submerged’ state, people will look at private savings accounts and think that the government isn’t doing anything…. There’s no social to this program and thus no politics and thus no real political constituency for it…. This is my quick read, and I’d really enjoy your thoughts.  What do you think about the difference of the two approaches?…”