Must-Read: Ronald Nikles: Pay No Attention to the Man Behind the Curtain: the Great Oz has spoken…

Must-Read: What is the rule of law here? What should courts do when the President announces that he will not take care that the laws be faithfully executed? When a president announces that his policies will violate the Establishment clause, should courts let him proceed and so ignore the question whether pretexts publicly announced to be mere pretexts are in fact mere pretexts?

Ronald Nikles: Pay No Attention to the Man Behind the Curtain: the Great Oz has spoken…: “When a presidential candidate promises to ban Muslims from the country as his first act in office…

…should the courts be allowed to investigate the motivations of an Executive Order barring entry to nationals of six Muslim countries, ostensibly to keep out terrorists? Should courts be allowed to look behind the curtain of an Executive Order?… On February 9, 2017 the 9th Cir. Court of Appeals affirmed the nationwide stay of Travel Ban 1.0 until a hearing could be held on the merits.  That order is now moot…. President Trump signed… Travel Ban 2.0… Travel Ban 1.0… [with] modifications designed to make it “court-proof.”… Ilya Somin  noted that Travel Ban 2.0 continues to be driven by hostility to Muslims and that its security rationale continues to be extremely weak. Travel Ban 2.0 continues to assert “nearly unfettered authority by the federal government,” he said. This week two federal trial courts, in Hawaii and Maryland, have agreed with Somin….

How do courts determine whether a governmental action (like Travel Ban 2.0) is animated by religious animus? The court looked at the 2005 U.S. Supreme Court decision in McCreary County v. ACLU of KY: “In determining purpose, a court acts as an ‘objective observer’ who considers ‘the traditional external signs that show up in the text, legislative history, and implementation of the statute, or comparable official act.'” In other words, the mere identification (or claim) of a valid secular purpose does not satisfy the test. Courts will look at objective signs. It’s something that courts do “all the time.”…

In defending Travel Ban 2.0, the administration’s lawyers point to Kleindienst v. Mandel (1972)…. Justice Blackmun… “when the Executive exercises this power (to grant an exemption) negatively on the basis of a facially legitimate and bona fide reason, the courts will neither look behind the exercise of that discretion nor test it by balancing its justification against the First Amendment interests of those who seek personal communication with the applicant.”… Most judges aren’t buying this argument…. One judge who thinks that courts should not be looking behind the curtain in reviewing Travel Ban 2.0 is Judge Jay Bybee of the 9th Circuit… joined… by… Kozinsky, Callahan, Bea, and Ikuda…. Bybee, of course is infamous for being one of the authors of the Bush torture memos…

Should-Read: David Dayen: “Brad DeLong is wondering what happened to the Trump infrastructure policy…

Should-Read: David Dayen: “Brad DeLong is wondering what happened to the Trump infrastructure policy…

…He’s correct that the brief hope of an actual push of public money into a building boom is dead and buried. But that was never the Trump plan; it was what DeLong calls the “bunga-bunga” policy—tax breaks for public-private partnerships to give rich investors control of the commons.

And while Congress could give a rip, you can see what Trump is up to by looking at the 2018 budget.Granted, it’s a fantasy document Congress has no intention of looking at. But you have to look at all the cuts to infrastructure projects in there. It completely eliminates funding for the Federal Transit Administration’s New Starts program, affecting dozens of transit initiatives. TIGER, which Transportation Secretary Elaine Chao called her “favorite program” in confirmation hearings, is also zeroed out. A funding program for rural infrastructure is gone. Part of the $3 billion Community Development Block Grant program goes to infrastructure too.

When asked about this, OMB Director Mick Mulvaney said it was intentional. The administration plans to shift that money into “more efficient infrastructure programs later on.”

So not only will private equity guys get to scoop up infrastructure and put tolls on everything, they get their pick of projects that would already have had funding in place. It’s just a bonanza.

Must-Read: Ezra Klein: Does Donald Trump Know What the GOP Health Bill Does?

Must-Read: How, you ask, did Donald Trump’s Mad Management Skillz take DJT from $15/share to $0? This is how:

Ezra Klein:Does Donald Trump Know What the GOP Health Bill Does?: “With the help of Vox’s Jacob Gardenswartz, I collected and read absolutely everything Donald Trump has said publicly about the AHCA…

  1. Trump has a very limited set of talking points on health care, and he repeats the same words and sentences constantly—his comfort zone on both the issue and the legislation is very narrow….

  2. Trump seems confused about what the GOP bill does… spun by more ideologically motivated advisers (that’s certainly the narrative pro-Trump outlets like Breitbart are pushing)….

  3. Trump has bought into a caricature of Obamacare… that heavily informs his thinking…. This could prove more consequential than people realize.

The AHCA does literally none of the things Trump says it does…. The AHCA doesn’t lower costs… “premiums would be 13% (~$1,000) higher under the AHCA than under current law, holding plan generosity and the individual market age distribution fixed at their current law levels.” To the extent that the AHCA sees lower premiums, it’s because older people can’t afford care and younger people buy sparer plans…. Most people will have fewer affordable choices…. Competition is likely to fall…. The idea that the AHCA will “ensure health care access for all Americans” is sufficiently absurd that I’m not even going to spend time on it.

But the idea that it will let you choose your doctor and plan is more interesting—it seems entirely possible to me that Trump doesn’t realize the limited choices people complain about in Obamacare are the result of people being unable to afford more generous plans with broader networks, and it seems likely to me that he doesn’t know the AHCA will make that problem worse, or why conservative health reformers think that’s a good thing…. On March 10, Trump said this:

You all remember, you can keep your doctor, you can keep your plan. I know, Greg, you’ve never heard that, right? But it was said many, many times, and it turned out to be not true. This is the time we’re going to get it done.

This is either an extremely foolish thing to say or it is the comment of a man who doesn’t realize that the plan he’s backing would, in a stroke, mean millions of people could no longer afford the subsidized insurance they were using, and would react with fury and surprise when they realize they were betrayed.

The absolute constant in Trump’s health care rhetoric is the idea that Obamacare is dead no matter what he does…. If your only trusted source of information on Obamacare were the furthest reaches of the conservative press, this is the impression of the law you would have. But it’s not true…. Trump… thinks “unless we gave it massive subsidies in a year from now, or six months from now, it’s not even going to be here,” and argued that “there’s not even going to be any people on the plan” unless he does something. This is flatly nonsense, but it might be nonsense Trump believes. The irony, of course, is that the AHCA will destabilize individual insurance markets further, and lead to far greater coverage losses than if Obamacare were left untouched…

Weekend Reading: “the luck of the Irish” 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

Many Americans think of college as a great beacon of upward mobility in the United States. Kavya Vaghul takes a look at research that gives policymakers conflicting evidence of whether this is actually the case. Vaghul also notes that scholars have failed to look at an equally important dimension of this question: race and ethnicity.

Elisabeth Jacobs writes about new research suggesting that universal pre-K programs, rather than targeted programs, do a better job at serving low-income students.

What does the craft beer craze have to do with inequality? New research by Equitable Growth grantee Xavier Jaravel, a post-doctoral fellow in economics at Stanford University, finds that firms focused their innovation on products that cater to high-income households, such as the explosion in different kinds of craft beer.  Lower-income products, however, face less competitive pressures and have therefore experienced a higher rate of inflation. There’s other research highlighting the potential of rising inflation inequality in the United States.

Speaking of inflation, Nick Bunker looks at how common-sense views of inflation and its determinants affected the Fed’s decision to raise interest rates, and why that view may not make sense.

Trump’s economic doctrine may not work when it comes to the actual policy specifics, but Heather Boushey writes in The Atlantic about the psychological and emotional appeal of such a doctrine in that “it answers the core question that millions have about economic policy […]: What about me?”

The montly data release from the Job Openings and Labor Turnover Survey was Thursday. Check out some key graphs from the new data.

And because it’s St. Patrick’s Day, a look back at a piece written last year by Matt Markezich on what Ireland’s spectacular economic growth reveals about corporate tax avoidance.

Links from around the web

Tanvi Misra looks at a new interactive created by Texas Christian University’s Kyle Walker that shows the distribution of the U.S. population by educational attainment. The maps show the extent to which, in urban areas, the achievement gap is associated with racial and economic segregation.  [citylab]

If the proposed U.S. border tax adjustment blueprint reduces U.S. imports and promotes U.S. exports in a way that violates international trade rules, it could put pressure on U.S. trading partners to retaliate. Chad P. Brown argues that any overhaul of the tax system, therefore, should take a closer look at the international affects of the policy. [piie]

Neel Kashkari, President of the Minneapolis Fed, was alone in voting to keep interest rates steady at the Federal Open Market Committee’s meeting earlier this week. He provides an explanation. [medium]

In his address to Congress, President Trump cited a report released by the National Academy of Sciences to claim that immigration harms the U.S. economy. Cornell University’s Francine Blau, an editor of the report, and University of California-Berkeley’s Gretchen Donehower, who served as a consultant, say that the report actually finds that the economic and fiscal consequences of immigration are generally positive. [vox]

Some of the best academic ideas are secluded from the public domain in journals read largely by other academics. Savo Heleta looks at why academics are not doing more to share their ideas with the broader public. [the conversation]

Friday Figure

From “Product innovations and inflation in the U.S. retail sector have magnified inequality” by Xavier Jaravel

Must- and Should-Reads: March 16, 2017


Interesting Reads:

Must-Read: Heather Boushey: The Appealing Logic That Underlies Trump’s Economic Ideas

Must-Read: Heather Boushey: The Appealing Logic That Underlies Trump’s Economic Ideas: “For [President Trump], the way to create economic prosperity is to “follow two simple rules: Buy American and hire American”…

…While Trump’s economic doctrine may fall apart when it comes to the specifics, which in the end is the only measure that will really matter, there is a certain undeniable logic to it. It answers the core question that millions have about economic policy over the past three decades or so: What about me? Instead of saying, “Just wait—this will all work out in the end,” the Trump economic doctrine delivers an emotionally and psychologically satisfying response: You first…

Should-Read: Stan Collender: “This is not a budget…

Should-Read: Stan Collender: “This is not a budget…

“…It’s a Trump campaign press release masquerading as a government document. The Trump skinny budget includes proposals for just one-third of all federal spending, doesn’t mention revenues, conveniently doesn’t include any forecasts about the economy, and doesn’t bother to include a table showing the federal deficit and debt. Bottom line: Like most of the other plans from the Trump White House, this “budget” was released prematurely and is not well-conceived or complete. And, also just like many of the other Trump initiatives, this will be walked back and revised in the not-too-distant future.

Must-Read: Walter Schiedel: Economics: The architecture of inequality

Must-Read: The first review of our After Piketty http://amzn.to/2myMCTE book. In Nature:

Walter Scheidel: Economics: The architecture of inequality: “Income inequality is an ancient and intractable social, economic and political condition…

…Now, five books examine its inevitability…. Piketty’s Capital in the Twenty-First Century (Belknap, 2014) tries to hold economics and politics together. He argues that inequality is a product of fundamental laws of capitalism, and would be amenable to change through a global tax on financial transactions…. After Piketty, edited by Heather Boushey, Bradford Delong and Marshall Steinbaum, responds to what the editors describe as academic economists’ less-than-healthy reaction to Piketty. It asks an interdisciplinary crowd of social scientists to tug at the various threads of his argument to see whether it unravels. (It also includes a fascinating essay from an emboldened Piketty on issues such as the potential of collective bargaining to reduce inequality generated by capitalism.) The book serves as a fantastic introduction to Piketty’s main argument in Capital, and to some of the main criticisms, including doubt that his key equation — r > g, showing that returns on capital grow faster than the economy — will hold true in the long run.

It also contains thoughtful interventions in debates about the political economy of inequality. Economist Branko Milanović, for instance, documents how sharing capital more equally across the population could weaken the impact of a rising capital share (when those who own capital gain more of an economy’s income). Stemming the tide of rising inequality in a period of slow growth may require redistribution of capital, not just income…

JOLTS Day Graphs: January 2017 Report Edition

Every month the U.S. Bureau of Labor Statistics releases data on hiring, firing, and other labor market flows from the Job Openings and Labor Turnover Survey, better known as JOLTS. Today, the BLS released the latest data for January 2017. This report doesn’t get as much attention as the monthly Employment Situation Report, but it contains useful information about the state of the U.S. labor market. Below are a few key graphs using data from the report.

The rate at which U.S. workers are quitting their jobs increased in January to 2.2 percent. That’s close to pre-recession levels, but that might not be a good standard to judge job mobility.

The lack of change in the unemployment-to-job opening ratio is due to both a slowdown in the growth of job openings and leveling of the number of unemployed. If the trend of rising prime-age labor force participation increases, then this ratio could possibly increase.

The vacancy yield, or the ratio of hires to job openings didn’t change much in January, perhaps a sign its decline has ended. The decline in hiring appears to be not of unemployed workers, or those out of the labor force, but rather workers already with jobs.

Must-Read: Jonathan Portes: What’s the role of experts in the public debate?

Must-Read: Intellectual garbage disposal from Jonathan Portes on BREXIT and Michael Gove:

Jonathan Portes: What’s the role of experts in the public debate?: “We have three really important functions…

…To explain our basic concepts and most important insights in plain English…. Second is to call bullshit.  Recently, Change Britain supposedly a “thinktank backed by Michael Gove” claimed that leaving the customs union–and concluding new free trade deals with countries ranging from India to Korea–could “create 400,000 new jobs”, because of the projected increase in UK exports. Michael was quoted in the Telegraph as saying that the report showed how new trade deals would create hundreds of thousands of jobs…. Change Britain took some estimates from the European Commission of the potential boost to both exports and imports…. They translated the increased exports into extra jobs. They forgot to translate the increased imports into fewer jobs. Now, a moderately intelligent 12 year old could understand the problem here…. For better or worse, a large part of my job is in fact intellectual garbage disposal….

Perhaps most difficult… is in synthesising… a difficult topic… putting it in context, and explaining why it does, or doesn’t, matter. And this is perhaps where politicians and the public need us most…. The text for today’s debate is Michael Gove’s famous interview with Faisal Islam. I know Michael insists that he’s been taken out of context, so I’ll give the quote in full:

I think the people of this country have had enough of experts with organisations with acronyms saying that they know what is best and getting it consistently wrong…

The problem is that Michael is entirely happy to quote exactly those experts from exactly those acronyms when it suits him. Just 3 weeks before the referendum, Boris Johnson and Michael Gove, in a joint statement, said:

The Bank of England has said that a ten per cent rise in the proportion of new people coming here is associated with a two per cent cut in pay for working people…

The Bank of England was precisely one of the organisations with acronyms that Faisal Islam had cited and that Michael was ridiculing. But it’s much worse than that.  Michael’s… interpretation… was from the Daily Express, not from actual experts. Had he wanted to get it right, he would have asked an expert… [who would have said] quite a different story. Nor does Michael have to take my word for this. He can just ask Steve Nickell… one of the authors… [who] expressed his regret that he couldn’t complain during the campaign about the way his paper was being distorted by people like Michael…. Michael and Boris didn’t think it was enough to simply assert their point without evidence. On the contrary, they wanted to appeal to the authority of experts–indeed, the authority of the very experts at the Bank of England who Michael then claimed the people have had enough of…. Michael believes that the question of whether free movement is good or bad, and whether it does indeed drive down wages, is an empirical one, and that you should look at the empirical evidence, analysed by experts, before making up your mind.

So the question I have for Michael–apart from suggesting he might want to apologise to Steve–is whether, now that he knows the empirical evidence says almost the exact opposite of what he thought it said, whether  that changes his mind in any way about free movement?  In other words, are his beliefs on this topic–and by extension on other topics–faith-based or evidence-based? If they are in fact faith based… he should tell the voters that. If… he’s claiming to rely on evidence, then he has a duty to listen to… that evidence…