…say that it’s not their fault–who could have known that banks would just sit on all those reserves? The answer is, anyone who had paid attention…. Let me quote myself, from… 1998…. Data from the 1930s… seemed to confirm…. Japan gave us another experiment, when it tried quantitative easing…. Theory and experience both predicted exactly the sterility of monetary base expansion that we saw in practice. And, you know, that’s the kind of successful prediction that is supposed to change peoples’ minds: if you’re that wrong about how an experiment turned out, and someone else made a prediction you considered foolish but turned out completely right, you’re supposed to concede that just maybe, possibly, they were on to something. The fact that essentially nobody on that side of the debate has budged in the slightest tells us that whatever it is they’ve been doing, it’s not scientific research.
Month: February 2015
Evening Must-Read: Lemin Wu: If Not Malthusian, Then Why?
Problems of measuring living standards properly go way, way, way back, as Lemin Wu demonstrates:
…Technological improvement in luxury production… faster than improvement in subsistence production, would have kept living standards growing…. [There is] a puzzle of balanced growth between the luxury sector and the subsistence sector…. [The hypothesis is of] group selection in the form of biased migration. A tiny bit of bias in migration can suppress a strong tendency of growth. The theory reexplains the Malthusian trap and the prosperity of ancient market economies such as Rome and Song…”
Thomas Malthus (1809): “All other arguments are of slight and subordinate consideration in comparison of this. I see no way by which man can escape from the weight of this law which pervades all animated nature…”
Lionel Robbins (1998): “But in economics, the admission that mankind need not live at the margin of subsistence […] meant that, the very long run limit of wages was not physiological subsistence, it was psychological subsistence—a much more complicated and difficult matter to formulate exactly…”
Things to Read on the Evening of February 26, 2015
Must- and Shall-Reads:
- : “Ezra Klein is pushing back against the Healthcare Reform 2.0 talk with an interesting and I think wrong post at Vox…”
- : The simple reason Walmart & TJ Maxx are handing out raises — people are quitting
- : The Financialization Project
- : The Gender Pay Gap: How Has It Evolved Over Time?
- : A Guide to Statistics on Historical Trends in Income Inequality
-
: Teeth Whitening at the Supreme Court: The Antitrust Limits of Professional Sovereignty: “The Supreme Court’s 6-3 opinion in North Carolina State Board of Dental Examiners vs. FTC is out…. It… in an unexpected way… delineat[es] antitrust’s limits on the states’ powers to regulate, de-regulate, and out-source regulation to a “non-sovereign actor.”… [The case] has ended up as a poster child for the clear articulation and active supervision standards required to determine whether an anticompetitive policy is indeed the policy of a given state, and entitled to immunity…. North Carolina’s Dental Board functioned more as a trade association with super powers granted to it by the state–apparently with an open-ended portfolio of responsibilities relating to dentistry in the state…. The dissent argues the delegation was valid and the Sherman Act does not sit to second guess the wisdom or even fairness of the delegation. Whatever you think of the dissent, Justice Alito is spot on when he notes that the majority opinion is potentially quite disruptive for state medical licensing boards… long been under full sway of the regulated health professions…. We have almost no tradition of genuine state regulation of doctors, dentists, and optometrists other than the North Carolina Dental Board model…. If we aim to take it over it will not be a taking it back, but a taking it on–an invention out of whole cloth.” -
: Fairness and Frictions: The Impact of Unequal Raises on Quit Behavior: “At a large U.S. retailer… discrete pay steps created discontinuities in raises, where workers initially earning within 1 cent of each other got raises that differed by 10 cents…. We find large causal effects of wages on quits…. The large effects of wages on quits mostly reflects relative-pay concerns and not market comparisons…. After accounting for peer effects, quits do not appear to be very sensitive to wages–suggesting substantial employer wage–setting power…. The relative-pay concerns are asymmetric… driven mainly by workers who are paid below their peers, suggesting concerns about fairness or disadvantageous inequity.” -
: Breaking the Web: “I absolutely loved this New York Times column which lamented… apps… [with no] capability to link…. ‘Unlike web pages, mobile apps do not have links. They do not have web addresses. They live in worlds by themselves, largely cut off from one another and the broader Internet. And so it is much harder to share the information found on them.’ Yes, yes, for the love of God yes. We have broken HTTP… a good specification which we’ve steadily whittled away…. A core understanding of HTTP should be a base requirement for working in this business. To not do that is to ignore a massive part of digital history (which we’re also very good at)…. Narcissism runs rampant in this industry, and our willingness to throw away and ignore some of the core philosophies of HTTP is just one manifestation of this. Rant over.” -
: I’m writing a newsletter: “I made the case for Obama’s new regulations on investment advisors, did an explainer on Greece’s deal with the Eurogroup, aggregating some cool diagrams of an energy-negative house in Australia, aggregated a cool chart about cohabitation among unmarried parents, and offered a hot take on partisanship and patriotism…. Those pieces… are all designed for the social web as it exists in the winter of 2014-2015, which is to say that they are designed to be viable as atomic pieces of content read and shared by people who have no idea who I am or what I’ve done before. There’s a lot to like about the contemporary social web, but one thing it lacks that I loved about blogging was the sense of direct, continual engagement between author and audience. My solution to that, I hope, is a newsletter. Specifically this newsletter. Communication between myself and a self-selected audience of individuals who I hope will subscribe with the intention of reading regularly and coming back for more…. Though I will always–always–have a very special place in my heart for blogging as a medium…. This will be like blogging, but for your inbox… it will come out frequently–but unpredictably. And like a Matthew Yglesias blog, it will come with plenty of typos and minimal editing…” -
: Is There a Site That Is the Opposite of Zero Hedge?: “Back in 2009 or so, I found Zero Hedge… and it seemed like a well-reasoned, thoughtful, informative blog, with a number of clearly articulated reasons why the Fed’s actions were unsustainable, would fail, etc. Now, many years later, I see that none of these clearly articulated positions have come true. Everything they said couldn’t and wouldn’t happen did in fact happen. So, having missed out on the market’s huge rally, I am looking for some other well articulated blog…”
Should Be Aware of:
Evening Must-Read: Ann Marie Marciarille: Teeth Whitening at the Supreme Court: Occupational Licensing and Antitrust Law
…is out…. It… in an unexpected way… delineat[es] antitrust’s limits on the states’ powers to regulate, de-regulate, and out-source regulation to a “non-sovereign actor.”… [The case] has ended up as a poster child for the clear articulation and active supervision standards required to determine whether an anticompetitive policy is indeed the policy of a given state, and entitled to immunity…. North Carolina’s Dental Board functioned more as a trade association with super powers granted to it by the state–apparently with an open-ended portfolio of responsibilities relating to dentistry in the state…. The dissent argues the delegation was valid and the Sherman Act does not sit to second guess the wisdom or even fairness of the delegation. Whatever you think of the dissent, Justice Alito is spot on when he notes that the majority opinion is potentially quite disruptive for state medical licensing boards… long been under full sway of the regulated health professions…. We have almost no tradition of genuine state regulation of doctors, dentists, and optometrists other than the North Carolina Dental Board model…. If we aim to take it over it will not be a taking it back, but a taking it on–an invention out of whole cloth.
Afternoon Must-Read: Arindrajit Dube, Laura Giuliano, and Jonathan Leonard: Fairness and Frictions: The Impact of Unequal Raises on Quit Behavior
…discrete pay steps created discontinuities in raises, where workers initially earning within 1 cent of each other got raises that differed by 10 cents…. We find large causal effects of wages on quits…. The large effects of wages on quits mostly reflects relative-pay concerns and not market comparisons…. After accounting for peer effects, quits do not appear to be very sensitive to wages–suggesting substantial employer wage–setting power…. The relative-pay concerns are asymmetric… driven mainly by workers who are paid below their peers, suggesting concerns about fairness or disadvantageous inequity.
What Is the Interaction of the Supreme Court’s Forthcoming King v. Burwell Decision with Health Policy? Is There an Interaction?: Focus
For the first time, we have a clue as to what Republican plans are for what to do with respect to health policy in the event of an anti-government Supreme Court decision in King v. Burwell. And the Republican plan of Nebraska Senator Ben Sass is the same as the Democratic plan–override the Supreme Court, with the difference being that the Democratic override would be permanent, while Sass is only proposing a temporary override.
For now.
Now the obvious way for the Supreme Court to decide this year’s ObamaCare case–King v. Burwell–would be to dismiss the case because it is a political football, and the plaintiffs lack standing because they have not suffered the kind of injury from government policy necessary for this to be a real case rather than a judicial intrusion into political questions.
If the Supreme Court does not take that road, the obvious way for it to decide King v. Burwell would be to note that the absence of a technical-corrections amendment bill makes the ObamaCare statute more than usually ambiguous, and that fifty years of unanimous Supreme Court administrative-law precedent says that agencies have broad discretion to interpret ambiguous statutes in ways that seem sensible to them.
If the Supreme Court does not take that road, the obvious way for it to decide King v. Burwell would be to note that when the federal government attempts to coerce states into acting as it wishes by withholding funds the state must be put on clear notice as to what will happen, when, and why; that ObamaCare did not do that; and that federalism concerns thus require the provision of subsidies to ObamaCare insurance purchasers whether they buy on the federal or the state exchange.
Supreme Court justices are cranky beasts, impelled more often by their beliefs about what the law should be or what their political party wishes than by logic, reason, and precedent. So odds are about one-in-five that a justice will decide the other way even on a question where there is no genuine split in logic, reason, and precedent. We would thus expect–given the three considerations that weigh heavily for the government in King v. Burwell–that the decision for the government would be 9-0 or 8-1, because each justice would have only a 1-in-125 chance of rejecting all of the government’s standing, administrative law, and federalism arguments.
But we all know that if the government wins in King v. Burwell the decision is highly likely to be 6-3, and that the government may lose.
And the question is what to do if, this spring, five rather than three Republican Supreme Court justices are willing to reject standing arguments designed to prevent judicial intrusion into politics, overrule the unanimous Burger Court Chevron decision and throw half a century of administrative law into chaos, and disrupt federalism jurisprudence as well–all to promote the partisan end of removing ObamaCare exchange insurance coverage from states that rely on the federal exchange?
The Republican view is that then the Republican House and Senate majorities will pass their preferred ObamaCare replacement, and Obama will have to sign it to avoid total collapse. The Democratic view is that the Republicans have to come up with a plan and an offer, and then we will see what the future of health policy is.
But what is the preferred ObamaCare replacement? What is the plan and the offer?
Now, for the first time, there is a Republican legislator putting forward a proposal–but it is only a proposal that we pretend that King v. Burwell had not been decided, for a while.
For Nebraska Republican Senator Ben Sasse says that Republicans in Congress should immediately blink: rather than allow the Supreme Court’s decision to go into effect, they should immediately pass a bill overruling the Supreme Court–but only for the next eighteen months:
: A First Step on the Way Out of ObamaCare: “In the event that the [five Republican justices on the Supreme] Court…
…strike down the [federal-exchange health insurance] subsidies… Congress must… offer immediate, targeted protection…. Congress should offer individuals losing insurance the ability to keep the coverage… with financial assistance for 18 transitional months… [to] protect suffering patients entangled in the court’s decision to strike down… subsidy payments…
A game theorist–or even an experienced politician–would ask: and what will have changed in eighteen months to make the situation look any different?
Extending federal-exchange ObamaCare subsidies then becomes just another one of the must-do extenders, like postponing implementation of the SGR or raising the debt ceiling, that takes up Congress’s time and occasionally threatens to disrupt the country’s economic life for no good purpose. So why not just overrule the five Republican justices once and for all?
So why is Sasse proposing this? Is this his game–to permanently overrule the Supreme Court the day after the five Republican justices speak?
Perhaps…
Certainly Sasse embeds his legislative proposal in a great deal of verbiage. Some of the verbiage is a very unconvincing claim that his proposal is not, in fact, a temporary-but-renewable ObamaCare fix and extension to overrule the five Republican justices:
This is neither an ObamaCare fix nor an extension of it. This is temporary, transitional relief–completely outside of ObamaCare–to millions of Americans who will suffer because of the administration’s illegal actions…
But it is a fix and an extension–albeit a temporary one!
Some of the verbiage is partisan-squid ink:
King v. Burwell… is… of profound national importance… challenges the legality of 75% of ObamaCare…. I am hopeful about the court’s decision…. ObamaCare’s central planning is unworkable and unpopular…. The court… [could deliver] a mortal blow to ObamaCare…. The Machiavellian fine-print that regulators wrote to protect their bedfellows… big insurers will be allowed to dump ObamaCare patients…. Cynics in the administration…. The administration has no plan to help…. We’ve already seen some Republican governors finesse their principles to expand Medicaid and secure extra money…. ObamaCare’s command-and-control regime will reduce families’ choices, thwart innovation and chart a path of European-style debt and rationed access to health care…. Those hurt by this administration’s reckless disregard for the rule of law. ObamaCare took these patients hostage…. The stakes couldn’t be higher. Either we will continue the march toward a harmful European-style system, or we’ll adopt real, patient-centered solutions…
Some of it is the plea, once again, for Republicans to form a rough consensus and put forward some health care proposal of their own–a thing that they have never done. Recall that even Richard Nixon’s health-care proposal’s legislative strategy involved combining centrist Democrats with about the one-third of early 1970s Republican legislators who were relatively liberal:
Republicans need to unify around a specific set of constructive, longer-term solutions, and then turn the 2016 presidential election into a referendum on two competing visions of health care. Simply opposing ObamaCare isn’t enough…. In the media’s caricature, Republicans have no ideas on health care. In reality, my colleagues have put forward many ideas. I don’t endorse every approach, but all of them are more humble than ObamaCare’s broken one-size-fits-all regime…
And some of it is simple recognition that if there turn out to be five rather than three Republican justices willing to break administrative law, the consequences are likely to be disastrous for public health:
Big insurers will be allowed to dump ObamaCare patients…. Chemotherapy turned off for perhaps 12,000 people, dialysis going dark for 10,000. The horror stories will be real…
Coupled with recognition that responsibility for the public-health disaster is likely to adhere to the Republican judges who overruled half a century of interpretive precedent, and to the Republican state governors and legislators who do not immediately do the state-level fix–that is, pass a short resolution establishing a state ObamaCare exchange and authorizing the governor discretion to delegate the operation of that exchange:
A deluge of attacks on Republicans for supposedly having caused this…. [In] the holdout states and their 37 governors, the political pressure to adopt ObamaCare will be crippling…. Most governors will fold…. If governors cave, ObamaCare is never going away…. Some… believe… winning King means winning…. I… doubt their strategy… inaction… enshrine[s] ObamaCare eternally…
Memo: Exchange Types:
-
State-based: California, Colorado, Connecticut, District of Columbia, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont, Washington,
-
State-partnership: Arkansas, Delaware, Illinois, Iowa, Michigan, Nevada, New Hampshire, New Mexico, Oregon, West Virginia.
-
Federal: Alabama, Alaska, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Mississippi, Montana, Nebraska, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota Tennessee, Texas, Utah, Virginia, Wisconsin, Wyoming.
Memo: Medicaid Non-Expansion:
- Alabama, Alaska, Florida, Georgia, Idaho, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia. Wyoming.
The full nullification states are thus: Alabama, Alaska, Florida, Georgia, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wyoming. The full nullification states thus have 113 million people in them compared to 206 million people in the rest of the country.
Over at Project Syndicate: Making Do with More
Over at Project Syndicate: If we as a species can avoid nuclear war; curb those among us who are violent because they are God-maddened, state-maddened, or ethnicity-maddened; properly coordinate global action to reduce global warming from its current intolerable projected path to a tolerable one, adapt to the global warming that occurs, and distribute paying for the costs of that adaptation–well, if we can do all of those things, the human race can have a very bright future indeed.
In the United States today, 16% of workers are in office and administrative support; 11% in sales; 11% in food growing, preparation, and serving; 10% in management and business and financial operations; 9% in healthcare and healthcare support; 7% in transportation and materials-moving; 7% in production; 6% in education and training; 4% in installation, maintenance, and repair; 4% in construction and extraction; 3% in personal care services; 3% in computer and mathematical occupations; 2% in protective services—and 7% in the rest http://www.bls.gov/oes/current/oes_nat.htm#00-0000.
All of the extracting and growing and building and making and carrying–even the carrying from the kitchen to the restaurant table, and even the making that is the transformation of coffee grounds and water into hot caffeine-laden liquid–takes up only three in ten jobs in the United States today. The rest–seven in ten jobs in America today, and growing–are made up of planning what to make, figuring out where what we have made needs to be installed, using what we make to perform personal services for one another, and the entire overhead of talking to each other and keeping track of what we are doing so that we can figure out what to do next. And here the United States does, as Karl Marx said, prefigure the future of the rest of the world.
Thus a North Atlantic that is satiated in terms of our true needs is at hand: enough organic carbon-hydrogen bonds to break to keep us all energized, enough vitamins and other nutrients to keep us healthy, enough shelter to keep us dry, enough clothing to keep us warm, enough capital to keep us at least potentially usefully busy, and enough entertainment to keep us from being bored—and all at a labor-time cost that is now less than two hours a day of outside-the-household work.
We are not there yet–the robotization of manufacturing, kitchens, and construction will take another generation, perhaps. And the rest of the world looks to be 50 years behind the North Atlantic. But it now looks like when John Maynard Keynes said that for the grandchildren of his audience “the economic problem is not-if we look into the future-the permanent problem of the human race” http://www.econ.yale.edu/smith/econ116a/keynes1.pdf, he only needed to add “great-great-great-great” to grandchildren.
That this extraordinary ongoing occupational shift away from occupations making the true necessities and the useful conveniences of life to occupations performing personal services, accounting, planning, control, persuasion, and social-status game-playing functions is now well underway and will continue is clear.
But how are we to square this with the fact that you have to squint hard and put your thumb on the scale to assert even half-confidently that working-class and even middle-class Americans live any significant amount better than their predecessors did thirty-five years ago?
And how do we square this with the ebbing of productivity growth as tracked by John Fernald and Bin Wang http://www.frbsf.org/economic-research/publications/economic-letter/2015/february/economic-growth-information-technology-factor-productivity/ and the depressing headwind-gale retarded forecasts of Robert Gordon http://www.nber.org/papers/w18315? As Larry Summers said last week at the Brookings Institution’s Hamilton Project:
[if] technology [is] having huge and pervasive effects… you would expect it to be producing a renaissance of higher productivity [growth]…
that we simply do not see.
My preferred reconciliation is to note that the value provided by information-age commodities is very hard to track. Rival and excludible commodities lend themselves to a private property-based market economy. That they are excludible–that their “owners” can easily keep others from making use of them should they choose–gives an enormous amount of bargaining power to those who control the production-distribution-coordination nexus. That they are “rival”–that two people cannot use the same one at the same time–creates a demand to produce at enormous scale which gives an enormous amount of bargaining power to others in the production process who own factors that if not scarce now soon will be given the requirements of mass production.
As a result, money flows appear wherever utility and value are provided–and those money flows are easy to track in national accounts. But non-rival, non-excludible information-age commodities are a very different beast: difficult to properly incentivize their creation, difficult to monetize their distribution, and difficult to track in national accounts. Thus a larger and larger wedge emerges between growth in utility as measured by true willingness-to-pay and growth in real measured national product.
But redesigning our economic system to properly incentivize and redesigning our national accounts to properly measure the completion of the ongoing information-age occupational revolution are only two of our four problems. In addition: Distribution must match effective demand to total income earned. And distribution must create a middle-class society rather than one of techno-plutocrats and their service-sector serfs.
And here Larry Summers has said it better than I have been able to:
Folks, wage inflation in the united states is 2%.…. What we need is more demand and that goes to… how we operate macroeconomic policy, and the enormous importance of having tighter labor markets, so that firms have an incentive to reach for workers….
We have record low real interest rates…. We have record high profits…. There’s a lot of rents in what we’re calling “profits” that don’t really represent a return to investment…. Who’s going to get those rents? That goes to the minimum wage; goes to the power of unions; goes to the presence of profit-sharing, goes to the length of patents and a variety of other government policies that confer rents; and then, when those are received, goes to the question of how progressive the tax and transfer system is….
If we had the income distribution in the United States that we did in 1979, the top 1% would have $1 trillion less… bottom 80%… $1 trillion more… $700,000 per year for a family for the top 1%… $11,000 a year for a family in the bottom 80%…. [For] the Earned Income Tax Credit…. the policy… [is] to increase it by a half. I’m all for it, but we are talking about [reversing] 2.5% of the [upward] redistribution that has taken place… http://www.nextnewdeal.net/rortybomb/one-where-larry-summers-demolished-robots-and-skills-arguments
Evening Must-Read: Deane Barker: Breaking the Web
which lamented… apps… [with no] capability to link….
Unlike web pages, mobile apps do not have links. They do not have web addresses. They live in worlds by themselves, largely cut off from one another and the broader Internet. And so it is much harder to share the information found on them.
Yes, yes, for the love of God yes. We have broken HTTP… a good specification which we’ve steadily whittled away…. A core understanding of HTTP should be a base requirement for working in this business. To not do that is to ignore a massive part of digital history (which we’re also very good at)…. Narcissism runs rampant in this industry, and our willingness to throw away and ignore some of the core philosophies of HTTP is just one manifestation of this. Rant over.
Evening Must-Read: Matthew Yglesias: Newsletters Are the New Weblogs
…on investment advisors, did an explainer on Greece’s deal with the Eurogroup, aggregating some cool diagrams of an energy-negative house in Australia, aggregated a cool chart about cohabitation among unmarried parents, and offered a hot take on partisanship and patriotism…. Those pieces… are all designed for the social web as it exists in the winter of 2014-2015, which is to say that they are designed to be viable as atomic pieces of content read and shared by people who have no idea who I am or what I’ve done before. There’s a lot to like about the contemporary social web, but one thing it lacks that I loved about blogging was the sense of direct, continual engagement between author and audience. My solution to that, I hope, is a newsletter. Specifically this newsletter. Communication between myself and a self-selected audience of individuals who I hope will subscribe with the intention of reading regularly and coming back for more…. Though I will always–always–have a very special place in my heart for blogging as a medium…. This will be like blogging, but for your inbox… it will come out frequently–but unpredictably. And like a Matthew Yglesias blog, it will come with plenty of typos and minimal editing…
Things to Read at Lunchtime on February 25, 2014
Must- and Shall-Reads:
- : “It’s misleading to say the wage gap is a myth by pointing at occupational controls. It is much sounder to follow Goldin’s lead in her AEA presidential address and treat them as clues for understanding the various factors driving a very non-mythical wage gap…”
- : Obama’s newest plan might drive investment advisers out of business. Good
- : Inequality and One City: Bill de Blasio and the New York Experiment, Year One
- : “The belief that monetary policy does not matter is not just “the most dangerous idea in Federal Reserve economic history,” as the economists Christina and David Romer have noted; it is exceedingly hazardous to any economy. Europe faces enough serious risks already; it should not needlessly add to them.”
- : “TA one-decade delay in addressing climate change would lead to about a 40% increase in the net present value cost of addressing climate change…. Uncertainty and the possibility of tipping points provide a motivation for more action as a form of insurance against worse outcomes…”
- : “It was once believed that the rise of index investing would make markets less efficient and thus create new opportunities for active money managers… [but] perhaps the opposite is true…. Josh Brown, summing up… Larry Swedroe and Andrew Berkin…. ‘[W]ith all the unskilled investors departing, pros will be left to square off against only other pros. The lack of retail punters and their harvestable mistakes cuts off one of the most reliable historical sources of alpha for sharp-eyed managers…'”
- : Semiannual Monetary Policy Report to the Congress–February 24, 2015
- : Brief history of middle-class economics
- : Disability Insurance: An Essential Part of Social Security
-
: The links between institutions and shared growth: “[Standard] arguments leave little or no room for labor market institutions and public policies in the determining changes in the distribution of earnings up and down the income ladder. An alternative view is that institutionally-driven bargaining power is a critical piece of the story…. All rich countries face challenges from technology and globalization, but only the United States and the United Kingdom show inequality rising to extreme levels…. I will compare the United States with Canada, Australia, Germany, and France…. The United States can do a better job of generating decent jobs, and a sensible first step is to learn from the experiences of other countries.” -
: The Best Investment the U.S. Could Make Is Affordable Higher Education: “The skills-gap story ignores the fact that education will never be the answer for everyone…. However… a college degree is a worthwhile investment…. Fortunately for me, CSU Chico, which was nearby, only charged approximately $100 per semester…. If it hadn’t been for the cheap tuition, I would have been stuck in that town with little hope of finding my potential. I am grateful to this day that the State of California gave me that opportunity for an education, and that I was able to eventually make it through graduate school with very little debt…. How many people who are in a situation like I faced will be stuck there, unable to afford to go to the college that best suits them, or can’t go at all? When that happens, when so much potential is unrealized, it makes us all worse off…. We can do better than this.” -
: Monetary Policy and Housing Prices: Lessons from 140 Years: “Housing played a major role in the Global Crisis, and some worry that the ultra-low interest rate environment is inflating new housing bubbles. Using 140 years of data from 14 advanced economies, this column provides a quantitative measure of the financial stability risks that stem from extended periods of ultra-low interest rates. The historical insights suggest that the potentially destabilising by-products of easy money must be taken seriously and weighed carefully against the stimulus benefits. Macroeconomic stabilisation policy has implications for financial stability, and vice versa. Resolving this dichotomy requires central banks greater use of macroprudential tools.” -
: Phantom Phiscal Crises – NYTimes.com: “Matthew Klein takes on…the mysterious, persistent fear that Japan and other countries that borrow in their own currencies could suddenly face a Greek-style fiscal crisis…. It’s not just BowlesSimpsonGreenspan who believe in the threat; Taka Ito… is a good and sensible economist; so is Olivier Blanchard…. The answer I seem to get is fear of a dramatic flip in circumstances–that Japan, say, could engage in a sort of macroeconomic quantum tunneling, suddenly transitioning from deflation to crashing currency and runaway inflation…. It does seem an odd thing to be worrying about right now.. does… obsessing about the state of Social Security in 2030, really make that much difference to the prospect of such an abrupt transition? I don’t see the plausibility–and it seems really strange for that concern to loom so large in the face of everything else going wrong.”
Should Be Aware of:
- : Gadgetopia
- : Unstoppable Robot Ninja
- : The disappeared: Chicago police detain Americans at abuse-laden ‘black site’
-
: A different cluetrain: “Axioms about politics…. Automation privileges capital over labour (because capital can be substituted for labour, and the profit from its deployment thereby accrues to capital…. A side-effect of the rise of capital is the financialization of everything…. Since the collapse of the USSR and the rise of post-Tiananmen China it has become glaringly obvious that capitalism does not require democracy. Or even benefit from it…. The iron law of bureaucracy states that for all organizations, most of their activity will be devoted to the perpetuation of the organization…. Governments are organizations…. We observe the increasing militarization of police… the priviliging of intelligence agencies… and in the media a permanent drumbeat of fear, doubt and paranoia directed at “terrorists”…. Money can buy you cooperation from people in government, even when it’s not supposed to. The internet disintermediates supply chains…. Our mechanisms for democratic power transfer date to the 18th century. They are inherently slower to respond to change than the internet and our contemporary news media…. The expansion of the security state is seen as desirable by the government… because… the legitimacy of government is becoming increasingly hard to assert…. We’re all doomed. Have a nice century!”