Things to Read on the Evening of December 6, 2013

Must-Reads:

1. Rick Santorum: Africanist: “Nelson Mandela…was fighting against a great injustice. I would make the argument that we have a great injustice going on right now in this country with an ever increasing size of government that is taking over and controlling people’s lives, and Obamacare is front and center in that…”

2. Sherry Glied and Stephanie Ma: How States Stand to Gain or Lose Federal Funds by Opting In or Out of the Medicaid Expansion: “Following the Supreme Court’s decision… state officials are now deciding whether to expand their Medicaid programs under the Affordable Care Act…. States that choose to participate in the expansion will experience a more positive net flow of federal funds than will states that choose not to participate. In addition to providing valuable health insurance benefits to low-income state residents, and steady sources of financing to state health care providers, the Medicaid expansion will be an important source of new federal funds for states:”

Should-Reads:

1. Matthew Klein: Fixing What’s Wrong With Economics 101: “My colleague James Greiff tells me that his introductory course in economics had a heavy emphasis on the history of ideas, with The Worldly Philosophers as his textbook. But things have changed since then. In my ideal world, introductory economics students would start as I did, by studying Richard Radford’s account of his experience in a German prisoner of war camp during World War II. It’s less than 14 pages…. Joan and Richard Sweeney’s account of their baby-sitting cooperative’s troubles with inflation and deflation during the 1970s is another classic text…. Longer readings could include Charles Kindleberger’s Manias, Panics, and Crashes and Liaquat Ahamed’s Lords of Finance…”

2. Steve Goldstein: What bubble? Corporate profits reach new record as share of GDP: “One can make an argument about the stock market being overvalued, but the corporate profits that should underlie valuations are certainly in pretty good shape…. There are a number of profit measures in the report, but the one shown in this graph, adjusted after-tax profits…. As a percentage of GDP, corporate profits reached a record of 10.8%…”

3. Paul Krugman: PREs, VSPs, and the ECB: “Via Mark Thoma, ECB Watchers reports on what it calls a ‘confusing’ speech by Peter Praet, the chief economist of the European Central Bank. But actually there’s nothing at all confusing…. Praet, we learn from the speech, is a PRE; so, probably, are many of his colleagues at the ECB, including, one suspects, Mario Draghi himself. But they have to operate in an environment where Europe’s VSPs, who are both doctrinaire and in important ways anti-intellectual, still hold enormous power…. Praet… shows himself to be a Perfectly Reasonable Economist, aware of the… the zero lower bound on interest rates and the great difficulty in engineering downward movements in nominal wages…. You do have to wonder what calculation leads to the notion that a[n inflation] target of “close to but less than 2%” is appropriate, as opposed to, say, 3 or 4 percent. But actually you don’t… he and his boss have to deal with Europe’s Very Serious People… who believe in austerity regardless of circumstances….

   “The sad and remarkable thing that we’ve learned over the past year or so is how little intellectual debate matters. On both fiscal austerity and monetary policy, the PREs have completely blow the VSPs out of the water — the inflationistas, the expansionary austerians, the 90-percent threshold of doom people have all seen their claims collapse in the face of evidence. Yet policy barely changes, and the VSPs continue to talk as if they are in possession of The Truth. Still, I guess it’s good to know that there are PREs at the ECB, even if what they know doesn’t seem to matter very much.”

Should Be Aware of:

1. J.F.: Republican policy: Think of something: “AT A lunch given by a Republican women’s club outside Augusta, Georgia last month, Ralph Hudgens, Georgia’s Insurance Commissioner, shared his thoughts on the Affordable Care Act (ACA). The subject of his ire, curiously, was the requirement that insurers cover pre-existing conditions—-a provision of the ACA that even his fellow Republicans have little problem with. To Mr Hudgens, however, having a pre-existing condition and expecting insurers to cover you anyway is no different than getting into a car wreck that’s “your fault”. It’s callous, cruel and, of course, wrong: the human body breaks down, and it breaks down in ways that are neither predictable nor fair…. Now, the ACA isn’t perfect, but it is at least a good faith effort to make sure that nobody dies or goes bankrupt from lack of insurance. One would expect the Insurance Commissioner of Georgia to at least mention, if only for appearance’s sake, his concern for the hundreds of thousands of Georgians that might suffer those fates. But no.

   “I was thinking of Mr Hudgens as I read this month’s cover story in Commentary. It’s a plea from John Podhoretz and Michael Medved to Republicans: stop the infighting, the primary challenges, the insistence on ideological purity, because ‘the truest beneficiary of the intra-Republican civil war will be the Democratic Party’. In that assessment, they are, of course, correct…. Messrs Podhoretz and Medved are also correct in identifying a second batch of beneficiaries of Republican infighting: ‘a new class of political activists’ who rely on ’emotion—often negative emotion’…. Politics is easy. Anyone can yell at the TV. Anyone can get outraged at an email accusing someone of perfidy, treason, dishonesty or failing to honour campaign promises. Anyone can fork over money to someone who promises that they and they alone can save America. I am still on the email lists for various failed Republican presidential candidates from 2012, and they still send me emails: Biblical secrets to investing! The weird trick about retirement income the government doesn’t want you to know! It’s the same marketing strategy, just with grifts rather than candidates.

   “Where I think Messrs Podhoretz and Medved err–and how this connects to Mr Hudgens–is their assumption that if Republicans would just stop the infighting, they’d win. In their entire article they have not one policy idea, just an exhortation to ‘attract votes and voters’. The unstated assumption… is that Barack Obama won through some combination of chicanery, anti-white racism and his ‘cool’ factor…. One candidate favoured universal health care, higher taxes on the rich and a relatively non-bellicose foreign policy; the others opposed all three…. As I said above, the ACA is far from perfect. But it’s better than telling cancer patients and diabetics that it’s all their fault.”

2. Ed Kilgore: The Lost Constituency For Fighting Inequality: “A crucial factor in the success or failure of conservative backlash against efforts to extend the social safety net is whether they can be depicted as morally offensive to people who really have little or nothing in common with the wealthy and powerful Americans being asked to pay the freight. And that’s why racial appeals are so important in mobilizing downscale white folks to view themselves as victims or rivals of those people benefiting from our barebones version of the European welfare state…. It’s no longer considered dangerously self-destructive for representatives of our economic ruling classes to talk about getting rid of the New Deal and Great Society programs and making America an experiment in unregulated capitalism.”

Zack Beauchamp: How President Obama’s Speech Today Explains His Presidency | Alan Pyke: Obama: Forget Fiscal Deficits, Focus On ‘Relentlessly Growing Deficit Of Opportunity’ | Kevin Drum: We Are Deliberately Destroying Our Medical Future | Aaron Carroll: Media madness, ACA edition |