Month: March 2014

Paul Krugman: Data as Slogan, Data as Substance: “what would real data-driven reporting look like?…

Charles Gaba’s ACASignups.net. Gaba, a website developer, realized that nobody was systematically keeping track of enrollment data for Obamacare, and has turned himself into one-stop shopping…. And he really fills a need: when you read news reports on Obamacare, you can tell right away which reporters have been reading Gaba and know what’s happening and which reporters are relying solely on official announcements–or, worse, dueling political spin. For the record, Gaba’s take on the program so far is fairly optimistic: he projects 6.3 million… by March 31…. The main point is that he’s filling a niche by using a lot more data than the mainstream media. That’s what we thought Nate Silver would be doing, and maybe he eventually will. But for now, Gaba is the model.

Noah Smith: fivethirtyeight.com Needs to Step Up Its Game: “I’m a big Nate Silver fan, but let me join the chorus…

looking at his new ‘data-driven’ blog site… it’s barely data-driven at all! For example, take this post about how climate change is not increasing the cost of natural disasters…. Let’s focus on the idea that this post represents “data-driven” journalism at all. It doesn’t. The “data” in the post consists of one annual time series with a sample size of 23. That’s too small to do any sort of statistical analysis on, but then again, the post doesn’t do any statistical analysis. It shows a trendline, and from that trendline it draws broad, sweeping conclusions…. Every newbie blogger and his dog draws a trendline and extrapolates it–and if the blogger is worth his salt, he’ll at least have the common decency to qualify his extrapolation with “if this trend continues”, which Pielke does not. Furthermore, Pielke’s analysis is just sloppy. What happens if you strip out earthquakes, tsunamis, volcanoes, etc. from the data? What if you extend the trend back 40 years? How does the recent trend compare with the trend from before climate change started significantly affecting global temperatures?… And the economic theory behind the conclusion is even sloppier… costs of mitigation… variance… people [are] risk-averse?….

Continue reading “Morning Must-Read: Noah Smith: fivethirtyeight.com Needs to Step Up Its Game” →

James Fallows: Another Bloomberg Editor Explains Why He Has Resigned, Over Its China Coverage: “The New York Times… contend[ed] that Bloomberg editors had quashed an investigative report about corruption among leaders in China…

Higher-ups at Bloomberg were worried that the story would hurt the company’s sales of financial terminals—the mainstay of its business—inside China, since the main purchasers would be directly or indirectly subject to government control… Bloomberg was already “on probation” with the Chinese government, because of some very brave and probing official-corruption stories the previous year—including the one on “Red Nobility”…. The FT did a similar report… saying that Matthew Winkler, Bloomberg’s editor-in-chief, had ordered the story killed, for fear of ramifications…. Amanda Bennett… promptly resigned as head of Bloomberg’s investigative unit…. Michael Forsythe… joined the NYT staff. Bloomberg continued to deny the allegation of knuckling-under but refused to address any specifics. The story that reportedly was underway has not yet appeared…. I wrote to the man who reportedly gave the spiking order, editor-in-chief Matthew Winkler, and did not hear back….

The latest news… is Ben Richardson’s resignation as a Bloomberg editor…. I wrote to Richardson asking if he would say more about the situation…. Ben Richardson:

I was one of the two editors on the story that was spiked last year, and one of three who helmed the 2012 stories on the hidden wealth of China’s Communist Party leaders, so I have a pretty intimate knowledge of what happened. Unfortunately, I am bound by a confidentiality agreement that prevents me from disclosing the details. That said, much has already become a matter of public knowledge. I felt the NYT and FT articles were a fair account…

1. Ryan Avent
2. Doug Henwood
3. Edward Lambert
4. Dean Baker
5. Kathleen Geier
6. John Cassidy
7. Paul Krugman
8. Ed Kilgore
9. Jacob S. Hacker and Paul Pierson
10. Lawrence Summers
11. Tim Noah
12. Heather Boushey (and Me) on Thomas Piketty: Tuesday Focus: March 11, 2014

Continue reading “Dialogue: Eleven (so Far) Worthwhile Reviews of and Reflections on Thomas Piketty’s “Capital in the Twenty-First Century”: Wednesday Focus: March 26, 2014″ →

Sokrates: Production is currently mired some 8% below the growth trend that back in 2008 we confidently thought of as normal and highly unlikely to be disturbed.

Glaukon: It is indeed.

Thrasymakhos: And employment is currently mired some 7% below the proportion of the population that back in 2008 we confidently thought of as normal and highly likely to be quickly reattained after macroeconomic shocks.

Khremistokles: What will you say next, Thrasymakhos? That the sky is blue?

Aristokles: Nobody now expects a return to the “old normal”…

Glaukon: Indeed.

Thrasymakhos: Actually, the sky is grey here in Berkeley, California where we exist, and the morning fog has not yet burned off…

Khremistokles: But why doesn’t anyone expect a return to the “old normal”?

Sokrates: If you can say that we “exist” at all, being simply of figments of Brad DeLong’s imagination, as he sits at Espresso Roma, drinking coffee, trying to wake up, writing this dialogue, intermittently watching lectures from the “Reason and Persuasion” MOOC of John Holbo, and waiting for Nicholas Lemann…

Continue reading “A Dialogue on the Resolution of the Financial Crisis of 1989 and the Non-Resolution of the Financial Crisis of 2007: Tuesday Focus: March 25, 2014” →

Must-Reads:

1. Narayana Kocherlakota: “I view the March 19 Federal Open Market Committee (FOMC): statement as an unusually significant one. In that statement, the FOMC adopted new forward guidance about the evolution of its target for the federal funds rate. I see that new guidance as being intended to describe the Committee’s decisions for some time to come. I dissented from the new guidance for two reasons. The first reason is that the new guidance weakens the credibility of the Committee’s commitment to target 2 percent inflation. The second reason is that the new guidance fosters policy uncertainty and thereby suppresses economic activity. In what follows, I’ll elaborate on these reasons, discuss an alternative form of forward guidance, and conclude by strongly endorsing one aspect of the FOMC’s new forward guidance.”

2. Kevin Otterson: The other oral argument on Tuesday: “To the Cato Institute, the tax credit cases (Halbig v. Sebelius and a related case in the Fourth Circuit, King v. Sebelius) represent their last shot to cripple the four-year-old law by wiping health insurance subsidies to millions of people in the 36 states that did not create state exchanges…. The amicus brief filed on Thursday March 20, 2014 by the Commonwealth of Virginia in King v. Sebelius… the Pennhurst doctrine, which requires Congress to give states ‘clear notice’ if conditions on states are attached to federal spending…. Did Congress give ‘clear notice’ that the penalty for failing to build a state exchange would be the loss of billions of dollars of health insurance subsidies?  When you put it that way, Cato’s argument collapses. From the brief: ‘For no one can reasonably claim that the federal government gave Virginia clear notice that its citizens would be denied premium tax-credit assistance as punishment for the Commonwealth’s decision to forgo building its own health insurance exchange…. [The Plaintiffs argue] that everyone in Congress silently but mistakenly assumed that every State would create its own Exchange. (Appellants’ Br. 6, 42.) That claim finds no support in the record….’ The brief also notes that no Member of Congress expressed such a view and even the architects of this litigation (Cannon and Adler) were surprised by this ‘glitch’ after the fact. The brief also reviews the official correspondence to and from the Governor on this issue; any notice whatsoever is lacking, much less ‘clear notice’. What bothers me the most about this litigation is Cato’s willingness to hurt millions of vulnerable people in order to score political points, even after losing the 2012 Presidential election and the first bite of the Supreme Court apple in NFIB v. Sebelius. The Virginia brief puts the emphasis on the people: ‘Two sovereign interests compel the Commonwealth of Virginia to file this brief. First, the Commonwealth represents the interests of the hundreds of thousands of Virginians who depend on federal premium tax-credit assistance to afford the health insurance that is now available under the Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act” or “ACA”). Their interests are not represented by the Appellants here, four individual Virginians who do not want health insurance. Second, the Appellants’ legal theory contradicts the fundamental assumption on which the Commonwealth elected to forgo building its own health insurance exchange in favor of a federally-facilitated exchange: that doing so would not harm the interests of Virginians…'”

3. James Bessen: How Technology Creates Jobs for Less Educated Workers: “Since 1999, however, the number of LPNs has risen nearly 50% and wages have grown substantially. The reason: a combination of new technology and a new business model. New technologies, including advances in in electronics, fiber optics and anesthetics, allowed the widespread adoption of techniques for minimally invasive surgery. Using these techniques, surgical patients recover quickly enough to return home the same day…. Medical outcomes improved while avoiding the extra cost of a hospital stay and the complications that tend to arise from more invasive procedures…. Hospitals treat all sorts of patients with all sorts of symptoms. Many diseases, however, are difficult to diagnose…. The ambulatory surgery centers, by contrast, work in specialized areas where diagnoses are well identified, patients are screened for complications, therapies are well known and medical outcomes are predictable, if not always successful…. Because the procedures are standardized, an LPN learns valuable skills on the job…. Increasingly, doctors and dentists are performing a smaller share of the work and a variety of mid-skill providers, from LPNs and dental hygienists to nurse practitioners and physician’s assistants, are performing more. Over the last two decades this shift has created two million new jobs for mid-skill healthcare providers…”

4. Mark Duggan, Amanda Starc, and Boris Vabson: Who Benefits when the Government Pays More? Pass-Through in the Medicare Advantage Program: “In the Medicare Advantage (MA) program the federal government contracts with private insurers to coordinate and finance health care for more than 15 million Medicare recipients…. Additional reimbursement leads more private firms to enter this market and to an increase in the share of Medicare recipients enrolled in MA plans… [but] only about one-fifth of the additional reimbursement is passed through to consumers in the form of better coverage. A somewhat larger share accrues to private insurers in the form of higher profits and we find suggestive evidence of a large impact on advertising expenditures. Our results have implications for a key feature of the Affordable Care Act that will reduce reimbursement to MA plans by $156 billion from 2013 to 2022.”

Continue reading “Things to Read on the Evening of March 24, 2014” →

The President of the Minneapolis Federal Reserve Bank:

Narayana Kocherlakota: “I view the March 19 Federal Open Market Committee (FOMC): statement as an unusually significant one.

In that statement, the FOMC adopted new forward guidance about the evolution of its target for the federal funds rate. I see that new guidance as being intended to describe the Committee’s decisions for some time to come. I dissented from the new guidance for two reasons. The first reason is that the new guidance weakens the credibility of the Committee’s commitment to target 2 percent inflation. The second reason is that the new guidance fosters policy uncertainty and thereby suppresses economic activity. In what follows, I’ll elaborate on these reasons, discuss an alternative form of forward guidance, and conclude by strongly endorsing one aspect of the FOMC’s new forward guidance.

Continue reading “Evening Must-Read: Narayana Kocherlakota on Monetary Policy” →

I read Paul Krugman, and I want to sharply dissent:

Paul Krugman: Did Inflation Phobia Cause the Great Recession?: “Even avoiding the financial panic almost surely wouldn’t have meant avoiding a prolonged economic slump.

How do we know this? Well, what we actually know is that the panic was in fact fairly short-lived, ending in the spring of 2009. It doesn’t really matter which measure of financial stress you use…. Yet the economy didn’t come roaring back, and in fact still hasn’t. Why? Because the housing bust and the overhang of household debt are huge drags on demand, even if there isn’t a panic in the financial market…

Let me start with a graph that has become one of the principal lenses through which I view what has happened since 2005: my graph of four key components of total spending–real spending on exports, real spending by government purchasing goods and services, real spending by businesses purchasing equipment (and software), and real spending by construction firms building houses–all plotted as deviations from their business-cycle peak shares of potential real GDP:

What this graph tells me is this:

Continue reading “No, I Really Do Not Think That We Were Doomed to the Lesser Depression Plus the Greater Stagnation: I Think Paul Krugman Gets One Wrong Here…: Monday Focus: March 24, 2014” →

James Bessen: How Technology Creates Jobs for Less Educated Workers: “Since 1999, however, the number of LPNs has risen nearly 50% and wages have grown substantially.

The reason: a combination of new technology and a new business model. New technologies, including advances in in electronics, fiber optics and anesthetics, allowed the widespread adoption of techniques for minimally invasive surgery. Using these techniques, surgical patients recover quickly enough to return home the same day…. Medical outcomes improved while avoiding the extra cost of a hospital stay and the complications that tend to arise from more invasive procedures…. Hospitals treat all sorts of patients with all sorts of symptoms. Many diseases, however, are difficult to diagnose…. The ambulatory surgery centers, by contrast, work in specialized areas where diagnoses are well identified, patients are screened for complications, therapies are well known and medical outcomes are predictable, if not always successful…. Because the procedures are standardized, an LPN learns valuable skills on the job…. Increasingly, doctors and dentists are performing a smaller share of the work and a variety of mid-skill providers, from LPNs and dental hygienists to nurse practitioners and physician’s assistants, are performing more. Over the last two decades this shift has created two million new jobs for mid-skill healthcare providers…”

Mark Duggan, Amanda Starc, and Boris Vabson: Who Benefits when the Government Pays More? Pass-Through in the Medicare Advantage Program: “In the Medicare Advantage (MA) program…

the federal government contracts with private insurers to coordinate and finance health care for more than 15 million Medicare recipients…. Additional reimbursement leads more private firms to enter this market and to an increase in the share of Medicare recipients enrolled in MA plans… [but] only about one-fifth of the additional reimbursement is passed through to consumers in the form of better coverage. A somewhat larger share accrues to private insurers in the form of higher profits and we find suggestive evidence of a large impact on advertising expenditures. Our results have implications for a key feature of the Affordable Care Act that will reduce reimbursement to MA plans by $156 billion from 2013 to 2022.