hard heads soft hearts

a scratch pad for half-formed thoughts by a liberal political junkie who's nobody special. ''Hard Heads, Soft Hearts'' is the title of a book by Princeton economist Alan Blinder, and tends to be a favorite motto of neoliberals, especially liberal economists.

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Monday, January 02, 2012
Arthur Silber - ONCE UPON A TIME...


Susie Madrak - Happy new year!

Juan Cole - Top 5 Foreign Policy Challenges for US, 2012

Martin Gascoigne - Syria, the Invisible Massacre

Andrew Sullivan - Today In Syria: Assad's Terrible New Year

Glenn Greenwald - Good Chris Hayes segment, with Spencer @Attackerman, on Obama's secret drone wars: http://is.gd/kWvoT0

Charlie Rose - Ali Soufan on "The Black Banners: The Inside Story of 9/11 and the War Against al-Qaeda" (12/23/2011)

Yes, Minister - The Whiskey Priest
Jim Hacker: "Remember Churchill, the wilderness years. He found out about our military inadequacy and Hitler's war machine from army officers. So all the time he was in the wilderness, he was able to leak stories to the press and embarrass the government. I could do that."
Annie Hacker: "But you're in the government."
Jim Hacker: "Oh, yes..."

Question for Bradley Manning prosecution: Was Winston Churchill guilty of "aiding the enemy" when he leaked top-secret information of British military inadequacy to the Germans (and the British public)?

Obsidian Wings (russell) - what about huntsman?

I asked a conservative friend about Huntsman, his answer: "Why not Huntsman? Because he's NOT a conservative! . . . .He is NOT A CONSERVATIVE!".

So I guess Huntsman, if he still has hopes, should sink money into 2 ads: 1. Jon Huntsman - I'm A Conservative! 2. Jon Huntsman - I'M A CONSERVATIVE!!

possibly followed by 3. JON HUNTSMAN - HE'S A CONSERVATIVE!!!

Kevin Drum - America's 20-Year Investment Drought

Matthew Yglesias - America's Infrastructure Failure

Michael Mandel - My chart of the year: The investment drought continues

Matt Stoller - Who Wants Keep the War on Drugs Going AND Put You in Debtor’s Prison? (June 2011)

Rortybomb (Mike Konczal) - Please Consider Supporting the Roosevelt Institute

Josh Marshall - What’s the Deal with Romney’s Taxes?

Paul Krugman - when economists stop being polite
[John Cochrane] defines Ricardian equivalence as
the theorem that stimulus does not work in a well-functioning economy

But how do you determine when an economy is well-functioning?

Daniel Dennett blurb to Douglas Hofstadter's "Le Ton Beau de Marot: In Praise of the Music of Language" (1997)
"What Douglas Hofstadter is, quite simply, is a phenomenologist, a practicing phenomenologist, and he does it better than anyone else. Ever. For years he has been studying the processes of his own consciousness, relentlessly, unflinchingly, imaginatively, but undeludedly — he watches his own mind work the way a stage magician watches another stage magician's show, not in slack-jawed awe at the 'magic' of it all, but full of intense and informed curiosity about how on earth the effects might be achieved." - Daniel Dennett

Probably unfair, but "slack-jawed awe at the 'magic' of it all" describes my reaction to certain overly worshipful attitudes to capitalism, the free market, and the invisible hand. One example I have in mind is Milton Friedman's pencil story, which is a great story, but ignores the fact that they had pencils in the USSR, and the fact that pencil-making was invented, copied and improved under a wide variety of regimes, none of them completely laissez-faire.

David Atkins - The "No True Libertarianism" fallacy
. . .The modern welfare state didn't arise by accident or conspiracy: it evolved as a means of avoiding the failures of other models. . .

Karl Smith - John Taylor and ARRA (July 2011)
. . .I actually think Taylor is making an important substantive point here. It’s that in practice fiscal stimulus doesn’t raise GDP because in practice fiscal stimulus amounts to giving money to people, who then save it – just as Lucas, Sargent etc, said they would. . .

Bill Gross, CEO of the worlds largest bond fund PIMCO, seems to have had an epiphany about proper counter cyclical fiscal policy last week; in his monthly letter to investors, he said concern about deficits can wait for a stronger economy, and called for a new stimulus program similar the FDR’s WPA…quoting economist Hyman Minsky, he opined that “government should become the “employer of last resort” in a crisis, offering a job to anyone who wants one – for health care, street cleaning, or slum renovation” and repeated David Rosenberg’s “I’d have a shovel in the hands of the long-term unemployed from 8am to noon, and from 1pm to 5pm I’d have them studying algebra, physics, and geometry.”

Rational expectations is not crazy for saying that that if you give people money they might save it rather than spend it. It’s crazy for saying that people will save based on estimating their increased future tax liabilities because of the increased new spending (as if any self-respecting conservative would not be dreaming up clever schemes of tax avoidance instead of meekly estimating their future taxes!). The Chinese save a large fraction of their income, not because of future tax liabilities, but because they don’t have health insurance. With high unemployment, and the most unpredictable medical costs of any rich nation, it’s not hard to explain why people are saving as much as they possibly can.

Karl Smith - Health Care: Unfixable on the Demand Side (Sep. 2011)
. . .This slips under my definition of Liberalization Failure. You can point to all the things that are wrong with government controlled health care but when you leave cost control to the private markets the populist backlash is so severe that governments can’t help but make the problem even worse.

Thus you end up with the most costly health care system on the planet.


I think you’re overlooking the consolidation and recovery of pricing power on the part of providers, which seems to me a more important political force than a consumer backlash. (How politically effective have consumer backlashes against banking and higher education been?)

All the softie hospitals which would give away charity care without charging the uninsured usurious rates or going after them with bill collectors have been bought out/ shut down, leaving private hospitals administered by a bunch of hard-boiled eggs willing to be ruthless in treating uninsured/emergency patients as an opportunity to rack up billable hours, and then aggressively pursuing those claims through collection agencies.

I agree with roublen about the power of providers relative to consumers.

I also think that incentives for providers are often perverse in health care. For many severe conditions (cancer, COPD, kidney failure, etc) treatment is expensive, but failure to treat is cheaper, both in the short and long term.

I don’t think we will come up with an HMO model that will address this market failure.

I forgot to mention that, in theory, the right organization structure for private health insurance seems to be of a mutual insurer, so that successfully holding down costs leads to premium refunds. Does not deal with the problem of adverse selection, or bad relationships with providers, though.

To elaborate on my earlier assertion that that there was a gold "bubble", here's what I meant by that: By 2020, the price of gold will be closer to its 2005 price than its 2010 price. i.e. by 2020, the nominal price of gold will be less than a thousand dollars an ounce. Also, it will have turned out that during the bubble years, one or more of the major gold brokers will have done something unsavory/unethical/fraudulent. My guess is that they will have subcontracted with someone who claimed to have gold they did not actually have, or that they will interpret contracts in a way that gives investors rights to less gold than they thought they were buying.

Matt Phillips (WSJ) - Charlie Munger on gold (Jan. 2011)

Wikimedia foundation - Thank you from Executive Director Sue Gardner


Ezra Klein - Presenting the first-annual Wonky awards
. . .Central bank dissenter of the year: Charles Evans. While some on the Federal Reserve’s board of governors are worried that the central bank is doing too much and risking inflation, Evans has argued that the Fed isn’t doing enough to boost the economy. The president of the Federal Reserve Bank of Chicago, Evans is one of the few bankers who seems to recognize that 9 percent unemployment should, as he put it, set policymakers’ hair on fire as much as a slight uptick in inflation usually does. . .

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