Things to Read at Lunchtime on November 22, 2013

Must-Reads:

1. Maryn McKenna: Imagining the Post-Antibiotics Future: “A few years ago, I started looking online to fill in chapters of my family history…. My great-uncle Joe…. Through one of the scrapes, an infection set in…. Desperate to save his life, the men from his firehouse lined up to give blood. Nothing worked. He was thirty when he died, in March 1938…. Five years after my great-uncle’s death, penicillin changed medicine forever. Infections that had been death sentences—–from battlefield wounds, industrial accidents, childbirth–suddenly could be cured in a few days…. Lately, though, I read it differently. In Joe’s story, I see what life might become if we did not have antibiotics any more…”

2. Tim Duy: Desperate to Taper: “The minutes of the October FOMC meeting leave little doubt that the Fed increasingly desires to end the asset purchase program, enough so to contemplate tapering regardless of seeing satisfactory improvement in labor markets…. The discussion of the specifics of the asset purchase program began with: ‘During this general discussion… participants reviewed issues specific to the Committee’s asset purchase program. They generally expected that the data would prove consistent with the Committee’s outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months.’ The mythical taper–just a few months away.  And it will always be just a few months away given the broad weakness in the labor chart. Recall the Yellen Charts: Unless they narrow their focus to only the unemployment rate, the argument to taper is challenged to say the least. It is even more challenged considering inflation indicators. Knowing that the data continuously refuses to cooperate, the Fed explores plan B: ‘However, participants also considered scenarios under which it might, at some stage, be appropriate to begin to wind down the program before an unambiguous further improvement in the outlook was apparent…”

3. Ashok Rao The Intellectual Evolution of Larry Summers on the Possibility of a Long-Lasting Negative Real Natural Rate of Interest: November 14, 2011, February 11, 2013, and November 8, 2013…

Should-Reads:

1. Norm Ornstein: Republicans Forced Reid’s Hand On The Nuclear Option: “For whatever reason, the Republicans decided to go nuclear first, with this utterly unnecessary violation of their own agreement and open decision to block the president from filling vacancies for his entire term, no matter how well qualified the nominees. It was a set of actions begging for a return nuclear response. McConnell’s threat, it seems to me, makes clear the strategy: let Dems take the first step, and we will then bear no blame when we entirely blow up the Senate’s rules after we take all the reins of power. That other Republicans like Corker, McCain, Alexander, Murkowski and so on, went along, shows how much the radicals and anti-institutionalists now dominate the Republican Party. Which is sad indeed.”

2. Rachel Pearson: Life and Death in the “Safety Net”: “The first patient who called me ‘doctor’ died a few winters ago…. His belly was swollen, his eyes were yellow and his blood tests were all awry. It hurt when he swallowed and his urine stank…. His disease seemed serious, but… the tests… are beyond our financial reach…. We decided to send him to the emergency room…. There’s a popular myth that the uninsured–in Texas, that’s 25 percent of us–can always get medical care through emergency rooms…. The myth is based on a 1986 federal law called the Emergency Medical Treatment and Labor Act (EMTALA), which states that hospitals with emergency rooms have to accept and stabilize patients who are in labor or who have an acute medical condition that threatens life or limb. That word ‘stabilize’ is key: Hospital ERs don’t have to treat you. They just have to patch you up to the point where you’re not actively dying…. My patient went to the ER, but didn’t get treatment…. He’d finally gotten so anemic that he couldn’t catch his breath, and the University of Texas Medical Branch (UTMB), where I am a student, took him in. My friend emailed me the results of his CT scans: There was cancer in his kidney, his liver and his lungs. It must have been spreading over the weeks that he’d been coming into St. Vincent’s…. UTMB sent him to hospice, and he died at home a few months later. I read his obituary in the Galveston County Daily News. The shame has stuck with me through my medical training—not only from my first patient, but from many more…”

3. Benjamin Wallace-Wells: 50 Years of Conspiracy Theories: “Every good conspiracy theory begins with the pawn…. Consider… Ricky Donnell Ross circa 1980… high-school dropout… part-time [crack] dealer…. Oscar Danilo Blandon…. Within two years, as drug use exploded and he supplied crack to both the Bloods and Crips, Ross became one of the dominant dealers in Los Angeles, moving 100 kilos each week…. Blandon was… a contra, a member of the militias organized and deployed by the CIA to overthrow the left-wing government in Managua. The contras had, it seems, long supplemented the funds Washington sent by helping Colombian traffickers ship cocaine north…. Because of Ross’s pivotal role in the early crack trade in L.A., this episode soon became fuel for perhaps the last great conspiracy of the twentieth century: that the CIA had spread crack throughout America’s inner cities…. The wider the aperture around this theory, the harder its proponents work to implicate Washington, the shakier it seems…. But keep the aperture tighter, around Ross himself, and you see American intelligence officials working comfortably in close proximity to drug traffickers in Central America and a remarkably short chain from powerful figures in American intelligence to this crack dealer in Los Angeles. What is left is a general sense that something is amiss…. If Ross sensed that he had been a pawn for forces he could barely understand, he probably wasn’t wrong. The question was: What forces? That the Ricky Ross story follows a familiar plot, that we know what a pawn is and that we understand the patterns of conspiracy, owes a great deal to the Kennedy assassination, which took place 50 years ago this month and which gave birth to the modern golden age of conspiracy…”

4. Joseph Cotterill: The Fed and Treasury default: a coda: “At some point in the great collective peyote dream that was last month’s debt ceiling crisis, we asked you to imagine the Fed buying defaulted US Treasuries. Fortunately, the US central bank was thinking about it too: ‘Meeting participants saw no legal or operational need in the event of delayed payments on Treasury securities to make changes to the conduct or procedures employed in currently authorized Desk operations, such as open market operations, large-scale asset purchases, or securities lending, or to the operation of the discount window. They also generally agreed that the Federal Reserve would continue to employ prevailing market values of securities in all its transactions and operations, under the usual terms…’ That’s from the latest Fed minutes’ account of an unscheduled videoconference held on October 16–ironically, the day John Boehner cracked, leading to a late-night House vote to raise the ceiling. Still, the Fed knows what to do next time.”

5. Jérémie Cohen-Setton: Blogs review: Understanding New-Keynesian models: “A recent tractable formulation of the New-Keynesian liquidity trap by Ivan Werning has helped streamline the model to its essence and has generated important contributions that help clarify its mechanics…. Johannes Wieland writes that New-Keynesian models… robustly make two predictions at the ZLB… demand-side policies are very stimulative and, second, negative supply shocks are expansionary…. Paul Krugman writes the liquidity trap is puts us in a world of topsy-turvy…. Paul Krugman writes that the reason the classic Keynesian multiplier isn’t in NK models is not because it has been disproved, but because such models deliberately give hostages…. Johannes Wieland… writes that a less restrictive Euler equation is needed… if nominal wages are sticky and a large fraction of consumers are hand-to-mouth, then a negative supply shock can be contractionary… negative supply shocks [may] endogenously raise uncertainty…. Johannes Wieland focuses on another mechanism… In the calibrated model with credit frictions, demand-side policies are up to 50% less effective than in a standard new Keynesian model.”

Things to Be Aware of:

Stan Collender: Nuclear Option Increases Chances Of Another Shutdown, Sequestration | Sarah Binder: Boom! What the Senate will be like when the nuclear dust settles | Brad DeLong: Genuinely New Ways of Understanding IS-LM Watch: Karl Smith Is Really Smart and Thoughtful: Wednesday Hoisted from the Archives Weblogging | Jon Schwarz: Wow, 2013 Samantha Power Was Just EXCORIATED by 2003 Samantha Power | Joe Romm: Shell Oil [Internal Accounting] Self-Imposes Carbon Pollution Tax High Enough To Crash Coal, Erase Natural Gas’s Value-Added | Kevin Drum: The Media [John Harris, Mike Allen, and Company] Once Again Refuses to Answer Questions From the Media |