• Productivity Growth Has Been Declining For a Long Time

    Speaking of cherry-picked statistics, Brad DeLong is unhappy with John Cogan, Glenn Hubbard, John Taylor, and Kevin Warsh, who insist that Donald Trump might very well produce sustained economic growth of 3 percent. They back up their view with this chart of labor productivity:

    Aside from looking like something a first-grader would put together, real economists don’t just draw miscellaneous arrows through data. DeLong shows how it’s done correctly, drawing a nonparametric smoothed lowess trend through a scatterplot. However, he admits that us amateurs could show the same thing using a standard-issue curve fitted by Excel. Here it is:

    Hmmm. When it’s plotted with no particular bias to produce a specific result, it looks like productivity has been on a steady downward trend for the past 65 years, with a brief and modest uptick during the 90s.

    Is it possible that tax cuts for the rich will produce a sudden, gigantic surge in productivity and therefore a sudden, gigantic surge in economic growth? Sure. Tax cuts for the rich have never produced this before, but anything is possible. Should you bet on it based on a crude chart drawn by folks who have an axe to grind? Well, it’s your money.

  • Today in Trump Whining: Dobbs, Clinton, Schiff, and More

    Today’s news: Lou Dobbs is great; Hillary Clinton is a criminal; Jeff Sessions is “beleaguered”; Adam Schiff is sleazy; Republicans are cowards; and anyone who suggests that Russia affected the election is insulting the white working class.

    Got it?

  • The Economy Is Collapsing Under Donald Trump!

    The American economy has been collapsing ever since Donald Trump took office. Our trade deficit with Mexico has ballooned. Consumer confidence has cratered. Auto sales are plummeting. And job growth is slowing down. Check out the numbers:

    This is, of course, ridiculous. I cherry-picked these statistics; plotted them in a way that made their decline look enormous; and provided no context about what any of these numbers looked like in the year before Trump took office. It’s an easy game to play, and it’s all meaningless.

    So why bother? Just to make a point. Right now the economy is doing about as well as it’s been doing for the past few years. Nothing great, nothing terrible. You should pay no more attention to anyone who says the economy is booming under Trump than you should to anyone who says it’s collapsing. Right now, it’s just puttering along.

  • Medicare for All About to Get a Democratic Test

    How far has the Democratic Party shifted in its support for truly universal health care? Jeff Stein reports:

    Sen. Bernie Sanders (I-VT) is about to put Democrats’ newfound embrace of single-payer health care to the test….Despite the rise of “Medicare-for-all” as a political slogan in the party, Democrats don’t have a clear plan to translate that aspiration into policy, and their efforts to implement single-payer at the state level have been rebuffed — including in blue states like Vermont and California.

    ….Sanders will soon change that. The Vermont senator is expected to release his own revised Medicare-for-all bill, the path to single-payer health care. When he does so, Senate Democrats will have to make a choice they’ve thus far avoided: Are they for Medicare-for-all in practice, or just in theory?

    Is this a good idea? On the one hand, Republicans never bothered with this during seven years of their “repeal and replace” campaign against Obamacare, and it worked great. Until they actually took power, that is.

    On the other hand—well, I’m not sure I see the other hand. An actual bill gives Republicans a concrete target to rail against. It would include a bunch of new taxes. If its sums don’t add up, liberal analysts will say so because, for better or worse, that’s how liberal analysts roll. Its tradeoffs will all be front and center. It will make divisions within the Democratic Party sharper and more visible. From a purely political view, there’s not a lot of upside here to introducing actual legislative text.

    If this bill came from anyone else, I’d assume there might be some give and take before it was made public. With Sanders, who knows? Stay tuned.

  • If You’ve Ever Had Lyme Disease, Blame the Anti-Vaxxers

    Lyme disease has been spreading for years, and thanks to global warming it’s poised to explode over the next few years. This map is from New Scientist:

    That’s bad. But it turns out there’s a vaccine for Lyme disease. Or I guess I should say, there used to be a vaccine for Lyme disease. In 1998 the FDA approved a a drug called Lymerix, and it was pretty effective until the chronic Lyme crowd and the anti-vaxxers started ranting:

    Influenced by now-discredited research purporting to show a link between the MMR vaccine and autism, activists raised the question of whether the Lyme disease vaccine could cause arthritis. Media coverage and the anti-Lyme-vaccination groups gave a voice to those who believed their pain was due to the vaccine, and public support for the vaccine declined.

    “The chronic arthritis was not associated with Lyme,” says Stanley Plotkin, an adviser to pharmaceutical company Sanofi Pasteur. “When you’re dealing with adults, all kinds of things happen to them. They get arthritis, they get strokes, heart attacks. So unless you have a control group, you’re in la-la land.”

    But there was a control group – the rest of the US population. And when the FDA reviewed the vaccine’s adverse event reports in a retrospective study, they found only 905 reports for 1.4 million doses. Still, the damage was done, and the vaccine was benched.

    All of you who have had Lyme disease should know this. You could have avoided it if not for the ravings of the anti-vax nitwits and the gullibility of the mainstream TV talkers who give them a platform. It’s long past time to put an end to this idiocy.

    But I won’t leave you without some good news. First, although you can’t vaccinate yourself, you can vaccinate your dog. So there’s that. Second, a French company has developed an even better Lyme vaccination, and it should be ready in 2023. That’s a mere six years. Just be patient, OK?

  • Oklahoma Sure Has a Lot of Earthquakes These Days

    You should watch this. But you need to watch it all the way to the end. It’s only a minute long.

  • Medicaid Expansion Had a Huge Impact on the Finances of the Poor

    It often slips people’s minds that the point of insurance is fundamentally financial. Auto insurance doesn’t prevent accidents, but it keeps you from going bankrupt over one. Ditto for homeowner’s insurance, life insurance, etc.

    Health coverage is a little different because, in addition to being traditional insurance, it also pays for lots of routine medical care. Nevertheless, it’s still insurance. You can get medical care without it,¹ but it will cost you a fortune. So when you take a look at, say, Medicaid expansion, it’s at least as important to look at financial outcomes as it is to look at health outcomes.

    Via Paul G-P on Twitter, here’s a CFPB study of how Medicaid expansion under Obamacare affected the finances of the poor. The authors take advantage of the fact that some states accepted the Medicaid expansion and some didn’t. They also have access to extremely detailed tradeline data in credit records. Here’s their basic result:

    In states that didn’t expand Medicaid, nothing much happened. In states that did expand Medicaid, medical debt fell nearly 40 percent by the end of 2015. As a check, they also examined overall debt, and found that it varied by only a small amount between expansion and non-expansion states.

    Note that this is a 40 percent reduction in total medical debt. Since Medicaid is available only to the poor, it’s a good bet that it’s reduced the medical debt of the poor by considerably more than 40 percent.

    So: Does Medicaid work? Yes indeed. It has moderate but positive effects on health, and very large effects on medical debt.

    ¹Sometimes, anyway.

  • Here’s the Real Reason Trump Fired Comey

    Just a quick observation here. Donald Trump demonstrated again this morning that he remains obsessed with Hillary Clinton:

    Trump is preoccupied with Hillary because she ruined his victory: he still can’t stand the thought that she got several million more votes than he did. I suspect the same is true of James Comey. Sure, he wanted Comey to help him out with the Michael Flynn investigation, but Comey’s real sin was being a living, breathing, daily reminder that Trump won only because Comey helped him out with his last-minute letter about the email investigation. This gnawed endlessly at Trump, so Comey had to go.

  • Did Jeff Sessions Lie Again About Campaign Contacts With Russia?

    Ting Shen/Xinhua/Xinhua via ZUMA

    Does the volume of crap raining down on us ever let up anymore? Here’s the latest from the Washington Post:

    Russia’s ambassador to Washington told his superiors in Moscow that he discussed campaign-related matters, including policy issues important to Moscow, with Jeff Sessions during the 2016 presidential race.

    ….One U.S. official said that Sessions — who testified that he has no recollection of an April encounter — has provided “misleading” statements that are “contradicted by other evidence.” A former official said that the intelligence indicates that Sessions and Kislyak had “substantive” discussions on matters including Trump’s positions on Russia-related issues and prospects for U.S.-Russia relations in a Trump administration.

    Sessions has said repeatedly that he never discussed campaign-related issues with Russian officials and that it was only in his capacity as a U.S. senator that he met with Kislyak.

    ….Officials emphasized that the information contradicting Sessions comes from U.S. intelligence on Kislyak’s communications with the Kremlin, and acknowledged that the Russian ambassador could have mischaracterized or exaggerated the nature of his interactions.

    Where is this stuff coming from? If it’s coming from the intelligence community, color me disturbed. I don’t like the idea that the CIA and NSA are basically at war with the Trump administration. But if, instead, it’s coming from folks inside the White House, I’m astonished that anyone there would be interested in bringing down a hammer this colossal on Sessions. Do they want him to resign that badly? Or is it coming from former Obama officials who are just now getting around to leaking it?

    Is there a single person in the Trump administration with any better morals than your average Mafia hood?

    POSTSCRIPT: Here’s another thought. In his interview with the New York Times on Wednesday, Trump didn’t just gripe about Sessions recusing himself. He also remarked—without being asked—that Sessions had provided some “bad answers” to the Senate during his confirmation hearings. That struck me as an odd thing to say. Is it possible that Trump (a) knew about this intel, (b) knew it was going to get leaked soon, and (c) was deliberately distancing himself from Sessions before it happened?

  • Parliamentarian Deals Yet Another Killing Blow to Trumpcare

    Jeff Malet/Newscom via ZUMA

    I’ve been wondering when the Senate parliamentarian will rule on various provisions of the Senate health care bill, and apparently she already has. Today, Bernie Sanders released a summary of what’s in and what’s out. As you read this, keep in mind that the Byrd Rule allows a reconciliation bill to contain only provisions that directly affect the budget. If a provision only “incidentally” affects the budget, it needs to pass via regular order, which means it needs 60 votes—which means it’s dead. Here are the main provisions that are dead:

    Abortion. The GOP bill contains two separate provisions that ban the purchase of health care policies that cover abortion. Freedom Caucus chair Mark Meadows says that killing these provisions makes passage “almost impossible.”

    Planned Parenthood. This is a provision that prevents Medicaid from covering services provided by Planned Parenthood. Presumably this doesn’t pass muster because it doesn’t affect total spending, only where money can be spent.

    Essential benefits. A provision in the Senate bill allows states to propose Medicaid alternatives that don’t cover essential benefits. However, this is merely a regulatory change, not something that changes overall spending.

    CSR funding. This one is kind of ironic. The House has sued to stop the payment of CSR subsidies under Obamacare, and President Trump has deliberately refused to say if he’ll continue them. However, Republicans recognize how important they are, so they included them in their own health care bill. The parliamentarian struck down this provision because it duplicates something that already exists, which means it doesn’t affect the budget.

    6-Month Lockout. This is the Republican replacement for the hated individual mandate. Instead of legally requiring everyone to buy insurance, they encourage everyone to buy insurance by mandating a waiting period if you fail to maintain continuous coverage. With this gone, there’s no longer any incentive to buy insurance. You might as well just wait until you’re sick and then buy it.

    Medical Loss Ratio. This is a provision that does away with Obamacare’s mandate that insurance companies spend at least 80 percent of their revenue on medical care.

    This stuff is deadly. Conservatives will hate the abortion and Planned Parenthood decisions. Insurers will hate the CSR and lockout decisions. Medicaid reformers will hate the essential benefits decision. And the end of the 6-month lockout provision will almost certainly have a big negative impact on the next version of the CBO score.

  • Friday Cat Blogging – 21 July 2017

    Hmmm. If you plant a cat in a pot, will you grow more cats? We’re going to find out! I’ll have the surprising answer next week.

  • New Study Suggests Corporate Investment Is Down Because of Industry Consolidation

    Why are corporations sitting on such big piles of cash? Why aren’t they investing more? Max Ehrenfreund points to a new bit of research with an intriguing answer: as firms merge, their market positions become so powerful they don’t need to bother. After all, why spend money if you don’t have to?

    To investigate this, Germán Gutiérrez and Thomas Philippon took advantage of a natural experiment: the big rise in Chinese imports during the aughts. What they found was that in sectors that were highly affected by Chinese imports, firms increased their investment spending in order to compete. In sectors that were lightly affected, they didn’t bother:

    (Note that this is a log scale, so the difference between the lines starting around 2005 is actually quite large.)

    The authors suggest that the same thing has happened more generally. As sectors have become more consolidated, competition has dwindled and the need for heavy investment spending has dwindled too.

    I don’t have the chops to evaluate this, but I’m sure others will chime in. However, it reinforces my belief that competiton is good for its own sake, and antitrust law needs to recognize this. We should move away from “consumer benefit” fables that corporations use to justify mergers, and instead insist on keeping sectors as competitive as possible.

  • Quote of the Day: “I can’t even remember why I opposed it”

    From Patrick Murphy, owner of Bagel Barrel in Doylestown, Pennsylvania, on why he doesn’t want Obamacare repealed:

    I can’t even remember why I opposed it. Everybody needs some sort of health insurance.

    Answer: he opposed it because movement conservatives in the richest country in all of human history created a hysterical atmosphere of cultural doom and fiscal annihilation surrounding the idea of providing a minimal level of health coverage for everyone. Why did they do it? Why do they continue to do it? Even after seven years, I’m not sure I truly know.

  • Sean Spicer Finally Resigns

    Cheriss May/NurPhoto via ZUMA

    The Sean Spicer story has come to an end:

    Sean Spicer, the White House press secretary, resigned on Friday morning, telling President Trump he vehemently disagreed with the appointment of the New York financier Anthony Scaramucci as communications director.

    Mr. Trump offered Mr. Scaramucci the job at 10 a.m. The president requested that Mr. Spicer stay on, but Mr. Spicer told Mr. Trump that he believed the appointment was a major mistake, according to a person with direct knowledge of the exchange.

    On a purely personal level, I feel kind of sorry for Spicer, the same way I feel sorry for anyone who finally figures out just what kind of person Donald Trump really is.

    On the other hand, it was pretty obvious all along what kind of person Trump was. Spicer knew, and he took the job anyway. I can excuse that for some of the national security folks, who might genuinely feel that they’re doing a public service preventing Trump from blowing up the world. But press secretary? No. If you want to wreck your reputation working for a clown like Trump, there’s no excuse. You went in with your eyes open.

    POSTSCRIPT: Honestly, Spicer should have resigned after the Vatican snub. That was perhaps the pettiest thing I can ever remember a president doing to one of his staff. At a purely personal level, it shows what a horrible excuse for a human being Trump is.

  • Does Congress Really Think That Self-Driving Cars Will Spur Job Growth?

    For some reason, this is what I got when I typed "self driving car" into our photo service. As you can see, it is neither self driving nor a car. However, there really is a bear in the sidecar, so I decided to use it anyway.Visual via ZUMA

    Kevin Roose reports on efforts in Washington to regulate self-driving cars:

    It’s rare to find an issue with true bipartisan consensus in Washington. But self-driving cars have been praised by members of both parties, who see the technology as a way to spur job creation while preventing many of the roughly 40,000 motor vehicle deaths that occur on American roads each year. According to the National Highway Traffic Safety Administration, 94 percent of traffic deaths involve human error, including distracted driving and driving while intoxicated.

    The safety part I get. When they finally come, self-driving cars will almost certainly be safer than the 2-ton death machines that are currently piloted around our city streets by the texting/eating/singing/talking/shaving meat sacks that we laughingly refer to as sentient.

    But job creation? How are self-driving cars going to spur job creation? Are we talking about the few thousand programmers and engineers who invent this stuff? Or what? Because when this technology becomes real, millions are going to lose their jobs as bus drivers, truck drivers, taxi drivers, and shuttle drivers.

    What am I missing here?

  • Without Mexican Workers, California’s Ag Industry Is Relentlessly Mechanizing

    Immigration from Mexico—both legal and illegal—has been declining for over a decade. In California, that means farmers are increasingly turning to automation instead of human pickers:

    Driscoll’s is so secretive about its robotic strawberry picker it won’t let photographers within telephoto range of it. But if you do get a peek, you won’t see anything humanoid or space-aged. AgroBot is still more John Deere than C-3PO — a boxy contraption moving in fits and starts, with its computer-driven sensors, graspers and cutters missing 1 in 3 berries.

    ….Driscoll’s, which grows berries in nearly two dozen countries and is the world’s top berry grower, already is moving its berries to table-top troughs, where they are easier for both human and machines to pick, as it has done over the last decade in Australia and Europe. “We don’t see — no matter what happens — that the labor problem will be solved,” said Soren Bjorn, president of Driscoll’s of the Americas.

    AgroBot is still a prototype, but it’s getting better. And lots of other crops have already been mechanized:

    Vast areas of the Central Valley have switched from labor intensive crops such as grapes or vegetables to almonds, which are mechanically shaken from the tree. The high-value wine grape industry has re-engineered the bulk of its vineyards to allow machines to span the vines like a monorail and strip them of grape clusters or leaves.

    ….It may be too late to mechanize asparagus. The crop, among the most labor-intensive in the state, has gradually shifted to Mexico since trade barriers made it cheaper to grow there, casting a nostalgic pall over Stockton’s asparagus festival.

    This is what happens when immigration slows: jobs are either mechanized or offshored. Perhaps that was inevitable anyway. But if Donald Trump does build a wall and cut down substantially on illegal immigration, it’s unlikely to have more than a marginal effect on low-wage native workers. It will just mean more robots in the fields.

    On the other hand, it will also mean we have fewer people in the US speaking Spanish. And that’s really the whole point, isn’t it?

  • Donald Trump Is “Curious” About His Pardoning Power

    Pete Marovich via ZUMA

    From a Washington Post story today about the Trump-Russia investigation:

    Trump has asked his advisers about his power to pardon aides, family members and even himself in connection with the probe, according to one of those people….But one adviser said the president has simply expressed a curiosity in understanding the reach of his pardoning authority, as well as the limits of Mueller’s investigation.

    He’s just curious! I mean, who wouldn’t be? Then there’s this:

    Trump has been fuming about the probe in recent weeks as he has been informed about the legal questions that he and his family could face. His primary frustration centers on why allegations that his campaign coordinated with Russia should spread into scrutinizing many years of Trump dealmaking. He has told aides he was especially disturbed after learning Mueller would be able to access several years of his tax returns.

    Those tax returns must really be toxic. I wonder what’s in them that Trump is so hellbent on keeping secret? It must be something pretty spectacular. Here’s the New York Times:

    President Trump’s lawyers and aides are scouring the professional and political backgrounds of investigators hired by the special counsel Robert S. Mueller III, looking for conflicts of interest they could use to discredit the investigation — or even build a case to fire Mr. Mueller or get some members of his team recused, according to three people with knowledge of the research effort.

    The search for potential conflicts is wide-ranging. It includes scrutinizing donations to Democratic candidates, investigators’ past clients and Mr. Mueller’s relationship with James B. Comey, whose firing as F.B.I. director is part of the special counsel’s investigation.

    Trump seems to be treating this whole thing like a mob war. And maybe he’s right to do so. It just makes you wonder what he knows that we don’t.

  • Clickbait For the Day: How China Might Rule the World By 2050

    China has an ambitious plan to lead the world in artificial intelligence by the end of the next decade:

    The country laid out a development plan on Thursday to become the world leader in A.I. by 2030, aiming to surpass its rivals technologically and build a domestic industry worth almost $150 billion. Released by the State Council, the policy is a statement of intent from the top rungs of China’s government.

    ….The United States, meanwhile, has cut back on science funding. In budget proposals, the Trump administration has suggested slashing resources for a number of agencies that have traditionally backed research in A.I. Other cuts, to areas like high-performance computing, would affect the development of the tools that make A.I. work.

    I’m hardly a Henny Penny nationalist. If China wants to catch up to us in aircraft carriers, it doesn’t bother me that much. But I won’t deny that I feel a lot more comfortable with an America that retains its lead in important technology, and AI is the most important technology in the world right now. It’s no exaggeration to say that the country with the best AI in 2030 might be the country that rules the world in 2050.

    Then again, maybe not. But I’d just as soon not take that chance. America may have its faults, but we have a damn sight fewer of them than China.

  • Lunchtime Photo

    It’s Thursday Dog Blogging!

    I was telling my sister last night that I find dogs to be difficult subjects. Pictures of cats I find almost inherently adorable. But pictures of dogs always seem kind of meh. I love dogs in person, but photos never seem to capture much of their personality. Maybe that’s why cats took over the internet and dogs didn’t.

    Anyway, this pooch was hanging out at the lake while his owner sat on the bench and did homework. He wandered around, stared at the ducks, stared at me, looked at the birds, looked at the lake, went over to get his head scratched, and then finally gave up and plonked sadly to the ground. When will she finish that homework and play with me? When?

    UPDATE: After reading comments, I feel terrible. This was not a sad dog! He was just pretending to be bored in this particular shot. I’ve added another picture below showing him a few seconds later.

  • CBO: Deductibles Under Republican Health Plan Would Hit $13,000

    CBO has produced an analysis of the latest Senate health care bill, and it’s basically the same as the original version. Compared to Obamacare, it would leave 22 million more people uninsured, and the people who were insured would mostly be getting useless crap:

    Under this legislation, for a single policyholder purchasing an illustrative benchmark plan (with an actuarial value of 58 percent) in 2026, the deductible for medical and drug expenses combined would be roughly $13,000, the agencies estimate….Because a deductible of $13,000 would be a large share of their income, many people with low income would not purchase any plan even if it had very low premiums….For people whose income was at 175 percent of the FPL ($26,500) and 375 percent of the FPL ($56,800), the deductible would constitute about a half and a quarter of their income, respectively.

    Under current law in 2026, the deductible for a single policyholder purchasing an illustrative benchmark plan with an actuarial value of 70 percent would be much lower—roughly $5,000.

    People have—rightly—complained about the big deductibles in many Obamacare plans. But this is ridiculous. A health care policy with a deductible of $13,000 is all but useless.

    On another note, CBO has been criticized for overemphasizing the importance of the individual mandate. If you eliminated it, would 15 million people really decide not to buy insurance? I suspect that if you left everything else alone, that 15 million estimate might well be high. But if you combine the lack of a legal mandate with useless insurance, 15 million starts to seem a lot more reasonable, doesn’t it?

    By the way, this report doesn’t include the Cruz Amendment. I assume that’s still in the works. Until the Republican health care plan is officially dead and buried, CBO is the real zombie here.