Over at Grasping Reality: No, neither Lehman, nor AIG, nor Bank of America, nor Citigroup, nor Morgan Stanley, nor Goldman Sachs was solvent at then-prevailing market prices in late September 2008:
Category: Equitablog
Over at Grasping Reality: Jon Gruber in 2011: Yes, Subsidies Are Available to People Purchasing Health Insurance on the Federal Exchange
The truly remarkable thing about Halbig/King is that conservatives care much more than liberals do that the health exchanges actually work. Health exchanges are a last-ditch conservative attempt to keep private health-insurance markets from collapsing under the weight of increasing adverse selection and decreasing willingness to provide a large tax subsidy for employer-sponsored insurance. If the exchanges fail, the liberals try again in another decade with single-payer–Medicare for all–in order to attain near-universal coverage. If the exchanges fail, conservatives are out of arrows.
I have never understood why conservatives interested in health policy have not drawn a line in the sand here–have not said to their political masters: “Yes, we know that you have a strong partisan interest in destroying the signature accomplishment of a Black Democratic president. But the substantive policy stakes are too high.”
Morning Must-Read: Nick Bunker: What the Beveridge Curve Tells Us
…on printed job advertisements to create a jobs opening rate for years prior to 2000. And if you look at their Beveridge Curve for economic recoveries going back over 60 years, you see the current shift is actually quite typical. The curve appears to shift quite a bit (up and over to the right) after large recessions and shifts back (down and over to the left) after the labor market recovers from the large shock…
The evolution of class-based gaps in young children’s home environments
A good education is touted by U.S. politicians of all persuasions as the first step toward upward mobility and a better life. Yet news stories across the country frequently warn that an educational “achievement gap” is leaving an increasing number of young Americans without the education or skills to achieve even a basic level of economic security—with implications for our nation’s future economic growth and prosperity. In grappling with this issue, policymakers tend to focus their attention on educational accomplishment gaps based on race and ethnicity.
The racial gaps in test scores are narrowing, and undoubtedly deserve our attention. Yet there is an even larger skills gap between children in low and high income households, one that is sizeable before they even enter kindergarten. In fact, the achievement gap between the rich and the poor is widening dramatically, so much so that income is now a better predictor of test scores than race.
That is why the Washington Center for Equitable Growth awarded one of its inaugural grants to Ariel Kalil, Professor at the Harris School of Public Policy at the University of Chicago and Director of the Center for Human Potential and Public Policy. Kalil will document and examine whether and how these class-based gaps in parenting have changed over the past 25 years, and if so, whether these changes contribute to the growing income-based achievement gap.
It is clear that the fate of low- and high-income Americans has diverged in terms of educational attainment and cognitive skills, such as memory, reasoning, perception and intuition. Can the same be said for non-cognitive skills, such as resilience, motivation and attentiveness, necessary precursors for cognitive skill acquisition? While non-cognitive skill development is just as critical for future outcomes as cognitive ability, nobody has yet undertaken the research to explore whether an income-based non-cognitive skills gap exists. Kalil’s work will do so.
Kalil will focus in particular on the parenting and home environment of preschool children. Children at this age are in the midst of a crucial developmental stage. There is a strong connection between what a child experiences early in life and how much they succeed later on. It is not only the monetary investment or quantity of time that parents devote to their child that matters, but also the quality. Factors such as how a parent talks to their child, how much stress a parent is under, or even how many books are present in the home all have effects on a child’s future well-being.
While researchers have documented an income-based divergence in the amount of time parents spend with their child, they did not measure the quality of how that time was spent. We do know that economically advantaged parents are able to offer different home environments compared to their lower-income counterparts by committing more quality time and resources to their child’s development. As Kalil explains in her project description, these differences may “play a role in producing growing gaps in cognitive and non-cognitive skills, producing a feedback cycle that leads to low socioeconomic mobility and further growing inequality.”
Kalil’s research will help policymakers understand whether and how providing young children with the resources they need to succeed is merely an admirable goal or one that also affects the nation’s future economic growth. Human capital—the level of skills, education and talents in our potential workforce—is one of the most important factors in long-term economic growth. Investing in understanding the ways in which inequality affects the home environment and early childhood development will not only allow us to benefit every individual child but may also affect our long-term economic stability.
Noted for Your Morning Procrastination for November 13, 2014
Must- and Shall-Reads:
- : Medicaid patients have better access to primary care than you might think
- : The Thousand Fronts of Inequality
- : Leaked Geithner Files, as Quoted by Peter Spiegel
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: Time for the American right to declare peace on the US welfare state: “While the recovery’s glacial pace, both in terms of GDP and jobs, is unacceptable, the safety net’s performance is encouraging. The pain from the Great Recession, as bad it was, would have been far worse for middle- and low-income Americans if we were still in a sort of 1920s, Coolidgean world that many on the right these days seem to long for…. Now declaring peace isn’t the same thing as surrendering to the status quo…. But the welfare state needs thoughtful and thorough reform. And that doesn’t mean just slapping arbitrary spending caps on federal programs and block granting them back to the states…. Edward Glaeser would alter the EITC by making it a clear and transparent wage subsidy to all workers making less than $9 an hour…. There are lots of other center-right ideas out there: expanding the child tax credit, providing lump-sum bonus payments to unemployed workers who find a job, relocation vouchers to the long-term unemployed in high-unemployment areas, premium-support Medicare reform, expanding healthcare access through tax credits and well-funded high-risk pools…. The safety net isn’t going away, nor should it, but it will need to look a different tomorrow than it does today…” -
: An Unethical Bet in the Climate Casino: “The Republican victory in the midterm elections was a triumph for its strategy of sustained vilification of the president and obstruction of his policies. The result will have big implications for the future of the US. But it also has implications for the rest of humanity…. The US is also the world’s second-largest emitter of greenhouse gases and among the highest emitters per head. The most important consequence of this election may therefore be to bury what little hope remained of getting to grips with the risk of dangerous climate change…. Other countries will not–indeed cannot–compensate…. Nothing now suggests that humanity will move off the path towards ever greater emissions, with potentially huge and irreversible consequence. Why is that? If one ignores the charge that the science is a hoax, one sees two justifications and two reasons. One justification is that cost of action to mitigate emissions would be inordinate. It should be noted, however, that the costs indicated above would be less, possibly substantially less, than the costs to the high-income countries of the recent financial crises…. Yet, fascinatingly, the very same people who consider the costs of mitigation excessive wish to lighten financial regulation and so increase the risk of a repetition of the recent calamity. In addition, many of the opponents of such action are firm believers in the ability of economies to respond to market forces. So why do they not believe that markets would adjust to higher carbon prices? So what then are the real reasons? The first is ideology. If one accepts the existence of large global environmental externalities, one must also accept that there exists an important role for policy…. The second and more important reason is indifference to the fate of future generations…” -
: Best APEC summit ever: “This year’s APEC summit… stuff got done. Seriously, a LOT of stuff got done. For the United States, the centerpiece was three bilateral deals reached with China…. New targets for carbon emissions reductions by the United States and a first-ever commitment by China to stop its emissions from growing by 2030…. Mr. Obama and Mr. Xi also agreed to a military accord designed to avert clashes between Chinese and American planes and warships… as well as an understanding to cut tariffs for technology products. Those latter two agreements would be big deals in their own right…. The climate change agreement is even bigger, however, as it lays the groundwork for a global deal to be negotiated in Paris in 2015…” -
: A Non-Lawyer’s Guide To The Latest Supreme Court Case Attacking Obamacare: “The Supreme Court announced on Friday that it would hear a lawsuit, known as King v. Burwell, seeking to undermine the Affordable Care Act by cutting of subsidies intended to help millions of Americans pay for health insurance. Obamacare gives every state government a choice…. The government’s arguments are correct and the plaintiffs’ arguments are misleading…. Congress can define the phrase ‘Exchange established by the State’ to also include exchanges established by the federal government… and that is exactly what Congress did in the Affordable Care Act. Two provisions…. The first provides that ‘[a]n Exchange shall be a governmental agency or nonprofit entity that is established by a State.’ Read in isolation, this passage can be read in one of two ways. One way to read it is as a passage limiting who can set up exchanges. If an Exchange ‘shall be’ an ‘entity that is established by a State,’ that seems to mean that no other kind of ‘Exchange’ can exist. If the passage is read this way, federally run exchanges would be illegal, because they are not an ‘entity that is established by a State.’ The other… is that it is meant to define the term ‘Exchange.’ Under this second possible reading, the word ‘Exchange’ is defined so that any Exchange is deemed to be ‘established by a State,’ even if it was actually established by the federal government…. A third provision… provides that if a state elects not to set up its own exchange, ‘the Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.’… This may seem as bizarre as using the word ‘dog’ when you really mean ‘cat,’ but Congress has the power to define words in counterintuitive ways, and courts are obligated to follow those definitions…. King v. Burwell, in other words, is a straightforward case of statutory interpretation, and the law is clearly on the government’s side…. The subtitle of the Affordable Care Act which contains the provision plaintiffs rely upon is titled ‘Affordable Coverage Choices for All Americans.’ It is not entitled, ‘Affordable Coverage Choices for Americans Who Live In States That Elect To Set Up Their Own Exchanges’…”
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: Macro and Other Market Musings: The Cure for Neo-Fisherism: History: “Stephen Williamson, John Cochrane, and Stephanie Schmitt-Grohe and Martin… argue that a central bank holding interest rates low for a long period will cause inflation to fall. The conventional view is that such actions should cause inflation to rise…. There are two reasons to be leery of Neo-Fisherism. First, it ignores Wicksell’s cumulative process. This idea says that if the central bank pegs the short-term nominal interest rate below the natural interest rate the price level will eventually explode and vice versa. The Fisher relation is an equilibrium condition and says nothing about this disequilibrium dynamic…. Second, Neo-Fisherism has been tested in the real world and failed…. Germany During and After World War I…. The United States and the Accord of 1951…. Canada Over the Past Twenty Years…. History is filled with many examples of monetary policy regimes that violate Neo-Fisherism. In fact, it is hard to come up with examples that unambiguously fit the Neo-Fisherite view…”
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: Understanding Spillovers: “Hélène Rey, Professor of Economics at the London Business School, and Research Fellow at the Center for Economic Policy Research (CEPR) and the National Bureau of Economic Research (NBER), will give the keynote Mundell-Fleming lecture on the controversial issue of global financial cycles and the extent of monetary policy independence of national central banks…. Just to give you a flavor of what to expect, here are some of the questions that we will be discussing: What is the impact of changes in US monetary policy on foreign bonds yields? Does it differ depending on the policy instrument used? Do conventional and unconventional policies have a different impact on the yield curve? How has unconventional monetary policy by the European Central Bank worked? What was the impact on Europe and the on the rest of the world? What are the relevant transmission channels; are these similar to the ones under US UMP? What is the impact of government spending on the exchange rate? Is it really associated to exchange rate depreciations, i.e. ‘beggar-thy-neighbor’ type of effects? Do sovereign debt defaults in one country trigger defaults in other countries? Do they change the cost of financing and incentives to default in other countries?
What are the conditions under which international spillovers effects are Pareto efficient? How does equilibrium with strategic policy setting at the global level compare against equilibrium with global policy cooperation? Is it optimal to restrict international capital flows amid financial markets incompleteness, i.e. prices sending signals that do not induce socially optimal outcomes? Have capital controls been effective? How is their potential effectiveness affected by leaks—i.e. the limited enforcement of these measures? Does deeper trade integration through international input linkages amplify cross-border spillovers? Can fiscal and capital market integration dampen the transmission of leveraging/deleveraging shocks within a monetary union –i.e. Europe? Did growth in countries with higher trade and financial integration fall more during the Great Depression?…”
Should Be Aware of:
- : Is wage stagnation killing the Democratic Party?
- : “Each one of us has a relationship with our own ignorance, a dishonest, complicated relationship, and that dishonesty keeps us sane, happy, and willing to get out of bed in the morning”)
- : I was wrong about the Second Amendment: Why my view of guns totally changed – Salon.com:
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: The Real Roots of Hedge Fund Manager Rage: “Paul Singer, the head of the $25 billion hedge fund Elliott Management, had an Edvard Munch moment in his most recent letter to his investors. ‘Nobody can predict how long governments can get away with fake growth, fake money, fake jobs, fake financial stability, fake inflation numbers and fake income growth,’ he wrote. Some commenters think the economy is improving, but he wrote, ‘We do not think this optimism is warranted, and we think a lot of the data is cooked or misleading.’ This is only the latest howl about incipient inflation from the hedge fund manager crowd over the last several years. These inflation truthers have come in for consistent mockery, and deservedly so. They have aligned with conservative economists to attack the Federal Reserve and warn that its loose monetary policies are debasing the dollar and spurring sure-to-come, any-day-now runaway inflation. As The Washington Post’s Matt O’Brien noted, Mr. Singer made a classic, and in this case pretty hilarious, mistake of generalizing from his own experience. ‘Check out London, Manhattan, Aspen and East Hampton real estate prices, as well as high-end art prices, to see what the leading edge of hyperinflation could look like,’ Mr. Singer wrote…. Still, I come not to bury the wealthy investors, but to try to clarify what I think might be informing their perspective…. Hedge fund managers came of professional age during two gigantic bubbles, mass delusions that went on for years… the stock market bubble… a credit bubble…. These hedge fund managers–and the rest of the world of sentient markets observers–have spent the formative periods of their professional lives watching the madness of crowds, enabled by central banks…. After the stress tests, the government pronounced the banks O.K. (with a promise to backstop them if they couldn’t raise private capital). It was simply a collective exercise in looking the other way. Then, weirdly, it worked…. At the risk of sounding like a Singerite, doesn’t it sound just a bit–what’s the word?–fake? Just because you are paranoid, doesn’t mean the capital markets aren’t out to get you…” -
Thomas Piketty’s ‘Capital’ wins Business Book of the Year – FT.com: cg12348: “Don’t need to read the book – here is the premise. Business dreams are nothing more than greed. An you greedy business people should pay for those who are not cut out to take risk. You did not build your business – you owe everyone for your opportunity – you may have worked harder, taken more risk and even failed and picked yourself up at great personal risk and injury ( yes we often lose relationships and loved ones fall out along the way). However, none the less your are not entitled to what you make. Forget the fact that the real reason we have massive wealth today is we can now reach the global consumers – not just local – so the numbers are larger. None the less the fact is that is not fair – and fair is something life now guarentees – social engineers demand that you suspend the laws of nature and reward all things equally. 2 plus 2 = 5 so does 3 plus 3 = 5 everything is now levelled by social engineers. We need to be responsible for those who choose not to risk, want a 9 to 5 job and health benefits and vacation. The world is entitled to that – it is only right – so you must be taxed to make up for those who are too lazy to compete, simply don’t try or fail. In short the rich must map up the gap for the also ran’s. Everyone gets a ribbon. There are exceptions – if you are Google, BIDU, Apple or someone so cool or cute or a liberal who will tell people they should pay more taxes – you aren’t to be held to the same standard as everyone else.” Martin Wolf: “@cg12348, I think you succeeded in discrediting yourself comprehensively. You didn’t read the book. You do not in fact know what is in it. But you just ‘know’ what is in it. One can only hope that you do a little more work in your business ventures.”
Morning Must-Read: Leaked Geithner Files, as Quoted by Peter Spiegel
Geithner: [T]hings deteriorated again dramatically in the summer which ultimately led to him saying in August, these things I would never write, but he off-the-cuff – he was in London at a meeting with a bunch of hedge funds and bankers. He was troubled by how direct they were in Europe, because at that point all the hedge fund community thought that Europe was coming to an end. I remember him telling me [about] this afterwards, he was just, he was alarmed by that and decided to add to his remarks, and off-the-cuff basically made a bunch of statements like ‘we’ll do whatever it takes’. Ridiculous.
Interviewer: This was just impromptu?
Geithner: Totally impromptu…. I went to see Draghi and Draghi at that point, he had no plan. He had made this sort of naked statement of this stuff. But they stumbled into it…
[…]
Geithner: I remember coming to the dinner and I’m looking at my Blackberry. It was a fucking disaster in Europe. French bank stocks were down 7 or 8 per cent. That was a big deal. For me it was like, you know, you were having a classic complete carnage because of people [who] were saying: crisis in Greece, who’s exposed to Greece?… I said at that dinner, that meeting, you know, because the Europeans came into that meeting basically saying: ‘We’re going to teach the Greeks a lesson. They are really terrible. They lied to us. They suck and they were profligate and took advantage of the whole basic thing and we’re going to crush them,’ was their basic attitude, all of them….
But the main thing is I remember saying to these guys: ‘You can put your foot on the neck of those guys if that’s what you want to do. But you’ve got to make sure that you send a countervailing signal of reassurance to Europe and the world that you’re going to hold the thing together and not let it go. [You’re] going to protect the rest of the place.’ I just made very clear to them right then. You hear this blood-curdling moral hazard-y stuff from them, and I said: ‘Well, that’s fine. If you want to be tough on them, that’s fine, but you have to make sure you counteract that with a bit more credible reassurance that you’re going to not allow the crisis to spread beyond Greece and that’s going to require, you’ve got to make sure you’re putting enough care and effort into building that capacity to make that commitment credible as you are to teaching the Greeks a lesson….’
Interviewer: I mean was that, did you have this kind of foreboding like: oh my god, these guys are just going to…?
Geithner: Yeah. I had like a definite, and of course I, as I think I’ve said separately, I completely underweighted the possibility they would flail around for three years. I thought it was just inconceivable to me they would let it get as bad as they ultimately did. But the early premonitions of that were in that initial debate. They were lied to by the Greeks. It was embarrassing to them because the Greeks had ended up like borrowing all this money and they were mad and angry and hey were like: ‘Definitely get out the bats.’ They just wanted to take a bat to them. But in taking a bat to them, they were feeding a fare that was in its early stages. There were a lot of dry tinders…
[…]
Geithner: [T]o be sympathetic to them, the Germans’ experience has been every time they buy a little bit of calm [on the] markets and the Italian spreads start to come down, Berlusconi reneges on anything he committed to do. So they were just paranoid that every act of generosity was met by sort of a ‘fuck you’ from the establishment of the weaker countries in Europe, political establishment of those weaker countries in Europe, and so the Germans were just apoplectic. Sarkozy, who is trying to navigate between the Germans’ view of the crisis and the fact that France was suffering a fair amount of collateral damage, too, because Europe’s getting somewhat weak, he’s in election [campaigning]. He’s trying to figure out how to bridge this difference….
There’s a G20 meeting in France that Sarkozy hosts which was really incredibly interesting, fascinating thing for us and for the president and I’ll tell you just a few quick things in passing so we can come back to those things. The Europeans actually approach us softly, indirectly before the thing saying: ‘We basically want you to join us in forcing Berlusconi out.’ They wanted us to basically say that we wouldn’t support IMF money or any further escalation for Italy if they needed it if Berlusconi was prime minister. It was cool, interesting. I said no…. But I really actually felt, I thought what Sarkozy and Merkel were doing was basically right which is: this wasn’t going to work. Germany, the German public were not going to support, like, a bigger financial firewall, more money for Europe, if Berlusconi was presiding over that country…
[…]
Interviewer: And at this point were you talking to Merkel at all?
Geithner: No. Merkel would never speak to me. I never called Merkel directly. I would always be with meetings with her and the president, but she would never – and I went to Germany a couple of times. She would never see me. She was, I think she was quite respectful of me and she listened and engaged with me directly in those meetings, but when I went to Germany, [I] didn’t do it that often, a couple of times. I never like to ask to see a head of state. I find it, like, offensive. My general view is: they know I’m coming, if the finance minister wants me to see the head of state, and they decide to ask me to do it, I’ll do it, but I never wanted to ask. But usually Lael, who was a different approach to these kind of things, Lael would generally get somebody to ask on my behalf, and [Merkel] never wanted to see me. I would see Sarkozy or, you know, normally in those countries they would all want to see me…
[…]
Geithner: Schäuble was the former interior minister who was shot by a terrorist in Germany, disabled by it, consigned to a wheelchair and had moments when he was hospitalised during that period of time, during the crisis, which was sort of consequential. But he’s like a really impressive, I really like the guy, even when we disagreed a lot on the substance and response. He’s a Europeanist, older than Merkel, was I think more powerful in his party, the CDU, than Merkel and they always had a very interesting relationship. Somebody [who’s] out in front of her… he’s a really interesting guy…
[…]
Geithner: Olli Rehn is the guy, the economic guy on the commission, who is always in the papers about this kind of stuff, who doesn’t have much authority, so [garbled] the commission. But he’s definitely a force for reason and an interesting guy and generally, I think, on the side of angels in this stuff…
[…]
Geithner: That was, like, [an] incredible miscalculation for damage. They had a summit in Deauville, France, where Sarkozy, in order to get Merkel to back off her ‘fiscal union’ stuff, which was very hard for him politically because, you know, France in that [was] agreeing to come under the thumb of Germany on fiscal policy – at least that’s what the French politics was. He, Sarkozy, agrees to back Merkel on this haircut stuff…. I was on the Cape [Cod] for Thanksgiving and I remember doing a G7 call from the Cape and being in my little hotel room. And I basically, and Trichet did the same thing, I was, I’m sure I was rude and I said: basically, if you guys do that, you will, you know, all you will do is accelerate the run from Europe. No one will lend a dollar, a euro to a European government if they’re weak in that context because the fear will be, if they need money, you’ve got to force some restructuring, haircut [garbled]. It completely inverts the incentives you want to create. I was fucking apoplectic about it and I said it may be that you’re going to have to – I can’t remember how I said it – you may be, if you’re going to restructure Greece, but until you have the ability to in effect protect or guarantee the rest of Europe from the ensuing contagion, this is just [a] metaphor for our fall of ’08. You can’t do that…. At that point, Trichet was completely apoplectic about these guys, [and] said that you cannot afford to have all this loose haircut talk until you are in a better position to be able to guarantee and protect the rest of Europe from the contagion and the run of what happened…
[…]
Geithner: They invited me to go to a meeting of their Ecofin, which is their group of finance ministers, and central bankers in Poland in September. And they, the Austrian finance minister and a couple others – I think I’m very polite in the meeting. They asked me to come to the fucking meeting. I call them in advance and say: ‘You really sure you want me to come? It’s kind of a sensitive thing for me to come to your meeting.’ They turn to me in their meeting, they ask me for my views, my normal views which you’ll find boringly familiar at this point, and a bunch of their ministers go walk out afterwards and say: ‘Who’s Geithner to tell us what to do?’ Very disparaging, like quite disrespectful from their peripheral ministers. And the fucking New York Times writes a story – I can’t remember who wrote the story – somebody at the Times wrote a story that I came home to see at that point, or maybe it was after that, just like a really brutal story: end of American influence, [garbled] lack of influence of American officials, using anecdotes of that meeting for that. That wasn’t so great…
[…]
Geithner: Ireland, most people view in retrospect, was stupid to guarantee all their banks. They couldn’t afford it. They were eight times the size of their economy. Now it’s easy for us to say that. If they had haircut all their bondholders to the banks, then there probably would have been other forms of contagion. The rest of Europe maybe shouldn’t have guaranteed them, but the rest of Europe could afford to guarantee. The Irish couldn’t…
Afternoon Must-Read: James Pethokoukis: Time for the American Right to Declare Peace on the US Welfare State
…both in terms of GDP and jobs, is unacceptable, the safety net’s performance is encouraging. The pain from the Great Recession, as bad it was, would have been far worse for middle- and low-income Americans if we were still in a sort of 1920s, Coolidgean world that many on the right these days seem to long for…. Now declaring peace isn’t the same thing as surrendering to the status quo…. But the welfare state needs thoughtful and thorough reform. And that doesn’t mean just slapping arbitrary spending caps on federal programs and block granting them back to the states…. Edward Glaeser would alter the EITC by making it a clear and transparent wage subsidy to all workers making less than $9 an hour…. There are lots of other center-right ideas out there: expanding the child tax credit, providing lump-sum bonus payments to unemployed workers who find a job, relocation vouchers to the long-term unemployed in high-unemployment areas, premium-support Medicare reform, expanding healthcare access through tax credits and well-funded high-risk pools…. The safety net isn’t going away, nor should it, but it will need to look a different tomorrow than it does today…
Afternoon Must-Read: Martin Wolf: An Unethical Bet in the Climate Casino
…of the president and obstruction of his policies. The result will have big implications for the future of the US. But it also has implications for the rest of humanity…. The US is also the world’s second-largest emitter of greenhouse gases and among the highest emitters per head. The most important consequence of this election may therefore be to bury what little hope remained of getting to grips with the risk of dangerous climate change…. Other countries will not–indeed cannot–compensate….
Nothing now suggests that humanity will move off the path towards ever greater emissions, with potentially huge and irreversible consequence. Why is that? If one ignores the charge that the science is a hoax, one sees two justifications and two reasons. One justification is that cost of action to mitigate emissions would be inordinate. It should be noted, however, that the costs indicated above would be less, possibly substantially less, than the costs to the high-income countries of the recent financial crises…. Yet, fascinatingly, the very same people who consider the costs of mitigation excessive wish to lighten financial regulation and so increase the risk of a repetition of the recent calamity. In addition, many of the opponents of such action are firm believers in the ability of economies to respond to market forces. So why do they not believe that markets would adjust to higher carbon prices?
So what then are the real reasons? The first is ideology. If one accepts the existence of large global environmental externalities, one must also accept that there exists an important role for policy…. The second and more important reason is indifference to the fate of future generations…
Afternoon Must-Read: Daniel Drezner: Best APEC Summit Ever
…stuff got done. Seriously, a LOT of stuff got done. For the United States, the centerpiece was three bilateral deals reached with China…. New targets for carbon emissions reductions by the United States and a first-ever commitment by China to stop its emissions from growing by 2030…. Mr. Obama and Mr. Xi also agreed to a military accord designed to avert clashes between Chinese and American planes and warships… as well as an understanding to cut tariffs for technology products. Those latter two agreements would be big deals in their own right…. The climate change agreement is even bigger, however, as it lays the groundwork for a global deal to be negotiated in Paris in 2015…
Afternoon Must-Read: Ian Millhiser: A Non-Lawyer’s Guide To The Latest Supreme Court Case Attacking Obamacare
: A Non-Lawyer’s Guide To The Latest Supreme Court Case Attacking Obamacare: “The Supreme Court announced on Friday that it would hear a lawsuit…
…known as King v. Burwell, seeking to undermine the Affordable Care Act by cutting of subsidies intended to help millions of Americans pay for health insurance. Obamacare gives every state government a choice…. The government’s arguments are correct and the plaintiffs’ arguments are misleading…. Congress can define the phrase ‘Exchange established by the State’ to also include exchanges established by the federal government… and that is exactly what Congress did in the Affordable Care Act. Two provisions…. The first provides that ‘[a]n Exchange shall be a governmental agency or nonprofit entity that is established by a State.’
Read in isolation, this passage can be read in one of two ways. One way to read it is as a passage limiting who can set up exchanges. If an Exchange ‘shall be’ an ‘entity that is established by a State,’ that seems to mean that no other kind of ‘Exchange’ can exist. If the passage is read this way, federally run exchanges would be illegal, because they are not an ‘entity that is established by a State.’ The other… is that it is meant to define the term ‘Exchange.’ Under this second possible reading, the word ‘Exchange’ is defined so that any Exchange is deemed to be ‘established by a State,’ even if it was actually established by the federal government….
A third provision… provides that if a state elects not to set up its own exchange, ‘the Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.’… This may seem as bizarre as using the word ‘dog’ when you really mean ‘cat,’ but Congress has the power to define words in counterintuitive ways, and courts are obligated to follow those definitions…. King v. Burwell, in other words, is a straightforward case of statutory interpretation, and the law is clearly on the government’s side…. The subtitle of the Affordable Care Act which contains the provision plaintiffs rely upon is titled ‘Affordable Coverage Choices for All Americans.’ It is not entitled, ‘Affordable Coverage Choices for Americans Who Live In States That Elect To Set Up Their Own Exchanges’…