Things to Read on the Morning of February 10, 2015

Must- and Shall-Reads:

• Chico Harlan and Jim Tankersley: “‘When Hillary Clinton runs, she’s going to say, “The Republicans gave us a crappy economy twice, and we fixed it twice. Why would you ever trust them again?”‘ said Kevin Hassett… former economic adviser to… John McCain… and…Mitt Romney…”
• Miles Kimball: “Certificates that… attest to… ability to write computer code, write a decent essay, use a spreadsheet, or give a persuasive speech are going to be worth more and more. And any training program that takes the need to maintain its own credibility seriously can help students gain those skills and certify them…”
• Paul Krugman: “European debtors did… need to tighten…. [But] Germany and other core economies which needed to spend more… also tried to spend less. The result was… an environment in which reducing debt ratios was impossible…”
• Henry Aaron: “In place of the Obamacare requirement that people carry health insurance… Burr-Hatch-Upton plan would impose penalties lasting indefinitely on families that,… go without insurance, even if insurance is unaffordable.  And it is likely to be unaffordable…”
• Roger Farmer: Neo-Paleo-Keynesianism: A Suggested Definition

1. Michael Hiltzik: When a State Blocks Obamacare, ERs Close: The Lesson of Louisiana: “Baton Rouge… is about to lose one of its crucial hospital emergency rooms…. Gov. Bobby Jindal has refused to expand Medicaid under the Affordable Care Act, and won’t put up any other money to keep the facility open. Because of the scheduled closure of the ER of Baton Rouge General Medical Center-Mid City, patients needing emergency treatment will have to travel as much as 30 minutes longer…. Jindal has tried to position himself as the last stalwart Republican opponent of the ACA, but his state’s experience shows that his position is folly…. In the expectation that Medicaid would pick up the slack, the ACA reduced so-called disproportionate share hospital payments, which went to hospitals serving a large number of the uninsured. So institutions in states that have refused to expand Medicaid, like Louisiana, have faced a double-whammy–they still have to serve a large number of uninsured patients, but they have less money to do so. The ACA has reduced uncompensated care costs… by $5.7 billion in fiscal 2014 compared with what they would have been otherwise…”

2. Barry Eichengreen:: Cassandras and Currency Wars: “Economic analysis, it seems, is the art of recycling old ideas under new names. So it is with the debate over currency wars, which parallels exactly the 1930s debate over competitive currency devaluation. David Woo, meet Ragnar Nurkse. Nurkse, in… 1944… [argued that] competitive devaluation was a negative-sum game. These are exactly the arguments made by today’s Cassandras of currency wars…. Subsequent scholarship shows, however, that the main reason monetary policy didn’t work more powerfully in the 1930s was that it wasn’t tried…. Central banks in the 1930s were reluctant to utilise their newfound monetary freedom… failed to make open-ended commitments to raise prices… effectively transform expectations… supplement the new monetary regime with supportive fiscal action… failed to convince investors that they were committed to a fundamentally new policy regime…. And because they failed to coordinate their monetary and exchange rate policies internationally, haphazard exchange rate changes only created volatility and uncertainty, as argued here. Today, in contrast, central banks like the Bank of Japan and European Central Bank are making open-ended commitments to do what it takes…. Without that action and those steps, however, the Cassandras of currency wars will be right.”

3. Tim Duy: On The Fed Credibility Gap: “David Wessel opines…. ‘The markets think Fed officials and staff economists are overly optimistic about the U.S. economy, as they have been in the past….’ I will suggest another framework: Financial markets are pricing in a ‘secular stagnation’ scenario that is at odds with Federal Reserve thinking…. Suppose that the short term equilibrium real rate has fallen to zero…. Change the estimate of NAIRU from 5.6% to 5%… close to pre-recession Fed estimates. The results… [are] fairly close to market expectations…. It thus appears reasonable to argue that financial market participants are pricing in a secular stagnation story combined with a pre-recession level of NAIRU. In contrast, the Fed is not seriously contemplating such a story…. The biggest risk to the expansion is a dogmatic view… on the part of the Federal Reserve…. Financial market participants are saying the Fed has less room to maneuver than monetary policymakers believe. The Fed, I fear, is not taking sufficient heed of those signals. Would it be outrageous to think that the Federal Reserve could find itself backtracking after just 200bp of rate hikes? Not if Sweden serves as any example…. The Fed… risk[s] tightening too aggressively and turning an expansion that should last at least four more years into one with only two left.”

Should Be Aware of:

• Liz Gannes: Ten Years of Google Maps, From Slashdot to Ground Truth
• Nathaniel Stein: “I was keenly aware of my Jewishness when I enrolled at Hogwarts in… 1949…. Many of the more overtly anti-Semitic trappings were by that time long gone–the pork-levitation requirement dropped…”:

1. Paul Krugman: Greece: The Tie That Doesn’t Bind: “I’ve long believed that Matthew Yglesias hit on something… when he noted that small-country politicians… have personal incentives to go along with troika demands…. ‘Normally you would think that a national prime minister’s best option is to try to do the stuff that’s likely to get him re-elected…. But in the era of globalization and EU-ification… if you leave office held in high esteem by the Davos set, there are any number of European Commission or IMF or whatnot gigs that you might be eligible for even if you’re absolutely despised by your fellow countrymen…. The ultimate demonstration of solidarity to the ‘international community’ would be to do what the international community wants even in the face of massive resistance from your domestic political constituency.’ But a genuine government of the left… is very different–not because its policy ideas are wild and crazy, which they aren’t, but because its officials are never going to be held in high esteem by the Davos set. Alexis Tsipras is not going to be on bank boards of directors, president of the BIS, or, probably, an EU commissioner. Varoufakis doesn’t even like wearing ties…. There will be no consolation prizes for failing conventionally. Do Berlin and Brussels understand this? If not, they are operating under a dangerous misconception.”

2. Andrew Kaczynski: New Jeb Bush Chief Technology Officer Deleting Old Tweets About “Sluts”: “Ethan Czahor’s tweets began disappearing today after news broke that he had been hired by Jeb Bush…. After the story of his hiring broke, tweets on his Twitter account started disappearing. The Twitter account is linked from his personal website. The count this morning was 177 tweets…. The latest tweet count is 132. Several of the deleted tweets refer to women as ‘sluts’…. Right to Rise did not return request for comment on the deleted tweets.”

3. The Onion: Health Experts Recommend Standing Up At Desk, Leaving Office, Never Coming Back: “Experts at the Mayo Clinic issued a new set of health guidelines Thursday recommending that Americans stand up at their desk, leave their office, and never return. ‘Many Americans spend a minimum of eight hours per day sitting in an office, but we observed significant physical and mental health benefits in subjects after just one instance of standing up, walking out the door, and never coming back to their place of work again,’ said researcher Claudine Sparks, who explained that those who implemented the practice in their lives reported an improvement in mood and reduced stress that lasted for the remainder of the day, and which appeared to persist even into subsequent weeks…”