Brad DeLong

Ta-Nehisi Coates: The Dark Art of Racecraft

Andrew Sullivan says, apropos of Jason Richwine, the cross-burning Charles Murray, and company, that the racists are the real victims here…

Twenty-eight hours before Sullivan posts--thus showing that Ta-Nehisi Coates's worldline is capable of following closed timeline paths--Ta Nehisi Coates delivers the smackdown. And in the process he says what Sandy Jencks, George Borjas, and Dick Zeckhauser really should have said to Jason Richwine when he first proposed his dissertation topic, and he lays out arguments that Richwine really should have been forced to acknowledge and grapple with before they signed off on his dissertation:

Ta-Nehisi Coates: The Dark Art of Racecraft:

Dave Weigel is one of my favorite reporters, but I think this piece on Jason Richwine, intelligence research, and "race" deserves a closer look:

Academics aren't so concerned with the politics. But they know all too well the risks that come with research connecting IQ and race. At the start of his dissertation, Richwine thanked his three advisers -- George Borjas, Christopher Jenks, and Richard Zeckhauser -- for being so helpful and so bold. Borjas "helped me navigate the minefield of early graduate school," he wrote. "Richard Zeckhauser, never someone to shy away from controversial ideas, immediately embraced my work…." Anyone who works in Washington and wants to explore the dark arts of race and IQ research is in the right place. The city's a bit like a college campus, where investigating "taboo" topics is rewarded, especially on the right. A liberal squeals "racism," and they hear the political-correctness cops (most often, the Southern Poverty Law Center) reporting a thought crime.

It is almost as though the "dark arts of race and IQ" were an untapped field of potential knowledge, not one of the most discredited fields of study in modern history. We should first be clear that there is nothing mysterious or forbidden about purporting to study race and intelligence. Indeed, despite an inability to define "race" or "intelligence," such studies are one of the dominant intellectual strains in Western history. We forget this because its convient to believe that history begins with the Watts riots. But it's important to remember the particular tradition that Charles Murray and Jason Richwine are working in. A brief reminder seems in order. 

The Oregon Medicaid Lottery New England Journal of Medicine Baicker et. al Study Power Calculations

Austin Frakt has done the heavy lifting, and presents the power calculations that, in an ideal world, should have been done and archived ex ante as part of the experimental design of Baicker et al.: The Oregon Experiment — Effects of Medicaid on Clinical Outcomes. Needless to say, he may have made an error: this is the moral equivalent of rocket science. But with enough eyes all bugs are shallow, hopefully…

Until somebody improve and refines his calculations, I believe that the right bottom line is his:

Updated power calculation: Thestudy was underpowered for the change in proportion with elevated glycated hemoglobin (GH) by a factor of 23. Yes, twenty-three…. Let me now state where we are. With respect to the statistically insignificant physical health measures in the study… the sample was too small even for much larger effects. This renders them… uninformative about whether or how much Medicaid improves physical health. Uninformative means just that. No new information. No resetting of priors is justified… We also know, from the authors’ discussion and from Aaron’s posts, that the results include [point estimate] changes in blood sugar and blood pressure that are not unreasonable to have expected clinically [if Medicaid were effective]…. Again, no resetting of priors is warranted.

Given this, for the physical health measures only, I don’t understand the rush I’ve noticed in people updating what they expected Medicaid could do…. I think it is time for people to take another look at what this study is saying…. What I think we’re seeing is a re-expression of everyone’s priors. This study is an opportunity to do that, but it doesn’t and shouldn’t change what [priors] are. The claims that people should be changing sides from pro- to/from anti-Medicaid expansion just make no sense based on the physical health measures in this study.

On the other hand, it is perfectly acceptable--in fact, I think it is morally and scientifically required--to update your priors and shift them in a pro-Medicaid direction from the findings on emotional health and financial stress.

Mary Carson and Jordan Rau: A Patient’s View on the Oregon Medicaid Experiment

A patient’s view on the Oregon Medicaid experiment:

Jordan Rau, KHN:

A study of Oregonians who won Medicaid benefits in a 2008 state lottery has sparked an intense debate about the value of expanding health care to the poor — and the value of health benefits in general. Mary Carson is, in a way, at the center of that debate. The 55-year-old Oregon woman was accepted into the Oregon Health Plan, the state Medicaid program, in 2011. She and her partner live with her three children. They earn about $1,000 a month by making and selling replicas of historic battle knives used in the Civil War and the two World Wars, doing odd jobs and providing respite care for people with cancer.

Has Clive Crook Recovered His Orientation? Perhaps...

My comment on: http://www.bloomberg.com/news/2013-05-09/krugman-delong-and-radical-centrism.html

Now that is infinitely better!

But do note you are no longer claiming that Paul Krugman trying to radicalize the Obama administration's position on "the stimulus" in the winter of 2008-2009. You are, instead, making a different argument: an argument that Krugman's position at the end of 2010, after the largely-Republican politicization of everything, was not centrist enough.

And do note that the rest of Krugman's column--the part you do not quote--undermines your new argument pretty completely.

Who Are the Right-Wing Republicans Whom Clive Crook Thinks Are "Thoughtful [and] Public-Spirited… [with] Vews… Worthy of Respect"?: Tuesday Crickets Weblogging

Paul Krugman observes:

Not Everything Is Political: Clive Crook demands that I engage respectfully with reasonable people on the other side, but somehow fails to offer even one example of such a person. Not long ago Crook was offering Paul Ryan as an exemplar of serious, honest conservatism, while I was shrilly declaring Ryan a con man. But I suspect that even Crook now admits, at least to himself, that Ryan is indeed a con man…

Good to Know That David Gergen Isn't Pretending That Blame for Partisan Bickering Is Equally Shared...

Jacob Jensen: Political Polarization and the Dynamics of Political Language: Evidence from 130 Years of Partisan Speech:

Asked by Gerald Cohen whether he agreed with DeLong’s assertion that Republicans today are more partisan and less compromising, David Gergen replied in the affirmative.

Austin Frakt: Power Calculations for Diabetes in the NEJM Oregon Medicaid Study

Austin Frakt:

Power calculations for the Oregon Medicaid study: Kevin Drum:

Let’s do the math. In the Oregon study, 5.1 percent of the people in the control group had elevated GH [glycated hemoglobin, aka A1C, or colloquially, blood sugar] levels. Now let’s take a look at the treatment group. It started out with about 6,000 people who were offered Medicaid. Of that, 1,500 actually signed up. If you figure that 5.1 percent of them started out with elevated GH levels, that’s about 80 people. A 20 percent reduction would be 16 people.

Keynesian Economics: The Gay Science?

Niall Ferguson certainly thought so in 1995. Donald Markwell, author of Donald Markwell (2006), "John Maynard Keynes and International Relations: Economic Paths to War and Peace", emails me a copy of Niall Ferguson's 1995 Spectator article, with its claim that Keynes's belief in "the ideas contained in The Economic Consequences of the Peace" "owed as much to his homosexuality as to his Germanophilia…" for "there is no question that the attraction Keynes felt for [Carl Melchior] strongly influenced his judgment…"

But that is not what he says today:

My disagreements with Keynes’s economic philosophy have never had anything to do with his sexual orientation. It is simply false to suggest, as I did, that his approach to economic policy was inspired by any aspect of his personal life.

I Confess Clive Crook Is Getting to Me: Bloomberg Has Some House-Cleaning to Do Weblogging

Why oh why can't we have a better press corps?

Clive Crook is back again, writing:

Krugman… concede[s] (somewhat to my surprise)… stunningly disingenuous of Krugman…. Krugman… at the forefront in casting discussion of the stimulus in left vs. right terms… not to make the stimulus bigger but to reverse the Bush high-income tax cuts… higher spending over lower taxes… [placed] divisive value judgements about the size and scope of government at the center… the stimulus debate was as political as it gets… thanks to Krugman.

It's the absence of quotation marks in his columns that is doing it to me.

There are, I am starting to think, three kinds of columnists: those who quote people in order to show that they have properly construed the arguments they are praising or criticizing, those who quote people out of context in order to misconstrue their arguments, and those who don't quote anybody at all.

So here's the comment I left on Crook's column:

Guenter Grass DeLong Smackdown Watch: Monday Hoisted from Comments Weblogging

Brad DeLong : Thursday Dozen Hoisted from the Archives: Keepers from May 2005: Grebmörts said...

I see that you rethought part of your criticism of Guenter Grass shortly after posting it. The events that have happened since 2005 should make you rethink the rest. He complained that the "growing gap between rich and poor" had brought about "the impotence of politics", a political system that responds only to the interests of the elites. Democracy is being destroyed.

That sounds a lot like the situation in the US today. Washington is unable to end this depression because gridlock serves the interests of the overclass.

Grass was right. You owe him an apology.

Paul Krugman: Naive Fiscal Cynicism: It's Not That We Can't Manage Our Debt, It's That Right-Wing Republicans Seek to Break the Economy and the Government

Paul Krugman:

Naive Fiscal Cynicism: Expansionary austerity has been refuted… even the IMF says that short-run multipliers are big… 90 percent red line… was… fuzzy math… bond vigilantes remain invisible… the confidence fairy refuses to make an appearance… austerian economics has imploded…. Yet there remains immense reluctance to draw the obvious policy conclusion, which is not simply that we have too much austerity, but that right now we shouldn’t be having austerity at all.

Saying More than "When the Storm Is Long Past the Ocean Is Flat"

Paul Krugman:

Keynes, Keynesians, the Long Run, and Fiscal Policy: One dead giveaway that someone pretending to be an authority on economics is in fact faking it is misuse of the famous Keynes line about the long run. Here’s the actual quote:

But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.

Doug Holtz-Eakin Turns to the Dark Side

One correspondent asks if perhaps Douglas Holtz-Eakin isn't an honest Republican worth engaging with--those whom Clive Crook claims are so thick on the ground and that Paul Krugman is so remiss in not engaging, but he can't remember any of their names.

But another correspondent writes, and I agree:

He was an honest and effective CBO director. After he left CBO… he was invited to set up what he called a 'conservative think tank'. That that was the way he decided to go. And then he went downhill: occasionally now he says something informative and interesting, but most of the time he is saying what he calculates all please his right-wing political masters. It's quite sad…

Matthew Yglesias vs. Alex Tabarrok

Hey! Clive Crook! Here is one more reason why Paul Krugman is tired of trying to reason with you people

Matthew Yglesias:

Keynesianism today: Start by stating the argument correctly: This Alex Tabarrok post on growth in the face of fiscal austerity annoyed me as did his co-blogger Tyler Cowen chiming in to say Tabarrok had "nailed it"... the line "In the 1990s growth was strong even while 'austerity' was increasing."

That kind of thing is a dead giveaway that the author isn't even stating the argument for expansionary fiscal policy correctly.

The Long-Run and Short-Run Budget Picture

Opening statement at K-State Debate with Alan Reynolds:

How big a government should we have?

Right now the U.S. has a relatively small government: in a normal year the U.S. government as a whole spends something like 32% of total production. The U.S. government spends about ten percentage points less of GDP than the average rich, industrialized country spends. The U.S. government spends about 15 percentage points less of GDP than a never-Communist country as rich as the U.S. is today would be expected to spend. We are thus, in comparative perspective, a small-government country.

Aaron Carroll: Additional Thoughts on the New Oregon Medicaid Results

Aaron Carroll: Additional thoughts on the new Oregon Medicaid results:

1) This was a HUGE study. How can you say otherwise?

According to the paper, 12,229 people responded to the surveys and were analyzed. So, yes, for outcomes that effected everyone (think financial hardship), it’s likely they were super-powered. But for many of the outcomes that were more murky, that’s not the case. Take A1C for instance. Only 5.1% of the control group had an A1C>=6.5. Let’s assume that the starting prevalence was the same in the intervention group. That means that only 624 people (312 in each group) actually had a high A1C in the study. That’s not anywhere near as big. Especially when you’re talking about an indirect intervention like insurance as opposed to actual health care.

MCarson on the Oregon Medicaid Expansion

Robert Waldmann hoists this from my comments: mcarson:

I am one of the winners in the Oregon lottery [winners could get Medicaid]. Going from no insurance to insurance is very confusing. When you have no money every health question starts with "would I rather live with this problem and have electricity, or treat this problem and keep my milk in a cooler for a month or so?" Stepping back into healthcare was like hopping on a merry-go-round. The doctor wanted to do test after test to come up with baselines for me, and I had a hard time showing up at the lab.

Josh Barro: What to Make of the Oregon Health Study

I would say that we already knew that the Medicaid model is not a terribly productive way to create chronic conditions like high blood pressure and diabetes, and that we need to find better condition-management models pronto. But I would also say that the depression and financial security findings are better news than I expected. About what I would have expected (but worse than I might have hoped) on some welfare indicators, better than expected (and as good as I might have hoped) on others--net-net, goods news for the efficacy of Medicaid expansion.

And people who say otherwise aren't reading the study…

Oregon Medicaid Lottery Says: "Medicaid Expansion Definitely Worth It": Hoisted from Incidental Economist Comments Weblogging

Matt:

Two thoughts:

1. On your point #1 on sample sizes, note that the study is effectively even smaller than you’re saying. Thinking of the high A1C sub-sample as containing 624 people is correct for the intent-to-treat analysis (i.e. for estimating the effect of offering insurance). But (net) take-up was only about 25 percent. Thus, for the IV analysis (which provide the estimates of the effect of insurance per se), the point estimates and variance are scaled up by a factor of 4=1/0.25. This means that the “RCT-equivalent” sample size is only 156=624/4. That’s really, really small, even before you get to the fact that insuring people does not automatically get them the appropriate care (your point about direct versus indirect interventions).

DeLong, Neyman, Pearson, and Many Others Smackdown Watch: Medicaid Expansion Hoisted from Comments Weblogging

Robert Waldmann:

Heh, indeed.

I actually haven't read the whole [Baicker et al. NEJM Oregon Medicaid Lottery] paper, but I have read the abstract and a key table cut-and-pasted by Kevin Drum. It shows a more than four-fold increase in diabetes diagnosis due to Medicaid availability. This does not correspond to statistically significant decrease in the fraction of people with high hemoglobin glycosylation. So the paper does not contain proof that current therapy for diabetes is better than nothing.

I Am More Confident This Morning That Medicaid Expansion Is a Good Idea

Having read Katherine Baicker et al. (2013), "The Oregon Experiment — Effects of Medicaid on Clinical Outcomes", New England Journal of Medicine, I conclude that the study was--as natural experiments are--significantly underpowered, that the jury is still out on most of the effects, but that the success of the Medicaid expansion in reducing depression and improving financial security are rock-solid and nailed benefits, by themselves worth more than the net cost of the expansion.

Therefore I wish to withdraw my tweet from last night:

@tylercowen @petersuderman the case for Medicaid expansion is *marginally* less strong than I had thought...

— J. Bradford DeLong (@delong) May 1, 2013

And substitute for it, instead, the correct:

.@tylercowen @petersuderman CORRECTION: I have read the paper and evaluated its power, the case for Medicaid is stronger than I had thought

— J. Bradford DeLong (@delong) May 2, 2013

Has Jonathan Rauch Finally Stopped Pretending That Both the Democratic and Republican Parties Have Sane Technocratic Wings Equally Deserving of Support?

Jonathan Rauch:

According to the New York Times, key Senate Republicans threaten to sink the entire immigration reform initiative if it includes a provision allowing gay American citizens to bring their life partners into the country. “It’s a deal-breaker for most Republicans,” Senator Jeff Flake, R-Ariz., told the Times. In a radio interview (quoted by the Times), Sen. Marco Rubio of Florida, who is considered reform’s indispensable Republican, was blunt: “If that issue is injected into this bill, this bill will fail. It will not have the support. It will not have my support.”

Paul Krugman (2012): Economics in the Crisis

Paul Krugman (2012): Economics in the Crisis:

To say the obvious: we’re now in the fourth year of a truly nightmarish economic crisis. I like to think that I was more prepared than most for the possibility that such a thing might happen; developments in Asia in the late 1990s badly shook my faith in the widely accepted proposition that events like those of the 1930s could never happen again. But even pessimists like me, even those who realized that the age of bank runs and liquidity traps was not yet over, failed to realize how bad a crisis was waiting to happen – and how grossly inadequate the policy response would be when it did happen.

And the inadequacy of policy is something that should bother economists greatly – indeed, it should make them ashamed of their profession, which is certainly how I feel. For times of crisis are when economists are most needed. If they cannot get their advice accepted in the clinch – or, worse yet, if they have no useful advice to offer – the whole enterprise of economic scholarship has failed in its most essential duty.

"Austerity" in the Context of the Global Economic Downturn: Wednesday Hoisted from Archives from Two Years Ago Weblogging

Brad DeLong: Friday February 18, 2011: Let me speak as a card-carrying neoliberal, as a bipartisan technocrat, as a mainstream neoclassical macroeconomist--a student of Larry Summers and Peter Temin and Charlie Kindleberger and Barry Eichengreen and Olivier Blanchard and many others.

We put to one side issues of long-run economic growth and of income and wealth distribution, and narrow our focus to the business cycle--to these grand mal seizures of high unemployment that industrial market economies have been suffering from since at least 1825. Such episodes are bad for everybody--bad for workers who lose their jobs, bad for entrepreneurs and equity holders who lose their profits, bad for governments that lose their tax revenue, and bad for bondholders who see debts owed them go unpaid as a result of bankruptcy. Such episodes are best avoided.

From my perspective, the technocratic economists by 1829 had figured out why these semi-periodic grand mal seizures happened. In 1829 Jean-Baptiste Say published his Cours Complet d'Economie Politique… in which he implicitly admitted that Thomas Robert Malthus had been at least partly right in his assertions that an economy could suffer from at least a temporary and disequliibrium "general glut" of commodities. In 1829 John Stuart Mill wrote that one of what was to appear as his Essays on Unsettled Questions in Political Economy in which he put his finger on the mechanism of depression.

Rand Paul Says: "I Am the Real Victim Here"

Elias Asquith:

Rand Paul, Victim — The League of Ordinary Gentlemen: As Ta-Nehisi Coates notes, this report should put to rest any questions of Rand Paul’s sincerity when it comes to minority outreach:

Paul acknowledged criticism for the speech he gave at Howard University Wednesday, saying, “I think some think a white person is not allowed to talk about black history … which I think is unfair.”

Here’s Coates’ response, which is far more civil than Paul deserves:

Rand Paul went to Howard University, lied, and then got his ass kicked… [and] having gotten his ass kicked, his answer is to not to reflect but to make an allegation of racial discrimination.

One of the things I try to do in my work is — in general — take people at their word. It’s very hard to communicate about anything without good faith. This, of course, assumes that communication is the goal. That was my assumption about Rand Paul. I was clearly wrong.

You know, I liked Rand Paul’s trollspeech a whole lot better when Mitt Romney gave it.

Barack Obama's Statement on Boston Marathon Bombing

President Obama:

Earlier today, I was briefed by my homeland security team on the events in Boston. We’re continuing to monitor and respond to the situation as it unfolds. And I’ve directed the full resources of the federal government to help state and local authorities protect our people, increase security around the United States as necessary, and investigate what happened.

The American people will say a prayer for Boston tonight. And Michelle and I send our deepest thoughts and prayers to the families of the victims in the wake of this senseless loss.

We don’t yet have all the answers. But we do know that multiple people have been wounded, some gravely, in explosions at the Boston Marathon.

Macroeconomic Overview Talk for UMKC MBA Students (April 1, 2013)

20130401 Macro Outlook.pdf | 20130401 Macro Outlook.ppt | 8500 words

This year I am on sabbatical--which means I do not teach. And I do miss it. Thus, from my perspective at least, this next hour is going to be an hour of pure fun.

I hope it will be an hour of pure fun for you all as well.

As Bob Strom said, right now in this MBA class you are transitioning from studying micro to studying macroeconomics. You are moving away from studying that part of economics where you talk about how the market system works well: how supply balances demand to make the maximum possible amount and value of win-win deals, and how people respond to the incentives they’re given to change their behavior. To the extent that things go wrong in microeconomics--to the extent that when you step back and look at the situation you say "Geewillickers! I really wish this had not happened!"--it is because you wish that you or the market system had not given people the incentives that it in fact did.

Keeping the President from Having Powers William the Bastard Never Claimed

William the Bastard never claimed to have the power to execute his vassals on his say-so and whim without providing an explanation. Pejman Yousefzadeh has a proposal to keep U.S. presidents from claiming that power without ceding jurisdiction to an Article III court:

Drones and the Law: Restoring Checks and Balances: The Department of Justice has recently released a white paper detailing what it believes to be the scope of the president’s authority to kill Americans suspected of being members of al Qaeda… states that the power to kill such suspects can take place “away from the zone of active hostilities.”… The white paper has prompted spirited reaction… who qualifies as “an informed high-level official”[?]… Jeffrey Rosen claims that the administration’s arguments do not pass constitutional muster…. Jack Goldsmith states that… the white paper “does reveal problems in the administration’s political and legal strategy for conducting drone strikes, especially against American citizens”… we need “a new framework statute”….

Some have argued that the best “form of review” of the president’s actions would be found in a FISA-like court charged with the responsibility to authorize lethal operations against Americans…. But as Robert Chesney, a law professor at the University of Texas, Austin notes, “some judges want absolutely nothing to do with” the process of reviewing whether certain Americans ought to be marked for death, and even if they do, judicial oversight may be constitutionally and procedurally problematic. So perhaps a different “form of review” is required. One such alternative mechanism might be to empower the President’s Intelligence Advisory Board to serve as a check against any overreach of presidential power in targeting American suspects for killing… to truly establish the entity’s independence from the office of the presidency, Congress should pass and the president should sign legislation reconstituting the PIAB as a Federal Intelligence Commission, and making it an independent regulatory agency… members of the new FIC must be nominated by the president and must undergo Senate confirmation…. Empowering an independent agency to act as a check against presidential power and allowing for greater congressional oversight in the process is a good way to ensure the drone program is not being abused…

It's a smart idea--I'm still attracted to the idea of using the medieval law of outlawry, on the grounds that that worked reasonably well, and I do not see why courts do not see this as their business. But definitely worth thinking about...

Nate Silver, Ezra Klein, John Sides, Larry Bartels...

Tom Schaller:

I will live tweet the upcoming #mpsa panel featuring @fivethirtyeight and @ezraklein and @monkeycageblog John Sides + others starting soon.

Larry Bartels starts ball rolling by saying there wasn't much to learn (or he didn't) from what was mostly a quite predictable election.

The Beacon: Jobs Now!: Friday April 12, 2013: 8:00 PM CDT

Bill Black, Brad DeLong, Stephanie Kelton, Mike Konczal, Karl Smith, Steve Randy Waldmann:

The Beacon, The Monk's Loft: 5031 Main St., Kansas City, MO, Phone: 816-960-4646, Email: thebeacontavern@gmail.com

Wednesday Hoisted from (Other People's) Archives: Ethics of Macroeconomics Edition

Something to remember.

Paul Krugman:

A Brief Note on Macroeconomics and Ethics: I want to acknowledge Karl Smith’s very gracious and brave response to my piece on economics in the crisis. And I’d also like to add a small further thought….

[D]isagreement will happen. Economics is a hard subject, people will come to different provisional conclusions, and some of them will, in retrospect, turn out to have given very bad advice. That’s a shame but not a sin…. Ken Rogoff and I differ seriously on the relative risks of public debt and failure to spend on job creation. One of us is wrong, which means that the other is giving bad advice…. But this is an argument in good faith.

What bothers me, and should bother you, about much of this debate is that it pretty clearly is not in good faith. Too many economists and commentators on economics are clearly playing for a political team; too many others are clearly playing professional reputation games. Their off-the-cuff reactions to policy issues were wrong and foolish, and I think they know in their hearts that they messed up; but instead of trying to remedy the fault, they’re trying to defend the property values of their intellectual capital.

And that really is a sin…. This really matters to millions of people, and refusing to think clearly because you don’t want any negative thoughts about the papers you and your friends have been writing the past few decades is unforgivable.

Less than 100,000 Payroll Jobs, a 58.5% Employment-to-Adult-Population Ratio Exactly Where It Was a Year Ago, and Labor Force Participation Down by 0.5 Percentage Points in the Past Year

This is a bad employment report.

Twenty years from now, young whippersnapper economic historians will come to interview me.

They will ask: "Why don't you think Ben Bernanke was the worst Fed Chair since the Great Depression--worse even than the hapless G. William Miller--because of his failure to understand even one of (a) the implications of the pre-2008 growth of leverage, derivatives, and shadow banking; that his job in the summer and fall of 2008 was not to curb moral hazard but to prevent depression; (c) the goals of his dual mandate; the structure of the economy he was managing; and (e) how to mark his beliefs to market when the economy did not evolve as he had predicted?"

What answer am I going to be able to give?

What was Barack Obama thinking? What was Tim Geithner thinking? What was Ben Bernanke thinking?

What is Barack Obama thinking? What is Jack Lew thinking? What is Ben Bernanke thinking?

Why People Think I Am So Smart: Medicaid Expansion Edition

People think I am smart and know a lot about health care reform because I can ask Ann Marie Marciarille questions about health care finance, regulation, quality, and liability 24/7. I can.

Here she is last June explaining what has been happening for the last nine months with Medicaid...

Jonathan Chait on the Sad Excuse for a Republican Policy Infrastructure

Jonathan Chait:

Pretend GOP Urged to Adopt Imaginary Health Plan: You, in the clown makeup -- you seem to have some innovative proposals for state level high risk insurance pools you want to propose. Yuval Levin… and Ramesh Ponnuru have a (paywalled) cover story in National Review urging Republicans to stand fast in their fanatical determination to repeal Obamacare. As a piece of policy analysis, it is not remotely persuasive. What is interesting… the delicate balance… authors… coax the partisan rage of the party faithful toward their desired policy ends… avoiding any engagement with the cruelty and indifference of the actual Republican agenda…. This passage jumps out as especially telling:

The law also vastly expands Medicaid, which is a crummy form of insurance: Researchers who compare the program’s beneficiaries with people who have no insurance at all often have a hard time finding much of a difference in health.

Ezra Klein: Is Texas Governor Rick Perry Going to Shoot Texas in the Head to Prove That ObamaCare Is a Failure?

Ezra Klein thinks he just might…

Will the GOP’s plan to fight Obamacare in the states backfire?: The question, though, is whether governors who purposefully do a very bad job implementing Obamacare will hurt the law, or just themselves and their states. Call it the California v. Texas question. In 2010, Governor Arnold Schwarzenegger of California signed into law two bills to establish the online insurance marketplace — “exchanges” — that are at the center of President Obama’s health-care reform…. California promptly accepted the law’s Medicaid expansion. By this time next year… it’s possible that the portion of the state’s uninsured population will have declined from 20 percent to less than five percent.

In Texas… the Lone Star State isn’t lifting a finger to create an exchange, instead leaving the work to the federal government. Texas is refusing Obamacare’s Medicaid expansion, too. “The idea that we would expand and put more money and more people into a broken system is not unlike putting another 1,000 people on the Titanic,” Republican Gov. Rick Perry told Forbes. “You know how this is going to turn out. And it’s going to be a disaster.” One might observe that the health-care system in Texas, which, has the nation’s highest rate of uninsured residents — 24 percent, or more than six million people — is already a disaster. But the recalcitrance of Perry and Republican state lawmakers has the potential to make it much worse.

A Changing Argument Against Expansionary FIscal Policy Right Now?

I did indeed used to hear that running up the national debt right now via expansionary fiscal policy would indeed turn the U.S. into "Greece" and deepen the current downturn. It is true that I am not hearing that nearly as much any more--that it is now the burden of financing the debt in future generations that is the problem.

When did the shift take place? Why did the shift take place? How did the shift take place?

Paul Krugman:

Cheating Our Children: So, about that fiscal crisis — the one that would, any day now, turn us into Greece. Greece, I tell you: Never mind. It’s as if someone sent out a memo saying that the… repeated warnings of a U.S. debt crisis that keeps not happening has outlived its usefulness. Suddenly, the argument has changed…. The deficit, we’re told, is really a moral issue….

There has, of course, been no explicit announcement of a change…. But… pundits who spent years trying to foster a sense of panic over the deficit have begun writing pieces lamenting the likelihood that there won’t be a crisis, after all…. So they have a new line: We must bring down the deficit right away because it’s “generational warfare,” imposing a crippling burden on the next generation.

Deficits would indirectly be making us poorer if they were either leading to big trade deficits, increasing our overseas borrowing, or crowding out investment, reducing future productive capacity. But they aren’t: Trade deficits are down… business investment has actually recovered fairly strongly… the main reason businesses aren’t investing more is inadequate demand….

The North Atlantic Macroeconomy: Let it Bleed?: We Are Live at Project Syndicate

http://www.project-syndicate.org/commentary/the-great-depression-redux-by-j--bradford-delong

BERKELEY – In the 12 years of the Great Depression – between the stock-market crash of 1929 and America’s mobilization for World War II – production in the United States averaged roughly 15% below the pre-depression trend, implying a total output shortfall equal to 1.8 years of GDP. Today, even if US production returns to its stable-inflation output potential by 2017 – a huge “if” – the US will have incurred an output shortfall equivalent to 60% of a year’s GDP.

In fact, the losses from what I have been calling the “Lesser Depression” will almost certainly not be over in 2017. There is no moral equivalent of war on the horizon to pull the US into a mighty boom and erase the shadow cast by the downturn; and when I take present values and project the US economy’s lower-trend growth into the future, I cannot reckon the present value of the additional loss at less than a further 100% of a year’s output today – for a total cost of 1.6 years of GDP. The damage is thus almost equal to that of the Great Depression – and equally painful, even though America’s real GDP today is 12 times higher than it was in 1929.

The Live Arguments for Austerity Right Now: A Bestiary

Arguments that looser monetary policy right now would be too risky:

The Jeremy Stein argument: At very low interest rates, banks will gamble not quite for resurrection but for (apparent) profitability, because bank executives who report losses tend to lose their jobs. Thus it is very important that the central bank keep nominal interest rates on loans banks can safely make above 3%/year in order to prevent the impact of the lower bound on deposits from generating unwise reaching for yield, and consequent systemic vulnerability.

The Gavyn Davies argument: Central banks won't dare unwind because politicians won't like it when central banks report losses. Therefore central bankers dare not adopt policies that have a chance of incurring losses because they will not be able to execute such policies.

Arguments that looser fiscal policy right now would be contractionary:

Kick-Starting Employment: Wednesday Hoisted from the Archives from Four Years Ago

Brad DeLong (March 2009): Kick-Starting Employment: Unemployment is currently rising like a rocket, because businesses that normally would be expanding and hiring are not, and those businesses that would normally be contracting and shedding workers are doing so very rapidly. Businesses that ought to be expanding and hiring cannot, because the depressed general level of financial asset prices prevents them from borrowing money or selling bonds on profitable terms.

In response, central banks should purchase government bonds for cash in as large a quantity as needed to push their prices up as high as possible. Expensive government bonds will shift demand to mortgage or corporate bonds, pushing up their prices.

Even after central banks have pushed government bond prices as high as they can go, they should keep buying government bonds for cash, in the hope that people whose pockets are full of cash will spend more of it, and that this will directly pull people out of joblessness and into employment.

In addition, governments need to run extra-large deficits. Spending - whether by the United States government during World War II, following the Reagan tax cuts of 1981, by Silicon Valley during the late 1990's, or by home buyers in America's south and on its coasts in the 2000's - boosts employment and reduces unemployment. And government spending is as good as anybody else's.

Ann Marie Marciarille's Missouri State of Mind...

https://www.rebelmouse.com/annmariemarciarille/

Mark Thoma Laments the Gramscian Hegemony of the Overclass

Why Don’t Politicians Care about the Working Class?: If we want to ensure that our children and grandchildren have the brightest possible future, the national debt is not the most important problem to address. Reversing the polarization of the labor market… is much more important. But money driven politics and a political class that has all but forgotten about the working class… stand in the way of progress…. [A]round two-thirds of the jobs lost during the recession were in moderate-wage occupations… more than one-half of subsequent job gains have been in low-wage jobs….

To be successful, we must make jobs our top priority. Instead, our focus has been on the debt, but all of the hand wringing over the debt and the future of our children is a ruse by Republicans that diverts our attention from the plight of the working class. As I explained a few weeks ago, we can pay our bills. If we have problems, it will be because of the politics surrounding the debt, the political brinksmanship conservatives have used in pursuit of ideological gains, not the economics…. Republicans see the large debt, much of which was caused by the recession, as a golden opportunity to reduce the size of government…. I don’t blame Republicans for their efforts. I wish the working class was more important to Republicans, and I cannot understand the indifference to the struggles of so many people. But… [f]undamentally, it’s the party of the rich and this is a chance to lower government spending and reduce the pressure for tax increases on high-income households.

Winston Leonard Spencer Churchill on the Real Moocher Class

Winston Churchill:

Here let me remark that the best way to insure against unemployment is to have no unemployment.

There is another point: unemployables, rich or poor, will have to be toned up. We cannot afford to have idle people. Idlers at the top make idlers at the bottom. No one must stand aside in his working prime to pursue a life of selfish pleasure.

There are wasters in all classes. Happily they are only a small minority in every class, but anyhow we cannot have a band of drones in our midst, whether they come from the ancient aristocracy or the modern plutocracy, or the ordinary type of pub crawler.

J. Bradford Delong for Democracy Journal: Shrugging off Atlas

J. Bradford Delong for Democracy Journal: Shrugging off Atlas: Issue #28: Exactly how did once-respectable conservative economists get swept up in “moocher class” mania?

Review of Nicholas Eberstadt (2012), A Nation of Takers: America’s Entitlement Epidemic (Templeton Press) http://www.amazon.com/Nation-Takers-Americas-Entitlement-Epidemic/dp/1599474352.

If there was a single moment when Mitt Romney lost the 2012 presidential election, it was in May when he stood in front of the $50,000-a-plate audience at Sun Capital honcho Marc Leder’s home in Boca Raton and spoke his soon-to-be-infamous words:

There are 47 percent of the people who will vote for the President no matter what…. There are 47 percent who are with him, who are dependent upon government…who believe that government has a responsibility to care for them, who believe that they’re entitled to health care, to food, to housing, you name it…. These are people who pay no income tax…. My job is not to worry about those people—I’ll never convince them that they should take personal responsibility and care for their lives…

This is what Mark Schmitt of the Roosevelt Institute calls “the theory of the moocher class.” And Romney is all in with it. In July, after a poorly received speech at the NAACP convention, he boasted:

When I mentioned I am going to get rid of Obamacare, they weren’t happy…. But I hope people understand this… if they want more stuff from government tell them to go vote for the other guy—more free stuff.

Those of us who know the numbers, or who simply live in America and look around, know that the 47 percent who aren’t paying federal income taxes this year are by and large not “moochers.” About a fifth are elderly retired. About two-thirds are in households with incomes of less than $20,000 a year—definitely not living high. And nearly one-third owe no income taxes because of the earned-income and child tax credits, which both became law with bipartisan support.

As a group, the 47 percent who pay no income taxes do not lack work ethic. They do take personal responsibility for their lives. They may not pay federal income taxes this year, but they pay plenty of sales, property, and payroll taxes. For the most part, they do not constitute the Democratic base. More than half of the 47 percent are the elderly white and Southern white voters who voted for Romney by substantial margins.

So how does someone like Romney, along with his peers and all their staffs and everyone else in that Boca Raton room, become convinced that 47 percent of Americans are the moochers, the takers, dependent on “free gifts” from the government, lacking work ethic, lacking personal responsibility?

Enter Nicholas Eberstadt of the American Enterprise Institute (AEI), with his contribution to the think tank’s “New Threats to Freedom” series. We need venture no further into A Nation of Takers than the bottom of the second page…

Ezra Klein Points Out That the "House Progressive" Budget Would Actually Be Good for the Country

Ezra Klein:

Washington should be worrying about education, infrastructure and health care: Earlier today I tweeted, “If we got education, health care and infrastructure right, a lot of our other economic problems would take care of themselves.”… It’s a tall order, I admit. But Washington is spending all its time right now pursuing a “grand bargain” between the two parties, and that’s an even taller, and perhaps even impossible, order….

The partisan differences on education and infrastructure are smaller than they are on taxes and spending. As for health care, we’ve actually kept costs under control in recent years, we’ve already passed the Affordable Care Act, and we’re seeing movement among Republican governors to engage constructively with the law…. And it’s not as if emphasizing education, infrastructure and health care is some kind of second-best to another deficit-reduction deal. Another deficit-reduction deal is a distant second-best to improving the education system and infrastructure and bringing down health-care costs — all of which would both reduce the budget deficit and make people’s lives better.

And, for the record, I’d love to add energy legislation to this list…

Ezra Klein:

House Progressives have the best answer to Paul Ryan: The correct counterpart to the unbridled ambition of the Ryan budget isn’t the cautious plan released by the Senate Democrats. It’s the “Back to Work” budget released by the House Progressives. The “Back to Work” budget is about… putting Americans back to work…. The budget begins with a stimulus program that makes the American Recovery and Reinvestment Act look tepid. It includes $2.1 trillion in stimulus and investment from 2013-2015. The main policies there are a $425 billion infrastructure program, a $340 billion middle-class tax cut, a $450 billion public-works initiative, and $179 billion in state and local aid. This is a lot of stimulus. The liberal Economic Policy Institute estimates that would be sufficient to “boost gross domestic product (GDP) by 5.7 percent and employment by 6.9 million jobs at its peak level of effectiveness (within one year of implementation).”…

Investment on this scale will add trillions to the deficit. But the House Progressives have an answer for that: Higher taxes. About $4.2 trillion in higher taxes over the next decade, to be exact. The revenues come from raising marginal tax rates on high-income individuals and corporations, but also from closing a raft of deductions as well as adding a financial transactions tax and a carbon tax. They also set up a slew of super-high tax rates for the very rich, including a top rate of 49 percent on incomes over $1 billion…. [T]hese taxes aren’t just about reducing the deficit — though they do set debt-to-GDP on a declining path. They’re also about reducing inequality and cutting carbon emissions and slowing down the financial sector. They’re not just raising revenues, but trying to solve other problems….

As for the spending side, there’s more than $900 billion in defense cuts, as well as a public option that can bargain down prices alongside Medicare. But this budget isn’t about cutting spending. Indeed, the House Progressives add far more spending than they cut…

The Arkansas Medicaid Budget-Buster

Austin Frakt:

So efficient you can’t afford not to buy it: Medicaid private option edition: David Ramsey of the Arkansas Times has done a ton of great reporting on the private option. His latest post begins:

The strangest part of the “private option” is that the plan grew out of pressure from local Republican lawmakers, the very same folks who had the loudest concerns about costs of the original Medicaid expansion. That’s strange because the new “private option” is going to cost more (not necessarily for the state — see here and here — but almost certainly for the feds)…. There are a number of reasons that offering coverage via private insurance is costlier than offering it via Medicaid but the main one ain’t rocket science: private insurers reimburse at higher rates. Even conservatives that like the “private option” better agree that it will cost more. Well here’s the thing. Despite a broad consensus about cost, Republicans at the forefront of advocating for a “private option” as a possible alternative to Medicaid expansion do not agree. They think that the “private option” might not be any more expensive for the feds, and could even cost less.

He gives those Republican views a generous airing in the rest of his piece. Go read it! I didn’t see anything in it that I didn’t touch on in my “prebuttal.” (I should be clear. I’m not against expanding the scope of exchanges. I just think it will cost more and we should not be deluding ourselves that it won’t.) It’s crucial to separate two propositions: (1) Competition can be efficiency increasing; (2) Competition on a state insurance exchange of the type permitted under the ACA can bring spending below that of Medicaid. The former can be true even if the latter isn’t. That’s a reasonable expectation if Arkansas or any other state goes forward with the private option, as we currently know it (which is not very well).

The Onion Is America's Finest News Source

GOP Senator Flips On Gay Marriage After Son Comes Out:

Sen. Rob Portman (R-OH), a leading conservative who was on Mitt Romney’s shortlist for vice president, announced the reversal of his longstanding position against same-sex marriage, saying he had a change of heart after his son came out to him two years ago. What do you think?

“Let’s hope his kid has a tough time finding affordable health care.”

Lee Swart – Wharf Worker

John Cassidy: Paul Ryan in Wonderland

John Cassidy:

Paul Ryan in Wonderland: Chapter 6: Having wandered back into writing about U.S. politics for the past eighteen months or so, I sometime wonder how the full-time Washington correspondents, the lifers, do it: cover the same old junk year after year. The key to career longevity and job satisfaction, I suppose, is to buy into the notion, assiduously promoted by the politicians and their flacks, that what they are doing is serious. Budgets, national security, energy policy, health policy—these things matter….

Sorry folks. After watching Representative Paul Ryan launch his much-anticipated budget for the fiscal year 2014, I can’t keep up the pretense. The plan is a joke… and nobody should pay much attention to it, except as another exhibit in the indictment of latter-day Republicanism. Ryan’s numbers don’t add up. His proposals—cutting domestic programs, converting Medicare to a voucher program, returning Medicaid to the states, reducing the top rate of income tax to twenty-five per cent—were roundly rejected by the voters just five months ago. And the philosophy his plan is based upon—trickle-down economics combined with an unbridled hostility toward government programs designed to correct market failures—is tattered and shop worn….

Budget Discussion Complete Dysfunction Weblogging

Ezra Klein:

Our deficits aren’t as bad as Washington thinks: On Tuesday, Rep. Paul Ryan presented the budget for House Republicans…. In honor of the season, Americans everywhere will wear traditional budget-season hats and eat the customary budget-season meals, which include, of course, a rich dessert that we assume will be offset by future weight loss.

Okay, that last part is just what we do in my house. Behind all these appendix-heavy documents lurks the specter of our budget deficits, which have emerged as pretty much the only problem in Washington that both parties can agree to focus on (sorry, millions of jobless Americans). But what kind of problem, exactly, do our budget deficits present? Here are three ways to think about them:

1. We’re experiencing severe and measurable economic drag from today’s deficits.

2. We’re not experiencing measurable economic drag from today’s deficits, but we’re worried about future deficits implied by today’s policies and demographic trends.

3. We’re not experiencing severe and measurable economic drag from today’s deficits, but we’re worried about future deficits implied by today’s policies and demographic trends, and we’re also concerned about the likelihood of additional budget-busting policies that some future Congress might pursue.

If you guessed No. 3, then congratulations! You get a double serving of budget-season cake. Delicious.

Nobody Has Any Business Supporting These Republicans! Nobody!: Yet More Paul Ryan Weblogging

Do you like magic tricks? Paul Ryan's budget is about $1 trillion MORE MAGICAL now. bit.ly/Z1oOqa

— Matt O'Brien (@ObsoleteDogma) March 13, 2013

Matt O'Brien:

Paul Ryan's Tax Math Just Became More Magical :

There's something breathtaking about any Paul Ryan budget. There are the savage cuts to healthcare and safety-net spending for the young and poor. The deep cuts to education, research, and infrastructure. The way current seniors are spared from any of this fiscal pain. The increased defense spending. And the tax cuts -- heavily tilted towards the rich, of course -- that will supposedly be paid for by eliminating loopholes….

Ryan wants to radically simplify the tax code… radically reduce rates…. Oh, and he wants revenue to average 18.8 percent of GDP for the next decade. The only way to do all of this is to radically cut tax expenditures too. But Ryan doesn't name a single expenditure he wants to cut. Instead, he bridges the gap with a magic tax reform asterisk. This isn't a new magic trick for Ryan. It's just a bigger one… his magic asterisk needs to be even more magic…. About a trillion dollars more….

You're not alone if you think magic is more fun than math. Paul Ryan certainly agrees.

The Chicago School's Intellectual Collapse Continued: Richard Posner Is Uranus: Wednesday Hoisted from the Archives from Three and a Half Years Ago Weblogging

Richard Posner never managed to find the guts to apologize to Christina Romer, or Larry Summers, or his readers…

Brad DeLong : The Chicago School's Intellectual Collapse Continued: Richard Posner Is Uranus...: When I was a child, one of my favorite stories was that of the discovery of the planet Neptune on September 23, 1846 by Johann Galle, Heinrich D'Arrest, and Urbain Le Verrier. The astronomers of the nineteenth century found an anomaly in the orbit of Uranus: it was not going where Newton's law of gravitation said that it ought to be going

I wasn't going to revisit this, but I finally had enough time to think about Menzie Chinn's and Justin Wolfers's very useful attempts to strike a blow in the long twilight struggle for rational economic analysis of the stimulus package, and it struck me that here Richard Posner really is Uranus.