Consulting by RPM || Free Advice Blog

The Freedom of Contentment

A commenter here (sorry I forget who posted it) brought my attention to this wonderful sermon, by Tim Keller in 2003. I strongly encourage you to listen to it, even if you are a non-believer; there is a lot of secular wisdom here.

For example, a little before the halfway point he says that the people who contemplate (or go through with) suicide are those who either (a) realize they are never going to achieve their life’s dream or (b) actually achieve their life’s dream.

This dovetailed with half of what I had stumbled upon myself. I was trying to understand why so many rock stars, movie stars, etc. are so messed up, when any type of “rational” model of humans would make you think they should be among the happiest. I had concluded that they were rich, famous, married to a movie star, etc., and they still weren’t happy. So the recognition of that would indeed drive you to kill yourself, either in one drastic act or over a period of years through destructive behavior.

Last thing, if you are the kind of person who really needs to hear this talk, I strongly encourage you to just go to a quiet spot and listen to it. I.e. don’t play it in the background while you’re doing housework or driving to the gym, just take 45 minutes and listen to it.

A Policy Proposal That All Economic Schools of Thought Should Prefer to the Status Quo

[UPDATES in the middle and then at the end.]

Once again, Nick Rowe has argued that according to the very model that Paul Krugman claims to be using–and I mean here, the full-blown model with intertemporal optimization, not the cruder IS/LM model that Krugman thinks gives surprisingly good policy recommendations, using the full-blown model as the benchmark–it is actually NOT true that the government needs to increase spending today, in order to restore aggregate demand and hence full employment.

On the contrary, Nick argues, the crucial variable in Krugman’s formal model is G(t)/G(t+1), which must increase in order to help the economy today. In other words, what’s important to get people today to spend more, is that the expected growth rate in government spending goes down.

[UPDATE: In a follow-up post, Nick spells out the situation much more clearly. You can see that I’m not misreading him.]

So, notice that a sudden surge today in government spending (which will subside once the economy is fixed) will achieve that goal.

But, Nick’s crucial point is that another way to make that ratio increase, is to today cut the expected level of government spending in the future. That’s a different way to get the growth rate in government spending (gauged today) to decrease.

Can New Keynesians chime in? Is this true?

If so, then we should all be able to agree on a plan for the government to slash spending in, say, 2016 by, say, 10 percent compared to the current baseline level. That will–assuming Nick is correct–put a lot of people back to work today. The Fed will be able to boost NGDP growth even as it scales back its asset purchases. And of course, the size of government will (in a few years) be much lower than it is now.

So Keynesians, market monetarists, and Austrians should all prefer this policy to the status quo. Agreed?

Now let’s get Krugman, DeLong, Sumner, et al. to get on board. The first two guys in particular are the ones who really care about helping the unemployed, and really want to ground policy proposals in formal models.

UPDATE #2: From Brad DeLong’s response to John Cochrane, I’m guessing the way DeLong gets out of this one, is to say he does not believe in New Keynesian models. OK fair enough. But do self-described New Keynesians believe their models? After all, this is a School of Thought, isn’t it? It would be weird if no Austrian economists believed the implications of Austrian business cycle theory, right?

Jon Stewart on Chicago vs. New York

He made the best possible case, but c’mon, New York City pizza is terrible.

Warning: It’s Stewart, so some bleeped-out naughty words.

Chris Koresko Wins the Internet on ObamaCare/Katrina Comparison

David R. Henderson, like me, was surprised to see Matt Yglesias suggest that the failure of ObamaCare would result in zero deaths. (In contrast, Yglesias argued, President Bush’s failure under Katrina did result in deaths.) But look at Chris Koresko’s take on the ObamaCare/Katrina analogy:

Actually the whole Bush/Katrina Obama/ACA comparison looks pretty shaky.

If Bush had lobbied hard for the first year of his presidency to bring a major hurricane to Lousiana, argued that there were 50 thousand Louisianans who didn’t have street-sweeping services and needed strong wind to blow their debris out to sea, promised that “If you like your house you can keep your house. Period.” and that the storm would stimulate the economy, and spent an enormous amount of tax money to get ready for it, only to have New Orleans flood, and then claimed that, “What I said was, if you like your house you can keep it, if it’s not substandard, or subsided.”, then it’d be a pretty fair comparison.

What Did Yglesias Know About Health Insurance Cancellations, And When Did He Know It?

I’m still trying to find a mea culpa where Yglesias discusses his off-the-mark predictions about how great the ObamaCare rollout would be. Nothing yet, but in the meantime I ran across this:

“If you like your plan, you can keep your plan.” That was the promise Barack Obama made to insured Americans when stumping for his signature health insurance overhaul back in 2009 and 2010. It’s a promise that’s coming back to sting him now that it isn’t coming true. It was an irresponsible promise, a cowardly cave-in to focus-group findings that it was what Americans wanted to hear. But it didn’t make sense as a promise and didn’t make sense as a description of any plausible insurance reform. While Obama ought to be sorry he said it, the idea of actually trying to make it a policy goal is insane.

Now hang on a second. Did Yglesias know that this major plank of Obama’s plan–which Obama said at least 37 times, apparently, in different venues–was “insane” all along?

I’m not being a wiseguy here, I really think somebody who knows the guy should ask Yglesias to clarify. As recently as late May, Yglesias was predicting that the ObamaCare rollout would be a tremendous success. Now that it’s blowing up in supporters’ faces, Yglesias is saying matter-of-factly that a major component of the promised outcome was “insane.” So what gives?

==> Did Yglesias not realize that this aspect of the plan was insane, back in May when Yglesias was telling us how great ObamaCare was? Isn’t that a big deal? Is there anything else that Yglesias hasn’t considered?

or

==> Did Yglesias realize millions of Americans were going to have their policies canceled, but didn’t speak up because he was afraid it would possibly upset passage of the ACA?

Yglesias: Health Insurance Doesn’t Have Anything to Do With People Living or Dying

I have been trying to find out how Matt Yglesias dealt with his hilarious and confident predictions about the rollout of ObamaCare, such as this one from May 24, 2013:

You heard it here first from me in April, but I want to reiterate that over the next 18 months you’re going to read a lot of stories about problems with Affordable Care Act implementations. Many of those stories are going to be accurate. But fundamentally Affordable Care Act implementation is going to work out great, and people are going to love it.

The latest evidence comes to us today from California, America’s largest state and one of the states that’s tried the hardest to actually implement Obamacare. As Sarah Kliff explains, their exchanges are getting set up, and it looks like premiums for “silver” and “bronze” plans are both going to be lower than was previously expected. Far from a “train wreck,” in other words, the biggest single set of clients for the program is getting something like a nice, smooth high-speed train ride.

I haven’t found Yglesias addressing these statements (seriously, I want to see what he said–I am no stranger to making a bad prediction), but I did come across this from today (November 15):

Since the comparison is in the air, it’s worth noting the big difference between Hurricane Katrina and the botched Obamacare rollout. So here it is: 1,833 people died during Hurricane Katrina.

Obviously, George W. Bush and his administration are not responsible for all of those deaths. A storm’s a storm. But let’s be very generous to Bush and say that the underlying bad fundamentals are responsible for 95 percent of the damage and the bungled response gets just 5 percent of the blame. That’s 91 dead people. How many people have died using HealthCare.gov? I’m pretty sure it’s fewer than one. In fact, despite all the problems over 160,000 people have already gotten Medicaid.

None of which is to minimize the extent of the failure here. The administration and the Democratic Party writ large had very high aspirations for the Affordable Care Act…If they can’t make the basic infrastructure work, none of that will happen and it’ll be a huge failing. But even in the worst case, they’re not going to get anyone killed. That’s a big difference.

Uno momento, por favor. Is Yglesias saying that whether “health care reform” is successful or–dare I use the phrase?–a train wreck, it will have zero impact on American mortality?

I recall people making grandiose claims about how many people would die if “we” didn’t “reform” health care delivery in this country. So is Yglesias saying that they were a bunch of liars? Or is it heads Obama wins, tails Boehner loses?

My Canceled Health Insurance “Plan” Was Probably “Junk,” So No Biggie

[UPDATE below.]

Remember how I had the selfishness to be upset that my health insurance plan was rendered illegal by ObamaCare? Well Jamelle Bouie at The Daily Beast explains to me why it’s not a big deal:

Indeed, one reason not to jump on the GOP train of “solutions” to Obamacare’s current woes…is that the cancellation letters aren’t a problem. As Matthew Yglesias noted in a column for Slate, “it never made financial sense for the insurer to actually pay up in the case of major illness.” Most of the “plans” cancelled by insurers were junk—plans that gave peace of mind to consumers, but wouldn’t help them in the case of an emergency. They shouldn’t have been sold in the first place. And indeed, as Obama noted, part of the reason for health-care reform was that insurers were refusing to cover care for the millions of Americans who purchased these plans. Under the Affordable Care Act, this can no longer happen.

Five million Americans received cancellation notices. They account for a third of the roughly 15 million people in the individual insurance market, or just 1.6 percent of all Americans….

Yes, there’s no fun in receiving a cancellation notice, and yes, folks will have to pay more for coverage in the exchanges (though, it’s important to note that many are eligible for subsidies, and it’s always possible to expand subsidies for those who aren’t). But the truth is that these cancellations are a small price to pay for an insurance system that actually provides for people who are sick or injured, and doesn’t saddle them with tens of thousands of dollars in debt.

No, President Obama shouldn’t dismiss the anger of this small minority, but we also shouldn’t pretend that the current situation is worst than the past. It isn’t.

Do you see how Orwellian this is? He actually put the word “plan” in quotation marks. It’s like Michael Cohen saying the canceled plans could “barely qualify as insurance.”

Question: Do these people think fire insurance policies are actually “policies” and that they barely qualify as insurance? I mean, most homeowners don’t get any money out of those things. They just cover catastrophic outcomes, like your house catching on fire.

UPDATE: Actually in fairness, I think there are two things going on here. Cohen is quite outrageously saying that a plan with a high deductible etc. barely qualifies as insurance. But Bouie and Yglesias are referring (in part) to “rescissions,” in which an insurer apparently drops coverage when you get sick. So their claim is more defensible.

Trouble Withdrawing Money From Bank Account?

I know someone who is selling a (modest) house. He is concerned that he won’t be able to take the money out of his checking account and turn it into cash. Has anybody done this recently, who would like to share the experience in the comments? To be clear, he doesn’t want to do anything illegal with the money, he just doesn’t trust it sitting in his bank account because he is spooked by the economic environment.