Things to Read on the Morning of May 25, 2014


  1. Julie Rovner: The Politics Of Health In 2014 Aren’t What You Think: “Last year, the GOP playbook for keeping the U.S. House in 2014 and winning the Senate consisted of a fairly simple strategy: Run against Obamacare. But now… that strategy is looking not so simple…. Republicans face two key problems using the law as a political cudgel, analysts say. One is that with millions of people now signed up for coverage, making the law go away would result in taking away something tangible for a large and growing group of voters. ‘So in short order it’s going to be about what you lose as a consequence’, Jennings says. The second problem is with the back half of what Republicans have continually branded as a ‘repeal and replace’ strategy, says Clancy. ‘In my 20 years of following health care policy, (Republicans) have never been able to coalesce around en electorally inspiring alternative on health care…. [Republicans are] fundamentally divided between pro-market and pro-business factions’ when it comes to health care… ‘that makes it difficult for Republicans to come together over truly pro-patient reforms.'”

  2. Carola Conces Binder: Kocherlakota’s Case for Price Level Targeting: “Narayana Kocherlakota, President of the Federal Reserve Bank of Minneapolis, described the benefits of price level targeting to the Economic Club of Minnesota on May 21…. ‘The low inflation in the United States tells us that resources are being wasted. What exactly are these wasted resources?…. The biggest and most disturbing answer is our fellow Americans…. The FOMC is undershooting its price stability objective and is expected to continue to do so. But we should all keep in mind that this outcome–and especially the forecast for continued undershootin–typically means that the FOMC is also underperforming on its other objective of promoting maximum employment…. If my inflation forecast is right, the price level in 2018 will be about 2.5 percent below what it would have been had the FOMC hit its inflation target over the preceding six years’…. He describes two main benefits of adopting price level targeting…. ‘The first reason is that price level targeting makes long-term contracts safer’…. The second reason that the FOMC might want to use price level targeting is that it would serve as an automatic stabilizer…. I don’t think a switch to price level targeting is likely in the near term. It would (nearly) be a global first. Only the Swedish Riksbank, from 1931-37, has explicitly targeted the price level. The Bank of Canada, an inflation-targeting regime since 1991, seriously considered switching to price level targeting, but decided against it in 2011…. A shift to treating the [inflation] target as a true target, with symmetric costs of overshooting and undershooting, and sufficient weight on the employment part of the mandate, may be an easier-to-implement solution than an explicit price-level target.”

Should Be Aware of:


  1. David Glasner: Never Reason from a Disequilibrium | Uneasy Money: “One of Scott Sumner’s many contributions… has been to show over and over and over again how easy it is to lapse into fallacious economic reasoning by positing a price change and then trying to draw inferences about the results of the price change. The problem is that a price change doesn’t just happen; it is the result of some other change…. So, until you have specified the antecedent change responsible for the price change under consideration, you can’t work out the consequences of the price change. In this post, I want to extend Scott’s insight in a slightly different direction, and explain how every economic analysis has to begin with a statement about the initial conditions from which the analysis starts. In particular, you need to be clear about the equilibrium position corresponding to the initial conditions from which you are starting. If you posit some change in the system, but your starting point isn’t an equilibrium, you have no way of separating out the adjustment to the change that you are imposing on the system from the change the system would be undergoing simply to reach the equilibrium toward which it is already moving, or, even worse, from the change the system would be undergoing if its movement is not toward equilibrium. Every theoretical analysis in economics properly imposes a ceteris paribus condition. Unfortunately, the ubiquitous ceteris paribus condition comes dangerously close to rendering economic theory irrefutable…”

  2. Sahil Kapur: On A Losing Streak, Conservatives Struggle To Keep Fighting Gay Marriage: “In a lengthy piece for National Review… the Heritage Foundation’s Ryan T. Anderson addresses the unsettling question for opponents of gay marriage: ‘where do we go from here?’ He argues that conservatives can still win the fight if they ‘persuade our neighbors that our views about marriage are reasonable’ and fight for them culturally and politically before the ‘chaos’ of redefining marriage sets in. In other words, winning back hearts and minds…. ‘In the short run, the legal battle over the definition of marriage may be an uphill struggle’, Anderson wrote. ‘But in the long run, those who defend marriage as the union of a man and woman will prove to be prophetic’. Ed Whelan, a conservative legal writer, had a more visceral reaction to the Pennsylvania judge’s call for tossing law against gay marriage ‘into the ash heap of history’, opining that it displays a ‘frighteningly Jacobin temperament’ and ‘incredible hubris’. On the national level, Republicans have all but given up…. The Republican National Committee warned last year of the “generational difference”…. On the state level, some prominent Republican governors and certain subsets of legislators are quietly backing away…”

Already-Noted Must-Reads:

  1. Paul Krugman: Crisis of the Eurocrats: “The bitter irony here is that Europe’s elite isn’t actually technocratic. The creation of the euro was about politics and ideology, not a response to careful economic analysis…. The same can be said of the turn to austerity: All the economic research supposedly justifying that turn has been discredited, but the policies haven’t changed…. And the European elite’s habit of disguising ideology as expertise, of pretending that what it wants to do is what must be done, has created a deficit of legitimacy. The elite’s influence rests on the presumption of superior expertise; when those claims of expertise are proved hollow, it has nothing to fall back on…. There are some very scary people waiting in the wings. If we’re lucky–and if officials at the European Central Bank, who are closer to being genuine technocrats than the rest of the elite, act boldly enough against the growing threat of deflation–we may see some real economic recovery over the next few years. This could, in turn, offer a breathing space…. But economic recovery by itself won’t be enough; Europe’s elite needs to recall what the project is really about. It’s terrifying to see so many Europeans rejecting democratic values, but at least part of the blame rests with officials who seem more interested in price stability and fiscal probity than in democracy. Modern Europe is built on a noble idea, but that idea needs more defenders.”

  2. ACA Signups Presenting the Great Conservative Kynect ChallengeBrainwrap: ACA Signups: Presenting the Great Conservative Kynect Challenge!: “I present you with the following (thanks to Jed Lewison for the tip): ‘MCCONNELL: KY. EXCHANGE UNCONNECTED TO HEALTH LAW
    LOUISVILLE, Ky. (AP) — Kentucky Sen. Mitch McConnell says he would try to repeal the Affordable Care Act…. But the veteran senator won’t say what would happen to the 413,000 Kentuckians who have health insurance through the state’s health care exchange. McConnell told reporters Friday that the fate of the state exchange is unconnected to the federal health care law. Yet the exchange would not exist, if not for the law that created it….’ Now, supporters of the law in Kentucky… want people to have access to healthcare coverage even if the recipient is too intellectually lazy (or, gasp, racist?) to perform the most rudimentary research on the subject…. That brings us to the Mitch McConnell story above. Senator Turtle just flat-out lied about the fact that Kynect is Obamacare. He didn’t exaggerate or tell a half-truth; he told a bald-faced lie about it. So, here’s my challenge to you, Conservative Pundits: Will you tell your readers at Forbes, HotAir, the Daily Caller, NewsMax and (dare I say it) FOX News the truth? Will you state point-blank with no equivocation that Kynect, Obamacare and the Affordable Care Act are all the same Goddamned law?…. I’ll make it easy for you; here’s a simple graphic for you to share:”

May 25, 2014

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