Things to Read on the Evening of May 12, 2014

Should-Reads:

1. Ed Luce: Review of Stress Test by Timothy Geithner: “Long after Rahm Emanuel, Lawrence Summers, Robert Gates, Peter Orszag and even Hillary Clinton had left the scene, Geithner was still at the president’s side. ‘Thanks for navigating us through a terrible storm’, wrote Mr Obama. ‘[Alexander] Hamilton would be proud!’… Geithner faced down the ‘Old Testament populists and moral hazard fundamentalists’ who would have preferred to burn the house down, in his view, than bail out rich bankers. ‘Nothing we did was out of sympathy for the bankers’, says Geithner. They were merely ‘collateral beneficiaries’. He repeatedly had to dissuade Mr Obama from the ‘showy, populist head fakes’ thrust on him by his political advisers. These included proposals to fire the chiefs of the bailed-out banks, nationalise the banks, impose strict pay limits and claw back generous bonuses…. Will history see Geithner as a great Treasury secretary? That is uncertain. He was certainly effective. But too much of this otherwise self-deprecating memoir is self-defence…. He is stung by the charge that he served Wall Street at the expense of Main Street. Yet he admits, ‘I wish we had expanded our housing programs earlier, to relieve more pain for homeowners’…”

2. Barry Eichengreen: The Eurozone Crisis Is Not Over: “If we have learned one thing from the last four years, it is that the European Union lacks the capacity to act decisively…. The patient is far from cured. Ireland, Portugal, Spain, and Greece have made considerable progress in lowering their unit labor costs to 1999 levels relative to Germany. The problem is that 1999 levels are not enough…. Italy and France… have made considerably less progress…. Nor is it clear where the crisis countries will find the demand that they need…. The ECB… continues to do too little to support demand… has been behind the curve since 2011…. Valls and Renzi also plan to cut spending to prevent their budget deficits from rising, which means that their initiatives will not boost demand…. Europe’s banking crisis is unresolved…. And everyone knows that Europe’s much vaunted banking union is deeply flawed…. Finally, there is that pesky matter of public debt…. All of this has the makings of a dismal prognosis. But it is how Europe progresses…”

Should Be Aware of:

1. Elizabeth Stoker: Augustine, Locke, Labor Mixing: “I was leafing through one of Augustine’s many screeds against the Donatists when I came up with an interesting piece on the framework he deploys in figuring the process of property ownership…. So the Donatists write Augustine to complain about confiscation of their property, and he responds: ‘We disapprove of everyone who, taking advantage of the imperial edict, persecutes you, not with loving concern for your correction, but with the malice of an enemy…. [But] since every earthly possession can be rightly retained only on the ground of divine law, according to which all things belong to the righteous; or human law, which is the jurisdiction of the kings of earth, you err in calling those things yours which you do not possess as righteous persons and which you have forfeited by the laws of earthly sovereigns; and it is beside the point for you to plead, “we have labored to gather these things”, for you may read what is written: “the wealth of the sinner is laid up for the just.”‘… Such an interesting move…. He’s saying: since you’re heretics (and thus unrighteous) you have no divine right to use… and since you broke the law and the law is the originator of all property, then you have no legal right to it either. Further he points out that their [Lockeian] labor-mixing theory… is emphatically not the schema God employs in the distribution of property….. This is in direct confrontation with, say, Locke, ch 5 of the 2nd treatise…. Locke is at pains to allude to… [the] certain divine parameters on property ownership…. But it’s important to note that Augustine totally disagrees with the Lockeian ontology of labor-mixing…”

2. Aaron Carroll: Problems with ACOs: “Here’s problem #1: Of all the beneficiaries assigned to ACOs in 2010, only 80% were assigned to the same ACO in 2011. Of those assigned to an ACO in 2010 or 2011, only 66% were assigned to the same ACO in both years. Problem #2: Beneficiaries likely to have been assigned unstably were either healthier in general or in the highest decile of spending. In other words, the instability is likely to make year-to-year spending per beneficiary in an ACO unpredictable. Problem #3: About 9% of office visits with primary care docs were outside assigned ACOs. Worse, about 67% of visits with specialists were outside assigned ACOs. Problem #4: Those who went outside the ACO for care were likelier to be higher-cost patients. These aren’t problems to be ignored. These are the kind of problems that will sink the ACO experiment…”

3. Bill Black: Geithner’s Single Most Revealing Sentence | Geithner’s Other Ad Hominem Attacks on Barofsky: “Geithner’s claim that Barofsky had no ‘financial knowledge or experience’ takes about five seconds of search time to falsify…”

And:

• Linda J. Blumberg et al.: Why Not Just Eliminate the Employer Mandate?
• German Lopez: Early data suggests Obamacare premiums aren’t skyrocketing
• The Anti-Reactionary FAQ
• Lisa Eadicicco: DEKA ARM Mind-Controlled Prosthetic Limb
• David Beckworth: What Caused Great Recession? Household Deleveraging or ZLB?

Already-Noted Must-Reads:

1. John Timmer: Glaciers draining Antarctic basin destabilized, big sea level rise all but certain: “Researchers at UC Irvine and the Jet Propulsion Laboratory have announced results indicating that glaciers across a large area of West Antarctica have been destabilized…. These glaciers are all that stand between the ocean and a massive basin of ice that sits below sea level…. Even in the short term, the new findings should increase our estimates for sea level rise by the end of the century, the scientists suggest. But the ongoing process of retreat and destabilization will mean that the area will contribute to rising oceans for centuries…. The glaciers… drain into the Amundsen Sea. On the coastal side, the ends of the glacier are actually floating on ocean water. Closer to the coast, there’s what’s called a ‘grounding line’, where the weight of the ice above sea level pushes the bottom of the glacier down against the sea bed. From there on, back to the interior of Antarctica, all of the ice is directly in contact with the Earth. That’s a rather significant fact, given that, just behind a range of coastal hills, all of the ice is sitting in a huge basin that’s significantly below sea level. In total, the basin contains enough ice to raise sea levels approximately four meters…”

2. Heather Boushey: I like Jane Austen’s novels, but I certainly don’t want to live like that: “One thing haunting me throughout the book was a question about what his findings meant for women and, so, inspired by Piketty, I picked up my Jane Austen anthology…. I very quickly found myself immersed in the tale of Elizabeth Bennet…. Austen’s heroines… know that a good income is not the only factor in her future happiness, but she also knows that there’s no happiness without it…. Miss Bennet was smart, capable, and someone who I could imagine as my friend. But, the world she lived in was terrifying. She is constrained by the reality that her life will be defined by her choice of spouse. Feminists laud Jane Austen for elevating the interior lives of women and the economics of marriage markets in the 18th century and for making clear these enormous constraints on women’s choices…. The economic inefficiency of an economy where success depends on inheritance not on developing one’s own skills and productivity. This is what Piketty means when he says that the ‘past devours the future’…. The 20th century saw enormous forward momentum towards equality…. As the Piketty mania took hold—it actually hit number one on Amazon.com in the first few weeks after its release–there was only one other woman, besides myself, that I knew of, Kathleen Geier, who published a review of the book. While scores of men debated r, g, and the substitution of labor for capital, women were strangely absent…. I would like to encourage more women, and especially more feminists, to pick up Piketty’s tome…”