Must-read: Simon Wren-Lewis: “The Financial Crisis, Austerity and the Shift from the Centre”

Must-Read: Simon Wren-Lewis: The Financial Crisis, Austerity and the Shift from the Centre: “Think of two separate one dimensional continuums…

…one economic, with neoliberal at one end and statist at the other, and the other something like identity. Identity can take many forms. It can be national identity (nationalism at one end and internationalism at the other), or race, or religion, or culture, or class. Identity politics is stronger on the right…. For the political right identity in terms of class can work happily with neoliberalism, but identity in terms of the nation state, culture and perhaps race less so…. When neoliberalism is discredited, this potential contradiction on the right becomes more evident… [as] politicians on the right use identity politics to deflect attention from the consequences of neoliberalism…. Identity has always been strong on the right, so it is a little misleading to see it as only something that the right uses in an instrumental way….

None of this detracts from the basic point that Quiggin makes: the apparent drift from the political centre ground is a consequence, for both left and right, of the financial crisis…. One interesting question for me is how much the current situation has been magnified by austerity. If a larger fiscal stimulus had been put in place in 2009, and we had not shifted to austerity in 2010, would the political fragmentation we are now seeing have still occurred? If the answer is no, to what extent was austerity an inevitable political consequence of the financial crisis, or did it owe much more to opportunism by neoliberals on the right, using popular concern about the deficit as a means by which to achieve a smaller state? Why did we have austerity in this recession and not in earlier recessions? I think these are questions a lot more people on the right as well as the left should be asking.

Must-read: The Economist: “Chairman of Everything”

Must-Read: I do not understand China. But it now looks more likely than not to me that Xi Jinping’s rule will lose China a decade, if not half a century…

The Economist: Chairman of Everything: “Two curious articles appeared in government-linked news media…

…The first [was] written in an allegorical style traditionally used in China to criticise those in power, in this case in the form of an essay praising the seventh-century emperor, Taizong, for heeding a plain-talking courtier… [and] called for more debate and freer speech at a time when China’s president, Xi Jinping, has been restricting both. ‘The ability to air opinions freely often determined the rise and fall of dynasties,’ it said. ‘We should not be afraid of people saying the wrong things; we should be afraid of people not speaking at all.’ The second article, in the form of an open letter, ran—fleetingly—on a state-run website. ‘Hello, Comrade Xi Jinping. We are loyal Communist Party members,’ the letter began. It called on Mr Xi to step down and eviscerated his record in office. The president, it said, had abandoned the party’s system of ‘collective’ leadership; arrogated too much power to himself; sidelined the prime minister, Li Keqiang; caused instability in equity and property markets; distorted the role of the media; and condoned a personality cult….

The historical essay was reposted on the disciplinary commission’s website (where it remains); it was clearly more than the work of a single disgruntled editor. The letter may have been planted by a lone dissident who managed to hack into an official portal, but it raised many eyebrows in China. The police have reportedly detained around 20 people…. When he became the party’s leader in 2012, more was known about Mr Xi’s family and personal qualities than about his politics. He was a princeling…. Mr Xi had spent almost 20 years in Fujian, a southern province far from political nerve-centres. More is now clear. As Geremie Barmé, an Australian academic, puts it, Mr Xi is China’s ‘COE’, or chairman of everything….

Mr Hu was a wooden leader whose rule was overshadowed by the retired Mr Jiang; Mr Jiang, while in power, had to bow to his retired predecessor, Deng Xiaoping; even Deng trod carefully for fear of upsetting fellow party elders. Mr Xi, like Mao, appears unfettered by such concerns. He wants the country to know it, too…. Mr Xi is no Mao, a man whose whims caused the deaths of tens of millions and who revelled in the hysteria of his cult. But he rules in a way unlike any leader since the Great Helmsman. After Mao’s death, Deng tried to create a leadership of equals in order to push China away from Maoist caprices. Mr Xi is turning from that system back towards a more personal one. Indeed, he is more of a micromanager than Mao ever was….

The anti-corruption campaign has involved a radical change in the unwritten rules that have held the party together since the near civil war that Mao inflicted on it…. The anti-graft campaign is popular with the public, which suffers hugely from officials’ corruption, negligence and incompetence (a scandal that came to light in March involved rampant corruption in the state’s oversight of the sale and use of vaccines). But it has dismayed officials, many of whom have responded with passive resistance and fear-driven inertia…. Mr Xi has also sown alarm throughout the 2.3m-member People’s Liberation Army (PLA), the collective name for the armed forces. He has arrested generals for graft who were once considered untouchable, announced a trimming of the ranks by 300,000, shaken up the outdated command structure and slimmed down the top-heavy high command. Any one of these moves would have been impressive…. Mr Xi’s willingness to take on these tasks simultaneously suggests remarkable confidence….

Both in his reforms of the PLA and in his fight against corruption, Mr Xi’s actions aim first and foremost at tightening control: both the party’s over the army and his own over the party. It is similar in other areas of politics…. Mr Xi is determined to reimpose discipline on a querulous society that in recent years, thanks to the rapid spread of social media, has become much better equipped to organise itself independently of the party and to evade official controls. In the war against dissent, however, Mr Xi is facing visible resistance. Ren Zhiqiang, a property mogul turned commentator, said the media should serve readers and viewers, not the party….

Mr Xi has been even more hesitant in his handling of the economy. Months after taking power, he proclaimed that under his leadership markets would play a ‘decisive’ role. Since last year he has begun to talk of a need for ‘supply-side’ reforms, implying that inefficient, debt-laden and overstaffed state-owned enterprises (SOEs)—ie, most of them—need shaking up. But his approach has been marked by uncertainty, U-turns and, occasionally, incompetence…. Mr Xi’s lack of clear focus on the economy, and his unwillingness to let people more expert in such matters (namely, the prime minister, Mr Li) handle it, have caused a series of errors…. Markets are unpredictable and no Chinese leader (including Mr Xi) has any experience of the way they work in Western economies. But it is also likely that Mr Xi’s desire to hog power is partly to blame…. Mr Xi understands power, is not afraid to use it and is willing to take risks. He understands less about the new complexities of a changing society and worries about social unrest, so plays safe. He does not understand the economy well, is not sure what to do and does not trust others to act for him.

The way Mr Xi rules has three broad implications. The first is that problems common to all dictatorships will grow…. Another implication is that it is no longer reasonable to argue that China is a model of an authoritarian country opening up economically without doing so politically…. The third is that Deng’s policy of putting ‘economic construction at the centre’ is no longer the country’s most hallowed guiding principle. For Mr Xi, politics comes first every time…. The success of Mr Xi’s rule will rest not just on whether he wins the battles he has chosen to fight, but on whether he has picked the right ones. Seen from the point of view of China as a whole, it does not look as if he has. Mr Xi seems bent on strengthening his party and keeping himself in power, not on making China the wealthier and more open society that its people crave.

Must-read: Juan Linz: “The Perils of Presidentialism”

Must-Read: Juan Linz’s “The Perils of Presidentialism” is a rather good analysis of Richard Nixon and his situation, but a rather bad analysis of Barack Obama and his. In a way, the McConnell-Boehner-Ryan strategy, taken over from the Gingrich playbook, was based on Linz: Block everything Obama attempts, they decided, and then his supporters who have an exaggerated idea of his power will turn against him, and we will rise to power:

Juan Linz: The Perils of Presidentialism: “Given his unavoidable institutional situation…

…a president bids fair to become the focus for whatever exaggerated expectations his supporters may harbor. They are prone to think that he has more power than he really has or should have, and may sometimes be politically mobilized against any adversaries who bar his way. The interaction between a popular president and the crowd acclimating him can generate fear among his opponents and a tense political climate…. In the absence of any principled method of distinguishing the true bearer of democratic legitimacy,, the president may use ideological formulations to discredit his foes; institutional rivalry may thus assume the character of potentially explosive social and political strife….

This analysis of presidentialism’s unpromising implications for democracy is not meant to imply that no presidential democracy can be stable; on th contrary, the world’s most stable democracy–the United States–has a presidential constitution. Nevertheless… the odds that presidentialism will help preserve democracy are… less favorable…. The best type of parliamentary constitution… [needs] a prime-ministerial office combining power with responsibility… [to] help foster responsible decision-making and table governments… encourage genuine party competition without causing undue political fragmentation…. Finally… our analysis establishes only probabilities…. In the final analysis, all regimes… must depend… upon the support of society at large… a public consensus which recognizes as legitimate authority only that power which is acquired through lawful and democratic means… on the ability of their leaders to govern, to inspire trust, to respect the limits of their power, and to reach an adequate degree of consensus. Although these qualities are most needed in a presidential system, it is precisely there they are most difficult to achieve…

Looking at Obama’s 53% approval rating and contrasting it with GWB’s 28%, it has, obviously, not worked out that way. Instead, it is McConnell and Boehner and Ryan’s supporters–not the president’s–who had exaggerated expectations that were disappointed by reality, and have now turned against their putative leaders and representatives.

Must-Read: Matthew Yglesias: “Brian D. McKenzie’s ‘Political Perceptions in the Obama Era

Must-Read: Racial animosity, myths of betrayal, and fear of poverty and economic insecurity all combined together in a cocktail–but at least it’s an ethos!

Matthew Yglesias: “Brian D. McKenzie’s ‘Political Perceptions in the Obama Era: Diverse Opinions of the Great Recession and its Aftermath among Whites, Latinos and Blacks’…

…The Kaiser Family Foundation and the Washington Post working with some scholars from Harvard to look at race and the recession… included one question asking whether Obama has done ‘too much’ in terms of ‘ looking out for the economic interests of African Americans’ and another one asking which racial groups had been hardest hit by the recession. The results….

Numerous whites overlook the economic evidence that blacks were substantially harmed on multiple fronts during the recession and instead believe this group was unfairly aided by a sitting black president. These perceptual biases shape whites’ political opinions and are associated with feelings of financial frustration and higher levels of blame toward the government…. Interestingly, while many whites believe that African Americans are the beneficiaries of favorable economic policies from the Obama administration, blacks themselves do not feel they have been uniquely assisted financially (Harris 2012; Harris and Lieberman 2013).

This ties together white nationalist themes, economic anxiety themes, and populist anti-establishment themes nicely–a large bloc of white voters believes they are suffering economically because their elected representatives in Washington betrayed their interests in order to help nonwhites….

Following Mitt Romney’s defeat in 2012, the leadership of the Republican Party decided that they wanted to go in the exact opposite direction… the GOP would present itself as a modern, cosmopolitan, forward-thinking vehicle for right-of-center economic policy. Conservatism would be an ideology for everyone, not just for white people terrified that all their money was going to be spent on Obamaphones and hip-hop barbecues…. This sent… the wrong message to an important element of the GOP base… that their own party’s leaders were planning to betray them….

Resentful white people perceive themselves to be in a zero-sum clash for resources and opportunities with African Americans and Latinos, and want candidates who will champion their interests rather than throw them overboard in pursuit of a broader electoral coalition.

Must-read: Wolfgang Munchau: “The Errors Behind Europe’s Many Crises”

Must-Read: Wolfgang Munchau: The Errors Behind Europe’s Many Crises: “The EU was wrong to construct a single currency without a proper banking union…

…wrong to create a passport-free travel zone without a common border police force and immigration policy. [And] I would add EU enlargement… the haste with which it was pursued. The cardinal mistake of our time was the decision to muddle through the eurozone crisis. Europe’s political leadership failed to generate the public support for what was needed: creating a political and economic union. Instead, the European Council did the minimum necessary…. There are four channels through which that policy contributed to the broader instability….

First… the EU has the capacity only to deal with one big crisis at a time…. Second… the conflation, real or imaginary, of two more crises. The Greek economy continues to contract… refugees have been trapped in Greece… since Macedonia closed the border…. There are the fake connections. Poland has used last week’s Brussels bombings as a pretext for questioning a commitment to accept 7,000 refugees… an interaction between the terrorist attacks and the prospect of British exit…. Third… the output of several eurozone countries has yet to return to pre-crisis levels. Security… was among the areas most affected by austerity…. The widening income gap between rich and poor — and north and south….

Fourth… a generalised loss of trust and political capital…. Populist parties on the left and the right are exploiting the union’s failures…. The combination of these four channels frustrates perfectly good ideas for further projects aimed at European integration–those that would benefit everybody, such as central agencies to co-ordinate the fight against terrorism and to deal with the influx of refugees. If the EU had not messed up the previous crises, people would look at a European immigration policy or an antiterrorism task force with a more open mind. But would you trust with your own security somebody who cannot even contain a medium-sized financial crisis?…

Economic history has shown… that efforts to muddle through financial crises never work…. For the EU it was a catastrophic policy error… an economic depression… destroyed public confidence in the EU and in the very idea of European integration.

Must-read: Martin Wolf: “China’s Struggle for a New Normal”

Must-Read: Martin Wolf: China’s Struggle for a New Normal: “Beijing must be decisive and yet responsive to the needs of the people…

…At present, it seems strangely indecisive on the economy and yet increasingly authoritarian on the politics. Only a fool would consider political instability anything but a disaster for China and the world. Equally, the desire of President Xi Jinping to attack corruption and so strengthen the legitimacy of the Communist party is understandable…. [But] its political institutions must surely move beyond the ‘democratic centralism’ invented by Vladimir Lenin a century ago. The challenges are daunting. It is only the successes of the recent past that provide confidence in those of the future.

Must-read: Josh Barro: “Rubio Tax Cut Got Bigger and Bigger”

Must-Read: Josh Barro: Rubio Tax Cut Got Bigger and Bigger: “If you want an insight into what Senator Marco Rubio’s instincts on policy are…

…just look at what happened when he got his hands on another senator’s tax cut plan: It became about three times larger, and way more tilted toward the rich. Mr. Rubio’s recently announced tax plan is a descendant of the ‘Family Fairness and Opportunity Tax Reform Act,’ introduced in 2013 by Mr. Rubio’s fellow Senate Republican, Mike Lee…. The Lee plan went for a sizable tax cut: $2.4 trillion over 10 years, or about 6 percent of then-projected federal revenues…. The top 1 percent of taxpayers would have gotten a 2.8 percent increase to their after-tax income…. (The top 0.1 percent did better, with a 3.8 percent increase to income.)…

As Mr. Rubio got involved, the price started to soar. The plan was rebranded as the Economic Growth and Family Fairness Tax Plan, and as usual, ‘economic growth’ was code for large tax cuts for owners of capital…. Rich people with capital income weren’t the only big winners under the Rubio-Lee plan; there was also a large new benefit for people with low incomes. The original Lee plan had included a $2,000-per-person tax credit replacing the standard deduction, but you could take the credit only against income tax you actually owed. The Rubio-Lee plan generously revised this credit to be ‘refundable,’ meaning it could lead to a negative income tax bill for people with low incomes. But there’s a catch: It’s not clear the senators had decided exactly how refundable the tax credit would be….

Rubio apparently was not yet done with his Oprah act. In October, now running for president, Mr. Rubio announced his own stand-alone version…. Mr. Rubio’s current plan would cost $6.8 trillion over the 10-year budget window. That is, 16 percent of currently projected federal tax revenues over that period, and nearly three times the size of Mr. Lee’s plan from less than three years ago…. Rubio’s biggest tax cuts, by far, are at the top. His new plan would raise incomes for the top one-thousandth of taxpayers by 8.9 percent — that is, an average tax cut of more than $900,000 per year — because of its sharp cuts in tax rates on business income and capital income. Of course, all that assumes Mr. Rubio could find a way to finance a 16 percent overall cut in federal taxes…

Mid-February musings on the economics, sociology, and psychology of Obamacare implementation

ObamaCare: How Is It Doing?

There have been three very surprising things with respect to Obamacare implementation so far.

The first is the surge in enrollment in employer-sponsored insurance. The fear was that people and employers would find the coverage offered on the exchanges irresistible, and that there would be a great deal of disruptive churn as the exchanges started up. The penalty for large employers who did not offer health insurance was constructed to guard against this. Yet it seems to have been needless. The appearance of the exchange option appears to have led to more rather than fewer employers offering insurance.

Kevin Drum February 2016 Mother Jones

This is a problem for economists: alternatives are supposed to be at most irrelevant, and certainly their appearance is not supposed to lead to more people voting with their feet for something that was always there. This is a victory for psychologists and sociologists, who if they did not predict this consequence are at least unsurprised by it. The implementation of Obama care thanks health insurance more salient in workers’ minds, and so more highly valued. This shift in valuation induces more employers to offer it as they try to find their compensation sweet spot.

The second surprising thing is the failure of national health expenditures to rise as ObamaCare has been implemented more rapidly than was projected in the baseline. There was, everyone agreed, a great deal of pent-up demand for medical care from people who had been unable to get affordable insurance. When this wave hit, everybody expected, spending would surge–especially as, while ObamaCare did a great deal to expand demand for medical services, it did little to expand supply. The initial surge would, people thought, eventually ebb. But the ebb would leave national health spending on a higher trajectory: people who had not had access to affordable medical care would have it, and they would use it.

The hope of ObamaCare’s advocates was that a system with near-universal coverage would be a more rational and more cost-conscious system. Rather than treating patients and then scrambling for someone with deep pockets who could be made to pay not only their own but others’ bills, a rational calculus of treatment costs and benefits would become at least possible. And, down the road, this plus increased competition would bend the cost curve—and, if not, then whatever additional regulatory steps would turn out to be necessary would be taken.

But the cost curve bent itself.

The cost curve bent itself before Obamacare implementation even began.

And the bending of the cost curve continues. Some attributes the bending to the lesser depression and to a consequently poor society.

As a full explanation, this seems highly strained. Once again, it looks like a victory for the psychologists and the sociologists. The public debate around ObamaCare raised the salience of cost control, of avoiding overtreatment, and of being good stewards of what might be increasingly limited medical care resources in a context in which more people were able to draw on those resources.

All in all: a substantial surprise for us economists. Perhaps we should be cast down from our high seats in the Ttmple of policy analysis?

And there is, of course, the third surprising thing about ObamaCare implementation.

The unreliable rumor on the street is that when Chief Justice Roberts decided to rewrite the Affordable Care Act from the bench—lawlessly, in a technical sense: in a manner with no support in president, law, or the Constitution—Roberts and his clerks thought that they were throwing Americas right wing a bone, but a nothingburger bone. The money to finance Medicaid expansion was more than free to the states: everybody who could do the arithmetic knew that as the federal government paid for the Medicaid expansion, other ancillary draws on state treasuries would decline, leaving states in a better fiscal position. One-third of the Medicaid expansion money would provide more employment in healthcare, as people without affordable access to medical care gained it. One-third would beef up the shaky finances of those healthcare providers who do treat Americas poor. And one-third would flow into the medical industrial complex which would no longer be informally taxed to pay for services that the federal government was now willing to pay for.

How could you turn this down?

Unless, that is, you are a psychopath or a madman for whom treating the poor and paying those who do treat the poor is a minus, Medicaid expansion was and is a no-brainer.

And even if you are a madman and a psychopath, you are also a politician. You draw heavily upon the medical-industrial complex for your campaign contributions. Would you seek to anger the MIC over real money, for nothing except a symbolic declaration that all of the works of the hated Kenyan-Muslim-socialist were rotten? Particularly since those works had originally been the core social policy platform of your own 2012 presidential nominee?

The answer is: yes.

Mad men, and psychopaths, and totally unfazed by the idea of inciting the ire of the MIC. Ohio Governor John Kasich said, apropos of his acceptance of Medicaid expansion money:

You know how many people were yelling at me? I go to events where people are yelling at me. You know what I tell them? I mean, God bless them, I’m telling them a little bit better than this. But I said, there’s a book. It’s got a new part and an old part. They put it together. It’s a remarkable book. If you don’t have one, I’ll buy you one. And it talks about how we treat the poor…

And the response, from then Louisiana Governor Bobby Jindal and current South Carolina Governor Nikki Haley, was this:

At a closed-door donor forum in Palm Springs hosted by the Koch brothers, Kasich was attacked by two fellow Republican governors, Nikki Haley and Bobby Jindal, for, in the words of a source who attended the event, “hiding behind Jesus to expand Medicaid.” The source added, “It got heated”…

So: contrary to what sources who may or may not be reliable concerning Chief Justice John Roberts’s assumptions about the ability of some of his party colleagues to do the math, not a nothingburger bone of a concession at all…

Once again: we economists are in trouble. Politicians turning down free money? Politicians alienating powerful lobbying groups that are in large part inside their coalition for no gain?

Now in the long run it may all work out for the economists. How long will the wave of cost control enthusiasm last? How long will the provision of health insurance remain salient and thus a cheap way for more employers to please their workers? How long will the Brownbacks and their flacks continue to claim, largely falsely, that Medicaid expansion props up inner city hospitals that ought to close because they treat Black people? How long will those who elect and reelect the Brownbacks continue to buy this, as rural hospitals that treat white people continue to call out for the life preserver that the Brownbacks? continue to refuse to throw?

But in all three of these cases the long run is certainly taking its own sweet time in arriving…

Must-Read: Richard Mayhew: The Hope of Health Care Cost Stabilization: “We knew that there was going to be a massive amount of catch-up [health] care…

…as people who either were uncovered, sporadically covered or had no usable insurance because the cost sharing was atrocious got coverage through either Medicaid expansion or the Exchanges. The big question was always how much catch up care was happening and if/when would it subside as crisis care converted into maitenance care. There is starting to be some evidence that the catch up care wave is subsiding…. This uncertainty about catch-up care was why there were the three R’s of risk adjustment, risk corridors and re-insurance. No one knew how many expensive surprises were out there.

Why don’t we have a better press corps yet?

I am beginning to think that the highly-estimable Kevin Drum needs his meds adjusted–not those affecting the rest of his body, those seem to going better than I had expected, but rather those affecting his neurotransmitter levels. For he fears to be descending into shrill unholy madness…

I feel his pain. I, too, had hoped that the coming of independent webloggers giving an unmediated public-sphere voice to those with substantive policy knowledge, plus the arrival of the Matt Yglesiases, Ezra Kleins, Nate Silvers, and so on who were interested in making the world a better place through policy-oriented explainer and data journalism would shame the press corps into behaving better.

But no: it’s still, overwhelmingly, horse-race coverage, and bad horse-race coverage, by those who have not even learned how to assess horseflesh, jockey skill, and the track:

Kevin Drum: Republican Tax Plans Will Be Great for the Ri—zzzzz: “Our good friends at the Tax Policy Center…

…have now analyzed—if that’s the right word—the tax plans of Donald Trump, Jeb Bush, and Marco Rubio. You can get all the details at their site, but if you just want the bottom line, you’ve come to the right place…. Unsurprisingly, they’re all about the same: middle income taxpayers would see their take-home pay go up 3 or 4 percent, while the rich would see it go up a whopping 10-17 percent. On the deficit side of things, everyone’s a budget buster. Rubio and Bush would pile up the red ink by $7 trillion or so (over ten years) while Trump would clock in at about $9 trillion. That compares to a current national debt of $14 trillion.

No one will care, of course, and no one will even bother questioning any of them about this. After all, we already know they’ll just declare that their tax cuts will supercharge the economy and pay for themselves. They can say it in their sleep. Then Trump will say something stupid, or Rubio will break his tooth on a Twix bar, and we’ll move on.

Must-read: Mark Thoma: “Why the Working Class Is Choosing Trump and Sanders”

Must-Read: Mark Thoma: Why the Working Class Is Choosing Trump and Sanders: “the Center for Budget and Policy Priorities…

…in response to Mitt Romney’s claim during his presidential campaign that many recipients of government help are undeserving found that 91 cents of every dollar spent on entitlement programs goes to ‘the elderly (people 65 and over), the seriously disabled, and members of working households… and [7 of the remaining 9 to] medical care, unemployment insurance benefits (which individuals must have a significant work history to receive), Social Security survivor benefits for the children and spouses of deceased workers, and Social Security benefits for retirees between ages 62 and 64.’… Middle-class households are 60 percent of the US population…. Redistribution… is from the top 20 percent of households to the bottom 20 percent. Too many people have been misled into believing that their problems are the result of a non-existent ‘moocher class.’ Those at the top, those who have benefitted the most from our economic system, have pushed this myth in a successful attempt to reduce their tax burden….

The working class is not asking for income to trickle down to them, and they have been misled about the amount that trickles away from them. All they want is a fair share of what they’ve earned and the opportunity to improve their lives if they work hard and play by the rules. They want the security of knowing they aren’t a pink slip away from living on the streets, that they can find another job easily if they are laid off and, if not, help will be there for them. Working class households want to know that their kids can go to a decent college without being saddled with burdensome debt and that quality=affordable health care is available if they need it. They want to look forward to a better economic future instead of the same struggles they’ve had for years and years, and they want to have confidence that their children will do better than they did. They don’t feel like they are getting any of this…. The two sets of voters–those for Sanders and those for Trump–see different causes and different solutions to the struggles they face, but the goal in both cases is the same… an economy that works for them and a political system that responds to their needs…