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August 7, 2012

Latest Posts from Economist's View


Latest Posts from Economist's View


Posted: 17 Jul 2012 12:42 AM PDT
A defense of some, but not all economists:
Why Some Economists Failed
I assert that some economists got things mostly right about the recession and what was needed to fix it, but they have been ignored in policy discussions. Conversely, those who got things mostly wrong were given prominent seats at the policy-setting table where they continued to make errant forecasts even as the evidence piled up against them. One attempt at rebuttal is, I suppose, is to ask how we know who was correct? The answer is that unlike the economists who continue to promote austerity, fear of inflation, and so on, the assertion is based upon the empirical evidence on these issues. [See Paul Krugman for a related issue, why fear of inflation, deficits, and so on "resonates with a lot of people no matter how often and how badly the worldview fails in practice." Part of my point is that I don't think economists are free of blame for this.]
Posted: 17 Jul 2012 12:24 AM PDT
Tim Duy:
A Slap in The Face, by Tim Duy: The retail sales number should be a slap in the face for any FOMC members sitting on the fence. Stripping out autos and gas gives us this picture:
Retail1
Clearly, sales growth has rolled over. But what is more startling is the pace of the deceleration. The three-month change:
Retail2
The three-month change is severe, to say the least, and since 1992 unseen in the absence of recession with the exception of the deceleration in June and July of 2010. The deceleration also lends credence to the theory that the jobs slowdown this summer is not entirely an artifact of seasonal variation but also reflects a general softness in economic activity. The rapid downgrades of Q2GDP estimates reflects that softness.
Note, however, that the 2010 slowdown in sales did not foreshadow a recession. But it did foreshadow the Jackson Hole speech and QE2. With that in mind, I would expect Federal Reserve Chairman Ben Bernanke to acknowledge the deceleration of activity when he marches up to Capitol Hill this week. And such acknowledgement would be a signal that more easing is on its way. Moreover, given the pace of deterioration in the data, the Fed may not have time to find any new tricks, and thus be forced to deliver that easing in the form of additional balance sheet action.
Posted: 17 Jul 2012 12:06 AM PDT
Posted: 16 Jul 2012 08:37 AM PDT
I am supposed to be on vacation this week. I am going to try to keep up, links will still appear daily for example, but realistically posting will likely slow from its normal rate. For now, let me send you to an "annoyed" Aaron Carroll:
Let's try to stick to the real world when we talk about Medicaid, by Aaron Carroll: Tyler Cowen had a piece in the NYT this weekend on Medicaid. He doesn't seem too thrilled with its use in the ACA's coverage expansion. ... I have to admit that his article set me off a bit. It could be that he didn't have space in the NYT for more nuance. Perhaps he'll provide it on his blog. In particular, I'd love him to address some of the points below…
I get a bit  annoyed when people claim that we can't "afford" more government intervention or, god-forbid, single-payer. That kind of statement willfully ignores the fact that every country that has MORE government intervention spends LESS.
I get a bit annoyed by the claim that an expansion of government insurance leads to lines and waiting when lots of countries have universal access and less of a wait-time problem than we do. Moreover, almost no one makes this argument when we expand private insurance, only government.
I get a bit annoyed by blanket claims that doctors won't accept Medicaid. Such statements often ignore the fact that the majority of Medicaid beneficiaries are children and pregnant women. We don't need all types of doctors to accept Medicaid patients in equal numbers. ...
I get a bit annoyed when people just claim government programs are "unpopular". Like Medicare? I don't think so..., polling shows the opposite of what Tyler (and lots of others) suggest.
I get a bit annoyed at the blanket acceptance of the awesomeness of the free market in health care, when there is no phenomenal evidence of its success. And again, those countries with less free market are cheaper, universal, and often just as good. ...
Look, I get that people may not like the political implications of those systems. They may not like the governments that produce them. They may not like the lack of choice inherent in such systems. They may not like the potential  limitations within them for making money, and therefore for innovation. But we need to stop making stuff up about them.

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