Should-Read: Austin Frakt: Don’t Assume That Private Insurance Is Better Than Medicaid: “The RAND study… shows… people are terrible discriminators of what care is needed and what’s not… http://theincidentaleconomist.com/wordpress/dont-assume-that-private-insurance-is-better-than-medicaid/

…Since most people under the age of 65 are healthy, even in the RAND study, that doesn’t matter much. But even if most people are healthy, some are not (and particularly those on Medicaid). In the RAND study, poorer and sicker people—exactly the kind more likely to be on Medicaid—were slightly more likely to die with cost-sharing. Free care also resulted in improvements in vision and blood pressure for those with low income. As an influential 1983 New England Journal of Medicine paper put it: “Free care does make a difference.” One limitation of the RAND study is its age. It took place between 1971 and 1982. There have been no studies of cost-sharing to rival it since….

There are certainly private plans for poor and sick Americans that are better than Medicaid. But plans with very high cost-sharing—which are the ones being offered in Congress as A.C.A. replacements—are not among them…

Should-Read: Martin Wolf: Britain is incapable of managing Brexit and calamity will follow: “The UK once had a deserved reputation for pragmatic and stable politics… https://www.ft.com/content/bf0025aa-6720-11e7-8526-7b38dcaef614

…That will not survive the spectacular mess it is making of Brexit. Remember what has happened. In an unnecessary referendum, a small majority chose an option they could not understand, because it had not been worked out. Thereupon, a new prime minister, with no knowledge of the complexities, adopted the hardest possible interpretation of the outcome. She triggered the exit process in March 2017, before shaping a detailed negotiating position. Some 70 days later, in an unnecessary election, she lost both her majority and her authority…

Should-Read: Jeff Mackie-Mason: Scholarly Publishing Landscape: “We are optimistic about our ability to collaborate and partner to achieve a sustainable open publishing universe… http://www.lib.berkeley.edu/scholarly-communication/publishing/landscape

…one in which all scholarly outputs—research data, visualizations, articles, books, and more—are accessible, discoverable, and preserved.  We invite you to learn about the challenges and successes that we share with the entire scholarly community…

Should-Read: IGM Forum seems to me to be asking some of the wrong questions.

IGM Forum: Inflation Target http://www.igmchicago.org/surveys/inflation-target:

First, they are not questions the respondents are asked to answer: they are statements with which the respondents are asked to agree or disagree.

Second, the first question should be: “If the Fed changed its inflation target from 2% to 4%, the long-run costs of inflation for households would not rise by an amount significant when weighed in the balance against the costs of the Fed’s being unable to lower interest rates to Wicksellian neutral in a recession.”

Jacob Levy: The Sovereign Myth: “The sense of control that is often attributed to voters in the olden days was really a sense of satisfaction with outcomes… https://niskanencenter.org/blog/sovereign-myth/

…Long years of economic growth in the West, broadly shared in, and in excess of the expectations of people who had lived through wars and economic collapse, propelled this satisfaction. In retrospect, though, it’s easy to flatter ourselves that, if things went well, it’s because we made such good decisions. Things look rather different when expectations are suddenly, sharply disappointed, as in the 2008 financial crisis and its aftermath…. The simple versions of the “economic anxiety” explanations for who supports such political movements have been widely debunked. But I think it is part of what makes fertile ground for such holist and fear-based political movements. The loss of the feeling of control can, moreover, go past economic questions; the demagogue can promise a restoration of control to the real people on social and cultural matters, too.

But in all these domains, the promise of control will be disappointed.

To the demagogue, the disappointment is a feature, not a bug. A perpetually frustrated and perpetually fearful populace is one that will continue to lend support to demagoguery. The policies adopted by an Erdogan or a Duterte are not meant to solve problems, but to keep the fear of them alive. Those of us hoping to see decent liberal democratic constitutionalism in the future have to proceed differently. Yes, there has to be hope for a better future; but hope is not the same as autarkic, nationalist, or democratic sovereign control…. We need to think of politics itself as a result of human action but not human design and decision, which even those who understand spontaneous and emergent orders in economics and society have been reluctant to do. It’s difficult to come to terms with. But however we are to manage the difficult psychological task of navigating currents that we didn’t decide into being, the first step will be understanding and admitting that we didn’t decide them.

I discuss some of these issues in greater depth in two recent academic pieces: Contra politanism, Against solidarity: Democracy without fraternity

Should-Read: Salvatore Morelli: Is growing inequality hurting our economies?: “The recent 2007–2008 collapse of the global financial system naturally acted as a catalyst for growing concerns around the increasing dispersion of economic resources within most advanced economies… https://equitablegrowth.org/research-analysis/is-growing-inequality-hurting-our-economies/

…Subsequently, the landmark book by Thomas Piketty, Capital in the Twenty-First Century, underlined very clearly the risk of the rising importance of inherited intergenerational advantages in transforming our societies into patrimonial capitalistic economies dominated by wealthy dynasties…. The reverse direction of inquiry—how macroeconomic performance may be affected by the extent of inequality—rests instead outside the scope of Piketty’s analysis and modeling…. In fact, the investigation of the (fairly complex) relationship between inequality and economic growth has been featured prominently in the empirical literature on inequality, with disparate findings and hypotheses pointing in different directions….

Economic theory provides different anchors as to why the so-called equity-efficiency trade-off may fall apart…. If most of the dispersion of economic outcomes of individuals results from inequality of opportunities… opportunities are not necessarily given to the most talented but to individuals with predetermined circumstances, and economic growth may in turn be weakened…. High levels of income and wealth inequality… may be detrimental to the level of economic activity as only those who inherit sufficiently high wealth may be able to pay the fixed cost of entrepreneurial activity or education…. Investments in productive capital and risky activities themselves can also be discouraged by highly unequal distribution of resources as a result of increasing rent-seeking behavior and other expropriation actions…. Does wealth inequality really promote rent-seeking behavior?… Bonica and Rosenthal documented the U.S. campaign contributions of the Forbes 400 wealthiest individuals between 1982 and 2012. Their figures imply an average individual donation of $10,000 for each $1 million increase in wealth—presumably a relatively easy achievement for a billionaire…

Should-Read: Martin Sandbu: Globalisation goes on without those who want to get off: “The EU, Japan and Canada keep the economic openness show on the road… https://www.ft.com/content/97582468-5fc7-11e7-8814-0ac7eb84e5f1

…The significance of this imminent accomplishment is only matched by the degree to which it is ignored by the public…. The EU, flanked by Japan and Canada, has taken on the leadership mantle of economic globalisation. Even more importantly, if implemented, the two deals show that Europe is capable of leading successfully…. For countries such as the US and the UK, which behave as if they have been victimised by globalisation, the new European trade deals show the wrong-headedness of their self-pity…. The US and the UK can hurt themselves by throwing up barriers to trade between themselves and their trading partners. But that is all they will achieve; there will not be a reorientation of “better” or “fairer” trade that will somehow improve on the status quo ante. (Of course there are plenty of domestic policies that these countries can improve, but there is no need to deglobalise to make those changes.) Meanwhile the countries that have stuck to their senses will simply move ahead shaping the global economy…

Should-Read: Koichi Hamada: The Rebirth of the TPP: “Jagdish Bhagwati said… ‘the TPP was a bit like allowing people to play golf in a club, but only if they also attended a particular church’… https://www.project-syndicate.org/commentary/tpp-revival-japan-us-by-koichi-hamada-2017-06

…The deal’s signatories were in it for the golf–that is, the expanded trade and investment flows. But they couldn’t avoid the obligation to accept rules that would benefit the US…. The US… had a strong national interest in both the golf and the church. Now it will get neither. And when the new TPP, excluding the US, begins to flourish, US businesses will be wishing Trump had not canceled their tee time…