Things to Read on the Afternoon of February 16, 2015

Must- and Shall-Reads:

• Greg Ip: Benefit of ECB’s Bond Buying: Fiscal Breathing Room | When Is It Time for Mindful Austerity?
• Kaiser Health News: Majority of Public Says Congress Should Act to Close Gaps if the Supreme Court Bars Financial Help for Purchasing Insurance in States Relying on healthcare.gov; Most in Potentially Affected States Want Their State To Set Up Its Own Marketplace if Needed
• Kevin Drum: “What better way [for Sam Brownback] to distract the rubes than to engage in a bit of gay bashing? That’ll get everyone riled up, and maybe they won’t even notice just how much worse off they are than they used to be. It’s a time-honored strategy.”
• Nicholas Bagley: “If it weren’t for the problems with the standing of the other three plaintiffs [in the King vs. Burwell case], I might be inclined to give Luck the benefit of the doubt. But I’m beginning to wonder how thoroughly the King lawyers vetted their clients…”
• Scott Lemieux: Well, that’s funny, because I happen to have Congressman Doggett right here, so….
• Yichuan Wang: “Financial stability is apparently the new hot reason to tighten monetary policy, and in this article for Quartz I go in on some reasons for why this is a horrible idea…”

1. William K. Black: Foreshadowing the Three Fraud Epidemics that Drove the Crisis: “[Piskkorski, Seru, and Witkin] were not aware, however, of the answers to these fundamental questions [about mortgage fraud]…. ‘These misrepresentations are not instances of the classic asymmetric information problem in which the buyers know less than the seller. Rather, we contend that they are instances where, in the process of contractual disclosure by the sellers, buyers received false information on the characteristics of assets.’ The use of the word ‘classic’ indicates an important (retrograde) movement in economics. The ‘classic’ treatment of asymmetry… George Akerlof’s 1970 article on a market for ‘lemons’… all about ‘buyers receiv[ing] false information on the characteristics of assets’ in the process of ‘contractual disclosure by the sellers.’ Akerlof presented a dynamic process in which the seller makes false disclosures… to maximize the asymmetry of information…. Indeed, Akerlof emphasized the propagation of that fraudulent asymmetry through the industry as a result of what he dubbed a ‘Gresham’s’ dynamic. ‘[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence‘ (Akerlof 1970). The fact that top economists, 40 years later, claimed that fraud does not represent a ‘classic’ pathology of asymmetrical information demonstrates how far economics has fallen…”

2. Richard Mayhew: Thoughts on a post-King market: “I alternate between being sure that there are five votes on the Supreme Court to throw out a couple of generations of agreed-upon administrative law precedents in order to keep people from getting subsidized health insurance in most states, and being reasonably confident that there are only three…. I see the four liberal judges writing a fairly brief and caustic opinion…. The other two judges in the positive scenario will write a paen to the majesty of cooperative federalism where the law clearly states that subsidies only go to state run exchanges BUT the threat was not clearly communicated therefore, the subsidies have to flow to all states…. But what happens if the Supremes have five sadists?… Quite a few insurers would pull most if not all of their On-Exchange products…. The remaining individual insurance market now looks like the pre-PPACA New York State insurance market…. We get a death spiral where average premiums for a 30 year old would almost double… [and] reasonably-healthy people who otherwise would have qualified for subsidies now sit out of the market because they can’t afford the coverage…”

3. Matthew Yglesias: Why Politicians Are so Boring (and the MSM Is so Bad): “Gaffe-coverage… signif[ies] nothing and leav[es] nothing behind… distracts from more consequential, but complicated, debates…. In an internet world of limited time but unlimited newshole the ‘gaffe’ story offers easy content…. Last… the old-time division between ‘news’ and ‘opinion’ continues to saddle much mainstream political coverage with a perverse bias toward tactics and process… that a politician gaffed is a fact… while the fact that a politician’s agenda might be bad for the world is opinion…”

4. Paul Krugman: Triumph of the Chart: “The Vox interview with President Obama… reactions… not just from the right, but from centrists are remarkable. Jack Shafer compares it to a Scientology recruitment film; Rich Lowry compares it to Leni Riefenstahl…. What seems to offend the critics is the very idea of covering a politician’s policies…. Back in 2004… you could watch all the network and major cable coverage for two months, and learn literally nothing about, say, the candidates’ health care plans…. That’s the kind of thing the people at Vox are trying to fix–and the response is to accuse them of acting like cultists if not Nazis.”

Should Be Aware of:

• David McRaney: “The misremembering [Brian] Williams claims to have suffered is easy to reproduce in our own lives…”
• Lady FOHF: “The feedback… on management fees… grumble[d]… on incentive fees… vociferous and frequently inseparable from complaints about performance… broadly summarised as follows: paying 20% for ‘alpha’ is apparently fine, paying that for ‘beta’ is definitely not…”
• The Journal of Brief Ideas: “This is the Journal of Brief Ideas–citable ideas in fewer than 200 words”
• WSJ Staff: Greg Ip Returns to Wall Street Journal as Chief Economics Commentator
• Jeet Heer: “[David Carr’s] Colombo strategy… start casual, drop hints & then as the suspect (or reader) relaxes, push the inescapable conclusion…. If I was teaching a J-school class, I’d have students think about those last paragraphs Carr built towards, why they came as surprises. Of course, the type of writing Carr did depended on trust…”
• Ben Thompson: “[Ezra] Klein… has 732k Twitter followers and a history of success…. Blogs are not dead, but Klein’s is, and while I don’t begrudge him his choice, I question the degree to which he knows he made one…”
• Ben Thompson: “The entire history of social media… is a story of unbundling…. Twitter has replaced link-posts and comments, Instagram… pictures… Facebook… albums and blogrolls… [in] contrast to a blog’s ability to do anything and everything relatively poorly…. [But] the blog has not and will not die: it is the only communications tool… owned by the author; to say someone follows a blog is to say someone follows a person…”
• Daniel J. Benjamin et al.: “Most existing efforts to find associations between genetic variation and economic behavior are based on samples that are too small to ensure adequate statistical power. This has led to many false positives in the literature…”