New paper by John Williams of the San Francisco Fed for the Brookings Papers on Economic Activity series makes the case that targeting a 2 percent inflation rate is probably too low:
In “Heading Daedalus: Optimal Inflation and the Zero Lower Bound”, John Williams of the Federal Reserve Bank of San Francisco finds that 2 percent inflation may not be enough to prevent any future great recessions from occurring when the Federal Reserve is forced to lower the funds rate to zero frequently. While the Fed’s holding of the interest rate to zero in late 2008 and throughout 2009 has not materially contributed to the sharp declines in output in the United States and many other economies, it has been a significant factor in slowing recovery, he says, projecting that it will cost about $1.7 trillion in terms of lost GDP over the next several years. His model found that “an additional 2 to 4 percentage points of rate cuts would help bring the unemployment and inflation rates more quickly to longer-run values, but the zero lower bound precludes these actions,” he writes.
Interesting. On the other hand, if we were to eliminate cash we’d be able to get around the zero bound problem and run low inflation without facing this risk. And I assume that some day we really will eliminate cash, though that day’s probably a way’s off.
Today on ABC’s Good Morning America, Sen. Jim DeMint (R-SC) tried to portray the protesters as a bipartisan group of moderates, saying that “it’s not about President Obama. It’s not about the Democrats. … I’m glad they’re here to take back their country.” DeMint, of course, has made it all “about President Obama,” saying that the health care debate will be Obama’s “Waterloo” because it will “break him.”
Update
TP reader JD sent in another photo of an Obamacare/Kennedy sign:
The distributor looks to be the American Life League; apparently the kind of pro-life organization that thinks that it would be terrible if people who get sick could have access to medical care:
At any rate, the ALL/healthcare nexus mostly seems to me to be emblematic of the knee-jerk quality of the whole thing. As we know, back in November most people voted for Barack Obama. Most people voted for a Democratic House candidate. And most people voted for a Democratic Senate candidate. Today, most people prefer Obama’s approach to the approach of congressional Republicans. But this is a very large country. And a large minority of the population is out of step with the views of the minority. You’ve got your anti-abortion guys, your tenthers, your birthers, your Medicare-hating congressmen, etc. Something called the Ayn Rand Center for Individual Rights is among the sponsors of the rally.
And so, fine, there are a lot of people with far-right political opinions. But the idea that this is actually some kind of response to specific things Barack Obama has done is pretty off-base. It’s just the usual suspects getting fired up.
Tyler Cowen did a post the other day asking how much highway construction matters for suburbanization and concluding “I am not suggesting that highways do not matter, but the extent of the influence is maybe not as large as many people think.” This will, I suppose, depend on what it is we think “many people think” about the issue. It’s pretty clear, though, that the trend toward suburbanization is pretty strong across the developed world even though there’s a lot of policy diversity.
What I wonder about US highway construction is what kind of impact its had on what the suburbs look like and what commuting patterns look like. On Long Island, for example, there’s both the LIRR and also several limited-access highways. Consequently, some people commute on train and others by car. There’s also an extent to which the suburbs have little “downtowny” areas around the train stations, but it’s mostly in a more typical suburban pattern. In other suburbs of other metro areas, there are more limited-access highways but no commuter rail whatsoever. In those areas, a greater proportion of people commute by car and there are no station-centered suburban towns. Presumably on Long Island instead of building those highways, the money could have been invested in more and better commuter rail service and suburban Long Island would look different from how it does. Admittedly, absent knowledge of climate change it’s not clear to me why you would have thought that would be a good idea, which is presumably why it didn’t happen.
Particularly if it’s not the existence of highways that inspires people to move to the suburbs it seems like there might be a great deal of possible flexibility in terms of how suburban transportation works. I suppose a system built around excellent trains, normal roads, and congestion pricing in the center might actually make relatively long-distance commutes more attractive than they generally are right now and inspire an even more spread-out growth pattern.
On Thursday, the National Republican Campaign Committee worked alongside the Association of American Physicians and Surgeons (AAPS) to host a small rally opposing President Obama and his health care reforms. Earlier in the day, ThinkProgress caught up with a spokesman for AAPS, who explained that the group opposes any government involvement in health care and supports privatizing Medicare. Similarly, at the rally, Rep. Tom Price (R-GA) — a card carrying member of the AAPS — promised the audience that “we will not rest until we make certain that government-run health care is ended.” Asked by ThinkProgress to explain if his pronouncement included the government-run program of Medicare, Price evaded:
Q: You said on the stage that you wanted to end government healthcare, do you support privatizing Medicare?
PRICE: What government-run medicine does is forces other individuals besides themselves and their families making medical decisions. [...]
Q: You said on the stage that you want to get rid of government-run healthcare, what’s the difference between Medicare and the public option?
PRICE: No what I support is allowing patients to make independent medical decisions.
Q: So you support government health care when it’s Medicare.
PRICE: What I support is patients making independent medical decisions.
Watch it:
Earlier this year, Price celebrated the 44th anniversary of Medicare by arguing that “nothing has had a greater negative effect on the delivery of health care than the federal government’s intrusion into medicine through Medicare.”
Americans generally take it for granted that corporal punishment, Singapore- or Saudi Arabia-style, is inhumane. We don’t just chop people’s hands off or tie them to a post and beat them. In practice, however, being sentenced to a U.S. prison in effect is a sentence to physical abuse. But rather than the level of abuse being determined by a judge and by the law, it tends to be determined by the vicissitudes of chance and gang affiliation. Read, for example, Carrie Johnson’s writeup of a recent report on sexual misconduct in federal prisons:
In what the inspector general called a “particularly egregious case,” a ring of corrections officers provided gifts to prisoners in return for sex, allowed the inmates to leave their cells and gave prison employees keys to offices so they could engage in sex with prisoners. To prevent detection, the officers allegedly intimidated prisoners to keep them from cooperating with investigators. Six of the officers were indicted in 2006, and when agents went to the prison to arrest them, one correctional officer pulled a smuggled gun and shot at random, wounding a prison lieutenant and killing inspector general agent William Sentner III.
I would add that when you’re “engag[ing] in sex” with someone who’s in prison and you’re a prison guard, you’re raping the prisoner. The prison/guard dynamic is obviously not conducive to any normal idea of consent.
On Thursday, Dick Armey’s FreedomWorks partnered with an anti-health reform group pushing to privatize Medicare to host a Republican rally outside the Capitol. Alongside speakers such as Rep. John Boehner (R-OH) and Rep. Eric Cantor (R-VA), Armey proclaimed, “Give me liberty or give me death. Well, Barack Obama is trying to make good on that.”
Speaking to reporters and ThinkProgress after the rally, Armey pretended that the upcoming 9/12 anti-Obama march on D.C. was entirely “grassroots,” and that his corporate-backed group only provided “consulting.” In fact, most of the groups paying for the rally are front groups and phony think tanks fully-funded by big business to create an image of public and academic support for their special interest agenda. One of the most visible organizations mobilizing the protest this Saturday is the Tea Party Patriots group. As Talking Points Memo has reported, the Tea Party Patriots’ listserv is managed by FreedomWorks staffer Tom Gaitens. Not only is the list managed by FreedomWorks, but Armey’s staffers have final say on decisions such as the logo for the event this Saturday. Tea Party Patriots does not even hide its close affiliation with corporate front groups, since it lists FreedomWorks as a coalition partner. The Tea Party Patriots listserv was used to distribute the infamous memo from a Tea Party Patriots volunteer detailing how town hall attendees should “rattle” Democrats by interrupting their events with coordinated yelling and shrieks.
When ThinkProgress asked Armey about this close relationship with the Tea Party Patriots, he erupted in rage. He also denied even knowing his own employee:
Q: Mr. Armey you said you have no affiliation with the Tea Party Patriots group that’s organizing this rally, but isn’t it true that your staff members manage the Tea Party Patriots list serv?
ARMEY: Absolutely not.
Q: So Tom Gaitens is not connected to your–
ARMEY: Who? First of all who is Tom Gaitens?
Watch it:
Armey proceeded to call the ThinkProgress reporter a “juvenile delinquent.” Armey has lashed out before at critical questions, attacking Joan Walsh, saying “I am so damn glad you can never be my wife ’cause I surely wouldn’t have to listen to that babble from you every day.”
Gaitens — who helped organize the very first pilot “tea party” protests in February and demanded that “folks … need to intimidate Congress” — is listed multipletimes on the FreedomWorks’ website as the Florida Outreach Director for Armey. He has not only won awards from FreedomWorks, but he also helped organize a tea party this year where Armey was the main speaker.
Of course, Armey’s deception is the very basis on which FreedomWorks gins up support for its causes. FreedomWorks maintains severalother domain addresses to promote tea party events. Last year, the Wall Street Journal exposed FreedomWorks for building “amateur-looking” websites to promote the lobbying interests of Armey.
Last night, DePauw University hosted the “first-ever debate between Karl Rove and Howard Dean on a college campus.” The debate covered a wide range of issues from Bush administration policy to current events, and included a rather fiery exchange over health care reform.
At one point, Dean argued that Medicare delivers care more efficiently than private insurers. Rove claimed that Dean was comparing “apples and oranges.” “It’s like saying ‘you got to deliver the overnight package the same cost as delivering the mail in three or four days,” he said. “If you had an apples to apples comparison, there is no doubt in my mind that Medicare would be as expensive as private insurance is to administer and far less effective”:
ROVE: Private plans do cost about 7 percent in administrative overhead. However, Medicare does not do the following: Medicare does not have to comply with the varying state insurance regulations nor does it have to have underwrite like private insurance. It doesn’t have those functions. It doesn’t have those costs. It doesn’t engage in the kind of fraud analysis that private insurers do….There are a whole bunch of other things that we abrogate. We say, you don’t need to do if you’re a government plan. It’s apples and oranges. It’s like saying ‘you got to deliver the overnight package the same cost as delivering the mail in three or four days. If you had an apples to apples comparison, there is no doubt in my mind that Medicare would be as expensive as private insurance is to administer and far less effective.
Watch it:
While private insurers, which spend anywhere from 5 to 40 percent of premiums on administrative expenses, do carry extra expenses, a near perfect apples-to-apples comparison exists in the Medicare market. Traditional Medicare and private insurers in Medicare Advantage both operate under the same rules and enroll the same population. Yet according to the Congressional Budget Office, traditional Medicare spends less than 2 percent of expenditures on administrative costs, while private plans in Medicare Advantage spend approximately 11 percent .
But, one man’s ‘excess overhead’ is another man’s profit and the public industry’s ability to provide care more efficiently is precisely the reason why private insurers and Karl Rove — who actually criticized the President for vilifying private health insurers in his address — are afraid of competing with an efficient Medicare-like public option.
“This enormous global progress-10,000 fewer children dying each day than in 1990-is something to celebrate and carry forward,” said ONE President and CEO David Lane. “We know that in countries where we invest in smart ways, we get results that save children’s lives. But 8.8 million children are still dying each year. There is much more work to do. Now is the time to accelerate the progress we’ve seen by expanding investments to tackle diseases that have yet to be targeted and to reach countries that are not seeing gains.”
Public health experts attribute the continuing decline to increased use of key health interventions, such as immunizations, including measles vaccinations, the use of insecticide-treated bednets to prevent malaria and Vitamin A supplementation. Where these interventions have increased, positive results have followed.
Of course problems remain:
“A handful of countries with large populations bear a disproportionate burden of under-five deaths, with forty per cent of the world’s under-five deaths occurring in just three countries: India, Nigeria, and the Democratic Republic of Congo,” said Veneman. “Unless mortality in these countries can be significantly reduced, the MDG targets will not be met.”
Trying to see what we can do to help India out with this problem seems to me like a much more realistic “democracy promotion” opportunity than trying to sponsor the overthrow of foreign governments.
While Nicholas Stern, the world’s top climate economist, recently endorsed 350 ppm as “a very sensible long-term target,” he laid out two blunt messages about our current do-nothing strategy in a talk to students in Beijing’s People’s University:
Stern warned that if the world continued to emit around the same levels of greenhouse gases every year, there was a 50 percent chance temperatures would rise more than five degrees Celsius (nine degrees Fahrenheit) within 100 years.
A rise of “five degrees Celsius has not been seen on this planet for 30 million years — we as humans have been here for only 200,000 years,” he said.
“This type of temperature change involves radical dislocation, it involves re-writing where people can live, it would involve the movement of hundreds of millions, probably billions, of people.”
“This would result in extended, serious global conflict.”
