Category: Equitablog

Must-Reads:

1. Jared Bernstein: Paul Ryan’s New Budget: Orwell Would Blush: “It’s a lot like his old ones, as you’d expect, with a few new wrinkles…. Here’s pretty much all you need to know: his cuts to Pell grants–college tuition assistance for students from low-income families–comes under the section called ‘Expanding Opportunity’. ‘Strengthening the safety net’ is actually block granting SNAP (food stamps) and Medicaid. ‘Ending cronyism’ is repealing Dodd-Frank.  Orwell would blush.”

2. Aaron Carroll: Look, exchanges are either evil, or they’re not.: “From the Fiscal Year 2015 House Budget Resolution: ‘Starting in 2024, seniors (those who first become eligible by turning 65 on or after January 1, 2024) would be given a choice of private plans competing alongside the traditional fee-for-service Medicare program on a newly created Medicare Exchange. Medicare would provide a premium-support payment either to pay for or offset the premium of the plan…. The Medicare recipient of the future would choose, from a list of guaranteed-coverage options, a health plan that best suits his or her needs. This is not a voucher program. A Medicare premium-support payment would be paid, by Medicare, directly to the plan or the fee-for-service program to subsidize its cost. The program would operate in a manner similar to that of the Medicare prescription-drug benefit…. This approach to strengthening the Medicare program——which is based on a long history of bipartisan reform plans——would ensure security and affordability for seniors now and into the future….’ If I took this language, swapped in ‘Americans’ for ‘seniors’ and ‘ACA’ for ‘Medicare’, this would almost be a perfect description of the state exchanges that are part of the Obamacare…. I know that exchanges are, to some conservatives… preferable… [to] the single-payer-like Medicare system we have… that these same exchanges are less preferable… than the status quo ante. What I don’t understand, however, are people who declare community-rated, guaranteed-issue exchanges some unholy end-of-days totalitarian plan to destroy freedom when they’re part of the ACA, yet completely awesome and budget-saving when they’re part of Medicare.”

3. Austin Frakt: Job lock: Conclusion: “The ACA only addresses certain, but not all, conditions that give rise to job lock and not completely. If you combine this fact with the prior paragraph, you’ll notice that we have a situation in which we neither fully know the extent of the problem nor the extent to which the ACA will address it. In their 2002 literature review, Gruber and Madrian also commented on the fact that we do not know the full welfare implications of job lock. As best I can tell, the literature has not advanced…. Nevertheless, the labor market distortions of the pre-ACA insurance landscape… are real… weighed heavily on the minds of economists… motivated some of the provisions of the health reform law.”

Continue reading “Things to Read at Dinnertime on April 2, 2014” →

Austin Frakt: Job lock: Conclusion: “The ACA only addresses certain,

but not all, conditions that give rise to job lock and not completely. If you combine this fact with the prior paragraph, you’ll notice that we have a situation in which we neither fully know the extent of the problem nor the extent to which the ACA will address it. In their 2002 literature review, Gruber and Madrian also commented on the fact that we do not know the full welfare implications of job lock. As best I can tell, the literature has not advanced…. Nevertheless, the labor market distortions of the pre-ACA insurance landscape… are real… weighed heavily on the minds of economists… motivated some of the provisions of the health reform law.

This morning’s example on why we root so strongly for Nate Silver, Ezra Klein, and company:

Rupert Murdoch’s Wall Street Journal: Jack Nicas and Susan Carey: Southwest Airlines, Once a Brassy Upstart, Is Showing Its Age: “CHICAGO: At Midway Airport here on Jan. 2,

Southwest Airlines Co. LUV +1.88% canceled a third of its flights…. A severe snowstorm was the main culprit, but Southwest managers also blamed ramp workers, suggesting that nearly a third of them called in sick to protest slow contract talks. The spat boiled into a legal battle, with the workers suing Southwest for requiring they provide doctor’s notes…. Now Southwest is asking for some of the biggest contract changes ever from employees in a bid to contain costs—and some union leaders are furious…. The recent acrimony is one way that Southwest is showing its age. Once the industry’s brassy upstart, the airline, which took wing 43 years ago, has begun to resemble the mainstream rivals it rebelled against in its youth: carriers that were slow-growing, complex and costly to run…. For decades, it was the fastest-growing and lowest-cost airline in the U.S., undercutting competitors’ fares in new markets and sending traffic skyward….

And then, without any sign of irony:

Over the past year, Southwest’s stock has risen 77.6% to $23.94, and the carrier remains the only U.S. airline with an investment-grade credit rating. Still, the airline has failed to hit its long-standing goal of a 15% return on invested capital since 2000…

I believe that in the pre-Murdoch Wall Street Journal somebody–Alan Murray, Marcus Brachli, or whoever–would have said: “Wait a minute. Air travel is a highly cyclical industry. We have had two recessions since 2000, one of them the biggest since the Great Depression. What airline could make 15%/year on invested capital in such an environment? The stock price is at record highs: why are writing a Southwest-shows-its-age rather than a Southwest-still-successfully-scrappy article?”

And Nicas and Cary would have been sent back to the drawing board…

But this kind of question is, apparently, no longer asked at Rupert Murdoch’s Wall Street Journal.

But this kind of question is supposed to be the kind of question asked by Nate Silver and is the kind of question asked by Henry Blodget…

Brad DeLong, Larry Summers, and Laurence Ball: Fiscal Policy and Full Employment: “

At present and going forward, activist fiscal policy is likely to be essential for the American economy to operate near potential levels of output and employment. This conclusion is a substantial change in view from the near-consensus of economists that monetary policy alone could and should be left to carry out the stabilization policy mission, a view that prevailed for nearly a generation prior to the 2008 financial crisis. READ MOAR

Aaron Carroll: Look, exchanges are either evil, or they’re not: “From the Fiscal Year 2015 House Budget Resolution:

Starting in 2024, seniors (those who first become eligible by turning 65 on or after January 1, 2024) would be given a choice of private plans competing alongside the traditional fee-for-service Medicare program on a newly created Medicare Exchange. Medicare would provide a premium-support payment either to pay for or offset the premium of the plan…. The Medicare recipient of the future would choose, from a list of guaranteed-coverage options, a health plan that best suits his or her needs. This is not a voucher program. A Medicare premium-support payment would be paid, by Medicare, directly to the plan or the fee-for-service program to subsidize its cost. The program would operate in a manner similar to that of the Medicare prescription-drug benefit…. This approach to strengthening the Medicare program——which is based on a long history of bipartisan reform plans——would ensure security and affordability for seniors now and into the future….

If I took this language, swapped in ‘Americans’ for ‘seniors’ and ‘ACA’ for ‘Medicare’, this would almost be a perfect description of the state exchanges that are part of the Obamacare…. I know that exchanges are, to some conservatives… preferable… [to] the single-payer-like Medicare system we have… that these same exchanges are less preferable… than the status quo ante. What I don’t understand, however, are people who declare community-rated, guaranteed-issue exchanges some unholy end-of-days totalitarian plan to destroy freedom when they’re part of the ACA, yet completely awesome and budget-saving when they’re part of Medicare.

Jared Bernstein: Paul Ryan’s New Budget: Orwell Would Blush: “It’s a lot like his old ones,

as you’d expect, with a few new wrinkles…. Here’s pretty much all you need to know: his cuts to Pell grants–college tuition assistance for students from low-income families–comes under the section called ‘Expanding Opportunity’. ‘Strengthening the safety net’ is actually block granting SNAP (food stamps) and Medicaid. ‘Ending cronyism’ is repealing Dodd-Frank.  Orwell would blush.

Must-Reads:

1. Kevin Drum: Senate Report: Torture Didn’t Work and the CIA Lied About It: “The Washington Post…. It’s impossible to say if these sources are characterizing the report accurately, and their summary descriptions of the report make it very hard to judge how fair the report’s conclusions are. But with those caveats and cautions out of the way, what does the report say? This…. ‘Its most troubling sections deal… with discrepancies between the statements of senior CIA officials in Washington and the details revealed in the written communications of lower-level employees directly involved…. The CIA’s ability to obtain the most valuable intelligence against al-Qaeda–including tips that led to the killing of Osama bin Laden in 2011–had little, if anything, to do with “enhanced interrogation techniques.”… “The CIA conflated what was gotten when, which led them to misrepresent the effectiveness of the program”’…. However, for those of us who think that detainee abuse is, in fact, as important as the lies that were told about it, there’s this: ‘Classified files reviewed by committee investigators reveal internal divisions over the interrogation program, officials said, including one case in which CIA employees left the agency’s secret prison in Thailand after becoming disturbed by the brutal measures being employed there. The report also cites cases in which officials at CIA headquarters demanded the continued use of harsh interrogation techniques even after analysts were convinced that prisoners had no more information to give. The report describes previously undisclosed cases….’ So the torture was even worse than we thought; it produced very little in the way of actionable intelligence; and the CIA lied about this in order to preserve their ability to torture prisoners. Anybody who isn’t sickened by this needs to take very long, very deep look into their souls. For myself, I think I’ll go take a shower now.”

2. “@nicholas_bagley: Dream of entrepreneurship but fear losing health coverage? @afrakt's : http://t.co/DLjpKm5n5O” pic.twitter.com/Utqant3s4G

   — Pat Bagley (@Patbagley) March 31, 2014

   Austin Frakt: Job lock: Entrepreneurship lock

3. Eric Rauchway: Going off gold and the basis for Bretton Woods: “Experience is teaching us a counterintuitive lesson: the way to control leads away from stability. Aim at growth – moderate growth in safer quarters, even if it means a bit of inflation and debt – and we will achieve stability. It is a lesson that our predecessors learned in the Great Depression, and which led them to establish the Bretton Woods system for precisely those purposes. The essential feature of Bretton Woods was a conditional commitment to exchange stability – with conditionality as essential as stability. The commitment was predicated on the Depression-begotten recognition that monetary stability took a back seat to the promotion of widespread prosperity. When we talk about Bretton Woods, quite often we emphasize the conflict before and at the conference between the UK and the US, and generally between the persons of John Maynard Keynes and Harry Dexter White… [who] won out – not because [his plan] was intellectually superior, but because the United States had more money and power and US congressmen wanted to see a plan that looked like it was more sparing of American resources. The White plan did not survive – in 1947, the international monetary system became more Keynesian, with the Marshall Plan, and in 1969 more Keynesian still, with the introduction of Special Drawing Rights as a reserve asset. Despite this early and lasting convergence on a Keynesian consensus, scholarly discussion of Bretton Woods generally focuses on the initial conflict and its detrimental impact specifically on Britain. Focusing on this conflict is misleading and I believe impoverishes our understanding of the fundamental, shared ideas underlying Bretton Woods…”

Continue reading “Things to Read on the Afternoon of April 1, 2014” →

I think the only complaint anyone reasonable could have with Kerry Emmanuel’s assessment of Nate Silver’s new 538 is that Emmanuel does not present enough graphs and charts: more data visuals would be very helpful…

Kerry Emmanuel: MIT Climate Scientist Responds on Disaster Costs And Climate Change: “I’m not comfortable with Pielke’s assertion that climate change has played no role in the observed increase in damages from natural hazards…

…I don’t see how the data he cites support such a confident assertion…. It’s not necessarily appropriate to normalize damages by gross domestic product…. Wealthier countries can better afford to build stronger structures and to protect assets…. A grass hut will be completely destroyed by a hurricane, but a modern steel office building will only be partially damaged; damage does not scale linearly with the value of the asset….

Continue reading “A Brief Comment on Kerry Emmanuel on the 538 Launch, Roger Pielke, Jr., and Global Warming” →

• Richard Mayhew
• Adrianna McIntyre
• Jonathan Cohn
• Noam Scheiber
• Paul Krugman
• Greg Sargent

It is worth noting, and reiterating, and reiterating again that, as Paul Krugman says, the RomneyCare exchanges are the conservative way to “universal” health insurance. If you want to preserve a robust private-sector health insurance market and if you want insurance to be affordable for all, then you need some forms of: (a) community rating, (b) subsidies, and (c) a coverage mandate. The other options are all some form of single-payer, or something that leaves a great many people unable to afford going to the doctor.

Maybe you want to disguise the single-payer nature of the program–John Kerry’s proposal by which the federal government would be the single payer for expenditures above… was it $50,000/year?… was such a disguise. But that plan met with no greater Republican enthusiasm than RomneyCare.

And if the marketplace-exchanges do turn out not to work, and if we retain the goal of affordable coverage for all, then single-payer will be our only remaining option.

Continue reading “End-of-Marketplace-Open-Enrollment ObamaCare Watch: Tuesday Focus: April 1, 2014” →

1. Branko Milanovic
2. David Cay Johnston

…to add to the twelve I already collected: Ryan Avent, Doug Henwood, Edward Lambert, Dean Baker, Kathleen Geier, John Cassidy, Paul Krugman, Ed Kilgore, Jacob S. Hacker and Paul Pierson, Lawrence Summers, Tim Noah, and Heather Boushey…

Continue reading “Two More Worthwhile Reviews of Piketty’s “Capital in the Twenty-First Century”” →