Joe Weisenthal: Goldman's Jan Hatzius on Sectoral Balances
Sherrod Brown: "When Newt Gingrich had a chance or President Bush had a chance, they wanted to shift costs onto beneficiaries by in part turning Social Security over to Wall Street…. [C]onservative Republicans… [have] a distaste for Social Security and Medicare. They’re public programs that are successful, and if it’s proven that these public programs are successful, it sort of undercuts their view that government can’t do anything right…. I don’t buy that they’re not sustainable any more than the defense budget is not sustainable…. We can fix these things with changes at the margins without radical surgery…"
Henry Aaron: Progressives and the Safety Net: "Conservative extremism has made any talk of entitlement reform verboten on the left. That will ultimately be self-defeating."
Scott Lemieux: Heighten-the-Contradictions: From the Center, It’s No More Convincing: "As with most heighten-the-contradictions arguments, [Jonathan Chait's argument for raising the Medicare qualification age] is unconvincing in the extreme…"
Alan J Auerbach and Yuriy Gorodnichenko: Output spillovers from fiscal policy: "It's tough out there…. [F]or countries hit by recession, fiscal stimulus in another country might significantly stimulate demand back at home…. [T]ransnational coordination of fiscal policy may well be more valuable than previously thought."
Dan Froomkin: How the Mainstream Press Bungled the Single Biggest Story of the 2012 Campaign: "Mann and Ornstein weren't completely ignored. 'We had really good reporters call us and say: "You're absolutely right"… They told us they used this as the basis for conversations in the newsroom.' But those conversations went nowhere…. 'Their editors and producers… were also concerned about their professional standing and vulnerability to charges of partisan bias', Mann said. So most reporters just kept on with business as usual.… simply refused to blame one side more than the other…"
Ed Luce: The fiscal cliff could split the Republicans: "The theatre has also changed. After the election, commentators urged the president to seduce Washington…. Mr Obama has ignored such advice…. The president can hardly be blamed for wanting to undo the damage he sustained last year: he kept offering bigger and better compromises to the Republican leadership, who kept spurning them. The GOP was prepared to burn the house down; Mr Obama was humiliated. This time Mr Obama wants to ensure it is the other way round…. In addition to his tough line on tax increases, Mr Obama is determined to ensure Republicans will never again be able to hold him hostage to an increase in the debt ceiling. Both demands are 'red lines'. But the latter is more important. The US is set to hit its $16.4tn debt ceiling in February – just a few weeks after the deadline for the cliff. Many of the Republicans urging Mr Boehner to compromise on taxes to avert the cliff are confident they can tilt the balance back in February. One cliff would be followed by another. And another. Washington, it seems, can never trust itself to do anything without a gun to its head…"
Michael Hunter and Ralph Atkins: Italian bond yields jump sharply higher: "Italy’s government borrowing costs jumped and its stock market fell sharply on Monday after Mario Monti’s weekend decision to resign as Italy’s prime minister earlier than expected. The yield on 10-year Italian bonds rose 28 basis points to a two-week high above 4.8 per cent after analysts warned financial markets to brace for a fresh outbreak of eurozone political turbulence…"
Department of "Huh!?": Zhu Feng: "China’s leaders do not need to inform the press and the public directly about anything, including their foreign-policy positions. Indeed, with the notable exceptions of Mao Zedong and Deng Xiaoping, China’s leaders have seldom imposed their own personalities upon Chinese diplomacy…"
Binyamin Applebaum: Fed Likely to Sustain Bond-Buying Program to Stimulate Growth: "The Federal Reserve is widely expected to announce… it will continue buying Treasury securities to stimulate growth…. 'I am not prepared to say we are remotely close to substantial improvement on the employment front', Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta, said…. 'I expect that continued aggressive use of balance sheet monetary tools will be appropriate and justified by economic conditions for some time, even if fiscal cliff issues are properly addressed.' The remarks were particularly significant because Mr. Lockhart is among the moderate members of the Federal Open Market Committee whose support Mr. Bernanke invested months in winning before starting the new policy…"
Alan M. Taylor: External Imbalances and Financial Crises: "In broad perspective, there have been essentially two competing views of the global financial crisis… One view… blames external imbalances…. The alternative view… finds more fault in the domestic arena…. This paper uses the lens of macroeconomic and financial history…. [T]he credit boom explanation stands out as the most plausible predictor of financial crises since the dawn of modern finance capitalism in the late nineteenth century. Historically, we find that global imbalances are not as important as a factor in financial crises as is often perceived…"
Caroline M. Hoxby and Christopher Avery: The Missing "One-Offs": The Hidden Supply of High-Achieving, Low Income Students: T[T]he vast majority of very high-achieving students who are low-income do not apply to any selective college…. [H]igh-achieving, low-income students who do apply to selective institutions are admitted and graduate at high rates. We demonstrate that these low-income students' application behavior differs greatly from that of their high-income counterparts who have similar achievement…. [I]n contrast to the achievement-typical students, the income-typical students come from districts too small to support selective public high schools, are not in a critical mass of fellow high achievers, and are unlikely to encounter a teacher or schoolmate from an older cohort who attended a selective college. We demonstrate that widely-used policies–college admissions staff recruiting, college campus visits, college access programs–are likely to be ineffective with income-typical students, and we suggest policies that will be effective must depend less on geographic concentration of high achievers."
Ambrose Evans-Pritchard: Europe clings to scorched-earth ideology as depression deepens: "The strategy of triple-barrelled contraction across a string of inter-linked countries has been the greatest policy debacle since the early 1930s. The outcome over the last three years has been worse than forecast at every stage, and in every key respect. The eurozone has crashed back into double-dip recession. It will contract a further 0.3pc next year, according to a chastened European Central Bank. The ECB omitted mention of its own role in this fiasco by allowing all key measures of the money supply to stall in mid-2012, with the time-honoured consequences six months to a year later…"
Carlos Ramirez: Robber Barons: "This paper compares corruption in China over the past 15 years with corruption in the U.S. between 1870 and 1930…. [C]orruption in the U.S. in the early 1870s — when it’s real income per capita was about $2,800 (in 2005 dollars) — was 7 to 9 times higher than China’s corruption level in 1996, the corresponding year in terms of income per capita. By the time the U.S. reached $7,500 in 1928 — approximately equivalent to China’s real income per capita in 2009 — corruption was similar in both countries. The findings imply that, while corruption in China is an issue that merits attention, it is not at alarmingly high levels, compared to the U.S. historical experience…"
Steve Kornacki: What Newt Gingrich still won’t admit: "Once upon a time, he guaranteed that raising taxes on the rich would trigger a recession -- but it didn't…"
Stan Collender:* Time To Start Planning For After We Go Over The Cliff (AWGOC): "A deal is still possible, of course, although the grand bargain/big deal/legacy agreement that never was very likely to begin with now appears to be all-but-impossible to achieve…. [T]here's a better than 60 percent chance that we won't get any deal by January 1…. The chances of getting a big deal are only about 5 percent, and I'm being generous…. The negotiations won't stop; they'll just move into the next stage as the new Congress gets sworn in and becomes more Democratic; as the tax increases and spending cuts technically go into effect; and as the news focuses on how taxpayers, companies, government contractors, federal departments and agencies and federal employees start to respond to the changes even f they haven't been fully implemented. This will make the period between the start of the new Congress on January 3 and the Inauguration… a whirlwind…"
FCC Boss Tired Of Having To Put His iPad Away For Takeoff, Tells FAA To Fix It | Techdirt: "Numerous people have talked about the ridiculousness of requiring airplane passengers to put away their iPads or other portable devices during takeoff and landing on airplanes. There used to be excuses about how it could impact the equipment in the plane, but no one actually believes that any more. Now, even FCC boss Julius Genachowski is getting impatient with all of this and has asked the FAA to stop procrastinating and start allowing the use of such devices. The letter, of course, was more polite than that, but makes it clear that the FCC is ready to get on with the show and would like the FAA to finally 'enable greater use of tablets, e-readers, and other portable devices'."
Paul Krugman: A Brief Note on Mary Matalin: "[She] attacked me for being a 'polemicist'… [when I] correct[ed] a claim she was making that was factually wrong. She threw out a number — $1.7 trillion from capping deductions — as evidence that the GOP claim that it can raise lots of revenue from high-income Americans without raising tax rates is true…. It’s what you get from capping itemized deductions at $17,000… burden[ing]… families well below the 98th percentile, so it would not be equivalent to raising the top rate. Second, it would devastate charitable giving. If you try to fix these things, you get a much smaller number; the White House says around $450 billion. So Matalin yelled “polemicist” precisely when I was trying to ensure that we had the facts straight. Are you surprised?"
As Molly Ivins said, the Texas legislature is dumber than dirt: Duncan Black: Completely Predictable Consequences: "Heckuva job: 'When state lawmakers passed a two-year budget in 2011 that moved $73 million from family planning services to other programs, the goal was largely political: halt the flow of taxpayer dollars to Planned Parenthood clinics. Now they are facing the policy implications…. [D]uring the 2014-15 biennium, poor women will deliver an estimated 23,760 more babies than they would have, as a result of their reduced access to state-subsidized birth control. The additional cost to taxpayers is expected to be as much as $273 million — $103 million to $108 million to the state’s general revenue budget alone — and the bulk of it is the cost of caring for those infants under Medicaid.' I think most men really have no clue how many women really really rely on Planned Parenthoood."
Paul Krugman: Introduction to Isaac Asimov's "Foundation" Trilogy
Michael Grunwald @MikeGrunwald: Do @jonathanchait, @ezraklein and others suggesting D's cave on raising Medicare age think R's won't then claim it was D proposal all along?
Jonathan Chait @jonathanchait: .@MikeGrunwald Did Rs blame Ds for cuts in Social Security in 80s? Honestly don't know. But not sure it's a central issue here.
Michael Grunwald @MikeGrunwald: .@jonathanchait After R's took back House in 2010 by attacking D Medicare cuts, it's relevant! http://swampland.time.com/2012/11/30/fiscal-cliff-fictions-lets-all-agree-to-pretend-the-gop-isnt-full-of-it/ …
Jonathan Chait @jonathanchait: @MikeGrunwald Right, but the Medicare cuts in Obamacare passed without GOP support. Different than blaming Ds for cuts
Michael Grunwald @MikeGrunwald: .@jonathanchait The lesson of last 4 years (documented by you) is that R's will blame BO for anything. They blamed BO for cuts in Ryan plan!
Jonathan Chait @jonathanchait: .@MikeGrunwald Your argument is that actual policy is irrelevant to who Rs blame. Therefore it shouldn't be a factor.
Michael Grunwald @MikeGrunwald: @jonathanchait Mostly true! But for media purposes it would be useful to force R's to demand unpopular concessions before making them.
Jonathan Chait @jonathanchait: Agreed MT @MikeGrunwald Mostly true! But for media purposes would be useful to force R's to demand unpopular concessions before making them.
Henry Whistler @nitrate21: @jonathanchait @MikeGrunwald Sounds exactly like what everyone's been saying to you, Jon. #preemptivesurrender