Should-Read: Matt Yglesias: The staggering hypocrisy of Bill Cassidy and Lindsey Graham

  • Should-Read: I’m just glad for the sake of his coworkers and innocent bystanders that Matt Yglesias did not have the workplace accident Bruce Banner had at Los Alamos. Just saying:

Matt Yglesias: The staggering hypocrisy of Bill Cassidy and Lindsey Graham: “Bill Cassidy… safe seat in Louisiana, could… have spent the past six months… https://www.vox.com/policy-and-politics/2017/9/19/16330094/cassidy-graham-hypocrisy

…lying low and voting for whichever health care bills leadership puts in front of him. But Cassidy was a medical doctor before he was a politician, his state has gained enormously from Medicaid expansion, and in the early days of the Affordable Care Act repeal process he made a name for himself as a rare GOP coverage hawk. The legislation he co-authored with Maine Republican Susan Collins would essentially have allowed state governments that like their Obamacare to keep it. And he vocally touted what he termed the “Jimmy Kimmel test” for health care policy. “Coverage does not have to have bells and whistles,” he told Business Insider’s Bob Bryan on May 14, “but does the coverage cover a tragedy that could occur in someone’s health or to a loved one?” Around this time, his colleague Lindsey Graham of South Carolina was expressing concern about the rushed process and hasty drafting….

Four months later, Cassidy and Graham are the lead authors of what’s become the GOP’s final stab at repealing Obamacare. Their bill brazenly casts aside all of their previous doubts, featuring the most slipshod legislative process yet and no guarantees of adequate coverage whatsoever. And neither of them has bothered to explain to anyone why they changed their minds… [and are] spearheading a process that is, if anything, more slipshod and ridiculous. The scoreless AHCA that Graham rightly objected to had, at least, been scored in an earlier form, even though the final amended text had not. The Congressional Budget Office has done no analysis at all of Cassidy-Graham, and it’s entirely the fault of Graham and Cassidy personally, who didn’t bother to turn their half-baked policy idea into legislative text until it was way too late. Now the Senate will vote on legislation without “estimates of the effects on the deficit, health insurance coverage, or premiums.”

But it gets worse…. Because the Senate’s reconciliation instructions expire on September 30… there’s no chance to amend or fix any aspect of a bill that’s had no real committee hearings, markup, or formal analysis….

[In] May… Cassidy was operating in a universe in which people are going to need health care services and thus the government needs to find a way to ensure that they can afford them. His new Cassidy-Graham bill casts all that to the wind…. It also lets insurance companies bring back the time-honored practice of pricing insurance for people with preexisting conditions at a higher — prohibitively higher if need be — rate, violating the absolute core of the Jimmy Kimmel test…. Neither Cassidy nor Graham nor a few dozen other Senate Republicans appear to have given this any thought or bothered to do any analysis of how it will play out. And for the few dozen, that’s not surprising even if it is shocking. Replacement-level Senate Republicans have never taken an interest in health policy or cared much about process. This bill repeals Obamacare and cuts spending, and that’s all they need to know.

But Cassidy and Graham both went out of their way to brand themselves as more concerned about such matters. They didn’t need to do that. They aren’t representing purple states or otherwise facing electoral vulnerability. Unlike Dean Heller or Jeff Flake or many of their House colleagues, they won’t personally pay an electoral price for destabilizing the American health care system. They just used to believe it would be a mistake to do so — that it would be wrong, morally speaking, to massively imperil Americans’ health insurance coverage via a slipshod legislative process. So they said so. And then, for some reason, they changed their minds.

Must- and Should-Reads: September 23, 2017


Interesting Reads:

Must-Watch: Joshua Gans: Danny Kahneman on AI versus Humans

Must-Watch: Joshua Gans: Danny Kahneman on AI versus Humans: “At our AI conference last week, Nobel Laureate Danny Kahneman was commenting on a paper by Colin Camerer: <https://digitopoly.org/2017/09/22/kahneman-on-ai-versus-humans/>


Rough Transcript:

That was conclusions from yesterday—when I couldn’t understand most of what was going on, and yet had the feeling I was learning a lot. So I will have some remarks about Colin [Camerer] and then some remarks about the few things that I noticed yesterday that I could understand.

I certainly agree with Colin—and I think it’s a lovely idea—that if you have a mass of data and you use deep learning you will find out much more than your theory. I would hope that machine learning can be a source of hypotheses: that is, that some of these variables that you identify are genuinely interesting.

At least in my field, the bar for successful publishable science is very low. We consider theories “confirmed” even when they explain very little of the variance as long as they yield statistically significant predictions. We treat the residual variance as noise. A deeper look into the residual variance—which machine learning is good at—is clearly an advantage. So, as an outsider here, actually I have been surprised not to hear more about that about superiority of AI to what people can do. Perhaps as a psychologist this is what interests me most. I’m not sure that new signals will always be interesting, but I suppose that some may lead to new theory and that would be useful.

I don’t really fully agree with Colin’s second idea: that that it’s useful to view human intelligence as a weak version of “artificial intelligence”. There certainly are similarities. Certainly you can model some of human overconfidence in that way. But I think that the processes that occur in human judgment are really quite different the processes that produce overconfidence.

I left myself time for some remarks of my own on what I learned yesterday. One of the recurrent issues both in talks and in conversations was whether AI can eventually do whatever people can do. Will there be anything that is reserved for human beings? Frankly, I don’t see any reason to set limits on what they can do. We have in our heads wonderful computers. They are made of meat. But they are computers. It’s extremely noisy. It does parallel processing. It is extraordinarily efficient. There is no magic there. So it’s very difficult to imagine that with sufficient data you there will remain things that only humans can do.

The reason that we see so many limitations is that this field is really at its very beginning.

We are talking about developments—deep learning—that took off—I mean the idea is old but the development took off—eight years ago. That’s the landmark date that people are mentioning. And that’s nothing. You have to imagine what it might be like in 50 years. The one thing that I find extraordinarily surprising and interesting in what is happening in AI these days is that everything is happening faster than was expected. People were saying: “it will take ten years for AI to beat Go”. And it took eight months. This excess of speed at which the thing is developing and accelerating is very remarkable. Setting limits is certainly premature.

One point made yesterday was the uniqueness of humans when it comes to evaluations. It was called “judgment”. Here in my noggin it’s “evaluation of outcomes”: the utility side of the decision function. I really don’t see why that should be reserved to humans.

I’d like to make the following argument:

  1. The main characteristic of people is that they’re very “noisy”.
  2. You show them the same stimulus twice, they don’t give you the same response twice.
  3. You show the same choice twice I mean—that’s why we had stochastic choice theory because thereis so much variability in people’s choices given the same stimuli.
  4. Now what can be done even without AI is a program that observes an individual that will be better than the individual and will make better choices for the individual by because it will be noise-free.
  5. We know from the literature that Colin cited on predictions an interesting tidbit:
  6. If you take clinicians and you have them predict some criterion a large number of time and then you develop a simple equation that predicts not the outcome but the clinicians judgment, that model does better in predicting the outcome then the clinician.
  7. That is fundamental.
  8. This is telling you that one of the major limitations on human performance is not bias it is just noise.

I’m maybe partly responsible for this, but people now when they talk about error tend to think of bias as an explanation: the first thing that comes to mind. Well, there is bias. And it is an error. But in fact most of the errors that people make are better viewed as this random noise. And there’s an awful lot of it. Admitting the essence of noise has implications for practice. And one implication is obvious: you should replace humans by algorithms whenever possible. This is really happening even when the algorithm don’t do very well. Humans do so poorly and are so noisy that just by removing the noise you can do better than people.

When you try to have humans simulate the algorithm and that idea by by enforcing regularity and processes and discipline on judgment and on choice, you improve you reduce the noise and you improve performance because noise is so poisonous.

???? said yesterday that humans would always prefer emotional contact with with other humans. That strikes me as probably wrong. It is extremely easy to develop stimuli to which people will respond emotionally. A face that changes expressions, especially if it’s sort of baby-shaped, are cues that will make people feel very emotional. Robots will have these cues. Furthermore, it is already the case that AI reads faces better than people do, and can and undoubtedly will be able to predict emotions and their development far better than people can. I really can imagine that one of the major uses of robots will be taking care of the old. I can imagine that many old people will prefer to be taken care of by robots by friendly robots that have a name and that have a personality that is always pleasant. They will prefer that to being taken care of by their children.

Now I want to end on a story. A well-known novelist—I’m not sure he would he appreciate my giving his name—wrote me some time ago that he was planning a novel. The novel is about a love triangle between two humans and a robot. What he wanted to know is how would the robot be different from the individuals. I propose three main differences:

  1. One is obvious the robot will be much better at statistical reasoning and less enamored with stories and narratives than people.
  2. The robot would have much higher emotional intelligence.
  3. The robot would be wiser.

Wisdom is breadth. Wisdom is not having too narrow a view. That’s the essence of wisdom: it’s broad framing. A robot will be endowed with broad framing. And I really do not see how, when it has learned enough, it will not be wiser than we people. We don’t have broad framing. We’re narrow thinkers. We’re noisy thinkers. It’s very easy to improve upon us. I don’t think that there is very much that we can do that computers will not eventually be programmed to do.

Thank you.

Should-Read: John Cole: Damn I Love The Jag and the Jet and the Mansion

Should-Read: The discovery of Uranus came about because Saturn was not moving like it should move were it to be the outermost planet. Republican senators are not moving like they should move unless they were under the strong influence of some very powerful, very strange, and very destructive force:

John Cole: Damn I Love The Jag and the Jet and the Mansion: “Graham/Cassidy… bad policy… will devastate many GOP states… hurt tens of millions… https://www.balloon-juice.com/2017/09/23/damn-i-love-the-jag-and-the-jet-and-the-mansion/

…gut protections for people with pre-existing conditions, something Trump claims he is against.

It’s bad politics. It betrays every alleged GOP “principle”… add to the debt, has not been debated properly, no one has read the bill, etc. It’s wildly unpopular. The members of the Senate don’t even like the bill and don’t even really know what it does. But yet, they are desperate to pass it.

Here’s why:

As more than 40 subdued Republican senators lunched on Chick-fil-A at a closed-door session last week, Senator Cory Gardner of Colorado painted a dire picture for his colleagues. Campaign fund-raising was drying up, he said, because of widespread disappointment among donors over the inability of the Republican Senate to repeal the Affordable Care Act or do much of anything else.

Mr. Gardner is in charge of his party’s midterm re-election push, and he warned that donors of all stripes were refusing to contribute another penny until the struggling majority produced some concrete results.

“Donors are furious,” one person knowledgeable about the private meeting quoted Mr. Gardner as saying. “We haven’t kept our promise.”

The backlash from big donors as well as the grass roots panicked Senate Republicans and was part of the motivation behind the sudden zeal to take one last crack at repealing the health care law before the end of the month. That effort faltered Friday with new opposition from Senator John McCain of Arizona, the perennial maverick who had scuttled the Senate’s first repeal effort. Now Republicans must confront the possibility that they will once again let down their backers with no big win in sight.

It’s all about the Benjamins and catering to the donor base. Literally nothing else matters to these guys. F—–g the poors and pissing off teh left would just be a bonus.

Weekend reading: “Discussing distributional tables” edition

This is a weekly post we publish on Fridays with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is the work we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

The Federal Reserve announced on Wednesday that it would start shrinking its balance sheet. This is not the first time it has unwound a large amount of its excess reserves. There may be lessons from the U.S. central bank’s experience in the 1930s.

As issues of market concentration and power become more prominent, analysts thinking about how to update U.S. antitrust policy have to consider whether to tweak existing doctrine or create a new one. Liz Hipple looks at a set of policy proposals that tries to take a “both/and” approach.

Distribution tables are the most common way of analyzing how tax reforms could affect income distribution. Many analysts argue that traditional distribution tables are flawed because they don’t account for the consequences of economic growth. Greg Leiserson rebuts that view and argues in favor of using “static” tables for evaluating tax reform plans.

As U.S. policymakers consider reforms to the tax code, Nisha Chikhale points out why they shouldn’t forget the Earned Income Tax Credit. She takes a look at a bill that would significantly increase the value of the tax credit for low- and moderate-income workers.

Links from around the web

The decline in the start-up firms across the U.S. economy is now a well-documented and troubling trend. Ben Casselman reports on how rising concentration and stronger market power for older companies may be responsible for the dearth of new companies. [nyt]

The median white family in the United States has 13 time more wealth than the median black family. Gillian White reports on a new book that argues efforts to combat this wealth gap via self-sufficiency and “black capitalism” have fallen flat. [the atlantic]

The statutory U.S. corporate income tax rate masks over a lot of variance in how much taxes companies in different industries pay. Jordan Weissmann argues that many of the current proposals to reform the corporate tax will make this variation even more severe. [slate]

Do Americans change their opinions when they are exposed to information about trends in economic inequality? Leslie McCall and Jennifer Richeson discuss their research, which shows such information changes people’s feelings about economic opportunity. [wapo]

As the Federal Reserve unwinds the financial assets it accumulated during its quantitative easing, some economists and investors fear a smaller balance sheet might be a drag on the economy. David Beckworth argues that the effect shouldn’t be very large, looking at the effects of QE2 and QE3. [macro musings]

Friday figure

Figure is from “Expanding the Earned Income Tax Credit is worth exploring in the U.S. tax reform debate,” by Nisha Chikhale

Should-Read: Matthew Yglesias: The economy really is broken — but we know how to fix it

Matthew Yglesias: The economy really is broken — but we know how to fix it: “The top 5 percent includes all the members of Congress and all of the donors and lobbyists and business leaders whom members of Congress speak to… https://www.vox.com/2017/9/19/16319416/broken-economy

…It also includes all the Federal Reserve governors and regional bank presidents and all the business leaders whom they speak to. It includes the top editors of all the major media outlets and most of the star talent. For that matter, it also includes most of the leading economic experts at top universities. All else being equal, of course, political elites prefer lower unemployment to higher. But it simply isn’t instinctively urgent in elite circles the way a financial market panic is. When the economy was crashing in the fall of 2008, the American political system went into emergency mode. When things had stabilized by the summer of 2009, emergency mode ended. But for the bottom 95 percent or so, the emergency didn’t really end until years later.

Yet policymakers spent this whole period in a kind of haze of inflation paranoia carried over from the 1970s. Tim Geithner in his memoirs says that even at the peak of the crisis, it was important for the Fed to “signal that they’ll eventually hit the brakes, and that they’ll remain vigilant about inflation going forward,” even though creating an expectation of future catch-up inflation would actually have boosted the economy at the bottom. The Obama administration pivoted to deficit reduction in early 2010 based on vague green shoots of recovery. And Republicans were, of course, worse, preaching austerity at the worst possible time. Janet Yellen’s Federal Reserve is raising interest rates to slow job creation in order to head off the possibility of future inflation even though actual inflation remains below target. Meanwhile, Kevin Warsh — the Republican most likely to replace Yellen — spent years warning that the Fed was doing too much to aggressively boost job creation.

For the economy to work for normal people, the federal government needs to be obsessed with avoiding recessions and making them as short as possible. If that means short bursts of inflation during supply-side shocks, or reduced bank profits due to restrictions on lending, or high deficits to stimulate the economy, we need to be willing to make those trade-offs. Wage earning is the backbone of the mainstream economy, and when unemployment is high, not only do a few million people lose out on the chance to work but tens of millions more lose the chance to bargain for wages…

Should-Read: Jacob Levy: Black Liberty Matters

Should-Read: Jacob Levy: Black Liberty Matters: “‘How is it that we hear the loudest yelps for liberty among the drivers of negroes?’… https://niskanencenter.org/blog/black-liberty-matters/

…This was Samuel Johnson’s bitter rhetorical question about the American revolution, and the conflict it identifies has never been far from the surface of American political and intellectual life…. The language of freedom in American political discourse has very often been appropriated for the defense of white supremacy. We have often heard the loudest yelps for liberty among those trying to protect the terror and apartheid states of the Jim Crow south, the quasi-serfdom of sharecropping, segregated schools, miscegenation laws, and the suppression of black votes. Particular types of freedom or particular strategies for limiting governmental power—freedom of association, religious liberty, federalism, bicameralism, and so on—all came to be identified at one point or another primarily as ways to prevent the federal government from breaking the power of white rule….

None of this means that liberty is not a worthwhile, and true, ideal…. [But] those who proclaim their commitment to freedom have all too often assessed threats to freedom as if those facing African-Americans don’t count—as if black liberty does not matter…. Two recent and awkwardly-connected controversies within, and about, American libertarianism.

Nancy MacLean Missed the Story on Libertarianism’s Race Problem: The more prominent is the debate about Nancy MacLean’s book on James Buchanan, the Nobel Prize-winning economist and a founder of public choice theory…. She treats Buchanan as the architect of a decades-long conspiratorial strategy to advance a political agenda that was both anti-democratic and compatible with (indeed possibly supportive of) the maintenance of Jim Crow…. The claims MacLean makes are untrue about Buchanan. But the history of the postwar libertarian movement is rich with moments of flirtation or outright entanglement with the defenders of white supremacy… the explicit sympathy for the Confederacy… Murray Rothbard’s support for Strom Thurmond… Lew Rockwell’s celebration of the beating of Rodney King… the racism… under Ron Paul’s name in… the 1980s and 90s… the insistence on discussing the Civil Rights Act primarily in terms of freedom of association (as if white supremacy in the Jim Crow south were just a private taste that some people indulged), and an interest in freedom of speech that focuses disproportionately on the freedom to indulge in racially-charged “political incorrectness” could all figure in such a book….

But there are ways to neglect black liberty that are subtler than the white nationalism of the Confederatistas. Think about the different ways that market liberals and libertarians talk about “welfare” from how they talk about other kinds of government redistribution…. The white welfare state of the 1930s-60s that channeled government support for, e.g., housing, urban development, and higher education through segregated institutions has a way of disappearing from the historical memory; the degrees earned and homes bought get remembered as hard work contributing to the American dream….

Returning for a moment to the overt white nationalists allows us to also think about the other recent dispute about libertarian politics: the embarrassingly large number of people associated with the racist alt-right who once identified as libertarians, or (even worse) still do. Some of this is just the inevitable sociology of the fringe…. But… the capture of the language of freedom by the defenders of white supremacy and the Confederacy is a major fact about American political language and its history, and there’s a small but vocal group of self-identified libertarians who participate in it and perpetuate it…. Reimagining libertarian politics in light of the truth that black liberty matters will take a lot of intellectual and moral work…

Should-Read: Ann Marie Marciarille: Eat Out Much?

Should-Read: Ann Marie Marciarille: Eat Out Much?: “With 16 dead and well over 400 documented as infected, it is fair to say San Diego is in the midst of an epidemic of Hepatitis A… http://www.marciarille.com/2017/09/eat-out-much.html

…Other cities with large populations of homeless individuals should be afraid, very afraid. I’m looking at you: Detroit, Salt Lake City, Santa Cruz, and others. It is significant that there already appears to be a satellite outbreak in Santa Cruz. We are, at present, witnessing the second largest U.S. based Hepatitis A outbreak in decades…. Public health authorities have had to try to reach customers of a popular tourist restaurant who may have been exposed through contact with a kitchen worker, who may have been exposed through a partner.  I note that responsible articles go out of the way to elaborate that restaurant transmission is not a common occurence, though a drop off in business at the particular restaurant has already been reported…. Fear of Hepatitis A  transmission in California has officially made the leap from what I call “them to us.”…

Then why are we so laissez-faire? First, it is and was invasive to require physical health examination of all food service workers for contagious diseases, even in the 1920’s. Second, it costs money, whether born by public health authorities or by food service employers and it is money spent examining a low wage workforce with high employment turnover. Third, we do not want to acknowledge that our health as food service product consumers is deeply intertwined with the health status of the food service industry worker’s health. Admitting otherwise punctures two popular American myths — the first that we are all almost completely in control of our own health and disease status as individuals and that your lack of health insurance or lack of easy access to health maintenance care is your problem and not mine.

I always ask my students who contend that the individual choice to obtain health insurance and health care is just that — an individual choice — if they eat out much.

Should-Read: Jacob Leibenluft: Like Other ACA Repeal Bills, Cassidy-Graham Plan Would Add Millions to Uninsured, Destabilize Individual Market

Should-Read: Jacob Leibenluft et al.: Like Other ACA Repeal Bills, Cassidy-Graham Plan Would Add Millions to Uninsured, Destabilize Individual Market: “Cassidy-Graham Block Grant and Medicaid Per Capita Cap Cut Federal Funding for Most States by 2026… https://www.cbpp.org/research/health/like-other-aca-repeal-bills-cassidy-graham-plan-would-add-millions-to-uninsured

…[Million dollars in 2026:] Alabama +1713, Alaska -255, Arizona -1600, Arkansas -1102, California -27823, Colorado -823, Connecticut -2324, Delaware -724, District of Columbia -431, Florida -2691, Georgia +1685, Hawaii -659, Idaho +177, Illinois -1420, Indiana -425, Iowa -525, Kansas +821, Kentucky -3062, Louisiana -3220, Maine -115, Maryland -2162, Massachusetts -5089, Michigan -3041, Minnesota -2747, Mississippi +1441, Missouri +545, Montana -515, Nebraska +203, Nevada -639, New Hampshire -410, New Jersey -3904, New Mexico -1350, New York -18,905, North Carolina -1099, North Dakota -211, Ohio -2512, Oklahoma 1118, Oregon -3641, Pennsylvania -850, Rhode Island -625, South Carolina +804, South Dakota +218, +Tennessee 1642, Texas +8234, Utah +313, Vermont -561, Virginia 268, Washington -3333, West Virginia -554, Wisconsin +252, Wyoming -90…

Expanding the Earned Income Tax Credit is worth exploring in the U.S. tax reform debate

Sen. Sherrod Brown, D-Ohio, co-sponsor of the GAIN Act, speaks on Capitol Hill in Washington.

In recent years, lawmakers on both sides of the congressional aisle have proposed expanding refundable tax credits for low-income workers across the United States such as the Earned Income Tax Credit, which provides them with additional earnings through the tax code. But a new proposal by Rep. Ro Khanna, D-CA, and Sen. Sherrod Brown, D-OH, hopes to go much further to make up for decades of stagnant wages.

The Grow American Income Now, or GAIN, Act proposed by Rep. Khanna and Sen. Brown would expand the Earned Income Tax Credit not only for low-wage working families with children but also for middle-income families and childless workers by increasing the income level for EITC eligibility. The EITC already is one of the country’s largest poverty-fighting cash-transfer programs—as a result of the program’s expansion in the early 1990s and then again under the American Recovery and Reinvestment Act of 2009—designed to explicitly boost the living standards of low-wage workers and families, but research shows the program could be even more successful if expanded further.

Last year, economists Hilary Hoynes and Jesse Rothstein of the University of California, Berkeley examined (open access version) how well the EITC accomplished its goals of redistribution, encouraging work, and limiting administrative costs and noncompliance. Hoynes and Rothstein argued then that policymakers could make the tax credit more progressive by expanding it for workers without children. This is one major revision that the GAIN Act has taken on board. In addition, the proposed bill would lower the qualifying age for the EITC from 25 years to 21 years, expanding eligibility to an even larger group of low-wage workers. What’s more, the GAIN Act proposes to nearly double the EITC for working families and increase the credit for childless workers almost sixfold.

As would be expected for such an ambitious proposal, it would be very expensive. The nonpartisan Tax Policy Center estimates the proposal would cost $1.4 trillion from fiscal year 2017 to fiscal year 2026. Under the proposal, the maximum tax credit available increases to $12,131 for families with three or more qualifying children; $10,783 with two qualifying children; $6,528 with one qualifying child; and $3,000 with no qualifying children. (See Figure 1.)

Figure 1

The proposed legislation also would allow for recipients to receive EITC advances capped at $500 each taxable year, which is subtracted from their total credit when they file their annual tax return. As Congress takes on tax reform in the next few months, there is sure to be talk of reforming the EITC. The GAIN Act is an interesting proposal and is worth exploring as part of tax reform to boost low- and moderate-wage workers’ earnings.