Things to Read at Lunchtime on November 23, 2013

Must-Reads:

1. Dan Baum reports John Ehrlichman said: When Someone Claims the War on Drugs Is a War on Minorities…: “The Nixon campaign in 1968, and the Nixon White House after that, had two enemies: the antiwar Left, and black people. You understand what I’m saying? We knew we couldn’t make it illegal to be either against the war or black. But by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did…”

2. Noam Levey: Healthcare industry vested in success of Obamacare: “Insurance companies, doctor groups and hospitals… are committed to the law’s success despite persistent tensions with the White House. Many healthcare industry leaders are increasingly frustrated with the Obama administration’s clumsy implementation…. Nearly all harbor reservations about parts of the sweeping law. Some played key roles in killing previous Democratic efforts…. But since 2010, they have invested billions…. Few industry leaders want to go back to a system that most had concluded was failing, as costs skyrocketed and the ranks of the uninsured swelled. Nor do they see much that is promising from the law’s Republican critics. The GOP has focused on repealing Obamacare, but has devoted less energy to developing a replacement. Healthcare industry officials generally view several GOP proposals, such as limiting coverage for the poor and scuttling new insurance marketplaces created by the law, as more damaging than helpful to the nation’s healthcare system…”

Should-Reads:

1. Miles Kimball: Even Economists Need Lessons in Quantitative Easing, Bernanke Style: “Feldstein’s argument boils down to saying, ‘The Fed has done a lot of QE, but we are still hurting, economically. Therefore, QE has failed’. But here he misunderstands the way QE works. The special nature of QE means that the headline dollar figures for quantitative easing overstate how big a hammer any given program of QE is. Once one adjusts for the optical illusion that the headline dollar figures create for QE, there is no reason to think QE has a different effect than one should have expected. To explain why, let me lay out again the logic of one of the very first posts on my blog…. In that post I responded to Stephen Williamson, who misunderstood QE… in a way similar to Martin Feldstein…”

2. Timothy Egan: The South’s New Lost Cause: “What is distressingly similar today is how the South is once again committed to taking a backward path. By refusing to expand health care for the working poor through Medicaid… most of the old Confederacy is committed to keeping millions of its own fellow citizens in poverty and poor health… out of spite…. In the states that have embraced… [expansion] almost 500,000 people have signed up for health care in less than two months time… good for business… for state taxpayers… can do much to lessen the collateral damages of poverty…. In Kentucky, which has bravely tried to buck the retrograde tide, Medicaid expansion is projected to create 17,000 jobs…. Beyond Medicaid, the states that have diligently tried to make the private health care exchanges work are putting their regions on a path that will make them far more livable…. And those states aren’t going to turn back the clock… no matter how Republicans try to kill health care reform…. What we could see, 10 years from now, is a Mason-Dixon line of health care… the insured North… where health care coverage was affordable and available… the uninsured South, where health care for the poor would amount to treating charity cases in hospital emergency rooms…. But most of the South is defiant–their own Lost Cause for the 21st century.”

3. Ed Kilgore: The Pure Meanness Litmus Test: “Partly as a byproduct of conservative optimism about rolling back ObamaCare and partly in conjunction with the Republican Governors Association meeting… there’s a lot of buzz right now about Medicaid expansion… a litmus test for conservative orthodoxy…. It’s no coincidence, of course, that one of the governors who did accept the expansion, Chris Christie, is the early MSM/Republican Establishment favorite for putting the Tea Folk back in their place and retaking the White House…. No one is being forced to drop private health insurance to enroll in Medicaid. No one can claim the president “lied” about Medicaid eligibility. The performance or non-performance of http://healthCare.gov isn’t really an issue. The pace at which eligible folks sign up mainly just affects them. And there’s no ‘premium shock’…. And that is sort of why the issue makes the perfect ideological litmus test: opposing the expansion can’t be and isn’t being justified as a prudent objection to an unworkable program or as disruptive to the health care status quo… states refusing the Medicaid expansion are doing so on grounds that they don’t want their own citizens to benefit from it. And since opposition has centered in the South, there’s not any real doubt a big motive has been a continuation of that region’s longstanding effort to–choose your verb–(a) reduce dependence on government among, or (b) keep down–those people…”

4. Felix Salmon: Why guru ETFs beat human gurus: “Wall Street is no place for shrinking violets, but even by New York standards, Jason Ader has some serious chutzpah…. In principle, [he] makes sense. One common criticism of passive investing is that if everybody did it, then there would be no price discovery–and that the more passive investors there are… the easier it becomes to take advantage of them…. But the point at which passive investing becomes self-defeating is a bit like the point at which the gradient of the Laffer curve turns negative… far beyond any state of the world that obtains in real-life…. It’s a simple mathematical truth that activist investing has not outperformed passive investing this year…. Of course, if your dream is to beat the market, then you’re going to have to invest in something other than a passive index fund…. And don’t kid yourself, either, that paying 2-and-20 to anybody is a sensible way to try to achieve your goal. Indeed, there’s an increasing number of relatively low-fee ETFs which aim to replicate the results you’d get from investing with some of the biggest-name investors…. Buying one of these guru ETFs is no sillier than buying a typical actively-managed mutual fund. In fact, it’s probably more sensible, since the discipline of the ETF strategy is baked in to its structure, and it’s harder for an all-too-human manager to make silly mistakes… [and] the fees… will never come anything close to the kind of fees being charged by Jason Ader and his ilk…”

5. Harold Pollack: This drug could make a huge dent in heroin addiction. So why isn’t it used more?: “This week, the New York Times’ Deborah Sontag published an extensive two-part series, ‘Addiction treatment with a dark side’, on buprenorphine misuse. The piece is vividly written. It shows the human faces of many drug users. She frankly depicts underground market in buprenorphine, and describes unethical providers…. Like many addiction researchers, I’m uneasy…. The specific facts are well-researched. There’s some beautiful reporting…. Yet the very vividness of the human portraits leaves readers with powerful… misimpressions… that buprenorphine is more widely abused than it actually is, that buprenorphine is more dangerous than it generally is, and that buprenorphine providers are less ethical than they generally are. Sontag cites a statistic that buprenorphine was involved on the order of 42 deaths per year…. That’s a frightening thing, but it matters that these occur in a population that now experiences 19,000 overdose deaths every year…”

Things You Should Be Aware of:

Andy Harless: Can Knut Wicksell Beat Up Chuck Norris? | Iván Werning: Managing a Liquidity Trap: Monetary and Fiscal Policy | Killer Martinis: Why I Make Terrible Decisions, or, poverty thoughts | Krugman v Stiglitz on whether rising inequality is what’s holding back the recovery | Garance Franke-Ruta: Why Is Maternity Care Such an Issue for Obamacare Opponents? |

1. John Aziz: The central banker who changed his mind: “When Narayana Kocherlakota was appointed president of the Federal Reserve Bank of Minneapolis in 2009, the University of Chicago-educated theoretical economist was best known for his insight that money is a system of memory…. In the year before his appointment, he had signed a CATO Institute petition to protest President Obama’s fiscal stimulus program. And after his appointment to the Fed, he was concerned that the central bank was being too accommodative…. But by August 2012 he seemed to have changed his mind, noting that ‘increasing policy accommodation might well be appropriate’ and voting later that year for the new quantitative easing asset-purchasing program (QE3)…. I don’t think that Kocherlakota’s shift has really been so very dramatic…. Inflation is currently below the Federal Reserve’s target, while unemployment is above the target, so the Fed seems ‘dovish’…. I think Kocherlakota simply updated his policy prescriptions based on new evidence about the state of the economy and the persistently high rate of unemployment…”

2. McSweeney’s Internet Tendency: Retail Therapy: Inside the Apple Store: It’s a Trap!: “New York Times… Catherine Rampell… ‘Cracking the Apple Trap’. Online… ‘Why Apple Wants to Bust Your iPhone’, and I am still dumbfounded that it was considered news fit to print…. The piece meanders through pontifications… the author’s aggrieved imagination… the New York Times has stooped to link-baiting, and I fell for it… rather than state… that all batteries… degrade over time, Rampell deliberately writes that ‘Apple phone batteries’ do so, implying peculiarity and intention. One expects Fox News to lead off thinly veiled editorials posing as economics coverage with phrasing like, ‘Some say’, or ‘Many may believe’, but the Gray Lady? Say it ain’t so!… Rampell wrote a follow-up… ‘Planned Obsolescence, as Myth or Reality?’ Referencing no less than three economists by name and ‘a lot of technology experts’ not by name, she successfully recycled half of her first piece, which inferred Apple’s evil motives, to arrive at a new conclusion, ‘It’s actually very hard to infer a company’s motives’. What a wonderful non-apology. Ironically, it rendered the older article obsolete. Was that planned? That’s pretty f^&%ing meta…”