Month: January 2014

Must-Reads:

1. Claudia Goldin: Close the Gender Pay Gap, Change the Way We Work: “The gap increases with age… wage differences are concentrated within occupations…. The earnings gap is most pronounced in occupations such as law that place a premium on the willingness and ability to work long hours, be in the office at specific times, and build face-to-face relationships with co-workers and clients…. Consider the case of women with master degrees in business administration. At 10 to 16 years into their careers, they are typically earning only 55 percent of what men do. Child bearing is a primary reason for the divergence…. The huge value that so many employers place on a standard work schedule affects more than the careers of women. Anyone who, for whatever reason, needs to take time off or work flexible hours gets penalized…. To be sure, some professions may never be able to offer much flexibility…. [But] many professions that once tied people to specific hours are finding ways to reduce the cost of flexibility…. Not everyone stands to gain in a world of greater job flexibility. Some of those willing to sacrifice their lives to work might no longer be able to reap outsize rewards. In the interests of a happier, wealthier and more equitable society, though, that would be a small price to pay.”

2. Washington Post: TwitLonger — When you talk too much for Twitter: “We regret to announce that Ezra Klein, Melissa Bell and Dylan Matthews are leaving The Post for a new venture. All three were instrumental in two of The Post’s most successful digital initiatives, Wonkblog and Know More. We plan to continue building those brands and expanding their reach, and we’ll have some exciting announcements related to them in the coming days…”

3. Josh Barro: We Need A New Supply Side Economics: “Demand stimulation remains the right goal today, but it’s not going to be the right goal forever…. We’re going to need a new supply side economics that encourages people to work, invest and innovate…. [This] doesn’t mean an agenda of small-bore and meddlesome initiatives designed to promote specific industries, particularly manufacturing, as often described by President Barack Obama…. Invest in smart infrastructure…. Reform means-tested entitlements…. Move the deregulatory agenda down to the state and local level…. Deregulate America’s most overrated industry: real estate…. Reform intellectual property–by weakening it…. Improve education, somehow…. Admit more high-skill immigrants…. Make taxes more progressive. This isn’t a supply-side reform; in fact, it is likely to discourage investment and economic growth at the margin. But it’s the most effective way to offset rising pre-tax income inequality, and a revenue source will be needed to pay for some of the above reform ideas…”

4. Ryan Avent: Secular stagnation: The second best solution: “Larry Summers has revived discussion in the ‘secular stagnation’ hypothesis. Income has become concentrated in… groups… with low propensities to [spend]… generat[ing] excess saving…. [One solution] is to raise inflation expectations in order to reduce real… interest rates…. Mr Summers’ preferred course of action…. It is a rare rich country that doesn’t have a list of infrastructure needs that could justifiably be addressed in the best of times. Pulling those off the shelf and taking them on amid rock-bottom interest rates and weak demand is a no-brainer…. Mr Summers reckons that while fiscal policy is the first best means to address stagnation, using higher inflation to reduce real interest rates and boost private demand is a clear second best…. My sense is that Mr Summers reckons the inflation strategy is not… easy to deploy successfully…. I often return to higher inflation as a strategy because something like Mr Summers’ five-year programme of deficit-financed public investment looks politically unachievable to me. Higher inflation, by contrast, is something the technocratic Fed could deliver…. But… central banks don’t generally propel economies out of slumps like these without significant political pressure being applied…”

5. Timothy Jost: All posts by Timothy Jost on Health Affairs Blog: The most recent: “On January 15, 2014, the Affordable Care Act won a very important legal victory in Halbig v. Sebelius. Judge Paul Friedman of the District Court for the District of Columbia held that the ACA unambiguously supports an IRS regulation allowing the agency to issue premium tax credits to individuals enrolled through federal, as well as state, exchanges…”

Continue reading “Things to Read on the Afternoon of January 22, 2014” →

Timothy Jost: All posts by Timothy Jost on Health Affairs Blog: The most recent:

On January 15, 2014, the Affordable Care Act won a very important legal victory in Halbig v. Sebelius. Judge Paul Friedman of the District Court for the District of Columbia held that the ACA unambiguously supports an IRS regulation allowing the agency to issue premium tax credits to individuals enrolled through federal, as well as state, exchanges.

This is the first ruling in a series of challenges to the IRS rule brought by individuals and employers in the District of Columbia and Virginia, as well as the attorneys general of Oklahoma and Indiana. The plaintiffs have already reportedly appealed Judge Friedman’s decision, but his reasoning is persuasive, and I expect that not only will his decision be upheld but that the judges in the other cases will follow his reasoning.

Continue reading “Lunchtime Must-Read: Everything by Timothy Jost About the ACA on Health Affairs” →

Still thinking about the absolutely remarkable four-day-apart columns a week or so ago by Emma G Keller in the Guardian and her spouse Bill Keller in The New York Times. Linda Holmes has, I think, the best take on what went on:

Linda Holmes: A Few Lessons About Twitter, Cancer And Publishing:

while the personal angles on this story–why would two married people in the same week devote entire columns to debating the same cancer patient’s chronicle of her disease?–are the most compelling and important, there is a publishing and media story here, which is that Bill Keller’s column, in particular, reflects a misunderstanding of what Twitter is.

Keller’s writing about Adams is full of little code words that downplay the significance of her writing, her readers, and her community, undoubtedly unconsciously.

Continue reading “Another Example of Our Old Media Professionals Not Understanding the World?” →

Looking Back on the Limits of Growth: Tuesday Focus (January 21, 2014)##

Mark Strauss: Looking Back on The Limits of Growth: “Forty years after the release of the groundbreaking study, were the concerns about overpopulation and the environment correct?…

Continue reading “Looking Back on the Limits of Growth: Tuesday Focus (January 21, 2014)” →

Noah Smith: Heroes of NoahSmithian Weblogging: Barry Ritholtz:

There is a huge amount of financial disinformation and misinformation and just plain bullshit out there in the world. Most financial news is random noise, and some is even worse than that. And there’s a good reason… it makes money for the people who put it out there. Thus, it is kind of a wonder that Barry Ritholtz exists at all. Barry Ritholtz… offers lots of free advice on his blog…. Much of his advice is about how you shouldn’t trust the finance industry of which he is a part…. And when Barry makes a correct prediction – such as when he nearly perfectly called the bottom after the 2008 stock market crash – he attributes it to luck. That is pretty extraordinary. Along with his partner and fellow blog hero Josh Brown (The Reformed Broker), Barry is helping to bring honesty to financial media… the first popular finance blogger to report extensively on behavioral finance.

Claudia Goldin: Close the Gender Pay Gap, Change the Way We Work:

The gap increases with age… wage differences are concentrated within occupations…. The earnings gap is most pronounced in occupations such as law that place a premium on the willingness and ability to work long hours, be in the office at specific times, and build face-to-face relationships with co-workers and clients…. Consider the case of women with master degrees in business administration. At 10 to 16 years into their careers, they are typically earning only 55 percent of what men do. Child bearing is a primary reason for the divergence…. The huge value that so many employers place on a standard work schedule affects more than the careers of women. Anyone who, for whatever reason, needs to take time off or work flexible hours gets penalized…. To be sure, some professions may never be able to offer much flexibility…. [But] many professions that once tied people to specific hours are finding ways to reduce the cost of flexibility…. Not everyone stands to gain in a world of greater job flexibility. Some of those willing to sacrifice their lives to work might no longer be able to reap outsize rewards. In the interests of a happier, wealthier and more equitable society, though, that would be a small price to pay.

Washington Post: TwitLonger — When you talk too much for Twitter:

We regret to announce that Ezra Klein, Melissa Bell and Dylan Matthews are leaving The Post for a new venture.

All three were instrumental in two of The Post’s most successful digital initiatives, Wonkblog and Know More. We plan to continue building those brands and expanding their reach, and we’ll have some exciting announcements related to them in the coming days.

When Ezra joined us in 2009, he was a wunderkind blogger with brash confidence and a burning desire to write a column in the print newspaper. As he leaves us, Ezra is still a brash wunderkind, but now his burning desire has a grander scope: He is looking to start his own news organization, an ambition that befits someone with uncommon gifts of perception and analysis. Ezra’s passion and drive will be missed, but we will take pride in watching him chart out his new venture.

Continue reading “Morning Must-Read: The Washington Post’s Ezra Klein-Melissa Bell-Dylan Matthews Departure Memo” →

Josh Barro: We Need A New Supply Side Economics:

Demand stimulation remains the right goal today, but it’s not going to be the right goal forever…. We’re going to need a new supply side economics that encourages people to work, invest and innovate…. [This] doesn’t mean an agenda of small-bore and meddlesome initiatives designed to promote specific industries, particularly manufacturing, as often described by President Barack Obama…. Invest in smart infrastructure…. Reform means-tested entitlements…. Move the deregulatory agenda down to the state and local level…. Deregulate America’s most overrated industry: real estate…. Reform intellectual property–by weakening it…. Improve education, somehow…. Admit more high-skill immigrants…. Make taxes more progressive. This isn’t a supply-side reform; in fact, it is likely to discourage investment and economic growth at the margin. But it’s the most effective way to offset rising pre-tax income inequality, and a revenue source will be needed to pay for some of the above reform ideas…

Ryan Avent: Secular stagnation: The second best solution:

Larry Summers has revived discussion in the ‘secular stagnation’ hypothesis. Income has become concentrated in… groups… with low propensities to [spend]… generat[ing] excess saving…. [One solution] is to raise inflation expectations in order to reduce real… interest rates…. Mr Summers’ preferred course of action…. It is a rare rich country that doesn’t have a list of infrastructure needs that could justifiably be addressed in the best of times. Pulling those off the shelf and taking them on amid rock-bottom interest rates and weak demand is a no-brainer…. Mr Summers reckons that while fiscal policy is the first best means to address stagnation, using higher inflation to reduce real interest rates and boost private demand is a clear second best…. My sense is that Mr Summers reckons the inflation strategy is not… easy to deploy successfully…. I often return to higher inflation as a strategy because something like Mr Summers’ five-year programme of deficit-financed public investment looks politically unachievable to me. Higher inflation, by contrast, is something the technocratic Fed could deliver…. But… central banks don’t generally propel economies out of slumps like these without significant political pressure being applied…

Must-Reads:

1. Martin Luther King: Letter from a Birmingham Jail [King, Jr.]: “My Dear Fellow Clergymen: While confined here in the Birmingham city jail, I came across your recent statement calling my present activities ‘unwise and untimely’. Seldom do I pause to answer criticism of my work and ideas. If I sought to answer all the criticisms that cross my desk, my secretaries would have little time for anything other than such correspondence in the course of the day, and I would have no time for constructive work. But since I feel that you are men of genuine good will and that your criticisms are sincerely set forth, I want to try to answer your statement in what I hope will be patient and reasonable terms…”

2. Alan Fernihough and Kevin Hjortshøj O’Rourke: Coal and the European Industrial Revolution: “We examine the importance of geographical proximity to coal as a factor underpinning comparative European economic development during the Industrial Revolution. Our analysis exploits geographical variation in city and coalfield locations, alongside temporal variation in the availability of coal-powered technologies, to quantify the effect of coal availability on historic city population sizes. Since we suspect that our coal measure could be endogenous, we use a geologically derived measure as an instrumental variable: proximity to rock strata from the Carboniferous era. Consistent with traditional historical accounts of the Industrial Revolution, we find that coal had a strong influence on city population size from 1800 onward. Counterfactual estimates of city population sizes indicate that our estimated coal effect explains at least 60% of the growth in European city populations from 1750 to 1900. This result is robust to a number of alternative modelling assumptions regarding missing historical population data, spatially lagged effects, and the exclusion of the United Kingdom from the estimation sample.”

3. Wolfgang Munchau: The real scandal is France’s stagnant economic thinking: “If you want to understand the financial crisis and the subsequent recession, Say’s Law is of no help whatsoever…. When you try to solve a shortage of aggregate demand through supply-side policies, the results are not going to be any different in France than they were elsewhere…. Do not romanticise his U-turn two years into his term and compare it with François Mitterrand’s similarly-timed adoption of the “franc fort” policy in 1983. The purpose of the Mitterrand’s decision was to allow France to coexist in a semi-fixed exchange rate regime with West Germany. It was a political choice of macroeconomic adjustment, not one of supply-side voodoo and ideological convergence….”

4. Jonathan Chait: Deficit Scolds Holding the Unemployed Hostage: “The main reason for the stalemate is the combination of strategic obstruction and ideological radicalism that dominates Congressional Republican thinking. But a second and nontrivial reason is that the deficit scolds have given the Republicans cover at every turn. The deficit scolds are a loose amalgamation of business executives, activists, and pundits, often centered around Pete Peterson and his network of activist groups, allied around the goal of bringing both parties together to agree on a plan to reduce the long-term budget deficit…. I don’t find their policy goals terrible…. The long-term deficit, while hard to predict… is probably too high. A bipartisan agreement along the lines suggested by the deficit scolds might be a positive thing…. The deficit scolds have proven to be completely impotent to bring about the changes they say they want, but surprisingly powerful allies in support of gridlock.”

Continue reading “Things to Read on the Morning of January 21, 2014” →