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I took lower-division at the local community college and had an instructor who did a good job of pointing out that the ideas in the course were grossly simplified and bore little resemblance to the real world. I have noticed that most Tea Partiers are engineers and others who have only had tangential exposure to economics and political theory. They read about Smith, they read about Locke, so now they have it all figured out.
James Kwak on John Komlos's "What Every Economics Student Needs to Know and Doesn’t Get in the Usual Principles Text": A Book That Needed To Be Written: Tuesday Book Review Weblogging
**James Kwak:** A Book That Needed To Be Written: "I have previously written about...excessive belief in the little bit that you remember from Economics 101.... >Economics 101 usually paints a highly stylized, unrealistic view of the world in which free markets always produce optimal outcomes.......
My point was that this is NOT paternalism. The government is not making people buy real insurance because it's good for them. This is not "Eat your spinach." The government is protecting society from behavior that people take in their self-interest, like going uninsured or underinsured, whether it's because they're indigent or downright irresponsible. When they get sick or injured, everyone else pays. Our deficits are being driven up by public-sector health care spending. It's not just Medicare and Medicaid. Every government agency provides some level of contribution to its employees' health insurance. And it's costing the private sector just as much.
We're telling them that they must be in some insurance plan, either private or public. We give people whose income isn't enough to cover their premiums help with that, in some cases making the insurance free. We don't do it because it's good for them. We do it because it's good for us. It's an issue of personal responsibility, not paternalism.
Henry Aaron: It's Good That Insurers Are Canceling Their Lousiest Health Insurance Plans: Noted
Henry Aaron: >Rather than apologizing for these cancelations, [the administration] should be bragging about them.... Imagine a new law enacted to promote food purity. As it is being debated, you are told ‘if you like what you eat, you can keep on eating it.’ The new law takes effect, and one day ...
Well, I had a different take on his comments about insurance company executives. I read it as amoral lizard-brained hucksters taking advantage of desperate, low-information consumers to charge premiums that are far in excess of the real value of the policies they're selling. Some. Not all.
Except for the people in the "Roberts Gap" in states that refused Medicaid expansion, they will be getting subsidies to purchase insurance that could more than make up for the higher premiums for real insurance.
Henry Aaron: It's Good That Insurers Are Canceling Their Lousiest Health Insurance Plans: Noted
Henry Aaron: >Rather than apologizing for these cancelations, [the administration] should be bragging about them.... Imagine a new law enacted to promote food purity. As it is being debated, you are told ‘if you like what you eat, you can keep on eating it.’ The new law takes effect, and one day ...
"Eat your spinach" was an unfortunate and inaccurate analogy. Forcing substandard "health insurance" plans off the market is more like outlawing the sale of lead-filled life preservers (hey, they protect you from radiation, right?). Many, if not most, of these policies gave the appearance of insurance, but have, in fact, left policy holders destitute when they became sick or injured. Many of these people end up in emergency rooms, where the costs are passed on to everyone else.
Henry Aaron has it right - this is the market finally working properly because of government regulation to overcome information asymmetries, and Democrats should be claiming it as a victory, not cowering under rocks.
Henry Aaron: It's Good That Insurers Are Canceling Their Lousiest Health Insurance Plans: Noted
Henry Aaron: >Rather than apologizing for these cancelations, [the administration] should be bragging about them.... Imagine a new law enacted to promote food purity. As it is being debated, you are told ‘if you like what you eat, you can keep on eating it.’ The new law takes effect, and one day ...
The GOP message on the shutdown (the ransom note) has shifted from Obamacare to "spending." Ferguson is merely laying the "intellectual" base upon which that message rests. That's his job. It sounds intellectual to low-information voters and the press. I really can't distinguish between them any more.
This Will Not Do at All…
Why oh why can't we have a better press corps? **Niall Ferguson:** Niall Ferguson: The Shutdown Is a Sideshow. Debt Is the Threat: >A year ago, the CBO's extended baseline series for the federal debt in public hands projected a figure of 52% of GDP by 2038. That figure has very nearly doubled to ...
Boehner offered assurances to Harry Reid and President Obama that the deal he negotiated with them would pass the House. So much for Boehner's assurances. What the House Republicans are doing now is trotting out mini-CRs, in the same manner kidnappers parade their blindfolded hostages with guns to their heads.
Here's John Boehner's negotiating strategy in a nutshell (well, a brief clip, anyway): http://www.youtube.com/watch?v=jsW9MlYu31g
Ashley Parker: Republicans Say Boehner Has Offered Assurances on Default: Noted
**Ashley Parker:** Republicans Say Boehner Has Offered Assurances on Default: >The lawmaker, who spoke on the condition of not being named, said Mr. Boehner indicated he would be willing to violate the so-called Hastert rule if necessary to pass a debt limit increase. The informal rule refers to ...
I'm not sure about what Republican economists think about uncertainty, but Republican politicians don't particularly care whether there's any validity to it or not. It's a talking point that successfully captures a large percentage of low-information voters, allowing them to pursue their policy objectives, such as tax cuts for the rich, reduced regulation, and no safety nets (forcing workers into slave-wage jobs).
My guess is that the true role of Republican economists is the same as John Yoo's in the Bush Administration - have someone with credentials to point to and say, "See? He said it's ok."
I Am Uncertain About Where Republicans See "Uncertainty" as a Drag on Demand...
**Paul Krugman:** What They Say Versus What They Mean: >Over at Wonkblog, Lydia DePillis asks, "Remember when Republicans were worried about 'economic uncertainty'?" Actually… I don’t…. They claimed to be worried… but it was… an attempt to put a new, quasi-academic gloss on the same old same old…...
The Post is still getting it wrong. The Republican leadership isn't failing, it's succeeding. Destruction of the New Deal has been a long-term goal of the Republican Party. If the hostage strategy works to repeal ACA, they'll be back, gunning for Social Security. Then Medicare. They'll do in a way that looks like "strengthening," but will be a privatization plan, which is to say, an elimination plan.
The Washington Post Recognizes the Nature of Today's Republican Party: Twenty Years Late and a Great Many Dollars Short Weblogging
Why oh why can't we have a better press corps? Those of us who came to Washington in 1993 to work for the Clinton administration, and who thought that we were going to be part of a centrist bipartisan governing coalition, were astonished to find not so--that we could not get a single Republican...
This crisis shows that Boehner is their ringleader. He refused to conference with the Senate on the budget when asked to months ago. He has played this thing out with the intent of using the fiscal deadline as a gun to the head of the administration and the Senate to repeal the ACA. At any time in the past week, he could have brought a clean CR to the House floor for a vote, but hasn't. Had he done so, the clean CR would have passed, and the tea party fanatics would have been able to vote against it, giving them political cover.
As for the President's options in the debt limit crisis, he could consider the Congress to have implicitly authorized the borrowing when it knowingly approved expenditures beyond known revenues. He could still be impeached, but the Senate would certainly acquit him. To avoid impeachment, the Democrats must get on the extortion message with a single voice. They have to define this series of events as hostage situations, with the Republican offering a deal that reads, "Give us what we want and we won't shoot your kid."
Henry Aaron: Obama Must Ignore the Debt Ceiling: Noted
**Henry Aaron:** Obama Should Ignore the Debt Ceiling: >Failure to raise the debt will force the president to break a law — the only question is which one. The Constitution requires the president to spend what Congress has instructed him to spend, to raise only those taxes Congress has authorized...
At first, I was with Dave Watkins on this. I thought DeLong was trying too hard to appear moderate. But on further reflection, I really think he's right about the need for longer-term thinking.
While most activists have been pushing conversion to clean renewable energy, reducing energy use through conservation and efficiency, reducing suburban sprawl, and changing transportation choices, few have mentioned anything about getting population grown in developing countries under control in the past twenty or so years.
If we don't curb population growth, none of the other stuff is going to work in the long-term. Brad was talking about the naïve assumption that we can stop increases in greenhouse gas emissions, but there's an equally naïve assumption that even if we could do so in the short-term, it would be enough. Even if we could get per-capita emissions down to a sustainable level in the near-term, population growth in the developing world will return us to unsustainable levels in the long-term. Maybe even in the not-so-long term.
DJW: Brad DeLong Is the Stupidest Man Alive: Monday DeLong Smackdown Watch Hoisted from Archives from 2004 Weblogging
DJW: DeLong on Global Warming: >Responding to libertarian blogger Abiola Lapite, Brad DeLong muses on global warming…. >>I think that, for most global-warming fearers, it is naivete that makes them advocate an immediate program to attempt to freeze global CO2 concentrations as close to current ...
-"Wow, I wonder how the modern version would read." It would depend on the circumstances. The patrol aircraft (the modern version of the Sunderland) would probably have had advance warning of the approach of hostile targets and instructed to abort the mission. If it started as a routine intercept (a daily occurrence during the Cold War) that turned sour, the flight crew on the patrol plane would have restarted the number one engine (normally shut down to increase loiter endurance) and initiated a Vne (never-exceed speed) dive to the deck while turning back toward their home base. If they made it to the surface of the water, they'd fly as low as they dared, hoping the back scatter from the water made it hard for the enemy's fire control radar to see their airplane, and forcing the fighter chasing them to burn huge amounts of fuel. By going low and heading toward home plate (and away from the enemy's base), they hasten the moment their enemy has to call off the attack, lest he run out of fuel. Jets are extremely inefficient at low altitude. The patrol plane would try to use electronic countermeasures to foil radars, chaff and tight turns if the fighter gets a missile lock, and flares to counter heat-seeking missiles. Unlike the Sunderland (and most WWII patrol bombers), most modern maritime patrol aircraft have no armaments (although the Royal Air Force's Nimrods carry rear-pointing Sidewinder missiles on the wings - just in case). Of course, fighter pilots already know all this and would probably just use the gun to saw the patrol airplane's wing off. That would be a very short engagement.
Liveblogging World War II: June 2, 1943
Ivan Southall: >1855 hours. The turrets moved slowly while eyes strained in the sunlight. This was indeed the Tiger Country, a slaughteryard, a stage for a play of suspense and savagery, where all men at one time or another knew the meaning of fear. Here there were no parachutes and no patriots...
Bikes don't burn gasoline. We wouldn't want them to catch on as a trend. They're bad for stock portfolios. Beyond that, I think it boils down to identities. Bicycles are seen as "liberal," and if they catch on, it means the liberals are winning.
Either that or the Wall Street Journal should have its plumbing checked for lead pipes.
Can Anybody Explain the Wall Street Journal's War on Bicycles to Me?
Joe Weisenthal: >DEATH BY BICYCLE: Wall Street Journal Goes Absolutely Ballistic Over New York's New Bike Share Plan: Big thanks to Josh Brown for pointing this gem out. >The Wall Street Journal has made an epic editorial video blasting NYC's new bike share program (called Citibikes). >The lead p...
"Hard to tell the typically aggressive pilot it's time to go back to the training command."
The government's really good at telling people hard things like this. He gets a piece of paper called orders that say something like "you are directed to report to Randolph Army Air Force Base no later than 0700, 24 JAN43 for duty with XXX Training Group" (or whatever the Air Force called it's training commands).
This was the policy of both the War and Navy Departments, so that lessons learned in combat would not be lost, but passed on to new pilots. The Japanese practice of leaving their combat pilots in-theater resulted in the Great Marianas Turkey Shoot, where the Navy nearly wiped out Japanese air power in the Pacific.
Liveblogging World War II: May 17, 1943
The Memphis Belle flies its 25th bombing mission — History.com: >On this day in 1943, the crew of the Memphis Belle, one of a group of American bombers based in Britain, becomes the first B-17 crew to complete 25 missions over Europe. >The Memphis Belle performed its 25th and last mission, in a b...
You'd be surprised how often I hear these crackpot right-wing theories as I talk to people in the field. "Roosevelt said he wouldn't go to war against Germany," they say, citing a radio broadcast they all seem to know.
If anyone "tricked" the U.S. into war against Germany, it was Hitler, by cleverly declaring war against us. Roosevelt probably couldn't have convinced Congress to declare war against Germany otherwise.
Given the aims of the Japanese militarists in power in the Thirties, war in the Pacific was pretty much inevitable. Their goal was to kick the western powers out of Asia so that Japan could take its "rightful place" as a co-equal colonial power. There was no way the US was going to walk away from that, nor would it negotiate the transfer of its holdings in the Pacific to anyone but the people who lived in them. We certainly wouldn't have handed them to a Japanese dictatorship. The Japanese navy had geared itself to war with the US Navy, and this went from simply having a paper target to aim for to a feeling that the U.S. Navy was a real enemy that needed to be fought (though Yamamoto famously opposed this view).
I think these rather stupid ideas are gaining traction again because the internet's cheap. Back when you had to buy printing presses, ink, and paper, or radio/TV studios and transmitters, crackpots couldn't get their stupid message out because stupid messages put large investments at risk. Now, you can put anything on the internet and gain a following.
Hey, Benn Steil, You Know Who Else Said the U.S. Was Tricked into World War II?
You would think that the past six years would have led Benn Steil to rethink his beliefs that (a) Jacques Rueff decisively refuted Keynesian economics in the 1940s by demonstrating the truth of Say's Law, and (b) that Bernanke's inflationist policies were going to lead in short order to a collaps...
Thanks. This is the first non-bunny, non-egg Easter image I've seen this week. Happy Easter!
Χριστός ἀνέστη! Ἀληθῶς ἀνέστη!
I also find it difficult to believe that Hitler would have allowed Jews to be evacuated anywhere, and because the Germans were well aware that there was a build-up to invasion underway, it's doubtful they would have allowed Allied transports to move people to Palestine, then return to their wartime duties. Nor could the Allies have even spared those ships. 1943 was also a bad year for trans-Atlantic convoys, which were suffering heavy losses to U-boats at the time.
The problem with this speculation is that it's divorced from the reality of fighting a major power war on two fronts. Bulgaria was just too far away, as was Poland. There was little the Allies could have done to stop the Holocaust, aside from winning the war.
Liveblogging World War II: March 27, 1943
Memorandum of Conversation by Mr. Harry L. Hopkins, Special Assistant to President Roosevelt regarding a meeting with Anthony Eden March 27, 1943 : >March 27, 1943. >Subject: Eden Visit--Conference with the President, Anthony Eden, Cordell Hull, Sumner Welles, Viscount Halifax, Mr. Wm. Strang >...
1943 was not a particularly good year for strategic bombing over Europe. The 8th Air Force was taking unsustainable losses in daylight bombing. The kinds of targets that would have needed to be destroyed, such as railroad lines or concentration camps, would have been nearly impossible to find and hit at night by the RAF. Further, railroad tracks would have been quickly repaired. It would have made little sense to risk big losses (ten percent on some missions) to hit a target that, even if destroyed, would have been restored within days, or even hours.
Liveblogging World War II: March 27, 1943
Memorandum of Conversation by Mr. Harry L. Hopkins, Special Assistant to President Roosevelt regarding a meeting with Anthony Eden March 27, 1943 : >March 27, 1943. >Subject: Eden Visit--Conference with the President, Anthony Eden, Cordell Hull, Sumner Welles, Viscount Halifax, Mr. Wm. Strang >...
In human societies, everything is a morality play. The moral story will push the reasoned argument out of people's minds every time. So Keynesians need to explain the moral goals they seek to achieve and find a way to connect their understanding of macroeconomics and the methods the evidence calls for to those moral and ethical goals.
I know you all hate this, but you have to do a better job framing the your goals and methods in a moral story than your opponents. That's not going to be easy.
Psychological Roots of Political Austerity?
Paul Krugman: [Psychological Roots of Austerity](http://krugman.blogs.nytimes.com/2013/03/23/psychological-roots-of-austerity/): >Simon Wren-Lewis has a thoughtful post on the reasons for austerity mania, in which he accepts the role of special interests but argues that there are also psycholog...
There were some diesel Shermans. It's possible the reporter had become familiar with them elsewhere (they were primarily for Lend-Lease), and assumed all Shermans were diesel. And they were as good as and in some aspects (like mobility in mountainous terrain) even superior to most of the German tanks at that point of the war.
Liveblogging World War II: March 22, 1943
British war correspondent Alan Moorehead embeds with the American army: >In the drizzling rain little groups of infantrymen were drawn up to receive their last instructions. They were hardly more than boys, most of them, wonderfully tall and proportioned and looking very forbidding under their ...
Another blood-letting to save the patient. Have any of the Eurozone patients managed to recover yet?
No? Draw more blood!
Pawel Morski: Cyprus: RealPolitik and Other Lessons
Pawel Morski: >Cyprus: A Brutal Lesson in RealPolitik | Some of it was true...: So it turns out that those who noted that the Cyprus bailout took place ahead of a local bank holiday on Monday were onto something. The terms of the bailout deal represent a huge leap in how the EU is tackling the ...
I seem to remember surpluses in 2000 (granted, they were primarily from Social Security revenues). Then, we got complete Republican control of the government, and the red ink began to flow with give-aways to their rich patrons through tax cuts, wars that primarily benefited defense industries, and a ridiculous Medicare prescription drug program that predictably broke the Medicare budget.
Now, they want to cut spending in a sluggish recovery and balance the budget in ten years. This is like saying the cast has to come off your broken leg in two weeks, whether it has healed or not. Tell me again about these knowledgeable, responsible Republicans.
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...
How would you go about doing (ii)? That would require a constitutional amendment. Otherwise, the future congress could simply write them away in the appropriations bills that would exceed the limits you attempted to impose. Long-term fiscal responsibility requires an informed and engaged citizenry. Gimmicks are not an adequate substitute.
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...
Well, I personally know quite a few union construction workers who aren't white males, but I'm glad to know that you believe that more Americans should be able to join a union. I encourage you to be more outspoken on the declining influence of unions to better the lives of American workers. I eagerly anticipate your pro-union comments on this and other outlets.
Michael Gerson and Paul Ryan Lie About What Republicans Say to Each Other About the "Takers"
Taegan Goddard juxtaposes: >Paul Ryan, Now and Then: >"No one is suggesting that what we call our earned entitlements -- entitlements you pay for, like payroll taxes for Medicare and Social Security -- are putting you in a 'taker' category. No one would suggest that whatsoever." >--Rep. Paul Ry...
Before any of these measures are taken (platinum Reagan gigabuck coins, 14th Amendment, dreaded Federal default), Obama still has time to do this politically by beating the Republicans at their own game - taking it to the streets. McConnell says taxes are now off the table - Obama should call B.S. Wall Street was unscathed in the "Fiscal Cliff" deal. How about asking for a 1/2-percent securities transaction tax (and settling for 1/4)? Obama could put this to the public, asking "Which would you prefer, taxing Wall Street or cutting Social Security and Medicare?" I think I know what the overwhelming answer from the public would be, especially if Obama takes this opportunity to inform people that those surpluses the Bush tax cuts were based on was actually the Baby Boom's Social Security money.
Dealing with Hostage Takers Like Senator Mitch McConnell (R-KY)
Hostage-takers like Senator Mitch McConnell (R-KY) reason that although they do not like what happens if the situation blows up, you dislike what happens if the situation blows up more--so given that they have the power to blow up the situation if they are not satisfied, all they have to do is (a...
I'll admit to engaging in some hopeful thinking. I don't think Obama's taking the leadership of the right-wing, though is is more conservative than his supporters in '08 thought he was (but then, so was Howard Dean). He needs to wait until the stock market starts to drop near the debt limit deadline, then uncork the constitutional path (14th Amendment, Congress did away with the debt ceiling and authorized the borrowing when it approved spending beyond revenues). He can't do it too soon. He has to look like the cavalry riding to the rescue of America's future. He needs to make it clear that he would rather have a political solution (which he clearly does).
Will he take this route? I'm hopeful. I've made your points to the point that I'm sick of it.
I Do Not Understand the Obama Administration...
The big reason to make a deal before January 1, 2013 was that detonating the "austerity bomb" would impose 3.5% of fiscal contraction on the U.S. economy in 2013, and send the U.S. into renewed recession. It was worth making a good-enough deal--sensible long-run revenue increases and tax cuts to ...
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