I thought you might be interested in the findings of the Urban Institute on the effects of the Affordable Care Act:

Whether the coverage provisions under the Affordable Care Act (ACA) would lead to adverse labor market consequences in the form of reduced employment, hours worked, or earnings has been the subject of substantial debate and analysis. This brief assesses whether coverage gains from 2010 to 2016 were associated with changes in labor market outcomes across occupations. Using data from the American Community Survey and the Current Population Survey, we show how employment, hours worked per week, and weekly earnings changed, by occupation group, and how these changes differed for occupations experiencing larger and smaller coverage gains under the ACA. We also examine whether occupations experiencing increased coverage through nonemployment sources (i.e., through Medicaid or individual plans purchased on the ACA’s Marketplace exchanges) also experienced offsetting declines in ESI coverage. We find that predictions that the coverage provisions of the ACA would lead to reduced employment, work hours, and earnings did not materialize, nor did predictions that employer-based coverage rates would fall as employers dropped coverage.

or, said another way, the predictions of the ACA’s opponents have not happened.

In an op-ed in the Boston Globe Niall Ferguson gives us his version of what’s wrong with the world, not just here in the United States but in most of the developed world:

1. You can’t do anything about demographics, and for most democracies the demographics are terrible.

2. You have inherited welfare systems that transfer resources from younger to older voters, but the latter tend to be more numerous and turn out more in elections, so you can’t reform them and survive.

3. Your safety valve is that you can borrow from the bond market and interest rates are very low, but that’s now changing, and you can’t do anything about it, because central banks are independent.

4. Your aging population means that there’s an economic demand for foreign labor and foreign students, but immigration is politically unpopular, even when the immigrants come from northern Europe (e.g., Poland) and genuinely relieve skill shortages.

5. You might just be able to overcome these problems if there were a real external threat, but the truth is that ordinary people just aren’t that scared of Vladimir Putin or Xi Jinping, much less Kim Jong Un.

6. As for climate change, ask President Macron how his proposed fuel tax is going.

7. Finally, social media have made it almost impossible for you to control the narrative. You can tweet to your heart’s content, but you are firing a water pistol into an ocean of extreme views and fake news.

That’s an interesting take but it doesn’t quite describe what’s happening because it doesn’t address Japan. Japan is facing a demographic bottleneck much worse than the U. S. and worse than Germany, France, or the UK. It’s GDP growth rate is extremely low. It’s debt to GDP is extremely high—more than twice that of the United States. It has a much more expansive welfare system than the U. S.

Despite all of these Japan isn’t experiencing the political upheaval that the U. S., Germany, France, or the UK are? What’s different about Japan?

Although its GDP growth rate is practically flat, its per capita GDP continues to rise, it is very equal compared to the U. S. or European countries, and, related to this, its immigration rate is extremely low. Its social welfare spending is very low. There’s a lesson in here somewhere.

I wanted to share with you some observations from Claire Berlinski at City Journal about the Gilets jaunes protesters in Paris:

I spent Saturday speaking to the Gilets Jaunes near the Bastille, where I figured I’d have a good vantage point on a traditional protest site. I walked with them as they slowly made their way to the city hall, or Hôtel de Ville. It was obvious from a single glance that these weren’t Parisians, but rural people who couldn’t afford to buy expensive Parisian clothes or get chic haircuts. I instantly understood why Macron rubs them the wrong way. They looked worn out; their hands and faces were lined; they were mainly in late middle-age. They seemed to be decent, respectable, weary people who had worked hard all their lives, paid their taxes, and played by the rules.

They couldn’t have seemed less disposed to violence, nor more apolitical. They were respectful of the police, and vice-versa. As cops drove by, relaxed, the Gilets Jaunes smiled at them, like kids excited about their first trip to the big city, waved at the officers, and gave them the thumbs-up. The cops reciprocated. The sentiment was fraternal. “We’re all weary, overtaxed working men,” they were saying to each other. “We’re on the same side.”

I concluded they were just what they were advertised to be: family men and women who couldn’t make ends meet and who were tired of Macron’s attitude. Why this protest, why now, I asked? The fuel tax was just the straw that broke the camel’s back, they said; it made the difference between “able to make ends meet, barely,” and “not able to make ends meet.” It had just been getting steadily worse every year since the economic crisis began. They had run out of hope.

Recall my observations about how demographically different these protesters are from the students or banlieusardes of previous demonstrations. When ordinary working class Frenchmen in their 30s and 40s think they have nothing left to lose, that seems like a rather serious development to me.

Why is the U. S. unemployment rate 3.7%? The Economist has their explanation:

Joblessness in America has fallen steadily thanks to the longevity and the sturdiness of the American recovery. America’s stretch of unbroken growth, which began in June of 2009, will become the longest on record in 2019 (assuming it continues).

while I think an explanation that comports better with the facts is that the wages for the jobs that are on offer are inadequate to attract people back into the job market, something explained by two-job families, non-portability of support systems, and a variety of other factors.

I guess it’s a question of whether you see the glass as half empty or half full.

I am left with a host of questions. Why do economists cling to the Phillips Curve when its predictive ability is now in question? What would the U. S. economy look like if we were calculating its size based on number of workers times the average productivity per worker rather than the way we are now? (or even better based on marginal productivity) In that case how would we calculate productivity? Is the calculation of the unemployment rate broken because the birth/death ratio (the fudge factor that has been accounting for more change in the estimated unemployment rate than actual measurements for years) is broken and the whole thing is made up? What happens to the unemployment rate when you take illegal immigrants into account?

I watched about 5 minutes of the “negotiation” among Nancy Pelosi, Chuck Schumer, and Donald Trump yesterday and then lost patience. There is a transcript here. I have also read quite a bit of commentary on the exchange.

I think that Trump and the Pelosi-Schumer combine both won to the extent that they got something they wanted. They got Trump to say he’d take the heat for any government shutdown which they think will work to their benefit. And Trump got Pelosi and Schumer to say they were satisfied with the status quo on the border which he thinks will work to his.

Beyond that who you think won or lost the exchange depends on the views that you came into the discussion with.

I wanted to draw your attention to this piece at Pew Research While the people in countries like the U. S., Australia, France, and Germany are alarmed at the massive levels of immigration, their concerns are dwarfed by the concerns of the people in countries from which people are migrating over outmigration:

At the same time, people in many countries worry about people leaving their home for jobs in other countries. Among surveyed nations, Greece and Spain – two countries that have seen significant numbers of people move abroad in recent years – have the highest shares of people who say this is a very or moderately big problem (89% and 88%, respectively).

About eight-in-ten (79%) say this in Mexico, which has one of the world’s largest numbers of people living outside of their country, at 13 million, according to the United Nations. (The country’s mass migration to the U.S. has slowed over the past decade or so.) In India, the nation with the largest international migrant population (16.6 million), 64% say people leaving for jobs elsewhere is a big problem.

I think that is a far too underreported story—the social upheaval being caused by mass outmigration. So, for example, I have little doubt that the Mexican authorities are telling their American counterparts that the people leaving Mexico for the U. S. are criminals and malcontents, the reality is that they also include some of Mexico’s hardest-working and most ambitious young people, people that Mexico desperately needs.

I don’t say he’s a great man. Willie Loman never made a lot of money. His name was never in the paper. He’s not the finest character that ever lived. But he’s a human being, and a terrible thing is happening to him. So attention must be paid. He’s not to be allowed to fall in his grave like an old dog. Attention, attention must finally be paid to such a person.

Arthur Miller, “Death of a Salesman”

In his latest Wall Street Journal column Walter Russell Mead asks a pair of intertwined questions. Why are voters in the UK, France, and Germany rebelling against the status quo? And if they’re rebelling when conditions are, at least on average, pretty good, how will they react when the inevitable downturn occurs?

The turbulence in these countries, pillars of European and indeed world order, isn’t just about particular leaders. Their entire political systems have come under strain. In the U.K., even before the Brexit referendum, the rise of the Scottish National Party and Jeremy Corbyn’s victory over the moderate wing of the Labour Party had already transformed the political system. In France, Mr. Macron came to power as the existing party system imploded. In Germany, the antiestablishment Left and Alternative for Germany parties have been steadily gaining strength as centrist parties falter in the polls.

It’s one thing for political systems to face populist revolts when times are bad. President-elect Jair Bolsonaro’s victory in Brazil came on the heels of a deep recession and a massive corruption scandal. Voters turned against a political establishment that was corrupt and economically inept. Italy’s populists came to power in a country where, a decade after the financial crisis, gross domestic product has not yet returned to 2008 levels. Persistent crime and poverty helped elevate a left-wing populist to the presidency in Mexico.

But that is not what is happening in Europe’s Big Three. The German economy under Ms. Merkel is the envy of much of the world. Britain’s economy has also done relatively well, with unemployment low and declining despite uncertainty from Brexit. And while growth in France is slow, it is real; average wages as reported by the Organization for Economic Cooperation and Development rose more than 1% a year between 2007 and 2017. Any material grievances voters may have are not extreme by historical standards.

The discontent shaking Europe’s governments, and the anger reverberating through American politics, comes as times are about as good as they get. The crash of 2008 and the Great Recession are far behind us, and most countries are at the peak of their business cycles. Conventional political science suggests this should be a better environment for incumbent politicians. People normally get cranky when the economy is doing badly but mellow out as things improve. Now a long period of steady if not exceptional growth is in the rearview mirror, but voters are in revolt across much of the West.

I think I can answer those questions. Ordinary people are working hard or at least they think they’re working hard. Promises have been made or at least they think that promises have been made. They don’t see those promises being fulfilled but they do see the lifestyles of their leaders and the economic elite. They see their lives changing irrevocably and not, from their point of view, for the better.

And those leaders respond by ignoring their concerns, dismissing them. Attention must be paid.

I’ve issued this warning before but maybe it’s time for me to do it again. Kicking the can down the road indefinitely is not a viable strategy. The choices are between smart and prudent change or foolish and ill-conceived change not between hoping it will all blow over and making changes that upset your own cozy circumstances.

Rather than dissecting Robert Samuelson’s Washington Post column which could be summarized “we never had it so good”, let me just make a few observations.

1. If you ignore enough factors, you can prove anything.
2. If you deal only in aggregates, things do look pretty darned good.
3. Heavy concentration of wealth in relatively few hands tells us that dealing only in aggregates does not jibe with ordinary people’s life experience nearly as well as it used to.
4. Yes, we have better smartphones.
5. What value do you place on confidence that you won’t be a victim of violent crime? Violent crime used to be unheard of in my affluent neighborhood on the Northwest Side of Chicago. Now it’s a block and a half away.
6. What value do you place on the confidence that your children will lead happier, more prosperous, longer lives than you did? That is no longer the case.
7. What value do you place on young people not being so burdened with educational debt that they may never dig their way out? That is no longer the case, either.
8. What value do you place on every news broadcast not devolving into a shouting match?

I don’t think the widespread dissatisfaction, not just here in the U. S. but, rather obviously, in Europe as well, is just petulance or because the people are ingrates. When people is behaving as though something were wrong, there probably is.

Update

In a related vein, Charles Duhigg’s article at Atlantic might be summarized

1. Americans are a bunch of angry ingrates.
2. There’s good money to be made in anger.
3. My anger is better than your anger.

I was taken aback by this statement in James Dobbins’s Wall Street Journal op-ed, “History Ended in 1945”:

In 1989 Francis Fukuyama published an essay heralding the “end of history,” by which he meant the triumph of representative democracy over all other forms of government. For a decade he appeared prescient, as democracy swept through Central and Southeastern Europe, Latin America and much of Asia. More recently some of those democracies have faltered. Although few have definitively collapsed, the democratic wave seems to have begun ebbing.

Yet in a larger sense, the “end of history” came in 1945. Since then there have been no wars between major powers and few between smaller states. The business cycle has been moderated if not eliminated. The subsequent seven decades saw almost continuous economic growth, lifting nearly half the world’s population into the middle class.

These accomplishments are based on two basic, widely accepted norms of international behavior: Thou shalt not covet thy neighbor’s territory, and thou shall open thy markets to all equally. The norms were buttressed by numerous postwar institutions—the United Nations, the North Atlantic Treaty Organization, the World Bank, the International Monetary Fund and the General Agreement on Tariffs and Trade, now the World Trade Organization. Equally important, the norms were backed by U.S. military and economic power and the attractiveness of the American political and economic model.

because it is so Euro- and America-centric. Yes, those two norms are basic and widely accepted—in the United States and Europe. Outside those two areas not so much.

Based on the World Bank’s assessment of tariffs China’s, India’s, and most of Latin America’s trade-weighted tariffs are four times ours. In most African countries they’re ten times ours. And that doesn’t even take into account the enormous non-tariff barriers the very same countries have in place.

Or consider territory. Since 1945 the total territories of the United Kingdom, France, the United States, and even Russia have declined. China’s has expanded and continues to do so.

The first 30 years of the period in question were accompanied by enormous expansion of the U. S. economy and increases in wages for ordinary American workers. For the next 40 years those both slowed substantially.

Perhaps a recalibration of Mr. Dobbins’s thesis is in order. The United States, Canada, and Europe adopted the “two basic, widely accepted norms”. The balance of the world, about three-quarters of the people and land mass, did not. That condition resulted in bringing a lot of people, mostly in China and India, out of poverty while a handful of people in the United States, Canada, Europe, India, and China became fantastically wealthy.

History is alive and well. We’re just ignoring it.