Things to Read on the Evening of March 19, 2014

Must-Reads:

1. Ryan Avent: Monetary policy: Try overshooting for two years: “Though it would be the right thing to do, I don’t expect the Fed to announce a new 3% inflation target or 5% wage growth target, or declare its intention to make up half of the shortfall in nominal output relative to the pre-crisis trend. Though it would be a very good thing to do, I don’t expect them to say that, in order to defend the integrity of their 2% inflation target, they intend to make up the shortfall in inflation accumulated over the past two years with an 18-month period of overshooting. But while I don’t expect those things, I don’t think they are entirely outside the realm of possibility, nor do I think that the Fed tied its hands forever in January of 2012.”

2. James Kwak: You Don’t Say: “Peter Eavis… highlighted a statement… by… William Dudley (formerly of Goldman Sachs, then a top lieutenant to Tim Geithner): ‘There is evidence of deep-seated cultural and ethical failures at many large financial institutions’…. In 2008… people probably thought that our largest banks were just guilty of shoddy risk management, dubious sales practices, and excessive risk-taking… we’ve had to add price fixing, money laundering, bribery,  and systematic fraud on the judicial system…. Framing the problem as a ‘trust issue’—customers no longer see banks as trustworthy institutions—is beside the point. Wall Street’s main defense is that its clients already realize that investment banks do not have their buy-side clients’ best interests at heart, and clients who don’t realize that are chumps. And in the wake of the financial crisis, I suspect there are few individuals out there who believe that their banks are there to help them. The banking industry has discovered that it can thrive without trust, which is not surprising; retail depositors trust the FDIC, and bond investors know that trust isn’t part of the equation…”

3. Jon Cohn: New GOP Health Plan Sounds Exactly Like Old One: “House Republican leaders have come up with a new health care proposal. And based on a report in the Washington Post, it will look a lot like their old health care proposals—the ones that would have done very little to improve access, reduce financial distress, and contain health care spending. But this new plan would be different in one key respect. Implementing this sort of Republican plan now would probably mean taking away coverage from quite a lot of people who just got it. That’s a pretty big deal…. The interesting question is how Republicans intend to present this plan…. If Republicans intend to repeal the Affordable Care Act and replace it with the framework that Costa’s story describes—or even something with a bit more money behind it—a lot of those people are going to lose… insurance altogether. Until this year, taking away Obamacare meant taking away a hypothetical benefit. Now that benefit is real…. But really, the policy details are sort of irrelevant here. Notwithstanding the efforts of a few dedicated intellectuals and a tiny cadre of federal lawmakers, the vast majority of Republican officials have zero interest in health care reforms that significantly increase access to care. The new House Republican plan was supposed to show otherwise. If they actually manage to produce something—this isn’t the first time they’ve promised a proposal wasn’t imminent—and if it looks like the media reports suggest, the plan will merely confirm everybody’s suspicions: Significantly increasing access to health care just isn’t a priority for today’s Republican Party.”

4. Timothy Noah: Inside Low-wage Workers’ Plan to Sue McDonald’s — and Win: “The wage theft lawsuits filed against McDonald’s last week in New York, Michigan and California threaten to breach a wall that for decades has protected fast-food corporations from the demands of minimum wage workers. The lawsuits accuse McDonald’s restaurants of various illegal labor practices. Many fast food workers, it’s alleged, have been taken “off the clock” either while working or while waiting on site to start or complete a shift; either way, federal law requires that the workers be compensated for their time. Another allegation is that many of these low-wage workers have gotten the cost of their uniforms deducted from their paychecks, effectively reducing their pay to below the federally or state-mandated minimum wage. Yet another allegation is that many fast food workers have been denied legally-mandated overtime pay. What’s unusual here aren’t the claims of labor law violations, which are common enough, but rather, who’s being blamed. The wall that fast food workers hope to blast through with these class-action suits is the franchise system. All of the lawsuits name McDonald’s itself as a defendant, even though most of the targeted restaurants are owned not by McDonald’s but by McDonald’s franchisees…”

Should-Reads:

• Andrew Sum et al.: The Plummeting Labor Market Fortunes of Teens and Young Adults

• IMF: Fiscal Policy and Income Inequality

• Tim Egan: Paul Ryan’s Irish Amnesia: “A great debate raged in London: Would it be wrong to feed the starving Irish with free food, thereby setting up a ‘culture of dependency’? Certainly England’s man in charge of easing the famine, Sir Charles Trevelyan, thought so…. And there I ran into Paul Ryan…. The Republican congressman was very much in evidence, wagging his finger at the famished. His oft-stated “culture of dependency” is a safety net that becomes a lazy-day hammock. But it was also England’s excuse for lethal negligence…. You can’t help noticing the deep historic irony that finds a Tea Party favorite and descendant of famine Irish using the same language that English Tories used to justify indifference to an epic tragedy.”

• Erik Loomis: Water in the West: “As I have said for many years now, agriculture is going to lose out in the water wars of the West. With continued urban growth and the political weight behind water-guzzling energy production, there just isn’t the water and, despite agribusiness’ power, they don’t have the political weight because they can’t mobilize the votes…. Of course, short of meaningful water planning that sharply rethinks western water law, there won’t be enough water to go around anyway. And no politician wants to touch this problem.”

John Aziz: Russia’s economy slides into crisis | Jamelle Bouie: How We Built the Ghettos | Richard Mayhew: “Stop the printing presses, the obvious has been confirmed.  Getting more people with decent health insurance has tended to reduce financial stress.  This is amazingly obvious but important news” | Martin Wolf: Prise Ukraine from Putin’s claws | RealClimate (2009): An open letter to Steve Levitt |

Should Be Aware of:

1. Chris Goodfellow: A Startlingly Simple Theory About the Missing Malaysia Airlines Jet: “I tend to look for a simpler explanation, and I find it with the 13,000-foot runway at Pulau Langkawi…. A loaded Boeing 777…. A hot night. A heavy aircraft. About an hour out, across the gulf toward Vietnam, the plane goes dark…. Two days later we hear reports that Malaysian military radar (which is a primary radar, meaning the plane is tracked by reflection rather than by transponder interrogation response) has tracked the plane on a southwesterly course back across the Malay Peninsula into the Strait of Malacca…. The left turn is the key here. Zaharie Ahmad Shah1 was a very experienced senior captain with 18,000 hours of flight time. We old pilots were drilled to know what is the closest airport of safe harbor while in cruise. Airports behind us, airports abeam us, and airports ahead of us. They’re always in our head. Always. If something happens, you don’t want to be thinking about what are you going to do–you already know what you are going to do…. I saw that left turn with a direct heading…. He was taking a direct route to Palau Langkawi, a 13,000-foot airstrip with an approach over water and no obstacles. The captain did not turn back to Kuala Lampur because he knew he had 8,000-foot ridges to cross…. The pilot did all the right things. He was confronted by some major event onboard that made him make an immediate turn to the closest, safest airport…. There most likely was an electrical fire… pull the main busses and restore circuits one by one until you have isolated the bad one. If they pulled the busses, the plane would go silent. It probably was a serious event and the flight crew was occupied with controlling the plane and trying to fight the fire. Aviate, navigate, and lastly, communicate is the mantra in such situations…. What I think happened is the flight crew was overcome by smoke and the plane continued on the heading, probably on George (autopilot), until it ran out of fuel or the fire destroyed the control surfaces and it crashed. You will find it along that route–looking elsewhere is pointless…. Capt. Zaharie Ahmad Shah was a hero struggling with an impossible situation trying to get that plane to Langkawi…. Fire in an aircraft demands one thing: Get the machine on the ground as soon as possible…. Smart pilot. He just didn’t have the time.”

2. Ben Thompson: FiveThirtyEight and the End of Average: “Silver’s FiveThirtyEight is one of a growing number of personality-driven sites and blogs, including Ezra Klein and Vox, Andrew Sullivan and his eponymous blog, and Silver’s colleague at ESPN, Bill Simmons of Grantland. All three are successful because of the Internet, their readers (including myself) love them, what’s not to like?… Why should I pick up the Wisconsin State Journal – or the Taipei Times – when I can read Nate Silver, Ezra Klein, Bill Simmons, and the myriad other links served up by Twitter?… Nate Silver’s manifesto for his new site is 3500 words long, meaning it would take the average adult just under 12 minutes to read. That 12 minutes is then gone forever, a bit of attention taken from whatever other activity said reader would have otherwise consumed, and instead gave to Nate Silver. That is why Nate Silver is so valuable…. The reality of the Internet is that there is no more bell curve; power laws dominate, and the challenge of our time is figuring out what to do with a population distribution that is fundamentally misaligned with Internet economics.”

3. Robin: Stock and flow: “There are two kinds of quantities in the world. Stock is a static value…. Flow is a rate of change…. I actually think stock and flow is the master metaphor for media today…. Flow is the feed. It’s the posts and the tweets. It’s the stream of daily and sub-daily updates that remind people that you exist. Stock is the… content you produce that’s as interesting in two months (or two years) as it is today. It’s what people discover via search. It’s what spreads slowly but surely, building fans over time. I feel like flow is ascendant these days… but we neglect stock at our own peril…. My pal Alexis Madrigal here in SF has got the stock/flow balance down…. He’s a Twitter natural and a Tumblr adept. Madrigal’s got mad flow…. But on the other end of the spectrum—and man, this is just so important—he’s working on… a book intended to stand the test of time…. And the real magic trick in 2010 is to put them both together.”

4. Kaili Joy Gray: Bill Kristol Has A Fantastic New Never-Been-Tried-Before Idea: Even More War!: “There is no problem that cannot be solved by more war. Sure, that may sound kind of dumb to you, but you are not Bill Kristol, the spittle-filled sack of stupid who has never been right about a thing ever in his entire lifetime. You think that’s hyperbole? It took him until 2013 to figure out Sarah Palin probably does not have a political future…”

And:

Joe Romm and Jeff Spross: Sea Levels To Rise More Than Expected Due To Warming-Driven Surge In Greenland Ice Loss | Dylan Scott: Koch Group Abandons Obamacare ‘Horror’ Stories After Fact-Check Backlash | Mike Hearn: The Newsweek Credibility Matrix | Ryan Cooper: Yes, income inequality is unfair. But liberals can make a stronger argument | Ian Millhiser: 10 Ways Republicans Botched Their One Year-Old Outreach Strategy To Women And Minorities | Stephanie Mencimer: The House GOP’s Obamacare Alternative Won’t Curb Health Care Costs—But It Will Enrich the Insurance Industry |