Category: Equitablog

…the practical implications of full repeal have made it a dead letter among all but the most reactionary conservatives in the Republican Party…. Bloomberg found that only 35 percent of American adults supports outright repeal…. [and] repeal and ‘repeal and replace’ are nearly coterminous…. Repeal is a fringe position… in that those who do support it reside disproportionately on the periphery of the law itself…. Dell Stone, quoted in the Bloomberg article, is a textbook case. Stone, 83, says she ‘certainly hopes’ the law gets repealed…. Stone’s antipathy to Obamacare stems from somewhere, but not from her interaction with the law itself. At 83, her frustrations with out-of-pocket health care costs are at best only tangentially related to Obamacare. She isn’t shopping for insurance on the federally facilitated Alabama exchange. She’s on Medicare. And she probably isn’t unhappy that the law increased her taxes because it almost certainly didn’t….

Among 18- to 64-year-olds—the people who pay for the law, or are eligible for the law’s benefits, or might become eligible for the law’s benefits at some point in the future—Obamacare is breakeven. Among… old people… 36 percent view the law favorably, while 46 percent view it unfavorably…. We shouldn’t give everyone’s views about Obamacare equal weight. The public sentiment animating the repeal movement is derived from people who have a negligible stake in the law, but who would like to throw millions of people off their new insurance plans…. Presumably we’d have no problem ignoring old people if they objected to child tax credits financed by working-age people. We should ignore them in this instance, too.

…encouraging innovation that increases the employability of workers, notably by emphasizing the human dimension of service provision. Public policy should aim to reduce market power in consumer markets, and to re-balance bargaining power between employers and workers…. Return to a more progressive rate structure for the personal income tax, with a top rate of 65 per cent…. The government should offer guaranteed employment at the living wage…. Employers should adopt ethical pay policies…. Increased taxation of investment income….

A fresh examination of the case for an annual wealth tax…. All receipts of inheritance and gifts inter vivos to be taxed…. National Savings… offering a guaranteed positive (and possibly subsidised) real rate of interest on savings…. Institutions to represent the interests of savers and to provide alternative outlets for saving not driven by shareholder interests…. A capital endowment for all, either at adulthood or at a later date…. An EU initiative for a participation income as a basis for social protection, starting with a universal basic income for children.

…declined over the first decade of the millennium widely across the industrialized world. ‘It’s puzzling that we can get away with paying so little for what are really terrible jobs,’ Professor Ashenfelter told me…. The job market–that most critical institution of capitalist societies, the principal vehicle to distribute the nation’s wealth among its people–is not working properly. This raises a fundamental question: If the job market cannot keep hardworking people out of poverty and spread prosperity more broadly, how will it be done? Is public assistance our future?… Something is not working right for a majority of Americans. Maybe it’s time to try something different.

…the link between labour market reform and economic performance. But the IMF is not new to these reassessments… has increasingly challenged the orthodoxy that still shapes European policy making… the widely discussed mea culpa in the October 2012 World Economic Outlook, when the IMF staff basically disavowed their own previous estimates of the size of multipliers, and in doing so they certified that austerity could not, and would not work… broke another taboo, i.e. the dichotomy  between  fairness and efficiency… a presentation by IMF economists showing how austerity and inequality are positively related with political instability… research linking increased inequality with the decline in unionization. Then, of course, the ‘public Investment is a free lunch’ chapter three of the World Economic Outlook, in the fall 2014.

In between, they demolished another building block of the Washington Consensus: free capital movements may sometimes be destabilizing…. The fact that research coming from the center of the empire acknowledges that the world is complex, and interactions among agents goes well beyond the working of efficient markets, is in my opinion quite something. What does this mass… of work tell us? Three things…. First, fiscal policy is back. it really is. The Washington Consensus does not exist anymore, at least in Washington…. Second… the IMF research department proves to be populated of true researchers, who continuously challenge and test their own views, and are not afraid of u-turns if their own research dictates them…. [Third] the ‘new’ IMF should learn to be cautious in its policy prescriptions…. Adopting a more prudent stance in dictating policies  would be wise…

…try to win lots of small pots… are the day traders of the poker tables. Others play any… two high cards… get outplayed after the flop by the loose aggressive types who eventually wear them down… long-only closet indexers who trade too much. Then there are the rocks…. They fold and they fold and they fold. They are going to wait until they know they have a huge advantage. Then they bet as much as they can. It is very hard to beat a player like this. They can last a long time. Once people figure them out, nobody will play them when they do play. So they don’t get the chance to get enough chips in when they have a large advantage. Could this be what is becoming of Berkshire Hathaway?… My poker style… is close to the patient players waiting for a big advantage…. I try to pick out one or two people at the table I want to play against…. When the situation feels right, I put in a big, aggressive raise with a marginal holding…. To do well in a poker tournament, you have to recognize a few non-traditional opportunities and you need to get people to sometimes fold the better hand…

…My subtitle was rejected by one of the co-organisers, namely Larry Summers. He argued that I was far too optimistic, that we were nowhere close to knowing where were going. Arguing with Larry is tough, so I chose an agnostic title…. We are indeed proceeding in the trenches. But where the trenches are eventually going remains unclear…. Let me start with macroprudential tools. If anything, the Crisis has convinced most of us that they have to be part of the basic macro toolkit…. But where are these trenches going? We do not know the shape of the future financial system, for example the degree to which it will be institution/bank based or market based. Sure, the same uncertainty applies to, say, the high-tech sector, and we do not worry; we just observe, and we shall see where it goes. But finance is different. Policymakers cannot be simple observers, as what the financial system will be depends very much on regulation. And we do not have a good sense of what regulation should be…

…The U.S. and the U.K… were tripped up every 10 to 20 years by financial crises and economic depressions…. [Since] 1978, when the Chinese Communist Party ‘shifted its center of gravity from propagandizing class struggle and organizing political campaigns to economic construction,’ China is now in its 37th straight year of economic expansion…. China adopted a radically pragmatic approach to governing. If something resulted in economic growth, it was a good policy. The only real limit was that the supremacy of the Communist Party could not be challenged… [a] strange blend of Communist-Party corporatism, Keynesian macroeconomics and Schumpeterian entrepreneurialism has delivered spectacular improvements in living standards and similar gains in national clout…. Delivering steady economic growth has become the key source of its legitimacy, so it will keep doing whatever it can to deliver. And, given how painful an outright Chinese recession would be for the sputtering global economy right now, we’re kind of stuck with rooting for it to succeed.