Category: Equitablog

Must-Must-Read: Steve Benen: The importance of setting Sessions straight: “The Senate Judiciary Committee held a… hearing…

…which became notable for one very specific reason. As much of the political world wait for the Supreme Court to issue its ruling in the King v. Burwell case, Republicans at least pretend to believe that the Affordable Care Act was written in such a way as to deny subsidies – on purpose – to consumers who enrolled through healthcare.gov. To that end, Sen. Jeff Sessions (R-Ala.) thought he was making an important point yesterday, addressing the Constitutional Accountability Center’s Elizabeth Wydra:

I think maybe, Ms. Wydra, the statute could have just been written, ‘Our goal is to make available health care for all Americans.’ That wasn’t what the law said, however.’

Soon after, Wydra had a chance to respond.

Sen. Sessions joked that the statute should have been written to say to health care ‘should be available for all Americans.’ Well, point of fact, Title I of the act is titled, ‘Qualify, affordable health care for all Americans. So that is the stated purpose of the law and it wouldn’t make any sense for Congress to have written the tax-credit eligibility to defeat that purpose.

Well, look at that. We just saw the entire King v. Burwell controversy get resolved in 41 seconds. Someone let the justices know their input is no longer required. The whole thing was caught on video. The New Republic’s Brian Beutler described the exchange as a ‘succinct, pithy demolition’ of the ‘bad faith’ arguments behind the King v Burwell case. I couldn’t agree more…. As Sessions put it yesterday, if the law’s authors… still walking around, telling anyone who’ll listen… wanted to make affordable care available to everyone, they should have put that language in the Obamacare statute itself. But that’s what makes Wydra’s response so brutal: the ACA’s authors did put that language in the Obamacare statute itself.
 
Just once, I want to hear an ACA critic admit what is plainly true: King v. Burwell is a brazenly stupid con, but they’re playing along with the charade because they really hate the president and his signature domestic policy initiative. Pretending the case is anything but a laughingstock is, at this point, simply impossible.

The sharp Tyler Cowen writes:

Tyler Cowen: Has fiscal conservatism met an impasse at the state level?: “The latest from Louisiana is that taxes are going up…

…but in a strange way that won’t be called a tax increase…. It is even weirder than that sounds.  Combine that with the recent fiasco in Kansas…. Fiscal conservatism has been stymied at the state level… for many other states, especially those governed by Republicans…. Trying to cut taxes at the state level doesn’t seem like a useful or productive way forward. If you have a better revisionist take on Louisiana and Kansas, please do put it in the comments, I would gladly read it, and if you have something really good I will pass it along.  But I see myself as stating what has to be the default hypothesis for the time being–should we not all come out and admit this?

There were always three arguments for aggressive state level revenue-cutting (including the cutting of money flowing into the state from the federal government by taking advantage of John Roberts’s empowering states to reject the ObamaCare Medicaid expansion while keeping standard Medicaid, and including dragging your feet on ObamaCare Exchange outreach). They were:

1. Lower state tax rates/avoiding the ObamaCare morass would unleash a wave of entrpreneurship and enterprise within your state that would quickly produce higher revenues to keep state budgets in shape.

2. Lower state tax rates/avoiding the ObamaCare morass would attract entrepreneurship and enterprise from neighboring states (in Kansas, cough, from across State-Line Road) that would quickly produce higher revenues to keep state budgets in shape.

3. Once the tax cut was in place, politicians would find that those crying against the cuts would have less political weight and actually care less than those benefitting from the tax cuts. (Though it was never clear whether the argument was that programs could be cut without actually losing much in the way of value because (a) government spending at the state level was massively inefficient, or because (b) government spending at the state level went to people who were now politically powerless).

I thought that, while (1) and (3a) were certainly false, (2) and (3b) were likely enough to be true that the Brownbacks in Kansas and the Jindals in Louisiana would be able to claim political and budgetary victories even as their policies lowered societal welfare in Kansas and Louisiana.

Now when Tyler Cowen writes:

Trying to cut taxes at the state level doesn’t seem like a useful or productive way forward…

He is saying: (1), (2), (3a), and (3b) have all failed to materialize, in such a way that Kansas and Louisiana are now deeply embarrassing for even semi-technocratic small-government advocates nationwide. And the only remaining question is which of the implementers and their ideologues–Jagadeesh Gokhale, Michael Cannon, and company at Cato; Arthur Laffer; Stephen Moore at the Club for Growth; and the others cranking up the noise machine; and Brownback, Jindal, and company in office–were in on the con, which were simply deluded, and how far do semi-technocratic small-government advocates need to distance themselves from the crew in order to maintain political and policy credibility?

This is actually surprising to me: I would have bet a decade ago that the combined probability of either (2) or (3b) in either Kansas or Louisiana was well north of 50%…

Must-Read: Marshall Steinbaum: Sampling Bias in “Firming Up Inequality”: “Firming Up Inequality [Song, Price, Guvenen, and Bloom (2015)]…

…estimates the extent to which increasing inequality in the distribution of earnings from labor is caused by rising within- vs. between- inequality. But its statistical sampling from the Social Security Master Earnings File (MEF) is biased in a way that reduces inequality in the sample relative to the population, arti

Must-Read: Peter Orszag: Congress Doesn’t Understand Health Costs, or Care: “More effort is needed to constrain [health care] cost growth…

…Yet the House of Representatives is set to vote this week to do the opposite–by repealing the Independent Payment Advisory Board…. It’s crucial that the Senate not follow suit…. It’s crucial to move more forcefully away from fee-for-service payments and toward payments that reflect the value of care. Doing so will require a series of nimble adjustments based on evidence showing which incentives and other strategies work well. It would be foolish to bet the ranch on any one untested approach. The Independent Payment Advisory Board was created by the Affordable Care Act… to provide a backstop if health costs grow… [and make] Congress will be more likely to act if members know that failing to do so means the IPAB will step in. Those favoring repeal of the IPAB either oppose a shift away from fee-for-service payment, or believe that Congress is about to become much more adept at complicated payment reform than it has ever been in the past…

Must-Read: Peter Orszag: Congress Doesn’t Understand Health Costs, or Care: “More effort is needed to constrain [health care] cost growth…

…Yet the House of Representatives is set to vote this week to do the opposite–by repealing the Independent Payment Advisory Board…. It’s crucial that the Senate not follow suit…. It’s crucial to move more forcefully away from fee-for-service payments and toward payments that reflect the value of care. Doing so will require a series of nimble adjustments based on evidence showing which incentives and other strategies work well. It would be foolish to bet the ranch on any one untested approach. The Independent Payment Advisory Board was created by the Affordable Care Act… to provide a backstop if health costs grow… [and make] Congress will be more likely to act if members know that failing to do so means the IPAB will step in. Those favoring repeal of the IPAB either oppose a shift away from fee-for-service payment, or believe that Congress is about to become much more adept at complicated payment reform than it has ever been in the past…

Must-Read: David Zweig: The facts vs. David Brooks: “The passage from ‘The Road to Character’ reads…

…‘In 1950, the Gallup Organization asked high school seniors if they considered themselves to be a very important person. At that point, 12 percent said yes. The same question was asked in 2005, and this time it wasn’t 12 percent who considered themselves very important, it was 80 percent.’ Over the course of my search I discovered other iterations…. During a 2011 appearance on ‘Real Time With Bill Maher,’ for example, Brooks tells the same exact story, except… not in 2005 or 2006, but in 1998. The NYT’s… reviewer noted that the passage in question was similar to one in an earlier Brooks book, ‘The Social Animal,’ only… ‘with slightly different dates.’… (Amazingly, to the New York Times reviewer, the late 1980s and 2005 are only ‘slightly different dates.’)….

The thing I keep wondering is how did Brooks get nearly every detail of this passage wrong? He said Gallup… when… academics. He merged a data set from 1948 and 1954 into 1950. He said the second data set was from 2005, when it was from 1989…. He said it was high school seniors, when it was 9th graders. And he said 80 percent answered true, when that was only so for boys. Can one accidentally get this many details wrong?… If it wasn’t an accident, why would Brooks deliberately falsify nearly every detail in a passage of his book, let alone one that is a cornerstone of the book’s PR campaign?…. In addition to his factual errors, it’s worth noting that Newsom and Archer challenge Brooks’s interpretation…. One question had a huge jump, ostensibly supporting the case of less humility over time… [but] the overall subset [of]… Ego Inflation… had a relatively small increase…. It’s generally not sound to spotlight one question in isolation, especially if it contrasts with the findings of the overall study or subset.

Must-Read: Paul Krugman: I’m With Stupid: “James Montier… castigat[es] economists for their…

…belief that central bank-set interest rates matter…. Janet Yellen, Larry Summers, and yours truly…. [But] if you were going to look for economists who blindly repeat doctrine… neither Janet Yellen nor Larry Summers would be top picks…. Montier… [says] interest rates move… [and] business investment is… unaffected…. Here’s what I wrote some years ago:

Back in the old days, when dinosaurs roamed the earth and students still learned Keynesian economics, we… learned… that the transmission mechanism worked largely through housing…. Fed policy, by moving interest rates, normally exerts its effect mainly through housing….

Montier seems to have forgotten about housing…. Are there times when monetary policy… can’t do the job? Of course. Summers and I have been talking about the zero lower bound since the 1990s…. There’s plenty of real stupidity in the world; we don’t need to… critique… imaginary stupidity.

Must-Read: Clay Shirky Corey Robin: “Professors” Do Far Less Teaching than the Public Imagines: “Up through the 1960s, state schools committed most faculty to teaching most of the time…

…[The] shift in our self-conception coincided with the spectacular but unsustainable support we got from the states after Sputnik. For fifteen glorious years, academies were funded as if we ran missile systems instead of monasteries. We used the money to reduce our teaching loads (in the old Carnegie model, a 4-4 load was considered full time) and allowed course release for anyone who brought in additional research dollars. When our Cold War funding began to ebb in the mid-1970s, rather than go back to the classroom, our selective institutions began calling up an army of TAs and adjuncts to shoulder the teaching load, a transition so enormous that contingent faculty is now the majority, and we tenured faculty the minority. As long as college was still cheap, and a degree consistently raised income, the public was largely indifferent to the increased reliance on contingent faculty…. That period is ending….

Scrutiny of… hiring practices… is slowly going public… as people who look back on their college days come to realize that many of their favorite professors weren’t actually professors. This confusion is often quite deliberate…. One of my former students… Jorge…. NYU was… bragging on him to the outside world… [and] had upgraded his title to Professor. Now imagine that Jorge had showed up, brandishing that magazine, to a Faculty Senate meeting. He would have been thrown out. Tenured faculty won’t let adjuncts play in any reindeer games, but our institutions won’t tell the public which teachers are and aren’t ‘real’ faculty either…. If you want to see this playing out with real stakes, tune into North Carolina…. The fight to treat teaching as a valued activity… will require a revolution… because it will require senior faculty to spend more time in the classroom, or… elevate contingent faculty… to the status of valued colleagues. Neither is compatible with current norms…

Must-Read: Marianne Bitler and Hilary Hoynes: Living Arrangements, Doubling Up, and the Great Recession: Was This Time Different?: “The Great Recession marks the worst downturn since those of the early 1980s…

…A large literature considers how the public safety net responded to this shock. We instead consider the responsiveness of one dimension of the private safety net. Families can react to negative shocks by moving in with relatives or downsizing. We use across-state over-time variation to estimate the effects of cycles on living arrangements, paying particular attention to young adults. We find living arrangements are cyclical, but effects are small. Surprisingly given the press attention, we find no evidence that things are different in the Great Recession.