Category: Equitablog

Michael Hiltzik: The housing market is still a drag on the economy–but why?: “Housing has stood out as the sick man of the U.S. economy…. Here’s that truth, as we see it: the 30-year fixed mortgage is still the bedrock of residential housing and still should be.

That means restoring Fannie Mae and Freddie Mac to their traditional roles as the backers of that market…. [Felix] Salmon thinks… the 30-year fixed mortgage… should be phased out altogether…. That’s too facile…. The 30-year fixed is what got us out of the housing morass of the ’30s and could do so again…. An entirely private housing finance system is a ‘pipedream’, as Adam Levitin of Georgetown University lectured the House Financial Services Committee…. Take the shackles off Fannie and Freddie, and let the 30-year fixed mortgage work its magic.”

Continue reading “Lunchtime Must-Read: Michael Hiltzik: FHFA Director Mel Watt Should Fix the Economy and Boost Housing Construction by Unleashing Fannie and Freddie!” →

John Aziz: Why stopping the next financial crash is an impossible dream:

Are financial crashes really preventable? I don’t think so. The world is just too unpredictable…. [And] as… Hyman Minsky put it, stability is destabilizing…. How do people react to a stable world?… They become more tolerant of risk…. Successful regulations [thus] became victims of their own success…. We need to move beyond the impossible dream of preventing financial crises before they occur. Laws to prevent theft, fraud, intentionally misleading investors, and gambling with other people’s money or with an implicit guarantee (like Glass-Steagall) are prudent…. But booms and busts are normal behavior in markets, because the future is so hard to predict and people are so unpredictable…

I do hear sometimes, as I roam around meatspace and cyberspace, that our elder sister institution the Center for American Progress is the Democratic-Party-policy-apparatus-in-exile (largely true during Republican administrations) and the Democratic-administration-farm-team (somewhat true–but only for policy positions, and only for a subset of them), and will produce whatever arguments a Democratic administration demands.

This last is not true.

But when I ask people why they think this is true, I get pointed to things like this from Ken Silverstein last February at the New Republic calling the Center for American Progress “Heritage’s liberal counterpart” and including it on a list of “purportedly scholarly institutions”.

Now everybody who either worked for the Clinton administration in 1993-1994 or who was hoping to see improvement in America’s health-care system in 1993-1994 (overlapping but not identical sets of people) derived a view of the New Republic from back then: our view was and is that, based on what it published on health-care policy in 1993-1994, The New Republic’s office furniture, computer, paper stock, any presses it has ever used, any trucks that have ever carried it, its servers, its routers, and its cables should all be set on fire and burned, the rubble should be razed, and the brownfield sown with salt and marked with nuclear waste signs. Then-publisher Marty Peretz, then-chief editor Andrew Sullivan, current publisher Chris Hughes, and chief editors who followed Sullivan–the late Michael Kelly, Charles Lane, Peter Beinart, Franklin Foer, and Richard Just–all really ought to make a full, complete, explicit, and abject apology, and it speaks volumes as to their guts and their honor that not a single one of them has done so.

So from our perspective it is not surprising to see the New Republic behaving badly. We should probably take it as a mitzvah that Ken Silverstein’s article is not as bad as Betsy McCaughey’s was.

For the record: the Center for American Progress is in no way Heritage’s liberal counterpart. The technocratic quality of the work it produces is light-years ahead of most things you will find from Cato and the American Action Forum, almost anything you will find from AEI or the National Center for Policy Analysis, and everything I have seen from Heritage.

And CAP President Neera Tanden had a very good response:

Continue reading “Neera Tanden on the Center for American Progress: Thursday Focus (January 16, 2014)” →

I confess I never expected to see the Republican governors and legislator of the red states getting behind a lawsuit that claims a drafting error has deprived their constituents of $10 billion a year–after all, I was told back at the start of 2009 that the reason that ObamaCare was going to be RomneyCare because then the Republicans would have no choice but to endorse what had been the principal policy accomplishment of the guy who was going to be their 2012 standard bearer.

Strange times indeed…

Anyway, Nicholas Bagley explains what is going on:

Nicholas Bagley: A resounding victory for the administration in the exchange litigation: “I wrote yesterday about the pending litigation over the IRS’s decision to make tax credits available on federally operated exchanges, notwithstanding a facially plausible statutory argument that doing so would contravene the ACA.

My timing was good: earlier today, Judge Friedman, a district court judge in D.C., released the first opinion… a resounding victory for the government… tracks the analysis I laid out yesterday. He starts with the observation that… tax credits are linked to health plans purchased on exchanges “established by the State under 1311.” And federally operated exchanges are established by the Secretary of HHS under §1321…. But Friedman also points out that… §1321… [says] when a state fails to establish a workable exchange, the ACA instructs the Secretary to establish “such exchange.” That little word “such” clarifies that an exchange established by the federal government is a 1311 exchange….

Continue reading “What? Another Court Case About ObamaCare?” →

Must-Reads:

1. Larry Mishel, and 80+ Others: Economist Statement on the Federal Minimum Wage: “Dear Mr. President, Speaker Boehner, Majority Leader Reid, Congressman Cantor, Senator McConnell, and Congresswoman Pelosi: July will mark five years since the federal minimum wage was last raised. We urge you to act now and enact a three-step raise of 95 cents a year for three years—which would mean a minimum wage of $10.10 by 2016—and then index it to protect against inflation. Senator Tom Harkin and Representative George Miller have introduced legislation to accomplish this. The increase to $10.10 would mean that minimum-wage workers who work full time, full year would see a raise from their current salary of roughly $15,000 to roughly $21,000. These proposals also usefully raise the tipped minimum wage to 70% of the regular minimum…”

2. Beth Kutscher: Insurers optimistic about exchanges: “Health insurers are expressing measured optimism for enrollment in the coverage they’re selling on the health insurance exchanges after quietly grumbling for weeks that the fumbled rollout was undermining their business plans. Some health insurance executives expressed some modest bullishness on the exchanges Tuesday at the JP Morgan Healthcare conference in San Francisco, even though a day earlier HHS revealed that the enrollees so far are skewing older than many had hoped.”

3. Vinod Khosla: Open Letter to 60 Minutes and CBS: “On January 5, 2014, CBS’ 60 Minutes aired a segment titled, ‘The Cleantech Crash’ that grossly misrepresented the state of the sustainable energy industry…. The pontificators at 60 Minutes, with their agenda-driven bastardization of news reporting, failed to do the most elementary fact checking and source qualification, as was the case with your Benghazi reporting. No wonder one major media outlet wrote that you have been ‘widely criticized for leaving out crucial information about the state of the clean tech sector’. Is this the new CBS standard?…. I have not invested over a billion dollars of my own money into cleantech… the U.S. Department of Energy (DOE) Loan Guarantee Program has created 55,000 new cleantech jobs… has a 97% success rate…. A substantial portion of DOE loans is allocated to nuclear… a fact conveniently left out despite your being aware of it…. The U.S. spent $502 billion subsidizing fossil fuels in 2011… [plus] $80 billion of taxpayer money was spent patrolling just the oil sea-lanes in the Arabian Gulf…. You fundamentally do not understand how innovation works…. To get to the energy-independent future we need, we must continue to try and sometimes fail, but the consequence for not trying is guaranteed failure. We will keep accepting intelligent and selective failure…”

4. Heather Boushey: Economists come together to weigh in on a most important economic issue: “Nothing gets the day going like an economist sign-on letter in support of an important economic policy. I’m happy to share the news that the two Larrys (Mishel from the Economic Policy Institute and Katz from Harvard) have combined their considerable forces to compile an all-star list of economists in support of a $10.10 minimum wage…. Check it out here: Economist Statement on the Federal Minimum Wage | Economic Policy Institute.”

Continue reading “Things to Read on the Afternoon of January 15, 2014” →

The Sugarhill Gang: “Rapper’s Delight” (1979):

Big Bank Hank:

Check it out:
I’m the C-A-S-A, the N-O-V-A, and the rest is F-L-Y.
You see I go by the code of the doctor of the mix, and these reasons I’ll tell you why.
You see I’m six foot one, and I’m tons of fun, when I dress to a T.
You see I got more clothes than Muhammad Ali, and I dress so viciously.
I got bodyguards, I got two big cars, that definitely ain’t the wack,
I got a Lincoln Con-tin-en-tal, and a sunroofed Cadillac.
So after school, I take a dip in the pool, which is really on the wall,
I gotta color TV, so I can see, the Knicks play basketball…

Continue reading “How Much of a Different Country than the U.S. Today Was Harlem in 1979?: Wednesday Focus (January 15, 2014)” →

Heather Boushey: Economists come together to weigh in on a most important economic issue:

Nothing gets the day going like an economist sign-on letter in support of an important economic policy. I’m happy to share the news that the two Larrys (Mishel from the Economic Policy Institute and Katz from Harvard) have combined their considerable forces to compile an all-star list of economists in support of a $10.10 minimum wage…. Check it out here: Economist Statement on the Federal Minimum Wage | Economic Policy Institute.

Vinod Khosla: Open Letter to 60 Minutes and CBS:

On January 5, 2014, CBS’ 60 Minutes aired a segment titled, “The Cleantech Crash” that grossly misrepresented the state of the sustainable energy industry…. The pontificators at 60 Minutes, with their agenda-driven bastardization of news reporting, failed to do the most elementary fact checking and source qualification, as was the case with your Benghazi reporting. No wonder one major media outlet wrote that you have been “widely criticized for leaving out crucial information about the state of the clean tech sector.” Is this the new CBS standard?…. I have not invested over a billion dollars of my own money into cleantech… the U.S. Department of Energy (DOE) Loan Guarantee Program has created 55,000 new cleantech jobs… has a 97% success rate…. A substantial portion of DOE loans is allocated to nuclear… a fact conveniently left out despite your being aware of it…. The U.S. spent $502 billion subsidizing fossil fuels in 2011… [plus] $80 billion of taxpayer money was spent patrolling just the oil sea-lanes in the Arabian Gulf…. You fundamentally do not understand how innovation works…. To get to the energy-independent future we need, we must continue to try and sometimes fail, but the consequence for not trying is guaranteed failure. We will keep accepting intelligent and selective failure…

Continue reading “Morning Must-Read: Vinod Khosla on Clean Tech and on CBS’s 60 MInutes Taking a Dive” →

The thoughtful and hard-working John Aziz on Twitter:

John B. Taylor: “There is little evidence of a savings glut” http://t.co/tquaxSCfbs

Er, what? http://t.co/hv7bP40M1x

Indeed. I cannot follow it either.

John Aziz provides some context and explanation

John Aziz (April 30, 2013): A Visual Representation of the Zero Bound:

This graph shows savings at depository institutions as a percentage of GDP against the Federal Funds Rate. The actual cause of the desire to save rather than consume or invest is uncertain… demographic trend… psychological trend… shortage of “safe” assets… anticipation of deflation…. But whatever it is, we know that there is an extraordinary savings glut. There have been a lot of assertions that interest rates at present are unnaturally or artificially low. Well, what can we expect in the context of such a glut?… Theoretically, lower[ing] interest rates ceteris paribus should inhibit the desire to save, by lowering the reward for doing so. But interest rates cannot fall below zero, at least not within our current monetary system…. Even tripling the monetary base — an act that Bernanke at least believes stimulates an interest rate cut at the zero bound — has not discouraged the saving of greater and greater levels of the national income…. Investors are not finding better investment opportunities for their savings and the structure of production does not appear to be adjusting very fast to open up new opportunities for all of that idle cash.
If that isn’t a “savings glut”, what would a savings glut be?

And when I go to John Taylor, I achieve no enlightenment at all.

Continue reading “(Trying to Be) the Honest Broker for the Week of January 25, 2014: John vs. John on the Savings Glut Question: John Taylor vs. John Aziz, Tim Geithner, Ben Bernanke, Larry Summers, Paul Krugman, Me, and a Cast of Thousands Weblogging” →

Noah Smith: Heroes of NoahSmithian Weblogging: Phil Yu:

America is in the middle of a huge, titanic, epochal change… to a fully multiracial nation…. If we’re going to come out of it as a unified nation, we’re going to have to accept the newcomers as ‘real Americans’, the way we once accepted East and South European immigrants into the fold a century earlier. Relatively few bloggers have focused on this problem, but Phil Yu has risen to the challenge. His blog, Angry Asian Man, is less angry than visionary…. Yu still alerts the blogosphere to instances of racism (and not just racism against Asians), but his blog is the place to find cool new Asian-American bands and films and artists and read the testaments of Asian-Americans. He has also spearheaded efforts to lobby the American government for a more liberal approach to immigration. And to top it all off, he posted this really cool cover of TLC’s ‘Waterfalls’. More than any other blogger, Phil Yu makes me excited about the future of America.