The Insurance Market Without a Mandate
– A recent research paper
by Jeffrey Clemens of Harvard helps to quantify what might happen if the federal government forbade insurers from taking people’s health into account when deciding whom to cover and how much to charge — but the government did not mandate
that everyone had insurance. The paper makes a more rigorous version of the point about Massachusetts that’s in my column
today. Without a mandate, insurance regulations can sometimes be quite problematic.
– Paul Krugman
– So Republican members of the Financial Crisis Inquiry Commission are going to issue their own report
, placing primary blame on the government — because it’s always the government’s fault. And according to reporting at the Huffington Post
, all four Republicans voted in favor of banning the phrases “Wall Street” and “shadow banking” and the words “interconnection” and “deregulation” from the panel’s final report, according to a person familiar with the matter and confirmed by Brooksley E. Born, one of the six commissioners who voted against the proposal.
Yep. It was all Fannie and Freddie, which somehow managed to cause housing bubbles in Ireland, Iceland, Latvia, and Spain as well as the United States; and the repo market had nothing to do with it. And bear in mind that this wasn’t one Republican; it was all of them.
What Is Money?
There’s a lot to be said about the right-wing attack on the Fed
, none of it good. But I’d like to highlight one aspect of this discussion that has been striking me: the conservative focus on the evils of increasing the money supply. You hear it all the time: the Fed is printing money! Danger, Will Robinson! In some comments on this blog I see assertions that the true measure of inflation isn’t prices, it’s what happens to the quantity of money. But here’s an even more basic question: what is money, anyway? It’s not a new question, but I think it has become even more pressing in recent years. The truth is that these days — with credit cards, electronic money, repo, and more all serving the purpose of medium of exchange — it’s not clear that any single number deserves to be called “the” money supply. Intellectually, this isn’t a problem; nor is there necessarily a problem maintaining monetary policy even if there isn’t any single thing you’re willing to call money. Mike Woodford
has been writing about this stuff for years.
– In light of Paul Krugman’s recent pro-corporate proclamation, where he sneers that we should just lie back and enjoy
corporate tyranny, that to want to fight it is “so sixties” anyway, I thought I’d ask a few questions about him of those who still believe in him. The contention is that he’s a reformist, and even among those who reject reformism there’s a residual affection for him. Everything he says is, on its face, reformist at best. But as I’ve traced in many posts, I think he’s actually a pro-bank, pro-austerity manipulator who only poses as a citizen. Others think his pro-bank aspects are the pose. If he’s really a citizen advocate, that’s the secret. Others think they can detect this citizen advocacy in him, but it seems to me they can never adequately explain it. My explanation for what I think is a scam is that it’s precisely because Krugman has such (fraudulent) progressive credibility that he can astroturf better by posing as a real progressive, even though he’s not really that even in his pose. But here’s my questions (versions of this can apply to many others as well):
The FCIC falls apart
– Shahien Nasiripour
reports this morning that the Financial Crisis Inquiry Commission has, to all intents and purposes, fallen apart. The four Republicans seem set to issue their own minority report, sticking to discredited Republican talking points which blame the government and Frannie for the crisis, with especial focus on the long-standing and harmless Community Reinvestment Act. As a result, the official report will be received as some kind of equal-and-opposite Democrat view, rather than a definitive take along the lines of the 9/11 Commission report. You really can’t make this stuff up: During a private commission meeting last week, all four Republicans voted in favor of banning the phrases “Wall Street” and “shadow banking” and the words “interconnection” and “deregulation” from the panel’s final report, according to a person familiar with the matter and confirmed by Brooksley E. Born, one of the six commissioners who voted against the proposal.
Income Inequality vs. Lifestyle Inequality
– Tyler Cowen
‘s American Interest
essay “The Inequality That Matters
” has sparked some interesting commentary on the wealth of bankers
. But, while that is indeed the meat of the piece, the titular topic is actually more important to the 99 percent of us who aren’t hyper wealthy bankers, athletes, and entertainers. [T]he inequality of personal well-being is sharply down over the past hundred years and perhaps over the past twenty years as well. Bill Gates is much, much richer than I am, yet it is not obvious that he is much happier if, indeed, he is happier at all. I have access to penicillin, air travel, good cheap food, the Internet and virtually all of the technical innovations that Gates does.
Not only do lower middle class Americans live better by almost every measure than their wealthy counterparts of a century ago, there are many ways in which they’re better off than the rich of even fifteen or twenty years ago. Technology
, particularly in medicine, information, and entertainment, has moved at a lightning pace with fantastic changes having occurred right before my eyes.
College, Jobs and Inequality – Searching for solace in bleak unemployment numbers, policy makers and commentators often cite the relatively low joblessness among college graduates, which is currently 5.1 percent compared with 10 percent for high school graduates and an overall jobless rate of 9.8 percent. A college education is better than no college education and correlates with higher pay. But as a cure for unemployment or as a way to narrow the chasm between the rich and everyone else, “more college” is a too-easy answer. Over the past year, for example, the unemployment rate for college grads under age 25 has averaged 9.2 percent, up from 8.8 percent a year earlier and 5.8 percent in the first year of the recession that began in December 2007. That means recent grads have about the same level of unemployment as the general population. It also suggests that many employed recent grads may be doing work that doesn’t require a college degree. Even more disturbing, there is no guarantee that unemployed or underemployed college grads will move into much better jobs as conditions improve. Early bouts of joblessness, or starting in a lower-level job with lower pay, can mean lower levels of career attainment and earnings over a lifetime. Graduates who have been out of work or underemployed in the downturn may also find themselves at a competitive disadvantage with freshly minted college graduates as the economy improves.
Letters From Foreclosure Hell – From ‘Single Mom‘: "I lost everything, I am now losing the roof over our heads, my 30 year history of good credit, my self-respect. I cried at night, sobbed really, about how I had destroyed my life, how I can’t look my son in the face now sometimes, for fear he will see how I let us down. " I wish somebody in a position of power would read the emails I keep getting from foreclosed homeowners. They paint a very different picture of the world than the one we usually hear about in Washington. The Administration’s doing too little, or the wrong things, at a time when their opponents are brazenly submissive to the banks. The public is frightened and angry, and nobody’s listening. The headlines tell the story, too. In the last 24 hours we’ve learned that a large majority of Americans want to ban bonuses at any bank that received Federal help. We also learned that more than half of those polled are worried about making their housing payments, a number that’s up sharply from 2008. And we’ve received more detail about the unethical and illegal behavior of big bank lawyers.