Must-Read: The estimable Mark Thoma sends us to a view of the Polanyian Perplex from Nature: Human Behavior:

Christina Starmans, Mark Sheskin, and Paul Bloom: Why People Prefer Unequal Societieshttp://www.nature.com/articles/s41562-017-0082: “There is immense concern about economic inequality…

…Many insist that equality is an important social goal. However, when people are asked about the ideal distribution of wealth in their country, they actually prefer unequal societies. We suggest that these two phenomena can be reconciled by noticing that, despite appearances to the contrary, there is no evidence that people are bothered by economic inequality itself. Rather, they are bothered by something that is often confounded with inequality: economic unfairness. Drawing upon laboratory studies, cross-cultural research, and experiments with babies and young children, we argue that humans naturally favour fair distributions, not equal ones, and that when fairness and equality clash, people prefer fair inequality over unfair equality. Both psychological research and decisions by policymakers would benefit from more clearly distinguishing inequality from unfairness…

Should-Read: Jonathan Portes: Spreadsheets are people too: statistics and reality http://notthetreasuryview.blogspot.co.uk/2017/04/spreadsheets-are-people-too-statistics.html: “[David] Goodhart’s response will be… that I am…

…“sniping in the footnotes” and that I spend too much time with databases and not enough in the “real world”. But there is a fundamental problem with the argument by those like Dr McCrae or Mr Goodhart that “spreadsheets” or “databases” are somehow divorced from reality, while the experiences of (selected) individuals represent it. In fact, spreadsheets—or at least the ones used by labour market economists and, indeed, quantitative social scientists more broadly—are far more closely connected to the “real world” than any [single] individuals’ experience can hope to be…. The statement that… the bottom decile… have recently seen their pay rise faster … is not (just) a statement about numbers, or a claim that Mr Goodhart has failed to read the right ONS spreadsheet. It is a statement about what has–contrary to Mr Goodhart’s claim-actually happened to the pay packets of several million people. It is the spreadsheet, not what my nephew looking for a job, your cab driver, or Dr McCrae’s landscape gardener friend say that best reflect the real world…

Should-Read: Financial Times: The Fed and ECB keep a cautious eye on the exit https://www.ft.com/content/a0180496-1b7b-11e7-a266-12672483791a: “Making a promise… and then breaking that promise tends to have more severe consequences for central banks…

…building up credibility for fighting deflation is as important, if not more, than keeping inflation down. Whether to hold on to assets and how to dispose of them are tricky technical questions. What should be clear, however, is that the Fed should be in no hurry. It has no need to bow to impatience from Congress or from investors who wrongly opposed QE in the first place. Thanks to their own efforts, central banks have increasingly pleasant tasks to perform, removing emergency measures rather than trying to think of more. But in doing so they must be guided by the same dispassionate technocracy that caused them to go down that route in the first place.

Must-Read: David Leonhardt: The Original Republican Lie About Obamacare: “It’s often said in a tone of regret: I wish Obama had done health reform in a bipartisan way…

…It is false…. That it’s nonetheless stuck helps explain how the Republicans have landed in such a mess on health care…. The AARP doesn’t like the bill, nor do groups representing doctors, nurses, hospitals, the disabled and people with cancer, diabetes and multiple sclerosis. Other than that, Mrs. Lincoln, it’s a great bill…. How did the party’s leaders put themselves in this position?… They began believing their own hype….

Barack Obama… could continue moving the party to the center or tack back to the left. The second option would have focused on… expanding Medicare to start at age 55. But Obama and his team thought a plan that mixed government and markets—farther to the right of Clinton’s—could cover millions of people and had a realistic chance of passing. They embarked on a bipartisan approach. They borrowed from Mitt Romney’s plan in Massachusetts, gave a big role to a bipartisan Senate working group, incorporated conservative ideas and won initial support from some Republicans. The bill also won over groups that had long blocked reform, like the American Medical Association.

But congressional Republicans ultimately decided that opposing any bill, regardless of its substance, was in their political interest…. At that point, Obama faced a second choice–between forging ahead with a substantively bipartisan bill and forgetting about covering the uninsured. The kumbaya plan for which pundits now wax nostalgic was not an option. The reason is simple enough: Obamacare is the bipartisan version of health reform. It accomplishes a liberal end through conservative means and is much closer to the plan conservatives favored a few decades ago than the one liberals did….

Having run out of political ground, Ryan, McConnell and Trump have had to invent the notion of a socialistic Obamacare that they will repeal and replace with… something great!… Their approach to Obamacare has worked quite nicely for them, until now. Lying can be an effective political tactic. Believing your own alternative facts, however, is usually not so smart.

Must-Read: Paul E. Smaldino and Richard McElreath: The Natural Selection of Bad Science http://rsos.royalsocietypublishing.org/content/3/9/160384: “Poor research design and data analysis encourage false-positive findings…

…Such poor methods persist despite perennial calls for improvement, suggesting that they result from something more than just misunderstanding. The persistence of poor methods results partly from incentives that favour them, leading to the natural selection of bad science. This dynamic requires no conscious strategizing—no deliberate cheating nor loafing—by scientists, only that publication is a principal factor for career advancement. Some normative methods of analysis have almost certainly been selected to further publication instead of discovery. In order to improve the culture of science, a shift must be made away from correcting misunderstandings and towards rewarding understanding.

We support this argument with empirical evidence and computational modelling. We first present a 60-year meta-analysis of statistical power in the behavioural sciences and show that power has not improved despite repeated demonstrations of the necessity of increasing power. To demonstrate the logical consequences of structural incentives, we then present a dynamic model of scientific communities in which competing laboratories investigate novel or previously published hypotheses using culturally transmitted research methods. As in the real world, successful labs produce more ‘progeny,’ such that their methods are more often copied and their students are more likely to start labs of their own. Selection for high output leads to poorer methods and increasingly high false discovery rates.

We additionally show that replication slows but does not stop the process of methodological deterioration. Improving the quality of research requires change at the institutional level.