Category: Equitablog

How much Grand Marnier is it proper to add to the cranberry sauce?

Agreement Between the Settlers at New Plymouth : 1620

IN THE NAME OF GOD, AMEN. We, whose names are underwritten, the Loyal Subjects of our dread Sovereign Lord King James, by the Grace of God, of Great Britain, France, and Ireland, King, Defender of the Faith, &c. Having undertaken for the Glory of God, and Advancement of the Christian Faith, and the Honour of our King and Country, a Voyage to plant the first Colony in the northern Parts of Virginia; Do by these Presents, solemnly and mutually, in the Presence of God and one another, covenant and combine ourselves together into a civil Body Politick, for our better Ordering and Preservation, and Furtherance of the Ends aforesaid: And by Virtue hereof do enact, constitute, and frame, such just and equal Laws, Ordinances, Acts, Constitutions, and Officers, from time to time, as shall be thought most meet and convenient for the general Good of the Colony; unto which we promise all due Submission and Obedience. IN WITNESS whereof we have hereunto subscribed our names at Cape-Cod the eleventh of November, in the Reign of our Sovereign Lord King James, of England, France, and Ireland, the eighteenth, and of Scotland the fifty-fourth, Anno Domini; 1620.

Mr. John Carver,
Mr. William Bradford,
Mr Edward Winslow,
Mr. William Brewster,
Isaac Allerton,
Myles Standish,
John Alden,
John Turner,
Francis Eaton,
James Chilton,
John Craxton,
John Billington,
Joses Fletcher,
John Goodman,
Mr. Samuel Fuller,
Mr. Christopher Martin,
Mr. William Mullins,
Mr. William White,
Mr. Richard Warren,
John Howland,
Mr. Steven Hopkins,
Digery Priest,
Thomas Williams,
Gilbert Winslow,
Edmund Margesson,
Peter Brown,
Richard Britteridge,
George Soule,
Edward Tilly,
John Tilly,
Francis Cooke,
Thomas Rogers,
Thomas Tinker,
John Ridgdale,
Edward Fuller,
Richard Clark,
Richard Gardiner,
Mr. John Allerton,
Thomas English,
Edward Doten,
Edward Liester.

The sect of “neoliberalism” I belonged to (or thought I belonged to) believed not that wherever possible the private sector should be left to deliver goods and services, but rather that it often made sense for the government to incentivize the private sector to deliver the right goods and services to the right people and then stand back and let it do so. It often makes sense. But it often doesn’t: consider war, education, pensions, health insurance, research and development, and the spread of knowledge and information more generally.

But perhaps the lesson is that even though “neoliberalism” a la Charlie Peters and the Washington Monthly has an honorable history, it is time to let the term simply stand for BAD THINGS and thus send it off to the intellectual glue factory…

Other than that quibble, a nice piece by John Cassidy:

John Cassidy: Liberalism Will Survive Obamacare:

Continue reading “John Cassidy Explains That Those Parts of ObamaCare That Are “Liberal” Are Working Very Well” →

A footnote to: Deficiencies of Bureaucratic Planning: Reading Jacobo Timmerman on Gabriel Garcia Marquez on Fidel Castro…. Courtesy of Patrick Iber:

From Jacobo Timmerman (1990): Cuba: A Journey:

Gabriel García Márquez, of course, is uncensored [by Castro], except when he enthusiastically refers, as he often does, to perestroika. His famous dialogue with Mikhail Gorbachev at the Moscow Film Festival in 1987, transmitted by Soviet news agencies, was not published in the Cuban press. The Colombian writer is the man who can perhaps influence Fidel Castro most. He is El Comandante’s most important instrument of public relations on the international front.

Continue reading “A Longer Version of the Accusations Jacobo Timmerman Lays Before the Bar of History Regarding Gabriel Garcia Marquez and Fidel Castro” →

I have always thought that the idea that there is a lot of “there” there is, at best, unproven–and given the energy that has been devoted to trying to prove it, that the failure to connect the links is strong evidence that there is not much there there at all,

Thus one of the analytical points made about the past six years I have not understood is a focus on “policy uncertainty” a la Baker, Bloom, and Davis as a factor holding back the U.S. economy. Residential construction is 1.5%-points of GDP below its level the last time the U.S. was at full employment, government purchases its 2.5%-points below its peak level, business equipment investment is nearly at its peak level, and exports are 1.5%-points of GDP above their level at the last peak. Add these up and we get a 2.5%-point of GDP drag. Apply today’s standard multiplier and add on a little bit for depressed household wealth and we have explained the shortfall in real GDP relative to potential.

Continue reading “How Much There Is There in Attempts to Ascribe Any Significant Component of Our Current Economic Distress to “Policy Uncertainty”?: Wednesday Focus” →

Must-Reads:

1. Stan Collender: The 10 Reasons There Won’t Be A Grand Budget Bargain Until 2019: “1. Democrats won’t agree to the big changes in Social Security, Medicare and other mandatory programs that Republicans want without getting a substantial revenue increase. Republicans won’t agree to a revenue increase without big changes in Social Security, Medicare and other entitlements. 2. Republicans absolutely can’t and won’t increase taxes until after the 2016 presidential election…. 3. Because of the problem with raising taxes before 2016, changes in mandatory spending are on hold until after 2016 as well…. 4. Therefore, there will be no big budget deal for the next three years…. 5. That means that, if it happens at all, the serious work… won’t begin until early 2017. 6. As the effort in the 1980s showed, tax reform is difficult and lengthy process…. 7. It also means that most members of Congress will have to express their dissatisfaction…. 8. The 1985 tax reform act took three years to enact. It was relatively easy from a budget point of view because from the start the bill was going to be ‘revenue neutral’… 9. Before Republicans will even be able to start to negotiate with Democrats, there will have to be a GOP vs GOP debate…. 10. The tax reform debate from the 1980s also took place when there was no tea party wing of the GOP and no social media…. Given these 10, it’s hard to see (1) how a process that could produce a grand bargain could get under way before 2017, and (2) how it could take less time than than it did in the 1980s.”

2. Kevin Drum: Janet Yellen Is Now a Litmus Test for Right-Wing Sanity: “Steve Benen notes that the increasingly shrill and hyperbolic Heritage Foundation has decided to make opposition to Janet Yellen a ‘key vote’. That is, they’ll count it on their end-of-the-year scorecard that tells everyone just how conservative you are…. ‘It now seems likely that most Senate Republicans will oppose the most qualified Fed nominee since the institution was founded.’ That’s true, which means this has become sort of a litmus test for wingnuttery. There’s simply no serious reason to oppose Yellen, who is outstandingly qualified to be Fed chair by virtually any measure. So opposition to Yellen is now a pretty simple proposition: you oppose her if you’re some kind of hard money lunatic or if you feel like you have to pander to the hard money lunatics. That’s it. Everyone else votes to support her confirmation. Should be an interesting roll call…”

Should-Reads:

1. Daniel Strauss: McConnell Challenger: Mitch Is Working ‘Actively’ To Make Sure Obamacare Is ‘Not Ended’: “Kentucky Republican Matt Bevin accused Senate Minority Leader Mitch McConnell (R-KY)… of ‘working actively’ to make sure Obamacare is not repealed. ‘We wanted to just call attention to frankly what we’re seeing as a rather disturbing trend which is the fact that we’ve thought for some time that most of Mitch McConnell’s bluster about yanking out Obamacare root and branch was really just that. But we’re seeing yet again the fact that behind the scenes and now with increasing amounts of overtness he’s really working actively to ensure that this is not a piece of legislation that is ended’. Bevin’s comments are in response to a report saying McConnell suggested he is not averse to discussing changes of the health care law. McConnell is quoted in that report saying that the law ‘was so botched from the beginning, that it’s not fixable’. Bevin said that despite McConnell saying that the law has been botched, the fact that he suggested some level of openness to changing the law shows that he does not totally want to repeal Obamacare.”

2. Ezra Klein: Obamacare is a Done Deal: “A spin through HealthCare.Gov this morning went smoothly. The site loaded quickly. The process progressed easily. There were no error messages or endless hangs…. My experience isn’t rare…. Reports from inside the health care bureaucracy are also turning towards optimism…. A political system that’s become overwhelmingly oriented towards pessimism on Obamacare will have to adjust as the system’s technological infrastructure improves.’ I think the best translation of that last sentence is, ‘Republicans will soon have to find something else to gripe about”

3. Kevin Drum: Obamacare is a Done Deal: Conservatives have always known that once Obamacare is up and running, it will become a popular program…. In a few months, it will be nearly as enshrined in the American social welfare firmament as Social Security and Medicare. Republicans have run out of time, and they know it. Their fixation on Obamacare already looks sort of balmy–this weekend’s deal with Iran was designed to draw attention away from Obamacare? Seriously?–and it’s only going to look loopier as time goes by. Getting Obamacare to the end zone wasn’t easy, and Obama almost fumbled the ball at the one-yard line, but he’s finally won…”

Should Be Aware of:

Burkhard Bilger: Inside Google’s Driverless Car | Ryan Avent: Monetary policy: Low rates forever | Jeff Spross: Rapid Plankton Decline Puts The Ocean’s Food Web In Peril | ProGrowthLiberal: Dean Baker v. Greg Mankiw on Wage Inflation: I may have been too nice to Greg Mankiw… | David Keohane: Let a hundred moles be whacked | Unofficial Transcript of Larry Summers’s Speech at the IMF Economic Forum, Nov. 8, 2013 | Lawrence Summers: Edited Transcript: IMF Fourteenth Annual Research Conference in Honor of Stanley Fischer |

Whether you call it James Scott (as in his Seeing Like a State) or Friedrich von Hayek (“The Use of Knowledge in Society”) or Adam Smith (An Inquiry into the Nature and Causes of the Wealth of Nations) or even Bernard de Mandeville (The Fable of the Bees), it is a very powerful insight to recognize that in the economy we want, as much as possible, to push the making of decisions out to the periphery–where the direct knowledge is, and where the direct impact of individual decisions are felt. And this is what the property-contract-market system is (or can be) good for. And this is the insight that we in North America call “neoliberalism”.

Continue reading “The Deficiencies of Bureaucratic Planning: Reading Jacobo Timmerman on Gabriel Garcia Marquez on Fidel Castro…: Tuesday Focus” →

Must-Reads:

1. Francis: Evangelium ad Unum Per Centum: “While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation… reject the right of states, charged with vigilance for the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power. To all this we can add widespread corruption and self-serving tax evasion…. The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule… http://www.vatican.va/holy_father/francesco/apost_exhortations/documents/papa-francesco_esortazione-ap_20131124_evangelii-gaudium_en.pdf

2. Larry Summers: Speech at the IMF Economic Forum, November 8, 2013: “Now think about the period after the financial crisis. I always like to think of these crises as analogous to a power failure, or analogous to what would happen if all the telephones were shut off for a time. The network would collapse. The connections would go away. Output would of course drop very rapidly. There’d be a set of economists who would sit around explaining that electricity was only four percent of the economy, and so if you lost eighty percent of electricity you could not possibly have lost more than three percent of the economy. There would be people in Minnesota and Chicago and stuff who’d be writing that paper. But it would be stupid. It would be stupid…”

Should-Reads:

1. Tim Jost: Implementing Health Reform: State Exchange Enrollment: “Covered California, the California exchange, reported that as of November 19, 2014, almost 80,000 Californians had selected a health plan through the exchange. Almost 31,000 had enrolled in October.  Of these, almost 5,000 were subsidy-eligible while 26,000 were not, suggesting that the Californians at the front of the line were higher-income applicants, who likely understand the need for insurance and may well need it for immediate health needs.  Almost 83 percent of enrollees were English speaking, while fewer than 5 percent spoke Spanish. Twenty-two percent of enrollees were between the ages of 18 and 34, roughly equal to the percentage of the total population in this age group. But 34 percent of enrollees were between the ages of 55 and 64, compared to 11 percent of the total population.  Adverse selection is thus a concern…”

2. Sy Mukherjee: Stubborn Opposition To Medicaid Expansion Is Forcing Hospitals In The Poorest States To Shut Down: “At least five public hospitals have shuttered their doors and many more are cutting staffing and services in non-Medicaid expansion states, according to Bloomberg. Three such hospitals have shut down in Georgia, while North Carolina and Virginia are experiencing similar closures…. The closures are tied directly to Republicans’ refusal to accept generous federal funding to expand Medicaid. And experts warn that even more closures may be on the horizon in poor states… that have also refused the Medicaid expansion. Safety-net hospitals… depend on federal money to make up for the uncompensated care costs…. The health law reduced payments to these so-called “disproportionate share hospitals”…. Lawmakers figured that Obamacare’s Medicaid expansion… would mitigate the cuts’ effects…. But… the Supreme Court ruled Obamacare’s Medicaid expansion to be optional, and about 26 states with GOP chief executives or legislatures have have refused to expand the program. Congress also rejected the Obama administration’s proposal to delay DSH payment cuts by a year to give safety net hospitals some breathing room…”

3. Matthew Yglesias: Bay Area: If you want to talk housing, you have to talk zoning: “Another day, another frustrating article about rising housing prices in the Bay Area that doesn’t mention the supply-side at all…. The high-tech economy is booming… affluent skilled workers want to move to the Bay Area… naturally the prices that people are willing to pay for housing are skyrocketing…. The city of San Francisco… [has] many low-rise districts of the city [that] could and should be redeveloped as denser high-rise areas. I’m often accused of wanting every city to turn itself into my native Manhattan, but San Francisco has about half the population density of Brooklyn…. But the even more egregious issues are in the suburban areas stretching south of San Francisco…. The reasonable thing to do would be to use the land intensively—some more apartment buildings, some more rowhouse neighborhoods, some more detached houses on slightly smaller plots—-but Valley politics have been relentlessly hostile to real-estate development. The shortage of both houses and commercial office space that results from this dynamic is a substantial driver of economic problems in the Bay Area… [and] also throughout the country. The supercharged growth in the high-tech sector ought to be creating massive spillovers of prosperity…. Instead, it’s mostly creating windfall profits for a relatively small number of people and cost-of-living spirals for others…

4. Paul Krugman: Nowhere Near The Exit: “Greg Mankiw… suggesting that the time for a Fed exit strategy may be drawing near. Dean focuses mainly on Greg’s use of what he considers a [single] misleading wage number…. We have multiple measures of wage developments…. One of these numbers, wages of production and nonsupervisory workers, shows a modest uptick, the others not. All three remain well below their pre-crisis rates of increase. Is this the kind of evidence on which you want to base a major policy change? Not in my world…. [And] it makes no sense at all to tighten until we see wage inflation rise, not just from its current level, but several points higher…. Arguments that the full-employment rate of unemployment has risen tend to rely on the claim that sustained high unemployment, even if it starts out cyclical, eventually becomes structural. But if that’s true, there are very high costs to premature policy tightening… this adds up to a strong argument for waiting to see overwhelmingly clear evidence of an overheated economy before beginning any kind of policy exit…”

Should Be Aware of:

1. Scott Lemieux: Four Reasons the Nuclear Option Was a Liberal Win: “Here are some of the major arguments being made against the deal from a Democratic perspective–and why they’re wrong. 1. Democrats Will Be Sorry, Because This Means Republicans Will Keep Doing What They’ve Been Doing Since the Reagan Administration…. 2. Pretending that the Filibuster Is the Only Political Constraint on the President…. 3. But Isn’t the House of Representatives Terrible?…. 4. Liberal Sentimentality about the Filibuster…”

2. John Cole: Resentment: “Just read this on facebook from a guy I know from the military: ‘After having to spend almost $200 on work boots,the hell happened to the America I grew up with. Are people and ceo’s that stupid. We are selling out at an alarming rate. Try finding american made anything without paying arm an leg.We need to make a stand an take our country back/ I use to wear only Levis’s. After buying some that ripped in 2 weeks I bought something else.The country we have sent our manufactoring jobs to also owns most of out debt.I remember when made in USA meant something. I remember when I joined military an heard star spangled banner, it had a whole differnt meaning. I also think you need to be a citizen to own a buisness. Take a look who owns motels,subways,gas stations and even kfc. This is America or it was. There should be no second langauge. People use to think it was honor to come here. Now we hand money out at airport.There should be a limit to time in office. Also no trust fund babies.’ This guy isn’t a white supremacist, but there are a whole lot of people who feel that way.”

Paul Krugman: Bubblephobia and Monetary Policy | Izabella Kaminska: Non-monetary effects of research evolution | Dean Baker: Technology didn’t kill middle class jobs, public policy did | Ann Marie Marciarille: Physician Boundary Crossing in the Face of Health Care System Failure | Martin Longman: High on Their Own Supply |

http://larrysummers.com/imf-fourteenth-annual-research-conference-in-honor-of-stanley-fischer/

That is to say, the word from the Macro Advisers and the Morgan Stanleys and the others who do real-time tracking is that it now looks most likely that the value of production (adjusted for inflation, and for the normal seasonal cycle in production) over October-December is going to be somewhere between 0.25% and 0.375% above the value of production in July-September. No signs of closing any of the 8% gap between the current level of production and what I think the economy’s stable-inflation productive potential currently is. Increasingly strong signs that the large amount of idle potentially-productive labor, idle capital, and slack investment is casting a dark shadow on our productive capacity in the future: the way I put it is that each month now we lose $100 billion in useful goods and services we would have produced if the macroeconomy were properly balanced at its stable-inflation potential, and that we lose another $300 billion from the drag that delaying recovery from this deep downturn for yet another month imposes on the future potential productive powers of the American economy.

This is a disaster…

And it was not that long ago that I was debating with myself about whether the long-run rate of real GDP growth in the American economy was closer to 2.5%/year, 3.25%/year, or 4.0%/year…

Izabella Kaminska: Evangelii One Percentium:

While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation… reject the right of states, charged with vigilance for the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power. To all this we can add widespread corruption and self-serving tax evasion…. The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule… http://www.vatican.va/holy_father/francesco/apost_exhortations/documents/papa-francesco_esortazione-ap_20131124_evangelii-gaudium_en.pdf