Things to Read on the Evening of January 12, 2015
Must- and Shall-Reads:
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So why aren’t wages responding to the tightening job market? - :
The Genius of Obama’s Two-Year College Proposal - :
Why America’s middle class is lost - :
Fed too complacent on US deflation damage - :
What Brill’s ‘Bitter Pill’ Gets Wrong on Obamacare
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Temporary Protection and Technology Adoption: Evidence from the Napoleonic Blockade:
“I find that, in the short-run, regions in the French Empire which became better-protected from trade with the British for exogenous reasons during the Napoleonic Wars… increased capacity in… mechanised cotton spinning to a larger extent than regions which remained more exposed to trade. Temporary protection had long term effects…. Firms located in regions with higher post-war spinning capacity were more productive 30 years later…. After… peace, exports of cotton goods from France increased substantially, consistent with evolving comparative advantage in cottons…. As late as 1850, France and Belgium… had larger cotton spinning industries than other Continental European countries… not protected from British trade during the wars…”
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Philip Klein’s Overcoming Obamacare:
“Philip Klein wanted to write a book that sums up competing schools of thought from conservatives as to what to do about Obamacare, and he succeeds. I can recommend it without reservation. But in doing so, I think he shows the relative seriousness of those schools of thought. In the Reform School, we see incredibly detailed plans (like those of Roy) where numbers have been run and tradeoffs calculated. There are things that conservatives want, and things they’re willing to concede. The Replace School is better considered than I had previously thought, but a little less detailed (and, perhaps, a little less realistic). The Repeal School, however, left me feeling like it was just a political ploy, with hand-waving to old studies (which barely applied) and old ideas like ‘HSAs can fix everything’. I’m curious to see if others agree. Bottom line, Klein is a talented journalist and writer who gave me some insights into what conservatives are thinking. Well worth my time. Likely worth your time, too.”
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Eurozone Must Act Before Deflation Grips:
“Deflation in the eurozone has nothing to do with the price of oil. Its cause is a series of policy errors over several years–the interest rate increase in 2011, the failure to act when inflation rates dropped off a cliff in 2013 and the pursuit of austerity in a recession. If the European Central Bank had met its inflation target of ‘close to but below 2 per cent’, the oil price collapse would have been harmless…. A year ago it was said that the eurozone was only one shock away from deflation. Since then, we have had two: Russia’s aggression against Ukraine and the fall in the oil price. Shocks happen…. But beware the second-round effects, those that come with a delay. There are already signs that German pay negotiators are dropping the ECB’s 2 per cent inflation target in their wage formulas…. My expectation is that QE will fall short for a number of reasons. The size of the purchases may not be large enough… may simply not work as well in an economy with a smaller capital market and a different system of housing finance…. A helicopter drop would work but sadly, I fear, it would be too unconventional for the continental European mind. A slightly more realistic possibility would be a combination of QE, an external stimulus from oil and a fiscal boost…”
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On Econoheroes http://krugman.blogs.nytimes.com/2015/01/12/on-econoheroes:
“Joe [Stiglitz] and I do tend to get quoted, invoked, etc. on a frequent basis in liberal media and by liberals in general, usually with (excessive) approbation…. [The] people playing a comparable role in right-wing discussion… tend not to be highly cited or even competent economists. So don’t tell me that Greg Mankiw or Robert Barro are famous economists and also conservative. Indeed they are. But are they omnipresent on the conservative scene?… ‘mankiw economy’… get[s]… 5200 hits… ‘stephen moore economy’… get[s] 65,700… ‘stiglitz economy’… get[s] 43,800…. This [is] a real asymmetry…. The right does not turn to these eminent conservative economists for guidance and support; it prefers the hacks.”
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History and Policy Failure:
“I’ve been having a hard time reading Barry Eichengreen’s Hall of Mirrors… It seems to be a very good book…. But the recent history is painful…. You often hear assertions to the effect that in early 2009… we didn’t know how deep and prolonged the slump would be… how much damage would be done by the pivot to deficit reduction. So it must be said: What do you mean ‘we’, white man?…. Up through 2011 the CBO… was… more pessimistic than what actually happened…. Thereafter CBO predicted a faster recovery… but even so CBO didn’t expect the output gap to go away until around now…. Conventional est… [gave] ample… [warning] that the proposed stimulus was inadequate and that 2010 would be way too soon to pivot to deficits…. It’s true that for years elite discourse was dominated by the worry that we were doing too much, that deficits and easy money were dangerous, that we were risking debt crisis and inflation. Now, seemingly suddenly, the Very Serious People have realized that in reality we did too little, that deflation and stagnation are looming as the great dangers, and there are cries of ‘Who could have known?’ Well, everyone could and should have known. I certainly did.”
Should Be Aware of:
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Psychologists Have Uncovered a Troubling Feature of People Who Seem Nice All the Time – Mic - :
America’s prison population: Who, what, where and why - :
WSJ Just Realized The Anti-ACA Lawsuit It’s Pushing Could Be Ruinous For Americans–Including Republican Voters - :
Ross Douthat ponders the Liberal Marriage Hypothesis
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Un-Awesome: Golden Globes Stupidly Pass Over The LEGO Movie:
“Calling the Golden Globes’ choice incorrect shouldn’t be translated as an insult to Dean DeBlois’ How To Train Your Dragon 2, as I actually enjoyed that film immensely when I saw it this past summer, but The LEGO Movie’s positive aspects really outweigh it all around. I will give the DreamWorks feature plenty of credit for being an adventures piece of storytelling and stunning to look at, but the immense creativity and originality of Warner Bros.’ film leaves really no comparison, and it’s a shame that it wasn’t rewarded for it. Interestingly, it’s the ‘F’ in HFPA that may very well have prevented The LEGO Movie from taking home this award – which it very rightly deserved. While Phil Lord and Chris Miller’s animated feature was a huge hit here in the United States – ranking as the fourth biggest domestic hit of the year with an impressive $257 million pull – the film didn’t really translate abroad…. It’s very possible that this sway was reflected in the voting for the Golden Globes…”
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Sweaty January and how gyms make money:
“Having seen the books of a gym chain or two, we can tell you that the ‘Sweaty January’ phenomenon is not an urban myth or a joke — it’s absolutely fundamental to the economics of the industry and it’s basically impossible to run an economically viable gym without taking it into account. Usually about 75 per cent of all gym memberships are taken out in the month of January. Not only this, but the economics of the industry absolutely depend on the fact that a very great proportion of January joiners will not visit more than three or four times in total before their membership comes to a floundering flop of weight not lost at the end of the year…”