Ryan's 2014 Medicare plan is different still. The voucher is now based on the average bid, not the second-lowest bid, and the inflation cap is gone. The market will either produce savings or it won't. [skip] The CBO has analyzed the effect of Ryan's 2014 changes, and they conclude that by 2020 the Ryan plan would save a grand total of $15 billion per year. That's 2 percent of net Medicare spending. Now, this is nothing to sneeze at. Savings are savings. However, like the cost containment proposals that are part of Obamacare, this represents a highly speculative estimate. We might get the 2 percent, we might get nothing.I comment. Recently I warned you to beware of Doug (Elmendorf head of the CBO). You guessed Obamacare would reduce the number of uninsured would be by 10 million by December 31. I guessed the CBO guess of 13 million would turn out to be about right. OK so now the CBO says 12 million so I can beware of Doug or note that they also reduced their exchange based QHP estimate by one million and look how that turned out. But now I cast aside all fear of Doug and wonder how the hell anyone can imagine that the 2014 Ryan plan will reduce Medicare spending. We have some experience with something very much like it called Medicare advantage, which reduced spending by -14%, that is, increased spending by about 14%. Ryan2014 sure seems to me to be Medicare advantage on steroids, crack and crystal meth. What happens if the average plan costs much more than ordinary CMS Medicare ? It seems to me the plan would be to send the difference to all the people who stick with the CMS. Now I do not guess that this that would increase spending by 14 % -- there would be some competition between the private option providers instead of the Medicare advantage formula (about which you know more that I do). But I don't see any reason to doubt that the Ryan2014 proposal would cost more than unreformed Medicare. You guess the reasonable range is 2% saving to 0% saving. That sounds to me to be vastly too kind to Ryan. If I had to guess, I'd guess his reform would cause spending to be at least $50 billion a year higher. This is a wild guess, but I don't see how anyone can have any doubt about the sign of the effect.
Monday, April 21, 2014
Friday, April 18, 2014
Thursday, April 17, 2014
Sunday, April 13, 2014
My latest is to estimates some Phillips curves. From the exercise, I learn that Mark Sadowski knows more about the macro-monetary policy literature than I do (OK I knew that -- I focus on oh growth or something or maybe robust econometrics). Nick Rowe also suggested that the results are just what one expects if the FOMC successfully targets the inflation rate (this is true). I replied at length in comments and copy and paste my reply here
April 13, 2014 7:14 am
This sort of result is exactly what you should expect. if the central bank is targeting inflation. The whole point of inflation targeting is to ensure that expected inflation does not vary over time, so you should not be able to estimate any effect of expected inflation on actual inflation.
Robert: Nick yes. The results are consistent with what central bankers call "anchored inflation expectations" and would occur if inflation were successfully targeted. There are two problems. First inflation has not been successfully targeted, inflation has not been equal to the target -- this could be because the true target is 0 to 2% not 2 % (or 2-4% as a goal not a target in the 80s). Second TIPS breakevens *are* still correlated with lagged inflation. There are two facts (both reported at this blog) one is that lagged inflation has a negative correlation with wage inflation, the other is that the R squared od TIPS breakevens on lagged inflation is about 50%.
You can explain the styllized fact which I just reported, but not the one I reported February 25 2013
Also there are survey's of price level forecasts made by people chosen as experts. I haven't reported much on this, but I have been looking at median CPI forecasts from the Livingston survey
Here I note that Volcker seems to have had significantly less inflation fighting credibility than Arthur Burns -- a very standard argument for how actual expectations differ from adaptive expectations is in total contrast with the data.
Here I note that decade averages Livinston median forecast errors correspond almost exactly to decade averages of unemployment.
All are evidence that very crude models of expectations work very well -- when modelling expectations. Now the Livingston team changed the survey in 2003 and I haven't dowloaded data from post 2003 surveys. My excuse is that I am keeping them for out of sample forecasts and giving myself no chance to data snoop. The real reason is that I am lazy. So I only have one year ahead forecasts of inflation up to 2004 (forecasts made in 2003).
Here is a a scatter of lagged annual personal consumption deflator excluding food and energy inflation and the annual CPI inflation forecast calculated from the mediian Livinston CPI forecast. I look at data since 1990 (recall the expecations unaugmented Phillips curve fits the data 1990-2013 well). There is no sign from the Livingston survey that inflation expectations are anchored.
Between the TIPS results (for recent years for which FRED has TIPS data) and the Livinston survey results (for older years before they changed the survey) I am willin to assert that inflation expectations are not anchored at all -- that TIPS purchasers and Livinston survey participants do not believe that the FOMC is successfully targeting inflation year by year (actually the TIPS breakevens are 5 year breakevens).
I should add that the median Livingston participant makes extremely anchored forecasts of inflation over the long term (10 years IIRC) forecasting around 2.5% (IIRC) in survey after survey.
Not ready for prime time, but I am convinced that the key issue is downward nominal rigidity not anchored inflation expectations.
Thursday, April 10, 2014
I think there is actually evidence that a strange race of alien beings (obviously including Obama) are taking over the planet. First point of contact somewhere in Indonesia. They have some mystical power -- call it charisma which makes them extremely popular.
The evidence ? Joko Widowo Mayor of Jakarta and super popular candidate for President of Indonesia. See Economist article entitled "Yes he can" See his face (OK the hair is different)
Born 1961 . Hmm who else was born 1961 ?
Implausible ? Maybe but I mean how likely is it that a half Kenyan whose middle name is Hussein and who just happened to have lived in Indonesia would be elected 11 years after September 11 and 2 years after arriving in Washington ? Are you willing to claim it is all a coincidence ? I am.
But just in case it isn't, I for one welcome our new large eared overlords. We haven't done a very good job on our own, and their results so far are promising.
Wednesday, April 09, 2014
(I like my own example in which the Medicare insurance program for the elderly is eliminated and a post office in Idaho is named "Medicare" but I'll take "two free asprin" and call it for Chait.)
In both posts, Chait notes that, when they should be discussing whether political claims of fact are true, Politifact denounces claims because they are criticisms of entitlement reform and Politifact thinks that entitlement reform is good.
In the lie of the year post
The item explaining this year’s choice largely consists of irrelevant filler. For instance, Politifact quotes a worried budget scold:Notice here how criticism from a "bipartisan" organization is presented as fact checking. Evidently there can be no "bipartisan" errors and there were WMD in Iraq."In terms of creating a national conversation about fiscal reform, the last thing we need is demagoguing attacks against people who have put forward serious policy proposals," said Jason Peuquet, a policy analyst with the bipartisan Committee for a Responsible Federal Budget. "It’s very worrying."Yes, if your agenda is to encourage politicians to propose deficit reduction, then you’ll be worried about any criticism of any deficit reduction proposal, accurate or otherwise. So what?
In the pants on fire post
"2. Politifact: "Republicans say that future spending projections for Medicare are not sustainable, and the program requires changes."
Obviously this has no relevance to the truth of the Democrats' ad."
This is in what is supposed to be a fact check of an ad which did not assert that the current Medicare program is sustainable. It is a matter of opinion, but also a matter of opinion which has nothing whatever to do with the claims of fact which are allegedly being checked.
In the Lie of the year post Chait goes on to conclude "But it’s not a partisan issue. Politifact had some genuine Democratic lies to choose from. Politifact is just a plain shoddy, not-very-smart group, and this is true when they’re calling Republicans liars as well."
Clicking the concluding clause leads to Chait complaining that Politifact falsely rates the true Republican assertion that the ACA includes Medicare cuts as false. It is clear that it is not a partisan issue, it is an ideological issue. Politifact considers criticism of any proposed Medicare cuts to be so bad that it's the moral equivalent of a lie (and I'm sure of proof that the critic is fat, stupid and a lousy tipper). This isn't partisanship, this is epistymology -- Politifact defines false to mean "either not corresponding to reality or criticizing cuts to the Medicare budget"
Well this too long post is two years too late too. The fact that MSM villagers inside the beltway (and in Florida) consider the desirablity of cutting social security and Medicare to be objective facts so that advocating such policy isn't advocacy is now about as well known as the location of Ukraine. But I still find it shocking.
In reality there are more than two sides. For example the Koch propaganda seems to correspond to the sincere views of Jane Hamsher who was (and for all I know still is) sure that the ACA was a bill to be killed because it was soft on health insurance industry profits.
But not even a very serious centrist villager could believe in a Teadog firebagger alliance of those who attack capitalism from the right and from the left. I think it is clear that opportunistic betrayal of the sacred tenets of hippy punching is the one thing that can make those guys admit, say, that they were totally wrong about Paul Ryan and worse much worse, that Paul Krugman was right.
When Ryan attacked the Medicare cuts in the ACA (and also in his budgets) he betrayed the VSP cause of cutting entitlements. To them acceptable debate includes any number of magic asterixes and claims that the CBO has scored something when it was ordered to assume that reduced tax rates don't imply reduced revenue (by Ryan who absolutely has the authority to order them to do that when scoring his roadmap as he did). But Mediscare is beyond the bounds (This also includes the true claim rated pants on fire with 4 Pinocchios and lie of the year that oh say Ryan wants to end Medicare and replace it with a fundamentally different program which he, exercizing his first amendment rights, choses to name "Medicare")
We like to pretend that science and religion can carve out their unique spheres (what Stephen Jay Gould called "non-overlapping magisteria"), but as well-intentioned as that may be, it's just not true.
Monday, April 07, 2014
Saturday, March 29, 2014
Wednesday, March 26, 2014
Tuesday, March 11, 2014
I am completely out of touch with both kids and universities, plus I'm an old fogey. And if you really want to know the truth, I'm not sure why university professors need to communicate with their students digitally at all. Don't they still meet a couple of times a week in meatspace, like we used to when I was a lad? Can't assignments and office hours and so forth be sufficiently communicated during class time?Curmudgeon v curmudgeon round two. Wow this is great, something I know about. 1. No meatspace won't do. Students skip classes. Students who are at the lecture seem to manage to not hear simple announcements. Information on the web is so useful that it would be crazy not to use it.
But fine. I get it. We all communicate digitally these days, so university professors need to do it too. But you know what? University students actually do know how to use email. Sure, they might consider it something that's mainly used for sending messages to grandma and grandpa, but they all know how to use it. And it has the virtue of being universal, extremely flexible, and supporting embedded links to any old thing you want. Students who plan to find jobs after graduation should probably know how to use it.
2. e-mail ??? It's hard to e-mail people if you don't know their e-mail address. Did you e-mail this blog post to me ? Of course not. You put it on the web and I came to you.
3. After announcing a change in my office hours in two successive lectures I finally finally followed my own observation in point 1 and updated the web page. See not e-mail a web page for me, the prof, where students surf. You know like a blog but much more boring. My students may thank you for provoking me into putting in the 10 seconds of effort. That is those who come to my office hours. That is no one.
Monday, March 10, 2014
The main point of the post here (emphasis mine)
Why is it that the working class often votes against its own economic interests? Well, let's compare the sales pitches of the Republican and Democratic parties when it comes to pocketbook issues:My comments
Republicans: We will lower your taxes.
Democrats: We, um, support policies that encourage a fairer distribution of growth and....and....working man....party of FDR....um....
There are two problems with the Democratic approach. First, it's too abstract to appeal to anyone. Second, it's not true anyway. Democrats simply don't consistently support concrete policies that help the middle class. Half of them voted for the bankruptcy bill of 2005. They've done virtually nothing to stem the growth of monopolies and next to nothing to improve consumer protection in visible ways. They don't do anything for labor. They're soft on protecting Social Security. They bailed out the banks but refused to bail out underwater homeowners. Hell, they can't even agree to kill the carried interest loophole, a populist favorite if ever there was one.
I very much agree with this post. In particular I am sure that Democrats would win more elections if they were more populist and that they are influenced by campaign donors. I think what set you off (and what set me off) was the really nutso idea of switching the debate to the environment -- Democrats shouldn't change the subject from people's pocketbooks, because their position is more popular.
However, I'm grumpy too and your claims of fact are odd.
Now I get really grumpy, because I scrolled up to the post to get the word "virtually" and couldn't click back down in the comment box. Also disqus forces me to use internet explorer, because it doesn't work with my Chrome and I hate that. So grrr get off of my lawn and more comment below.
I agree with this post but your claims of fact are odd (and disqus is made me start over grrr). I note the ultimate weasel word "virtually" in your claim that Democrats' policies have marginally helped the working and middle classes. That is, you know the claim is false (virtually true = untrue).
I have a modified A and B
A) Republicans: "We will cut your taxes and we did if you ignore payroll taxes and no we don't just cut taxes for the rich; why do you think that you anti-Republican liberal; ohhh you are a declared George HW Bush supporter who just hit the yes button when Clinton said that in a debate (this happened). well it's unfair to say we only care about the taxes of rich people. Think of all the times we complain about the 47% (AKA the retired and much of the working class).
B) Democrats We cut your taxes, but then you voted for a RepublicanHouse and the House Republicans insisted they be raised right back up again.
Your list of policies does not include the Obama tax cuts in the
ACA ARRA (update:oooops) then the partial payroll tax holidy. They happened. Under Obama the taxes of the working class were cut (until Republicans forced the cuts to be reversed). Under Reagan they increased (payroll tax increases being greater than income tax cuts). You haven't explained how the vast majority of US adults of all classes manage to not know about the simples possible tax cut. I'd say it is a gross failure of the news media to do their job.
In fact Democrats do sometimes run on "we will cut your taxes". Two examples are Clinton in 1992 and Obama in 2008. Hmm what do those two guys have in common ?
The ACA helps the working and middle classes by providing insurance insurance. Even people with employer provided insurance can't be sure that they will always have employer provided insurance. The ACA subsidies are available well up into the middle class reaching zero at an income about four thirds of the median family income. Here I think it is clear why the ACA hasn't convinced working and middle class Americans to vote for Democrats -- only half of poll respondents know about the subsidies at all. Also most of that half assume they are for low income people that is "those people." This is a sign of the power of the division of middle class vs poor (which of course has a lot to do with white vs black) and also a sign of a failure of the news media to do their job.
The ARRA helped the US working and middle classes both by increasing their chances of keeping their jobs (I'm not a US resident hence the third person) and by reducing the cutbacks in services provided by state and local government.
So I agree that Democrats are not egalitarian enough for their own political good. But you can avoid blaming the working class for deciding their are no pocketbook relevant differences between the parties only by ignoring the facts. You know better. You demonstrate it daily and non-virtually admitted it by typing "virtually."
update: and "next to". To not mention HAMP is to be kind to the Democrats but it sort of semi happened.
Sunday, March 09, 2014
Read it. Then don't read my carping comments below.
I humbly assert that this is an excellent essay. However I will only comment on the parts with which I disagree.
1. A cruel parody of the first two thirds or so of the essay is "When I came to Washington I wanted to disrupt life for comfortably cartels of producers. Now I realize that pre-internet journalism was one of them. It is fine to make life uncomfortably for airline workers (including executives) but not to make it difficult for people like us." Surely you can see the pattern of a young idealist who works for very little and wants things shaken up becoming a not so young exceedingly established retired dean who thinks things have been shaken up to much. I don't think this is fair at all. But I enjoyed typing it. 2.Assange is a journalist. Manning is his source. Assange did not publish huge amounts of classified material by pushing a button. Wikileaks screened the material. Yes there was too much for them to screen, so they collaborated with newspapers. But journalists Wikileaks, The Guardian and The New York Times were doing the same things. Those at Wikileaks were paid much less (if anything) and are not members of the club. That is the difference. You'd really better update before Glenn Greenwald reads this post. He can be very harsh. 3. "What if it turns out that journalism’s social mission and its economic fortunes have simply diverged—that ventures like Klein’s do a superb job of informing the public, but don’t make money? Should we just shrug our shoulders and say, Sorry, if the market won’t support you, you shouldn’t exist?" "Superstar". There is a radical contrast between your guess about the economic fortunes of Ezra Klein and your guess about the economic fortunes of Ezra Klein. I think it is clear that the economic prospects of his venture are solid (ask Josh Marshall). Wonkblog shows how much it costs to produce excellent journalism (very little).
I think the problem with daily Newspapers and TV news is not principally financial (although the financial problems are extreme). A profession which can afford to send hundreds of well paid people into a room to shout questions at a press secretary does not lack enough money to do a better job. You briefly note that the Washington Monthly had a budget of roughly zero (and probably still does). It gets the job done. To choose a middling example CNN has a rather larger budget. It doesn't get the job done.
4. "There was some of this feeling in President Obama’s State of the Union address this year, which evinced a deep weariness with the process of seeking legislation and a preference for executive orders, or for Congress to present solutions to him, rather than vice versa."
I disagree entirely. Obama is smart and idealistic and a wonk, but he is not a technocrat. He clearly is inclined to seek common ground and try to find solutions together. He turned to executive orders, because it was obvious to him (as it is to you) that he can seek legislation all he wants, but there won't be any. Clearly this is a case of someone who loved Democracy not wisely but too well finally facing the plain fact that, however wonderful it might be, the legislative process will not occur in the near future except for keeping the lights on and the debt paid on time.
I am never convinced by "evinced". The verb to evince is rarely used and never used when a plain verb wouldn't make the claim clearly false. If we find something in a speech we can say it is stated or displayed or revealed or exposed. You wrote "evinced" because it is so weak a word that a sentence based on it can hardly be false. I propose that you ask yourself why you wrote write "evinced". I think it is because you wanted to make a claim, but knew it was false. Also the word "some" serves only to weasel. It has no meaning in context. It served only to weaken a plainly false claim to a not so plainly false claim.
Saturday, March 08, 2014
That is crazy.
There is only one way to understand your use of "idealism." To you it means killing people for ideals (this also explains how you can imagine that Bush believes in Democracy and freedom in spite of the fact that he also believes he had the power to lock up anyone anywhere indefinitely without trial (and did so).
I generally respect you and the only complaint I usually have with this blog is that you don't post enough. But your definition of idealism convinces me that your inner idiot -- the one which advocated invading Iraq, still lives. You now understand that that decision was insane, but you stick to the insane idea that idealists who don't kill don't count.
If you don't equate idealism with a form of killing, then why did you write the passage I quote ? I ask for information. I think you can present no other explanation.
Note I am not a pacifist and agree that sometimes our ideals require us to kill people. The reason I am appalled is that you don't seem to think anything but killing could ever be the result of ideals.
Of course it is also clear that you think that foreign policy which doesn't involve killing people amounts to nothing.
Also the subtitle is garbled.
Chait's claim is that Obama is a realist but not a Realist, so this is an error "What Is Obama’s Foreign Policy Ideology? Realism — not the same thing as realism!" it can be corrected to "What Is Obama’s Foreign Policy Ideology? Realism is not the same thing as realism!" or to "What Is Obama’s Foreign Policy Ideology? realism — not the same thing as Realism!
Finally, as written it is equivalent to writing "It is realism - not the same thing as realism" The capital R in the subtitle just indicates that the word is the first of the sentence. An irregular single r as in my second correction is meaningful. Capitalizing the first word in a sentence indicates nothing.
Thursday, February 27, 2014
"In Winston’s view, it is a myth that the last midterm election was swung by voter outrage about Obama’s health-care proposal, which was then being debated in Congress."
Well that would be a myth, since the bill was signed months before the 2010 midterms. I'm pretty sure the error is not the fault of "David Winston, a pollster who advises House Speaker John A. Boehner." I think it quite possible that it isn't Karen Tumulty's fault either. I think a copy editor might have decided to save some ink by eliminating un-necessary words editing down from something like
In Winston’s view, it is a myth that [the outcome of] the last midterm [campaign] was swung by voter outrage about Obama’s health-care proposal, which was then being debated in Congress.
As rewritten, the sentence says that the law was debated during the 2010 election campaign. This is arguably true (especially but not only if you think the 2010 campaign started in November 2008). But really debating *in Congress* during an election ? Congress would never do that.