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The NYT ran an article on the goal for greenhouse gas emission reduction set by the Australian government. The article noted criticism of the goal as being inadequate. In particular, it refers to criticism from the Marshall Islands’ government that this sort of action will not be sufficient to keep the islands from being destroyed by rising sea levels.
While it would be a tragedy if the Marshall Islands were destroyed and its 53,000 people had to be relocated, this would be a relatively minor consequence of the failure to address global warming. By comparison, Bangladesh has a population of almost 160 million, most of whom live in relatively low-lying areas that are subject to frequent flooding. With rising oceans, these floods would be much more severe.
No one has a plausible plan to locate the hundreds of millions of people in Bangladesh and other low-income countries whose lives will be put at risk from rising oceans. Similarly, hundreds of millions of people live in areas of Sub-Saharan Africa that will be faced with severe drought if world temperatures continue to rise.
If the point was to call attention to the consequences of the failure to address global warming, these situations probably deserve more attention than the fate of the Marshall Islands.
The NYT ran an article on the goal for greenhouse gas emission reduction set by the Australian government. The article noted criticism of the goal as being inadequate. In particular, it refers to criticism from the Marshall Islands’ government that this sort of action will not be sufficient to keep the islands from being destroyed by rising sea levels.
While it would be a tragedy if the Marshall Islands were destroyed and its 53,000 people had to be relocated, this would be a relatively minor consequence of the failure to address global warming. By comparison, Bangladesh has a population of almost 160 million, most of whom live in relatively low-lying areas that are subject to frequent flooding. With rising oceans, these floods would be much more severe.
No one has a plausible plan to locate the hundreds of millions of people in Bangladesh and other low-income countries whose lives will be put at risk from rising oceans. Similarly, hundreds of millions of people live in areas of Sub-Saharan Africa that will be faced with severe drought if world temperatures continue to rise.
If the point was to call attention to the consequences of the failure to address global warming, these situations probably deserve more attention than the fate of the Marshall Islands.
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Several of the articles discussing the decision of China’s central bank to lower the value of the yuan have referred to the assessment of the I.M.F. that the Chinese currency now reflects its market value. Many have pointed out that China’s central bank has stopped buying large amounts of foreign exchange to keep the yuan from rising, implying that the current value now reflects the market rate.
The problem with this story is that China’s central bank is still sitting on more than $4 trillion in foreign exchange reserves. If we apply the rule of thumb that it should keep around 6 months worth of imports on hand as a buffer, this implies $3 trillion of excess reserves. This large holding of excess reserves, helps keep up the price of the dollar and other reserve currencies relative to the yuan.
This is the same situation as the Fed is in with its holding of $3 trillion in assets as a result of its quantitative easing programs. There are few people who would argue that the Fed’s holding of these assets doesn’t have the effect of keeping interest rates down. It would be very difficult to come up with a story whereby the Fed’s holding of assets keeps interest rates down, but China’s central bank’s holdings of foreign exchange doesn’t keep the value of the yuan down.
Several of the articles discussing the decision of China’s central bank to lower the value of the yuan have referred to the assessment of the I.M.F. that the Chinese currency now reflects its market value. Many have pointed out that China’s central bank has stopped buying large amounts of foreign exchange to keep the yuan from rising, implying that the current value now reflects the market rate.
The problem with this story is that China’s central bank is still sitting on more than $4 trillion in foreign exchange reserves. If we apply the rule of thumb that it should keep around 6 months worth of imports on hand as a buffer, this implies $3 trillion of excess reserves. This large holding of excess reserves, helps keep up the price of the dollar and other reserve currencies relative to the yuan.
This is the same situation as the Fed is in with its holding of $3 trillion in assets as a result of its quantitative easing programs. There are few people who would argue that the Fed’s holding of these assets doesn’t have the effect of keeping interest rates down. It would be very difficult to come up with a story whereby the Fed’s holding of assets keeps interest rates down, but China’s central bank’s holdings of foreign exchange doesn’t keep the value of the yuan down.
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We here at CEPR were glad to see that new research confirms what we had shown earlier, the Affordable Care Act (ACA) did not create a “part-time” nation as many of its opponents warned. In contrast to these studies, our work actually looked at the period when employers would have expected the sanctions to have been in effect, the first six months of 2013.
We did find a small increase in the percentage of workers employed between 25 and 29 hours a week, just under the 30 hours a week cutoff for the sanctions, as the opponents of the bill predicted. However this increase in the share of people working 25-29 hours was due to a reduction in the percentage of people working less than 25 hours a work, not a reduction in the number working more than 30 hours a week. In other words, there was no evidence that employers were shortening workweeks to escape the sanctions in the ACA.
This meant the bad story, that people who needed full-time jobs would only be able to find part-time work, was not true. But there is also a good story, that because people can now get insurance through the exchanges, many people will opt to work fewer hours at jobs that don’t provide health insurance. This is likely to be the case with many parents with young children and possibly among older pre-Medicare age workers who might find it difficult to work full time jobs.
We used the Current Population Survey (CPS) to examine the change in voluntary part-time employment between 2013 and 2014, the first year the exchanges were operating. We found a large increase in the number of young parents (the CPS only gives ages of the parents, not the children) who were choosing to work part-time. We also found an increase in the number of older workers, especially women, who were voluntarily working part-time.
In short, our takeaway is that the ACA is not taking away full-time jobs from people who need them, but it is giving many people an option to work part-time that they did not previously have. That looks like a pretty good deal.
We here at CEPR were glad to see that new research confirms what we had shown earlier, the Affordable Care Act (ACA) did not create a “part-time” nation as many of its opponents warned. In contrast to these studies, our work actually looked at the period when employers would have expected the sanctions to have been in effect, the first six months of 2013.
We did find a small increase in the percentage of workers employed between 25 and 29 hours a week, just under the 30 hours a week cutoff for the sanctions, as the opponents of the bill predicted. However this increase in the share of people working 25-29 hours was due to a reduction in the percentage of people working less than 25 hours a work, not a reduction in the number working more than 30 hours a week. In other words, there was no evidence that employers were shortening workweeks to escape the sanctions in the ACA.
This meant the bad story, that people who needed full-time jobs would only be able to find part-time work, was not true. But there is also a good story, that because people can now get insurance through the exchanges, many people will opt to work fewer hours at jobs that don’t provide health insurance. This is likely to be the case with many parents with young children and possibly among older pre-Medicare age workers who might find it difficult to work full time jobs.
We used the Current Population Survey (CPS) to examine the change in voluntary part-time employment between 2013 and 2014, the first year the exchanges were operating. We found a large increase in the number of young parents (the CPS only gives ages of the parents, not the children) who were choosing to work part-time. We also found an increase in the number of older workers, especially women, who were voluntarily working part-time.
In short, our takeaway is that the ACA is not taking away full-time jobs from people who need them, but it is giving many people an option to work part-time that they did not previously have. That looks like a pretty good deal.
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One of the most bizarre debates in national politics is over whether China “manipulates” its currency. It is bizarre both because of the term used and also because the fact that China manages its currency is really not a debatable point.
The use of the term “manipulation” is bizarre because it implies that China is doing something sneaky in the middle of the night when no one is looking. There actually is nothing sneaky about it. China openly targets the value of its currency at a level that is well below the market clearing rate. The question is not whether we can somehow catch them in the act, the question is what do we think about the policy.
Anyhow, China just gave deniers another degree worth of global warming to explain away when the bank lowered the target rate for its currency against the dollar in order to boost its economy. There are three points worth making here.
First, China is quite obviously acting in currency markets to keep down the value of its currency. Do we have to pretend we didn’t see this? The $4 trillion in reserves that China’s central bank was sitting on should also have been a big hint on this issue. (For those who confuse the importance of stocks, rather than just flows, almost everyone believes that the Fed’s holding of $3 trillion in assets puts downward pressure on U.S. interest rates. It’s the same story with China’s central bank’s reserves and China’s currency.)
The second point is that China’s government obviously believes that the relative value of its currency affects its trade balance. That also should not really be arguable, but there were some policy experts who believed that imports and exports from China are not affected by relative prices. Of course they may still be right, but this move demonstrates that China’s government does not agree with them.
The third point is that several other currencies moved in step with China’s currency against the dollar. This contradicts a common assertion that if China raised the valued of its currency against the dollar then we would just import more from other countries. In fact, since many countries’ currencies follow the Chinese yuan, the improvement in the U.S. trade balance with China that would result from a higher yuan is likely to be amplified by an improvement in our trade balance with other countries as well.
One of the most bizarre debates in national politics is over whether China “manipulates” its currency. It is bizarre both because of the term used and also because the fact that China manages its currency is really not a debatable point.
The use of the term “manipulation” is bizarre because it implies that China is doing something sneaky in the middle of the night when no one is looking. There actually is nothing sneaky about it. China openly targets the value of its currency at a level that is well below the market clearing rate. The question is not whether we can somehow catch them in the act, the question is what do we think about the policy.
Anyhow, China just gave deniers another degree worth of global warming to explain away when the bank lowered the target rate for its currency against the dollar in order to boost its economy. There are three points worth making here.
First, China is quite obviously acting in currency markets to keep down the value of its currency. Do we have to pretend we didn’t see this? The $4 trillion in reserves that China’s central bank was sitting on should also have been a big hint on this issue. (For those who confuse the importance of stocks, rather than just flows, almost everyone believes that the Fed’s holding of $3 trillion in assets puts downward pressure on U.S. interest rates. It’s the same story with China’s central bank’s reserves and China’s currency.)
The second point is that China’s government obviously believes that the relative value of its currency affects its trade balance. That also should not really be arguable, but there were some policy experts who believed that imports and exports from China are not affected by relative prices. Of course they may still be right, but this move demonstrates that China’s government does not agree with them.
The third point is that several other currencies moved in step with China’s currency against the dollar. This contradicts a common assertion that if China raised the valued of its currency against the dollar then we would just import more from other countries. In fact, since many countries’ currencies follow the Chinese yuan, the improvement in the U.S. trade balance with China that would result from a higher yuan is likely to be amplified by an improvement in our trade balance with other countries as well.
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Those of you who were wondering about the best way to finance drug research need look no further, the Washington Post has the answer: It’s government-granted patent monopolies. They told us in an editorial today:
“The profit-driven system in this country has its inefficiencies, including high marketing costs and the like; but on balance it has served the United States, and the world, well, by promoting more innovation than a state-dominated system of research probably would have.”
It would have been useful if the Post had given some hint as to what evidence it might be relying on to make this assertion. The claim doesn’t start well with the phrase “profit-driven,” since there is no reason that alternative funding mechanisms might not also be profit-driven. For example, military contractors are profit-driven, last time I checked. These alternative systems also would not create the same sort of perverse incentives that are likely to lead to enormous waste and bad medicine.
But hey, since we got the word from the Post, there is no reason to look further. (I suppose it is rude to mention that the Post gets lots of advertising revenue from drug companies.)
Those of you who were wondering about the best way to finance drug research need look no further, the Washington Post has the answer: It’s government-granted patent monopolies. They told us in an editorial today:
“The profit-driven system in this country has its inefficiencies, including high marketing costs and the like; but on balance it has served the United States, and the world, well, by promoting more innovation than a state-dominated system of research probably would have.”
It would have been useful if the Post had given some hint as to what evidence it might be relying on to make this assertion. The claim doesn’t start well with the phrase “profit-driven,” since there is no reason that alternative funding mechanisms might not also be profit-driven. For example, military contractors are profit-driven, last time I checked. These alternative systems also would not create the same sort of perverse incentives that are likely to lead to enormous waste and bad medicine.
But hey, since we got the word from the Post, there is no reason to look further. (I suppose it is rude to mention that the Post gets lots of advertising revenue from drug companies.)
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That’s pretty much what the headline and article said, telling readers that Clinton wants to spend $350 billion “to make college affordable.” Is that a lot of money?
Well, the article doesn’t tell us whether the spending is over one year or twenty years, which would make some difference. If we assume that it is over ten years, the standard budget horizon, that comes to $35 billion a year. With total government spending a bit over $5 trillion in a 2017-2026 budget horizon, this would come to roughly 0.7 percent of projected spending. Alternatively, with a bit more than 20 million students enrolled in college (including community colleges), this would amount to roughly $1,700 per student per year.
Anyhow, it might have been useful to provide a little context on this one.
That’s pretty much what the headline and article said, telling readers that Clinton wants to spend $350 billion “to make college affordable.” Is that a lot of money?
Well, the article doesn’t tell us whether the spending is over one year or twenty years, which would make some difference. If we assume that it is over ten years, the standard budget horizon, that comes to $35 billion a year. With total government spending a bit over $5 trillion in a 2017-2026 budget horizon, this would come to roughly 0.7 percent of projected spending. Alternatively, with a bit more than 20 million students enrolled in college (including community colleges), this would amount to roughly $1,700 per student per year.
Anyhow, it might have been useful to provide a little context on this one.
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That is the implication of comments by John Myers, a reporter with KQED radio in San Francisco. Myers was interviewed on the occasion of California paying off the last of $15 billion of bonds issued in 2004 to cover a large deficit. When Myers was asked how the bond issue worked out for the state, he responded:
“Well, certainly, the state got through the worst times. But again, in that million dollars a day, every day, for 11 years, that’s a lot of interest. I don’t think that the voters really understood that. Schwarzenegger did not sell that part of the plan when he was out campaigning for the deficit bond that it was going to cost all of this in interest. I think there are definitely lessons learned.
“The politics of California were so polarized back then. And of course, we have seen that now on a national level. There are, you know, some lessons about what happens that the political system can’t resolve at some point. And I think, too, there’s probably a lesson for voters that borrowing money in state bonds is not free money and that it does come at a cost. All of those interest payments could have gone for something else in California.
“That money – just as an example – could have paid for the state’s share of the University of California system for like 15 or 16 months. I mean, it is a lot of money. And these were choices that the voters were making. I think that might be the real lesson learned.”
The state could have only saved the interest to pay for its share of the University of California system for 15 or 16 months if it had found some combination of tax increases and spending cuts to fill a $15 billion gap in 2004. Since the state had already done both, and was still feeling the effects of the collapse of the tech bubble on its economy at the time, it does not follow that a further set of tax increases and spending cuts would have been wise policy at the time.
Of course the state could have made very large cuts to its contributions to the University of California and K-12 education in 2004, then it would not have been forced to pay so much interest in later years, but it’s hard to see why that would have been a better route for the state to take. In addition to the direct effect of these cuts, given the weakness of the economy at the time, it is likely there would have been an additional effect due to loss of purchasing power and therefore further job loss.
That is the implication of comments by John Myers, a reporter with KQED radio in San Francisco. Myers was interviewed on the occasion of California paying off the last of $15 billion of bonds issued in 2004 to cover a large deficit. When Myers was asked how the bond issue worked out for the state, he responded:
“Well, certainly, the state got through the worst times. But again, in that million dollars a day, every day, for 11 years, that’s a lot of interest. I don’t think that the voters really understood that. Schwarzenegger did not sell that part of the plan when he was out campaigning for the deficit bond that it was going to cost all of this in interest. I think there are definitely lessons learned.
“The politics of California were so polarized back then. And of course, we have seen that now on a national level. There are, you know, some lessons about what happens that the political system can’t resolve at some point. And I think, too, there’s probably a lesson for voters that borrowing money in state bonds is not free money and that it does come at a cost. All of those interest payments could have gone for something else in California.
“That money – just as an example – could have paid for the state’s share of the University of California system for like 15 or 16 months. I mean, it is a lot of money. And these were choices that the voters were making. I think that might be the real lesson learned.”
The state could have only saved the interest to pay for its share of the University of California system for 15 or 16 months if it had found some combination of tax increases and spending cuts to fill a $15 billion gap in 2004. Since the state had already done both, and was still feeling the effects of the collapse of the tech bubble on its economy at the time, it does not follow that a further set of tax increases and spending cuts would have been wise policy at the time.
Of course the state could have made very large cuts to its contributions to the University of California and K-12 education in 2004, then it would not have been forced to pay so much interest in later years, but it’s hard to see why that would have been a better route for the state to take. In addition to the direct effect of these cuts, given the weakness of the economy at the time, it is likely there would have been an additional effect due to loss of purchasing power and therefore further job loss.
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Apparently pay increases aren’t on the list of ways to address a teacher shortage according to the New York Times. The paper had an interesting piece reporting on a nationwide shortage of applicants for open teaching positions. The article described a number of ways in which schools are attempting to address this shortage, including lowering standards and recruiting overseas.
It does not indicate any plans to raise wages, which would be the textbook way to address a shortage of workers. Lack of job security could also be a factor making it difficult to attract qualified teachers, since some people have gained celebrity status as a result of the pleasure they take in firing teachers.
Apparently pay increases aren’t on the list of ways to address a teacher shortage according to the New York Times. The paper had an interesting piece reporting on a nationwide shortage of applicants for open teaching positions. The article described a number of ways in which schools are attempting to address this shortage, including lowering standards and recruiting overseas.
It does not indicate any plans to raise wages, which would be the textbook way to address a shortage of workers. Lack of job security could also be a factor making it difficult to attract qualified teachers, since some people have gained celebrity status as a result of the pleasure they take in firing teachers.
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