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July 27, 2014

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Posted: 27 Jul 2014 12:06 AM PDT

'The Illogic of Employer-Sponsored Health Insurance'

Posted: 26 Jul 2014 10:52 AM PDT

Uwe E. Reinhardt:

The Illogic of Employer-Sponsored Health Insurance, by Uwe E. Reinhardt, NY Times: ... Persuaded by both theory and empirical research, most economists believe that employer-based health insurance... ostensibly paid by employers ... is recovered from employees through commensurate reductions in take-home pay.
Evidently the majority of Supreme Court justices who just ruled in Burwell v. Hobby Lobby case do not buy the economists' theory. These justices seem to believe that the owners of "closely held" business firms buy health insurance for their employees out of the kindness of their hearts and with the owners' money. On that belief, they accord these owners the right to impose some of their ... religious beliefs ... on their employee's health insurance. ...
The Supreme Court's ruling may prompt Americans to re-examine whether the traditional, employment-based health insurance ... is really the ideal platform for health insurance coverage in the 21st century. The public health insurance exchanges established under the Affordable Care Act are likely to nibble away at this system....
In the meantime, the case should help puncture the illusion that employer-provided health insurance is an unearned gift bestowed on them by the owners and paid with the owners' money, giving those owners the moral right to dictate the nature of that gift.

'Are the Rich Coldhearted?'

Posted: 26 Jul 2014 10:52 AM PDT

Why are so many of the rich and powerful so callous and indifferent to the struggles of those who aren't so fortunate?:

Are the Rich Coldhearted?, by Michael Inzlicht and Sukhvinder Obhi, NY Times: ... Can people in high positions of power — presidents, bosses, celebrities, even dominant spouses — easily empathize with those beneath them?
Psychological research suggests the answer is no. ...
Why does power leave people seemingly coldhearted? Some, like the Princeton psychologist Susan Fiske, have suggested that powerful people don't attend well to others around them because they don't need them in order to access important resources; as powerful people, they already have plentiful access to those.
We suggest a different, albeit complementary, reason from cognitive neuroscience. On the basis of a study we recently published with the researcher Jeremy Hogeveen, in the Journal of Experimental Psychology: General, we contend that when people experience power, their brains fundamentally change how sensitive they are to the actions of others. ...
Does this mean that the powerful are heartless beings incapable of empathy? Hardly..., the bad news is that the powerful are, by default and at a neurological level, simply not motivated to care. But the good news is that they are, in theory, redeemable.

'Five Myths about the Gender Pay Gap'

Posted: 26 Jul 2014 09:53 AM PDT

Here are the myths described by Vivien Labaton:

1. The pay gap is closing rapidly. ...
2. Women earn less because they work in industries that pay less. ...
3. Women earn less because they don't negotiate well. ...
4. Women earn less because mothers choose to work less. ...
5. To close the pay gap, we should focus on deterring discrimination. ...

Details here.

Summers on 'The Greatest Threat to Open Market Capitalism'

Posted: 26 Jul 2014 08:58 AM PDT

Larry Summers on why he supports (conditionally) the Export-Import bank (from a longer interview):

Danny Vinik: I want to turn to your op-ed in the Financial Times on July 6 on the U.S. global stance on economic issues. In particular, you expressed support for the Export-Import bank and said that eliminating it would be an act of unilateral disarmament. Can you explain that?
Larry Summers: Probably at this moment, the greatest threat to open market capitalism comes from state-driven mercantilism capitalism, often carried on by authoritarian governments. They do not seek a level playing field. They seek a playing field that is tilted in their favor through the use of a variety of kinds of subsidized credits. The best and most credible way of deterring and limiting that behavior is to have a capacity to respond so that it does not produce commercial advantages. That's what the Ex-Im bank enables us to do.
There are some who believe that it is good for everybody globally to subsidize exports. I'm not among them. I'm in favor of negotiations that would move towards a system where you didn't have every country racing to compete with subsidies. But unilaterally renouncing our subsidies would be a source of great satisfaction in important parts of the world with which we compete and I do not think would be a productive way to bring about a more rules-based system.

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