Things to Read on the Morning of December 3, 2013

Must-Reads:

1. Guillermo Calvo et al.: Jobless Recoveries During Financial Crises: Is Inflation the Way Out?: “Three policy tools [could] mitigate jobless recoveries during financial crises: inflation, real currency depreciation, and credit-recovery policies. Using a sample of financial crises in Emerging Market economies, we document that large inflationary spikes appear to help unemployment to get back to pre-crisis levels. However, the counterpart of inflation is sizably lower real wages…. Interestingly, neither the change in the real exchange rate nor the change in output composition… displays a statistically significant relationship with inflation or jobless recovery. This suggests that currency depreciation can help reduce unemployment only insofar as it is associated with inflation, and that jobless recovery is likely due to nominal wage rigidity. The paper also shows that measures to reactivate credit flows could be beneficial to wage earners as a whole, as measured by the real wage bill.”

2. Norm Ornstein: “I’ve not seen anything like this before. It is just such an interesting phenomenon–call it anthropological or sociological or pathological. An obsessive hatred with all things Obamacare that has infected everybody on the Republican side. They can’t say anything positive about any element of a law that is based on their own fundamental ideas. It means that when anybody says something that could in any way be construed as positive regarding Obamacare it becomes fodder for attacks…. Conservatives are eating their own…”

Should-Reads:

1. Paul Krugman: Doing Macro First: “Mike Konczal… suggests that we should go back to the way Samuelson did it in 1948–macroeconomics first, then micro. This, he suggests, would give students a better perspective on reality, even though all the same material would eventually be covered. I would add that the motives behind Samuelson’s ordering apply just as well today as they did then. He was writing with the memory of the Great Depression still fresh; students wanted to know how such things could happen. Furthermore, how could you get anyone to take all that stuff about the perfection of markets seriously after what had just happened? By first teaching them that monetary and fiscal policy could be used to ensure full employment…. But there are some serious problems with Konczal’s vision–ways in which what Samuelson did in 1948 can’t be replicated now. What Samuelson brought was actually a double dose of innovation to economics–Keynesian macro plus a new orientation toward mathematical models. At the time these went hand in hand…. Also, back then Keynes was new and innovative. Today, you have generations of economists brought up in the belief that it’s wrong–they don’t know what’s in it, actually, but that’s what they were taught. Finally, if microeconomics is to be justified with the claim that government policy will ensure more or less full employment, what, exactly, in today’s world would inspire you to believe that?”

2. Harold Meyerson: The 40-Year Slump: “If Volcker’s and Carter’s attacks on unions were indirect, Reagan’s was altogether frontal. In the 1980 election, the union of air-traffic controllers was one of a handful of labor organizations that endorsed Reagan’s candidacy. Nevertheless, they could not reach an accord with the government, and when they opted to strike in violation of federal law, Reagan fired them all…”

Should Be Aware of:

1. Conor Friedersdorf: How Surveillance-State Insiders Try to Discredit NSA Critics: “Officials have actively stymied journalistic efforts to determine the whole truth. They’ve lied under oath to Congress and held back relevant information prior to important votes. They’ve long over-classified material on a wide range of subjects. And they still insist that many aspects of NSA surveillance ought to remain secret, unknown even to many members of Congress. National-security-state ‘insiders’ are entitled to the belief that classified mass-surveillance programs are legitimate and that obfuscation by officials is understandable. They are not entitled to falsely claim that journalists are not interested in gathering context, even as many labor mightily to do so and gradually make gains, to the consternation of insiders and their allies…”

2. karoli: CA Assembly GOP Puts Up Fake California Health Exchange Site: “California Republicans are desperate and shameless. In the past two weeks, GOP Assembly members have sent mailings out on what appears to be the state’s dime to their constituents about health insurance. Only, they don’t direct those people to CoveredCA.com to sign up. Instead, they send them to their own astroturf version at the URL http://CoveringHealthCareCA.com… links to negative articles and twisted messages…. If you click on the ‘Don’t have health insurance’ tab on the front page, you’re taken to a page that puts all the focus on the penalty and none on the benefits. In fact, they have a ‘penalty calculator’ on that page, rather than a premium calculator. And of course, they also manage to twist what is actually available on the exchange…. What we have here are elected officials intentionally trying to make California’s health exchange fail, and using taxpayer dollars to misinform taxpayers, using the standard fear and loathing tactics as their linchpin. While I expect nothing less from Republicans in general, it does gall me that they’re using ‘official mailings’ to misdirect constituents and Assembly resources to register and build the website. Just more proof Republicans don’t give a damn about anything but their own bad selves.”

Scott Lemieux: The Affordable Care Act v. Supreme Court, Round 2 | James Surowiecki: Is Health Care Spending Finally Falling? | Daniel Little: Making Institutions | Mark Thoma: Explainer: How does the Fed influence the economy? | Christopher Flavelle: Does Medicaid Breed Dependency? | Austin Frakt: Medicaid and access: Not what you think |