Things to Read on the Evening of December 30, 2013

Must-Reads:

1. Lena H. Sun and Amy Goldstein: Beneath health law’s botched rollout is basic benefit for millions of uninsured Americans: “Adam Peterson’s life is about to change. For the first time in years, he is planning to do things he could not have imagined. He intends to have surgery to remove his gallbladder, an operation he needs to avoid another trip to the emergency room…. These plans are possible, says Peterson, who turned 50 this year and co-manages a financial services firm in Champaign, Ill., because of a piece of plastic the size of a credit card that arrived in the mail the other day: a health insurance card…. Peterson is among the millions of uninsured Americans who are benefiting from the Affordable Care Act…. ‘I get these messages from acquaintances on Facebook saying, “Let me keep my doctor”‘, Peterson said. ‘Well, what about those of us who didn’t have health insurance before?… I have been walking a tightrope and have had some twists and falls off of it. To not have to worry about this anymore is a tremendous relief’.”

2. Jamelle Bouie: A Minimum Wage Increase is Great, but Full Employment Would be Better: “If we want to make a serious dent in income inequality, then the first step is a genuine push for full employment…. I’m skeptical that there’s any electoral utility to pushing for a higher minimum wage—the single biggest influence on voters is the short-term economy—but there’s no question that this is worth doing. At $7.25, the current minimum wage is at a relative low when you adjust for inflation. The congressional proposal, which would bring the wage to just over $10, is a modest boost that increases the value of the minimum wage to where it was in the 1960s and 70s. As for the GOP argument that this will harm small businesses? If Democrats were pushing for a larger increase—to $15 or $20 an hour—Republicans might have a case…. But it’s worth emphasizing the extent to which raising the minimum wage is a Band-Aid for wage stagnation and income inequality, to say nothing of the entrenched racial inequality that requires its own set of solutions…. If 2013 was the year that President Obama made the minimum wage a priority, then 2014 should finally be the year where he calls on Congress and the Federal Reserve to tackle mass unemployment and provide jobs for every American who wants to work. Since, overall, full employment is more than an important step towards reducing inequality—it’s a necessary one.”

3. Gavyn Davies: The separation principle drives the Fed towards tapering: “A new ‘separation principle’ seems to be emerging, and it explains why the FOMC seems eager to begin winding down its asset purchases in the near future, while relying even more heavily than before on ‘lower for longer’ guidance on forward short rates. This could have important ramifications for markets…. The separation principle was spelled out more clearly than ever before in Ben Bernanke’s speech on communications policy…. Bernanke’s core point is that the Fed’s reading of monetary conditions now distinguishes sharply between two distinct factors, which are the expected forward path for short rates, and the term premium built into long term bond yields. Asset purchases by the central bank are intended to affect the second of these factors, the term premium, but are not intended to give any signal to the markets about the Fed’s willingness to keep short rates at zero for a prolonged period ahead…”

Should-Reads:

1. Felix Salmon: The non-scandal of Scott Irwin and Craig Pirrong: “Ostensibly Respectable Academic Is In Fact A Hack: it’s a hardy perennial, and an enjoyable one…. But here’s the thing: for this kind of article to carry any weight, it has to demonstrate the mendacity or venality of the academics in question…. Which is why David Kocieniewski’s article about Craig Pirrong and Scott Irwin this weekend is such a disappointment…. Kocieniewski has missed the mark. Neither Pirrong or Irwin is mendacious or venal, and indeed it’s the NYT which seems to be stretching the facts well past their natural breaking point…”

And:

• Bart Taub (1985): Private Fiat Money with Many Suppliers

Should Be Aware of:

1. Josh Barro: Here’s Why I Don’t Sweat The Haters: “I’ve gotten a number of messages in the last few days — from both supporters and opponents of gay rights — expressing sympathy over the rude and hateful messages I’ve been getting (and publishing) ever since I started writing about Phil Robertson. This is sweet, but misplaced. The worst of my problems from being openly gay is that I get some nasty email. That means I have it really easy. In a country where gay teenagers are being bullied at school and thrown out of their homes by their parents and told by their clergy that they’re going to Hell, we should not count my inbox as a hardship. Rather than hurting me, these emails are a reminder that I have not just an opportunity but an obligation to be out of the closet — an obligation of which other people in my position should be mindful.

   “Being openly gay has always been pretty easy for me. I came out in high school in an affluent suburb of Boston, where attitudes toward gays were fairly positive and upscale New England standards of decorum stopped people from expressing negative ones to my face. Then I went to Harvard, where being gay is practically encouraged. As far as I can tell, being open about my sexuality has never caused me any professional hardship…. I have friends and family who love and support me for who I am…. In that context, why should I react with anything other than derision when somebody tells me God created Adam and Eve, not Adam and Steve? (Seriously, some loser actually used that line in an email today.) What can that guy actually do to me? Nothing. I hold all the power here….

   “The only reason these emailers make me angry is that I think about how their insults affect other people. I’m too arrogant for self-loathing, but that’s not true of everyone. A lot of gay people still live in communities where these hateful attitudes are dominant. A lot of gay children and teenagers are at the mercy of parents, teachers and clergy who hold bigoted views. Being open and unashamed about being gay is just one small thing I can do to change the culture and make life easier for people who haven’t had my luck. And that’s why I’m mystified by prominent gay people in business and media and Hollywood who choose to be in the closet. They have the ability to help lots of people who don’t have their advantages, and they’re selfishly passing on it under the guise of ‘privacy’. Often, they do this while living quite gaily in places like New York and Los Angeles and reaping the benefits of social acceptance in their non-professional lives.

   “Imagine, for example, that you were a prominent daytime news anchor on a national cable news channel aimed at a conservative audience, and you were gay. You would have the potential, by coming out of the closet, to change millions’ of viewers perspective on gay people for the better. You’d make it easier for your closeted gay viewers to love themselves, and easier for your viewers’ gay children to come out. Or you could live a fabulous gay life with your boyfriend in New York City while staying closeted to the national audience. Wouldn’t that be a pretty decadent choice?”

2. Paul Krugman: Fiscal Fever Breaks: “In 2012 President Obama, ever hopeful that reason would prevail, predicted that his re-election would finally break the G.O.P.’s ‘fever’. It didn’t. But the intransigence of the right wasn’t the only disease troubling America’s body politic in 2012. We were also suffering from fiscal fever: the insistence by virtually the entire political and media establishment that budget deficits were our most important and urgent economic problem, even though the federal government could borrow at incredibly low interest rates. Instead of talking about mass unemployment and soaring inequality, Washington was almost exclusively focused on the alleged need to slash spending (which would worsen the jobs crisis) and hack away at the social safety net (which would worsen inequality). So the good news is that this fever, unlike the fever of the Tea Party, has finally broken.

   “True, the fiscal scolds are still out there, and still getting worshipful treatment from some news organizations. As the Columbia Journalism Review recently noted, many reporters retain the habit of ‘treating deficit-cutting as a non-ideological objective while portraying other points of view as partisan or political’. But the scolds are no longer able to define the bounds of respectable opinion. For example, when the usual suspects recently piled on Senator Elizabeth Warren over her call for an expansion of Social Security, they clearly ended up enhancing her stature. What changed? I’d suggest that at least four things happened….

   “First, the political premise behind ‘centrism’ — that moderate Republicans would be willing to meet Democrats halfway in a Grand Bargain combining tax hikes and spending cuts — became untenable. There are no moderate Republicans…. Second, a combination of rising tax receipts and falling spending has caused federal borrowing to plunge. This is actually a bad thing, because premature deficit-cutting damages our still-weak economy — in fact, we’d probably be close to full employment now but for the unprecedented fiscal austerity of the past three years. But a falling deficit has undermined the scare tactics so central to the ‘centrist’ cause. Even longer-term projections of federal debt no longer look at all alarming…. 2013 was the year journalists and the public finally grew weary of the boys who cried wolf…. Finally, over the course of 2013 the intellectual case for debt panic collapsed…. Now, it’s not as if fiscal scolds really arrived at their position based on statistical evidence. As the old saying goes, they used Reinhart-Rogoff the way a drunk uses a lamppost — for support, not illumination. Still, they suddenly lost that support, and with it the ability to pretend that economic necessity justified their ideological agenda.

   “Still, does any of this matter? You could argue that it doesn’t — that fiscal scolds may have lost control of the conversation, but that we’re still doing terrible things like cutting off benefits to the long-term unemployed. But while policy remains terrible, we’re finally starting to talk about real issues like inequality, not a fake fiscal crisis. And that has to be a move in the right direction.”

And:

• Montaigne: Essays
• Toby Ng: The World of 100

Hal Varian (2004): Why Is That Dollar Bill in Your Pocket Worth Anything? | Tim Duy: On Challenging the Fed | Nick Rowe: Worthwhile Canadian Initiative: BackedCoin vs UnbackedCoin | Tyler Cowen: How and why Bitcoin will plummet in price | Tyler Cowen: On the future of Dogecoin, BitCoin, and other cryptocurrencies of the non-realm | Jorge G. Castañeda: Mexico’s Second Revolution |