I’m taking nominations for weasel of the week. At this point my frontrunner is the guy who killed the two police officers in New York. I suspect that some of my fellow Watchers will nominate Bill De Blasio but I think that’s overheated. I don’t think that De Blasio is a bad man, just a bad mayor. For that, blame the voters of New York.
I suspect that John Cochran’e Wall Street Journal op-ed critiquing Keynesianism won’t go unanswered:
Keynesians told us that once interest rates got stuck at or near zero, economies would fall into a deflationary spiral. Deflation would lower demand, causing more deflation, and so on.
It never happened. Zero interest rates and low inflation turn out to be quite a stable state, even in Japan. Yes, Japan is growing more slowly than one might wish, but with 3.5% unemployment and no deflationary spiral, it’s hard to blame slow growth on lack of “demand.”
Our first big stimulus fell flat, leaving Keynesians to argue that the recession would have been worse otherwise. George Washington’s doctors probably argued that if they hadn’t bled him, he would have died faster.
While I agree with Dr. Cochrane that Keynesian economists are too slow to acknowledge the failures of their preferred policy, particularly in Japan where it’s hard to see how they could have spent more, I think some of his criticisms are overblown.
As I’ve mentioned before I took my economics courses when Keynes was king. Keynesianism was not just the dominant strain of economic thought, it was very nearly the only strain of economic thought. I don’t think I heard the word “incentive” once in three years of economics courses. I think that Keynes was correct, even tautological, in theory. It’s obvious to us now that you can compensate for a shortfall in aggregate demand by filling up the hole with government spending spent in deficit. However, it has proven extremely difficult to implement Keynesian policies in practice for political reasons. The timing and structure can never be made exactly right.
My gripe is more against fine-tuning in general.
Let’s wait for the riposte as a prominent Keynesian or two weighs in in defense of Keynesianism (or at least a policy they’re calling “Keynesianism”).
I’d meant to post on this when the news came out but events overtook me. From time to time I’ve posted on Vermont’s plan to inaugurate a single-payer system within the state. Vermont has now shelved that plan:
Vermont under Shumlin became the most visible trailblaze [ed.: for a single-payer system]. Until Wednesday, when the governor admitted what critics had said all along: He couldn’t pay for it.
“It is not the right time for Vermont” to pass a single-payer system, Shumlin acknowledged in a public statement ending his signature initiative. He concluded the 11.5 percent payroll assessments on businesses and sliding premiums up to 9.5 percent of individuals’ income “might hurt our economy.”
That supports the growing intuition I’ve had about a single-payer system. For decades I supported such a system for the United States (after I’d lived and worked in Europe and gained a better understanding of how their systems worked). But then a little over a decade ago I began to lose faith in the practicality of such a system for the United States.
My intuition is that there’s a relationship among healthcare costs, national production, income, growth, and demographics outside of which a single-payer system is just impractical, both for reasons of affordability and political support. IMO while we might have been able to create a workable single-payer system in the United States 20 years ago, healthcare is just too darned expensive here now, economic and income growth are just too slow, we’re too old, etc. to create a workable system now. That’s why I argued so vehemently five years ago for healthcare reform that reduced costs: that would have expanded the range of possible solutions. Instead, Democrats decided to expand the number of insured persons without meaningful reductions in healthcare costs.
Vermont is a relatively progressive, prosperous, and homogeneous state. It also has one of the oldest median ages which, paradoxically, should make it easier to implement a state single-payer system—a higher proportion of the population is eligible for Medicare. If Vermont can’t implement a state single-payer system, which state can?
There’s an article over at Forbes on one company’s manufacturing military jet aircraft using off-the-shelf components:
So when Rhode Island-based Textron and its partner AirLand Enterprises unveiled an off-the-shelf strike and reconnaissance jet late last year, no one was certain the idea would fly. The Scorpion—a low-cost, two-seat, twin-engine, subsonic jet built largely from commercially available parts—is designed for intelligence, surveillance, and reconnaissance (ISR for short) as well as light strike missions. It’s not quite a fighter jet and it’s certainly not an ISR drone, but it packs the pared-down capabilities of both. Designed and developed in secret over just two years, the Scorpion defies the general expectations of what a military jet should be—expensive, super-capable, and years in the making. The $20 million Scorpion is inexpensive to buy and operate and just capable enough to be effective.
Most countries in the world don’t face threats from high tech enemies. The threats they face are distinctively closer to home. And jets have a certain cachet that turboprop aircraft just don’t have. The market for the Scorpion may be surprising high.
People talk about the technology revolution but they generally don’t recognize where the real revolution has been. It’s been in building things from standardized, and, importantly, off-the-shelf components. Those are the reasons you can afford to buy a personal computer or a smartphone and they’ve now come to military aircraft.
Writing at The Atlantic Jeffrey Goldberg considers how we would know if liberalizing our relations with Cuba is successful or not?
Here is my modest Plaza de Armas test: If, in two years, the booksellers on the plaza are selling books about something other than Che, and if they’re making actual money selling more of what they want to sell, then the argument that engagement leads to openness will look credible. I’m not expecting anything close to perfect freedom—I’d be surprised, in two years, to find Marco Rubio’s memoir for sale on the plaza—but I’ll go looking for some proof that change is actually happening. Internet connectivity, the release of political prisoners, the establishment of non-government newspapers—these are bigger tests. But the plaza test will be telling nonetheless.
Here’s my yardstick. If Cuban-Americans start travelling to Cuba in significant numbers to visit family members there, bringing with them consumer goods and stories of their lives in the United States, and those Cuban families start taking notice, the policy of liberalization will have been a success. IMO that’s the greatest danger to the present Cuban regime and we should keep our eyes open for pushback from the regime on it.
I suspect that the editors of the Washington Post don’t appreciate the irony of the caption on their editorial, “Obamacare deserves some credit”. It will need it since that’s how it will be paid for: on credit.
Returning to the meat of the editorial there is no doubt that the PPACA is responsible for the reduction in the number of people without healthcare insurance:
The percentage of Americans without insurance dropped by 5.3 points in the last year, the Urban Institute found this month , because of the ACA’s Medicaid expansion and health-care exchanges. The mellowing of health-care cost inflation, on the other hand, seems to have predated the ACA. Though some cost-containment measures might begin to bite in coming years, the law was more a coverage expansion policy than a cost-control policy.
As to whether it’s also a contributing factor to improvements in hospital care or the slower rate of increase of healthcare costs, it’s just too early to tell. We don’t have nearly enough data to draw those conclusions.
The great challenge in the years to come will be to determine whether more people with insurance translates into more and better care or whether more and better care translates into better health. That’s what the Oregon study called into question: the relationship between insurance and health. That’s the whole point, isn’t it?
Another of the Tuskegee Airmen has died:
Former Tuskegee Airman Lowell C. Steward, of Oxnard, who was awarded the Distinguished Flying Medal in 1944 for his actions during World War II, died Wednesday at Community Memorial Hospital in Ventura.
He was 95.
Lowell Steward Jr., of Sylmar, said his father passed away peacefully with several members of his immediate family at his bedside. He had come down with a cold on Sunday evening at his Oxnard home that quickly turned into pneumonia, Lowell Jr. said.
There are fewer of these brave and proud men left each year.
Obviously, most Americans are ungrateful, racist, partisan hacks incapable of noticing the economic boom that’s as plain as the noses on their faces:
The Battleground Poll of 1,000 likely voters, sponsored by The George Washington University, found that 56 percent believe economic conditions are getting worse or are poor and staying the same. Asked how anxious they are about current economic conditions, 77 percent of likely voters said they’re very or somewhat worried about the economic climate.
At the White House, some of Obama’s top advisers described conditions as decidedly less bleak, expressing optimism about economic progress during the president’s final two years in office, whether a Republican-led Congress collaborates with him or not.
Hasn’t the stock market been booming for the last few months? Doesn’t that prove that the U. S. economy is in fine shape?
Of course, the stock boom could be explained by everyone else’s economies being in even worse shape than ours. I guess that’s thoughtcrime. The world’s tallest midget as it were. Or maybe all of that prosperity just isn’t trickling down to three quarters of Americans. The ingrates. Serves ‘em right.
There’s a wisecrack attributed to V. I. Ulyanov, “Lenin”, that a capitalist will sell you the rope you will use to hang him. The media are full of umbrage over the apparent North Korean hacking of Sony’s film division and the subsequent pulling of an offensive comedy by Seth Rogen and James Franco scheduled for release next week:
The U.S. will have to respond in some way, likely in concert with our ally Japan. (Sony is a Japanese company.) This isn’t just an economic loss for Sony, it’s a threat to all American corporations, businesses and individuals.
Was Sony lax about its cybersecurity? Probably. But the company doesn’t deserve all of the financial losses, class-action lawsuits, and humiliation with which it has been hit.
The truth is that there isn’t any kind of cybersecurity that could keep a company safe from each and every hack.
The Internet was designed for openness, and as the pitfalls of this design become more and more expensive, all Internet users will have to make choices balancing openness with security. Smart security design may be the next big Internet boom — not because consumers demand it, but because businesses do.
As for “The Interview,” we urge Sony to release it for home video, at least. The movie deserves a viewing — and North Korea doesn’t deserve to win this fight.
There appears to be evidence that North Korea was, indeed, behind the hacking and blackmail:
Washington (CNN) — U.S. investigators have evidence that hackers stole the computer credentials of a system administrator to get access to Sony’s computer system, allowing them broad access, U.S. officials briefed on the investigation tell CNN. The finding is one reason why U.S. investigators do not believe the attack on Sony was aided by someone on the inside, the officials tell CNN.
The revelation is part of what is behind the government’s conclusion that hackers operating on behalf of North Korea were responsible. The government is expected to publicly blame the reclusive regime as early as Friday. The hackers ability to gain access to the passwords of a top-level information technology employee allowed them to have “keys to the entire building,” one official said.
and there have been some vague threats of a proportional response. Pat Lang has some ideas on that subject. In fine Jacksonian form he declaims:
If it is established that the North Korean government and/or its agents attacked Sony then I say, let slip the dogs of cyberwar. Hacking? You like hacking and destructive cyberwar activity? Hah! We will burn your servers into piles of smoldering kimchi !!
My preference would be for the U. S. to offer bounties to people who can produce evidence that they’ve brought down North Korean servers. A sort of market-based system for cyberwarfare.
There’s an irony in the hacking. The U. S. did invent the Internet after all. North Korea’s Internet connections run through China and Russia. Germany hosts servers for North Korea. If we’re not carefully explaining the implications to North Korea’s patrons, we’re making a serious error.
I don’t have as much time to comment on the Obamas’ remarks on their own experiences with racism as I wish I did. I think their relating of their experiences constitutes what somebody or other referred to as a “teachable moment” that I wish more would heed. I’ve seen quite a bit of smirking about them in the right-leaning blogosphere and punditry.
The reality is that many black folk experience events differently than white folk do. I don’t know what happened at Target that day but I have no doubt of the reality that Mrs. Obama experienced it as she said she did—as racism.
Young black men experience their encounters with the police differently than I, an old white man, do even when the same things happen to us. So there are two distinct things going on: some of their encounters with police are actually different from mine and even when our encounters are the same they experience them differently.
One size does not fit all. There’s no single solution to both of these issues and both need to be addressed.