Month: May 2014

So this morning I am reading the highly-intelligent Reihan Salam’s bill of indictment against ObamaCare. He says that ObamaCare “will eventually have to be either drastically reformed or replaced outright” because of its many problems. As I, at least, read the problems he thinks he sees, I find myself thinking that they are of five kinds:

(1) Problems that seem to me to be problems of politics:

1. The more familiar people become with Obamacare and its consequences, the less they like it….
2. 62 percent oppose the law, an increase of 4 percentage points since November….
3. 20 states… have so far refused to take part in [Medicaid expansion].

Continue reading “Reading Reihan Salam’s “Why I Signed Up for Obamacare”: The Honest Broker for the Week of May 10, 2014″ →

Should-Reads:

1. Tim Hatton: Height of World War I Servicemen: “In the following half century the height of males increased by about two inches…. Sanitary reforms and housing renewal improved the urban environment, and industry gradually became less toxic. Illiteracy disappeared while average education increased by 2-3 years. More and better education, combined with modest medical advances, brought better understanding of the benefit to children of nutrition and hygiene. Together, these developments help to explain the apparent puzzle of the improvement in average health status during a period of war and depression that predates the advent of universal health services…”

2. Harold Pollack: Death on the Installment Plan
   Now we know: Rejecting the Medicaid expansion could kill nearly 6,000 people each year: “The study examined the impact of the bipartisan insurance expansion enacted in Massachusetts in 2006—a.k.a. ‘RomneyCare’, which provided the basic model for the ACA…. Benjamin Sommers, Sharon Long and Katherine Baicker examined a decade’s worth of mortality data in Massachusetts counties, comparing trends to those found in carefully chosen comparison counties in other states…. Insurance coverage reduced [non-elderly adult] mortality rates [for deaths amenable to health care] by about 30 percent. For every 830 people newly insured, Massachusetts prevented one death per year…. Do these results generalize?… Massachusetts has done a better and more enthusiastic job implementing RomneyCare than many states (and the federal government) have done thus far with ACA. On the other hand, Massachusetts experienced the strongest survival benefits in low-income areas that contain many uninsured people…. Massachusetts began its reform as a prosperous liberal state with effective public health polices and a strong infrastructure of safety-net care. Other states are starting with a much less favorable baseline…”

Should Be Aware of:

Continue reading “Things to Read on the Afternoon of May 9, 2014” →

Andrew Ross Sorkin: What Timothy Geithner Really Thinks: “What is certain, however, is…

…Geithner had a predisposition that Wall Street, even as it was, remained essential to the functioning of the U.S. economy in just about every sector:

I did not view Wall Street as a cabal of idiots or crooks. My jobs mostly exposed me to talented senior bankers, and selection bias probably gave me an impression that the U.S. financial sector was more capable and ethical than it really was.

During his first few months in the job, Geithner fought with Summers, who felt that his protégé had become overly solicitous of the banks. Geithner dismissed Summers as espousing “the hedge-fund view.” (“Hedge-fund executives tended to see the banks as dumb, lumbering giants,” Geithner writes.)

Continue reading “Timothy Geithner: Department of “WTF?!?!”: Friday Focus: May 9, 2014″ →

Should-Reads:

1. Richard Rubin and Margaret Collins: Early Tap of 401(k) Replaces Homes as American Piggy Bank: “The Internal Revenue Service collected $5.7 billion in 2011 from penalties, meaning that Americans took out about $57 billion from retirement funds before they were supposed to. The median size of a 401(k) is $24,400 as of March 31, with people older than 55 having $65,300, according to Fidelity Investments. Those funds can disappear quickly in retirement, and the early withdrawals indicate that the coming retirement crisis could be even more acute than expected…”

2. Simon Gilchrist et al.: Monetary Policy and Real Borrowing Costs at the Zero Lower Bound: “For the ZLB period, we identify two policy surprises: changes in the 2-year Treasury yield around policy announcements and changes in the 10-year Treasury yield that are orthogonal to those in the 2-year yield. The efficacy of unconventional policy in lowering real borrowing costs is comparable to that of conventional policy, in that it implies a complete pass-through of policy-induced movements in Treasury yields to comparable-maturity private yields…”

3. Mary C. Daly and Leila Bengali: Is It Still Worth Going to College?: “Earning a four-year college degree remains a worthwhile investment for the average student. Data from U.S. workers show that the benefits of college in terms of higher earnings far outweigh the costs of a degree, measured as tuition plus wages lost while attending school. The average college graduate paying annual tuition of about $20,000 can recoup the costs of schooling by age 40. After that, the difference between earnings continues such that the average college graduate earns over $800,000 more than the average high school graduate by retirement age…”

4. Charlie Crist: “I left the Republican Party because the Republican leadership went off the cliff… so unfriendly to the African-American president. I’ll just go there…. Because I was a Republican, I saw the activists and what they were doing, and it was intolerable to me… and I saw how the party–some of them–were treating the African-American president and I couldn’t take it anymore. That’s a big part of why I left the party…”

Should Be Aware of:

Continue reading “Things to Read on the Evening of May 7, 2014” →

Jennifer Taub: What Tim Geithner Got Right: “I believe Mr. Geithner correctly recognized that restoring bank profitability…

…could be hastened by undermining efforts to rescue homeowners. What he got wrong was choosing banks over people. Mr. Geithner was right when he told Liaquat Ahamed in an interview published in the New Republic that ‘there is an ongoing political effort to legislate a weakening Dodd-Frank or block political appointees’, but he was wrong when he added, ‘That effort does not have much political force now’. Mr. Geithner is right when he notes that the 2008 crisis rescue presented an ‘extreme real-time challenge’. But it would be wrong to assume that means the government had no models…. Franklin D. Roosevelt‘s administration managed a rescue and reform that was (in comparison with the Bush administration and later, the Obama Administration) far tougher on failing banks and easier on struggling homeowners. The Home Owners Loan Corporation that was established in 1933, for example, refinanced more than a million (or 20 percent of all) home mortgages in the country…. I do concur that the country is indebted — not to Mr. Geithner, but perhaps because of him. Consider the more than nine million homeowners who still owe more on their mortgages than their property is worth. This collective negative equity still holds back the economy and housing market…

Janet Yellen: Testimony: The Economic Outlook–May 7, 2014: “Valuations for the equity market as a whole…

…and other broad categories of assets, such as residential real estate, remain within historical norms…. Bank holding companies… have improved their liquidity positions and raised capital ratios to levels significantly higher than prior to the financial crisis… stress tests mandated by the Dodd-Frank Act have provided a level of confidence in our assessment of how financial institutions would fare…. For the financial sector… leverage remains subdued and measures of wholesale short-term funding continue to be far below levels seen before the financial crisis…. The Federal Reserve finalized a rule implementing section 165 of the Dodd-Frank Act to establish enhanced prudential standards for large banking firms in the form of risk-based and leverage capital, liquidity, and risk-management requirements…. The Federal Reserve is considering whether additional measures are needed to further reduce the risks associated with large, interconnected financial institutions. While we have seen substantial improvements in labor market conditions and the overall economy since the financial crisis and severe recession, we recognize that more must be accomplished. Man… are still unemployed, inflation continues to run below the FOMC’s longer-run objective, and work remains to further strengthen our financial system…