Things to Read on the Evening of June 21, 2014

Should-Reads:

1. Jim Henley: Twitter / UOJim: “Congrats, trans friends!: Your liberation struggle has reached the point where NRO writers [like Charles C.W. Cooke] now write anti-anti-transphobia pieces!… Every white anti-anti rewriting a piece the New Criterion played out by 1991, you’re the ‘vocally boring & perpetually aggrieved’ dude…”

2. Paul Krugman: Austerity and Hysteresis: “If you believe official estimates of potential output… the Great Recession and its aftermath have done incredible damage, not just to short-run output and employment, but to long-run prospects…. Advanced country real GDP… grew 18 percent from 2000 to 2007… and… was… expected to keep rising at… the same rate… [but] advanced-country GDP is likely… in 2014… [to be] 10 percent below trend…. [with] estimates of economic slack… only 2.2 percent…. Something like an 8 percent hit to economic potential all across the advanced world, which is huge.”

3. David Dranove et al.: Pharmaceutical Profits and the Social Value of Innovation: “Exogenous shocks to the demand for medical products spur additional product development…. Breakthrough products and those that largely duplicate the performance of existing products…. We… explore the impact of the introduction of Medicare Part D… [and[ find that the law spurred development of products targeting illnesses that affect the elderly, but most of this effect is concentrated among products aimed at diseases that already have multiple existing treatments. Moreover, we find no increase in products targeting orphan disease or those receiving either fast track or priority review status from the FDA. This suggests that marginal changes in demand may have little effect on the development of products with large welfare benefits.”

4. Andres Velasco: Inequality in the region must be addressed by pre-distribution, not just redistribution: “No one can deny that the distribution of income is scandalously unequal in Latin America. But it will come as a surprise to Piketty’s boosters (many of whom have yet to read his book) that his theory has little, if anything, to do with the measured dynamics of income distribution in the region. Piketty’s theory concerns what economists call the functional distribution of income, or the split between providers of labor and owners of capital. But the maldistribution that causes so much unease in Latin America concerns the personal distribution of labor income…”

5. M. Buettgens and J. Dev: The ACA and America’s Cities: Fewer Uninsured and More Federal Dollars: “Among the seven cities in states that have expanded Medicaid, the ACA will likely decrease the number of uninsured by an average of 57 percent… between 49 percent in Denver and 66 percent in Detroit by 2016.  New federal spending on health care from 2014 to 2023 would range from $4.1 billion in Seattle to $27 billion in Los Angeles. Among the seven cities in states not expanding Medicaid… an average of 30 percent… from 25 percent in Atlanta to 36 percent in Charlotte by 2016. New federal spending… would increase by between $1.9 billion in Atlanta and $9.9 billion in Houston…”

Should Be Aware of:

• • Ed Kilgore: HRC’s Single Mindedness
• Emily Badger: Taxi medallions have been the best investment in America for years. Now Uber may be changing that
• Matthew Yglesias 7 ways Mike Lee’s push to get the GOP to stop obsessing over tax cuts for the rich matters
• Dan Gilbert: “Tattoos are a good example of a universal error in thinking. Human beings, and especially young adults, underestimate how much their personalities and values will change as they age…”
• Alex Payne: “Dear Marc Andreessen…. You seem to think everyone’s worried about robots. But what everyone’s worried about is you, Marc. Not just you, but people like you. Robots aren’t at the levers of financial and political influence today, but folks like you sure are. People are scared of so much wealth and control being in so few hands…”
• John Hechinger: Retirees Suffer as $300 Billion 401(k) Rollover Boom Enriches Brokers
• Bryan Caplan: Embarrass Me Now, Please
• Barry Eichengreen: “The Tyranny of Economic Growth: The South Korean ferry disaster shows the problem with putting too much emphasis on numerical targets, a lesson with relevance for China…”

And:

1. Doug Elmendorf: Projections of Tax Expenditures: “On the basis of estimates prepared by the staff of the Joint Committee on Taxation, CBO projects that, under current law, all tax expenditures in the individual and corporate income tax systems will total roughly 8.2 percent of GDP in fiscal year 2014, if their effects on social insurance taxes as well as on corporate and individual income taxes are included. CBO estimates that the comparable total for 2017 is 9.0 percent. The agency has not estimated the magnitude of all tax expenditures beyond 2017, but the percentage of GDP for the years 2018 to 2024 is probably similar to the percentage estimated for 2017. By comparison, CBO projects that total federal tax revenue will be close to 18 percent of GDP during the coming decade under current law…”

2. Jamelle Bouie: Juneteenth: The Black American Holiday Everyone Should Celebrate but Doesn’t: “Thursday marks the 148th anniversary of the first Juneteenth. For now, it’s a niche holiday, celebrated by black Americans and a handful of others who know and understand the occasion. But it deserves wider reach. Indeed, I think we should add it to the calendar of official federal holidays. Insofar that modern Americans celebrate the past, it’s to honor the sacrifices of the Greatest Generation or to celebrate the vision of the Founders. Both periods are worthy of the attention. But I think we owe more to emancipation and the Civil War…”

Already-Noted Must-Reads:

1. Mark Thoma sends us to Steve Cecchetti and Kermit L. Schoenholtz: Monetary Policy Target Regimes: Inflation, Price Level, Nominal GDP, etc.: “The question of the appropriate policy target… has become a matter of intense debate…. We conclude that returning to the price path implied by the pre-crisis trend is a realistic possibility. Returning to the earlier nominal GDP path is not. That said, the inflation overshoot that our rough calculations suggest is moderate, so the benefits are likely to be limited. But the costs could include a loss of credibility in the inflation-targeting framework. Would that really be worth it?”

2. Nick Bunker: Weekend reading: “Secular Stagnation: Greg Ip and John Hilsenrath. Long-Term Unemployment: John Hilsenrath and Victoria McGrane and Matt O’Brien. Allocation of Time: Danielle Kurtzleben, Ben Casselman, and Maria Konnikova. Millennials: Adam Davidson. China’s Credit Boom: Jamil Anderlini, David Keohane, and Kaushik Basu…”

3. Emmanuel Saez and Thomas Piketty: Inequality in the long run: “During the 20th century, growth rates were exceptionally high and rates of return were severely reduced by capital shocks (destructions) and the rise of taxation… quantitatively sufficiently important to explain why wealth concentration did not return to pre-WWI levels in the postwar period. Other factors might also have played a role… [but such] process[es] does not seem to have taken place in pre-WWI Europe…. To the extent that population growth (and possibly productivity growth) will slow down in the 21st century, and that after-tax rates of return to capital will rise… the 21st century… could… [see] wealth concentration…”

4. Michael Hiltzik: Can we finally agree that Obamacare is working?: “At the end of a war, some people will remain holed up in the trees thinking they can still turn the tide of a lost cause. Increasingly, that’s the best description of the anti-Obamacare dead-enders…. Nearly 60% of enrollees in ACA-compliant exchange health plans this year were previously uninsured…. Obamacare cut costs for buyers eligible for subsidies by an average 76% …. More than 80% of buyers are eligible for government subsidies…. Most people can save money by choosing plans offering narrower provider networks, and there’s “no meaningful” difference in health outcomes…. Projected rate increases for 2015 are coming in well below expectations…. Here’s the Republican approach to these trends. On Thursday, Sens. Orrin Hatch, R-Utah, and Charles Grassley, R-Iowa, issued a report attacking the Administration for its botched rollout of Healthcare.gov…. Texas Gov. Rick Perry fired up his state’s Republican convention by calling the expansion of Medicaid, which he’s refused to implement, ‘federal blackmail’. Number of Texas residents left without health insurance by his stand: 1.1 million…”