Things to Read on the Afternoon of December 31, 2013

Must-Reads:

1. Mike Konczal: 2013 Financial Reform Went Way Better Than Anyone Expected: “2013 was a not-awful year for financial reform… and compared to where people thought we’d be a year ago, we are in a pretty solid place… tougher holding requirements for capital… regulations of… financial derivatives… advance[d]… the final Volcker would be a pretty good start instead of an incoherent mess…. So what caused it? And how it might apply to future political goals?… The multi-billion dollar trading losses from JPMorgan Chase known as the “London Whale” changed the dynamics…. JPMorgan had been leading the charge against reform…. An intellectual movement that argued high capital requirements would both be an excellent way to stabilize the financial system at a minimal cost to society…. The last reason reform worked in 2013 was the result of insider and outsider actors committed to pushing reform on the agenda. Senator Warren…. The CFTC’s Bart Chilton…. Meanwhile, outside groups kept up the pressure through the democratic rule-writing process.”

2. Rand Ghayad: No, Rand Paul, There’s No Reason to Cut Unemployment Benefits: “Rand Paul says he cares about the unemployed…. So why does he want to end unemployment benefits for people who have been out of work for 6 months or longer? Well, Paul cites my work on long-term unemployment as a justification—–which surprised me, because it implies the opposite of what he says it does…. Paul says… extending unemployment benefits does a ‘disservice’ to the unemployed by encouraging them to stay unemployed for too long. And as a ‘big-hearted’ member of a party that cares about the jobless, he wants to protect them… by cutting their benefits, of course. But Paul misreads my work to try to back up his argument. He says my paper, which shows that companies don’t want to hire people who have been unemployed for more than 6 months, proves his point…. But just because companies discriminate against the long-term unemployed doesn’t mean long-term benefits are to blame. Paul might know that if he read beyond the first line of my paper’s abstract.”

3. Laura Tyson: What Policies Enhance Economic Growth and Distributional Equity?: “Inequality of market income before taxes and transfer payments in the US is similar to that in many other developed countries…. The US does have the most unequal distribution of disposable income after taxes and transfer payments… not because the US has the least progressive tax system… [but] the US has the least generous and progressive transfer system…. The US needs a more progressive and redistributive tax and transfer system…. To combat market-income inequality, the US also needs faster economic growth to boost the pace of job creation and reduce unemployment…. Obama reiterated several proposals to accelerate growth: increasing exports, reforming the corporate tax code, and investing more in infrastructure, R&D, and education. These proposals are both growth-enhancing and equity-enhancing. Yet Congressional approval is unlikely, and overall fiscal policy remains strongly contractionary…. Obama also called for an increase in the minimum wage to combat income inequality…”

Should Reads:

1. Owen Zidar: Debt to GDP & Future Economic Growth

2. Zach Beauchamp: Why Republicans Don’t Believe In Evolution Anymore: “Each generation of Americans… is increasingly more likely to accept natural human evolution…. The winnowing of self-identified Republicans to these demographic groups has been dramatic in recent years… a greying, born-again Republican Party increasingly out of step with the rest of America’s political views. The Republican base’s increasing hostility to evolution could very well explain the rash of recent state-level debates on teaching evolution in schools…. But the demographic explanation isn’t everything…. Republicans are more skeptical of evolution than you would expect even when you take into account the demographic character of its base. This suggests another, more subtle effect at work. A wealth of research into political psychology shows that people’s partisan affiliations affect their beliefs on basic facts…”

3. Matt Taibbi: On Christmas, Republicans Quietly Declare War on Themselvese: “The Chamber of Commerce disclosed that it will be teaming up with Republican establishment leaders to spend $50 million in an effort to stem the tide of ‘fools’…. Scott Reed… ‘Our No. 1 focus is to make sure, when it comes to the Senate, that we have no loser candidates…. No fools on our ticket.’ The blunt choice of words is no accident. All year long, as they’ve crept closer and closer to having to face the reality of a Ted Cruz presidential candidacy in 2016… the Beltway’s Republican kingmakers have drifted into ever more alarmist language about the need to change course. It’s been a transparent effort to reassure industry donors that the party’s future isn’t a bottomless pit of brainless Bachmanns and Cruzes and Santorums, all convinced our Harvard-educated president is a sleeper-cell Arab and that Satan is a literal being intent on conquering Nebraska with U.N. troops…. There’s almost no end to the comedy of this story. First of all, there’s the sheer size of the endowment. Fifty million dollars is enough money to fund half a dozen or more Senate campaigns. That the big-business donors who traditionally have funded the Republican Party believe they need to make that kind of monster investment just to keep ‘fools’ from getting on the ballot of a party they basically control is an incredible reflection of the state of things on that side of the political aisle. Then, of course, there’s the irony. Men like Karl Rove and Dick Armey…. To see these same Beltway Svengalis trapped now in this crazy role reversal, denounced by the far right for being the same kind of condescending establishment snot-bags they themselves spent decades trying to find and campaign against–well, that’s just seriously funny…”

And:

• David Card: Notes on Local Labor Markets
• Haley Sweetland Edwards: He Who Makes the Rules

Should Be Aware of:

1. Alan Schwarz: A.D.H.D. Experts Re-evaluate Study’s Zeal for Drugs: “Twenty years ago, more than a dozen leaders in child psychiatry received $11 million from the National Institute of Mental Health to study an important question facing families with children with attention deficit hyperactivity disorder: Is the best long-term treatment medication, behavioral therapy or both? The widely publicized result was not only that medication like Ritalin or Adderall trounced behavioral therapy, but also that combining the two did little beyond what medication could do alone…. But in retrospect… the study was structured to emphasize the reduction of impulsivity and inattention symptoms, for which medication is designed to deliver quick results, several of the researchers said in recent interviews. Less emphasis was placed on improving children’s longer-term academic and social skills, which behavioral therapy addresses by teaching children, parents and teachers to create less distracting and more organized learning environments. Recent papers have also cast doubt on whether medication’s benefits last as long as those from therapy…”

2. Jonathan Chait: John Harris of Politico Defends Mike Allen on the Grounds That People Are Allowed to Read Mike Allen: “After initially refusing to address Erik Wemple’s exhaustive documentation of Mike Allen’s pattern of parroting the editorial line of his advertisers, Politico editor John Harris… acknowledged the charges and then strung together a series of words in response to them…. [that] do not make a great deal of sense: ‘[the] suggestion, insinuation, innuendo in a really unfair way–that the product is somehow compromised by advertisers was (a) not supported and (b) horribly, horribly unfair to what really is one of the most transparent journalistic products in the city. Anyone can read it any given day and sort of take their best guess as to why this is in there, why it’s not, who Mike had lunch with, who was giving him this, who he had dinner with, who was feeding him that. Totally transparent.’

   “Harris seems to be claiming that we should have no issue with Allen editorializing on behalf of his paid sponsors because it’s ‘transparent’… ‘anyone can read it’ and therefore guess at the ulterior motives…. That seems like a pretty low bar. What would a nontransparent publication be? A tip sheet that people are not allowed to read?… It’s hard to think of any definition of transparency by which Playbook ranks especially high. When you read, say, a story on the front page of the New York Times about bombings in Russia, you don’t have to guess why the story is there. It’s because there were bombings in Russia. There’s no netherworld of friends and/or sources and/or paid sponsors lurking behind every word. If transparency simply means that the motives are hidden but the product itself is open, then yes, Playbook is tied for first place as the most transparent publication in the city. It’s also tied for last place.”

3. Paul Krugman: Jean-Baptiste Say, Cockroach: “A zombie idea is an idea that should have died long ago in the face of evidence or logic, but just keeps shambling forward, eating peoples’ brains…. Assertions that hordes of Canadians are crossing the border in search of care, or vast numbers of Canadian doctors emigrating… the insistence that cutting tax rates on the wealthy leads to soaring economic growth…. A cockroach idea is a bit different: it’s an idea whose wrongness is so obvious, once pointed out, that the people who stated it claim that they did no such thing…. Next thing you know, however, the roaches have invaded all over again.

   “Menzie deals with a prime example, the assertion that government spending can’t, as a matter of principle, increase demand…. But it’s not just Heritage. I was alerted to the fact that we were living in a Dark Age of macroeconomics when the same cockroach put in an appearance at the University of Chicago.

   “Now, some people get all upset by this terminology. Why can’t I be serious and respectful? Well, the answer is that we’re not having a serious conversation. There are real debates in economics–for example, about how much slack remains in the economy, how effective unconventional monetary policy really is, etc. For those debates a respectful tone is appropriate. But when people resurrect 80-year-old fallacies, then claim that they never said what they said, then come right back with the same thing, we need colorful language to convey the deep unseriousness of their position.”

And:

• Haley Sweetland Edwards: Special Deal
• Eric Loomis: Alterdestiny: Slavery and Texas Secession

Adrianne Jeffries: Why don’t economists like Bitcoin? | Tim Duy: What Comes After the Evans Rule? | Techno-Panic Timeline | Luke Johnson: Only A Quarter Of Unemployed Americans Receiving Benefits After Congress Failed To Act