At The Week Harry J. Kazianis speculates about what would happen if North Korea actually attacked its neighbors:

First, North Korean armed forces would launch a massive assault on Seoul, firing hundreds of artillery shells that devastate the outskirts of South Korea’s capital. Caught off guard, the residents of Seoul would go into sheer panic. People would flee the city and head south by the millions. Train stations, airports, and roads would be overwhelmed.

Meanwhile, North Korea would launch a coordinated cyber-attack on the south’s top financial intuitions as well as Seoul’s power grid and waste-treatment stations. Millions of people would be without access to cash, power, and other critical resources. A state of emergency would be declared nationwide.

At this point, the conflict is only hours old.

Read the whole thing. This is one of the reasons I’m glad that I’m not president. I wouldn’t want to be in the position of needing to make decisions under circumstances under which practically any alternative is horribly evil.

You might be interested in this post at Financial Samurai, “Scraping By On $500,000 A Year”. It illustrates how insidious lifestyle changes and the expectations that go along with them can be.

In another of his typically opaque posts at RealClearBusiness Jeffrey Snider takes 1,000 words to say something that could be said in a few: as long as the unimaginably large China keeps exporting inexpensive goods and deflation European and American central banks will never get inflation back to what they consider normal.

He does make some interesting points, however, to the effect that economics has transmogrified from a descriptive science to an ideology and that globalization and free trade are not identical.

I was astonished that Michelle Chen could write about the problem of homelessness in Silicon Valley at The Nation without mentioning zoning ordinances or anti-development regulations once. She mentions lots of other things including low wages (other than in the tech sector), joblessness, rent controls, and unionization but not those.

Daniel Gross has a post at Slate in which he outlines a point I’ve made here from time to time. Here’s the meat of his post:

There’s no such thing as a job an American won’t do. There are such things as jobs that Americans in your geographic area won’t do at the conditions on which you are offering them. At this point in the economic cycle, building homes in Denver now seems to be one of them.

When regional labor markets are tight, you have to send the price signal to potential workers that it will be worth their while to leave their current home or position in order to apply—that the job will pay well, that it will carry benefits, that if you get hurt or sick you’ll have good insurance, that there might be job security and prospects for training and development. That price might be closer to $100,000 than it is to $50,000. But that’s where we are in the economic cycle. And if builders prefer not to pay up to attract workers and are reluctant to try to charge more for their end products, they’ll muddle through at low volumes. That, alas, is also where we are.

The whole post is good and I encourage you to read it.

But it only tells half the story. In some sectors the availability of cheap labor, frequently illegal, has enabled, changed, or perpetuated certain business models. In agriculture, for example, in some parts of the country growers changed from using mostly black agricultural workers to mostly Hispanic agricultural workers practically overnight because black workers were beginning to organize and demand better conditions, terms, or pay. Illegal workers don’t have that option.

Now in many parts of the country agricultural workers are paid low wages, on terrible terms, in appalling conditions, largely to the absence of outrage. What would happen if there were strict enforcement of immigration laws and labor laws? Some growers would leave the business, some would invest in equipment to automate processes that are presently done by hand (that’s what’s meant by “increasing productivity”), and some would pay betters wages on better terms and offer improved working conditions.

Would anyone care to take up Megan McArdle’s gauntlet, thrown down at Bloomberg View, at to whether the Affordable Care Act has been a net gain?

There’s a new paper out looking at how the Affordable Care Act has transformed health-care access, and in turn, what that has done for health. The authors’ first answer probably won’t surprise you: when millions more people became insured, more got checkups and primary care doctors. But it’s not obvious that these people got any healthier. As the paper puts it: “No statistically significant effects on risky behaviors or self-assessed health emerge for the full sample.”

Other studies have found substantial effects on self-assessed health, but on the harder markers of health — like blood sugar, cholesterol and blood pressure — the famous Oregon Medicaid Study found no significant improvement when government gave people health care.

It turns out the link between “health care” and “health” is not as close as we would like. Health insurance is not magic. Insurance can give you access to a doctor, but it cannot make you take your medicine. An absolutely astonishing percentage of people don’t take their hypertension medication, even though the side effects are minimal, the medications are cheap generics, and the benefits are large; overall, about 50 percent of patients seem to fail to take their medicine as recommended. Insurance cannot make you stop drinking or smoking or overeating. Just ask the primary-care physicians charged with bullying people out of those behaviors. Yes, people with health insurance are more likely to be healthy. But people with good health insurance are also more likely to be successful folks who are remuneratively employed, which seems to be independently correlated with health, even when everyone is getting their health care through Britain’s National Health Service.

Even as some people use health insurance to get their blood pressure down or their lung disease treated, others will fail to comply with treatment regimens, or will get treatments that turn out in hindsight to have been a bad idea, or will spend money on unhealthy things now that they’re spending less on health care. Which effect ends up being larger in aggregate is an empirical question, even though individuals may be able to point to a very clear benefit or detriment to themselves.

That empirical answer ends up being … kind of cloudy. Some studies show large health benefits from health insurance, others little, none, or even negative effects.

Politically, it doesn’t matter whether it’s a net gain. It benefits some people and they’ll defend it to the death as will those who like the PPACA for political reasons.

My own concerns about the PPACA had nothing to do with whether it was a net gain or not but that it did little to address the issues we need to resolve so desperately or even sets the stage for addressing them in the future.

But back to her question. Make your case that the Affordable Care Act was a net gain or a net loss.

I think that I must be less favorably disposed towards mercantilism masquerading as free trade than George Friedman is. In his post at Mauldin Economics he laments letting the mask drop:

In the last G-20 meeting, its members agreed to drop the forum’s commitment to free trade at the insistence of the United States. That agreement was reached at one meeting and was contained in a single document—such agreements and documents are far from written in stone.

In spite of that, it must be regarded as a historical moment. Excluding the free trade commitment from the agreement marks a fundamental shift in a concept that has been central to global economics for more than a generation.

As the late Mayor Daley used to say, let’s look at the record. To the best of my knowledge no country has completely free trade. There are fewer impediments to any other country selling its products or services in the United States with the possible exception of goods that we euphemistically deem to be violations of our intellectual property laws than there are in most countries.

All of our major trading partners on the other hand have substantial barriers to the import and sales of U. S. goods and services within their borders, not limited to duties, quotas, and subsidies. Suggesting that we might do the same is just acknowledging reality.

The reality for the U. S. is that while trade may have boosted GDP a little, median income has remained frustratingly stable while the average income has risen sharply. That’s just another way of saying that a few people have benefited greatly by trade while most of us haven’t benefited at all and some of us have been gravely injured.

The trade regime I support is reciprocity. China or Japan can impose tariffs as high as they care to or impose quotas or provide subsidies to their hearts’ content, secure in the knowledge that we’ll take the same actions against their goods and services. That will hurt the Walton family but you’ll start to notice more neighbors who are employed making things than you used to.

While I agree with Cullen Roche’s headline conclusion, I disagree with his reasoning:

Let’s say we have two pools of people – the Healthcare Heads and the Healthy Heads. The Healthcare Heads are mostly older people and they need the healthcare system a lot. The Healthy Heads are mostly young people who need routine check-ups and basic coverage. Then we have two healthcare providers called Healthy McHealth Provider and McDonalds (not to be confused with the hamburger company) who offer two plans for these pools to compete over. The first plan is called the Hennessey Healthcare Plan and the second plan is called the Honda Healthcare Plan. As its name implies, the Hennessey Plan, named after one of the most awesome (and expensive) cars ever made, has all the best bells and whistles. The Honda plan is just, well, like a Honda. It’s nice, but you’re gonna have to pay extra if you want that CAT scan.

The reasons that “capitalism” (the market system) can’t fix health care are that:

1. People want care not insurance.
2. The cost of insurance is proportional to the cost of care.
3. As long as the cost of care goes up, the cost of insurance will, too, regardless of how insurance is structured.
4. If you constrain the supply and subsidize the demand, costs will inevitably rise.
5. If you want competent practitioners, you’ve got to constrain the supply.
6. If you don’t want anybody to go without the care he or she needs, you’ve got to subsidize demand.

1. Get re-elected.
2. Posture.
3. Otherwise do as little as possible.
4. Get paid a handsome salary for it.

What’s not to like?