Things to Read at Lunchtime on March 10, 2015
Must- and Shall-Reads:
- : “Whether significant changes [to the Federal Reserve] are warranted should depend on whether the central bank’s interventions… aggravated the recent crisis, as they aggravated… the 1930s. But the Fed’s critics have been curiously nonspecific about what they regard as the Fed’s mistakes. And where they have been specific, as with the accusation that the Fed was fomenting inflation, they have been entirely wrong…”
- : “In a Washington Post column on the Trans-Pacific Partnership (TPP), Larry Summers raises the right cautions… a trade deal should have rules that prevent countries from… deliberately lowering the value of their currency… not be about special privileges for corporations… not jeopardize public health by raising drug prices. Nonetheless it looks like Summers is likely still going to come down for the TPP… rationale… making East Asian markets more open to the United States. This is hard to see…”
- : “A ruling for the plaintiffs would be bad news… lead to the collapse of the exchanges in [red] states, as more healthy people stop buying insurance…. [But] many of the one percenters in the health-care industry are card carrying Republicans who regularly buy tickets to top of the line fundraisers. These folks will not be happy about Republican state officials needlessly reducing the size of their trough… a powerful fifth column leaning on their representatives in the legislatures to create exchanges…”
- : Welfare Reform: A Plea for Better Journalism
- : Herd Behavior in Financial Markets
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: Power from the People: “While causality is difficult to establish, the decline in unionization appears to be a key contributor to the rise of top income shares. This finding holds even after accounting for shifts in political power, changes in social norms regarding inequality, sectoral employment shifts (such as deindustrialization and the growing role of the financial sector), and increases in education levels. The relationship between union density and the Gini of gross income is also negative but somewhat weaker. This could be because the Gini underestimates increases in inequality at the top of the income distribution. We also find that deunionization is associated with less redistribution of income and that reductions in minimum wages increase overall inequality considerably…” -
: The Rise of Residential Segregation: “The sweeping rise in both urban and rural segregation across communities in every region implies a significant drop in social interactions between black and white residents. Consider a city like Chicago… 1880 to… 1940…. Black residents rose from 1.2% to 7.7% of the… population. Unsurprisingly… 1% of white households had a black neighbour in 1880…. The percentage of white households with a black neighbour declined to only 0.4% in 1940…. The percentage of black residents with a white neighbour declined from 66% to only 5% over this period. This dramatic decline in opposite-race neighbours could have profound impacts on the evolution of racial biases and ultimately become self-reinforcing…. Changing racial attitudes requires interactions between the races. In this respect, the sweeping rise of residential segregation patterns over the 20th century may very well have created an environment that has allowed racial prejudices to harden and lead to the stubbornly persistent racial inequalities we see today.” -
: How the White House Learned to Be Liberal: “Dan Pfeiffer… has been involved from the outset in navigating the central contradiction at the heart of Obama’s public persona: He ran as a figure who could overcome partisan polarization, yet he has instead presided over more of it despite accomplishing the majority of the substantive agenda he promised. Obama and his spokespeople have spent most of their administration quietly at war with the conventional wisdom in Washington over the cause of this failure…. Structural forces… rising polarization… the disintegration of restrictions on campaign finance… the news media… people select only sources that will confirm their preexisting beliefs. All of this combined makes communication with Republicans mostly hopeless…. Demographic change will eventually force Republicans to compete with Democrats for some of the same voters, reopening a national political conversation…. The original premise of Obama’s first presidential campaign was that he could reason with Republicans…. It took years for the White House to conclude that this was false, and that, in Pfeiffer’s words, ‘what drives 90 percent of stuff is not the small tactical decisions or the personal relationships but the big, macro political incentives.’ If you had to pinpoint the moment this worldview began to crystallize, it would probably be around the first debt-ceiling showdown, in 2011…. Ever since Republicans took control of the House four years ago, [Obama’s] attempts to court Republicans have mostly failed while simultaneously dividing Democratic voters. Obama’s most politically successful maneuvers, by contrast, have all been unilateral and liberal…. ‘There’s never been a time when we’ve taken progressive action and regretted it.’ This was deeply at odds with the lesson Bill Clinton and most of his aides (many of whom staffed Obama’s administration) had taken away from his presidency. But by the beginning of Obama’s second term, at least, the president seemed fully convinced…”
Should Be Aware of: