Assorted links

by on October 22, 2013 at 12:57 pm in Uncategorized | Permalink

1 Z October 22, 2013 at 1:16 pm

#4: If you can call sociology or psychiatry sciences, then I suppose economics is a science. But, then so it tarot card reading and astrology.

2 Urstoff October 22, 2013 at 1:38 pm

Who cares whether something is a science? What we care about is whether particular theories are true/justified or not.

3 Z October 22, 2013 at 4:23 pm

It used to be a way for the close enough fields to fob themselves off as right answer fields. It still is to some extent, but only with fields like economics. I don’t think anyone puts psychiatry and chemistry in the same bucket. Economics is not a STEM field, but it is not anthropology either. Of course, hard science is nibbling away at the soft science like psychiatry and anthropology so maybe it is not going to be an issue much longer.

It is all part of the quant-ification of the professions.

4 Max Factor October 22, 2013 at 4:45 pm

Psychiatrists are MDs and have a strong STEM background. They select and manage the pills. Psychologists don’t usually have a STEM background.

5 Brandon Berg October 23, 2013 at 1:42 am

Economics is basically applied math, isn’t it? It’s not a hard science, but it is STEM.

6 Derek October 23, 2013 at 9:41 am

A psychiatrist can have you lose your freedom because the judge trusts his judgement.

7 Paul October 22, 2013 at 1:55 pm

If you can call political science a science then you can call economics a science.

8 Rahul October 22, 2013 at 2:10 pm

….there’s even a “Bachelor of Chiropractic Science”. Means nothing.

People use that suffix often to gain implied legitimacy.

9 Jay October 22, 2013 at 11:00 pm

Like naming a political party the Progressive Party?

10 AB October 23, 2013 at 11:32 am

“Anything which uses science as part of its name isn’t: political science, creation science, computer science.” –Hal Abelson, MIT

11 RM October 22, 2013 at 4:13 pm

The obsession among social scientists about whether economics, or for that matter any social sciences, is a science reflects an inferiority complex. Even if it does not reflect an inferiority complex, the obsession is silly. The way i view it, the social sciences are way harder than physics, and chemistry. (I am not even going to mention biology). Trying to explain human and social behavior is something that defies modeling as we know it now.

12 perfectlyGoodInk October 22, 2013 at 7:22 pm

I would agree, but I still think the author hits on something. Macroeconomic research is very polarized and politicized because a lot of the demand for it comes from partisan politicians.

I would figure that misaligned incentives upon research is a big reason macroeconomic modeling hasn’t made much progress.

13 Ramagopal October 23, 2013 at 4:40 am

Deirdre McCloskey says science in all languages except English means disciplined inquiry, in any field from physics to the humanities. According to her scientific does not mean amenable for experimentation or even measurement. Economics is a science because it is a disciplined inquiry into social life and not for the reasons Raj Chetty states

14 mike October 23, 2013 at 6:01 am

“Deirdre” McCloskey also says he’s a woman

15 Tim October 22, 2013 at 1:55 pm

#1 is somewhat baffling. So an economist is recommending we all follow Texas’ unreproducible oil and gas industry? And how exactly are Texas’ oil and gas jobs different from IT? It’s still science and engineering driving a massive industry of low paid jobs. Oil and gas just haven’t felt enough of a pinch to start heavily robotizing and automating.

16 FC October 22, 2013 at 2:11 pm

“Oil and gas just haven’t felt enough of a pinch to start heavily robotizing and automating.”

And that’s where I realized you don’t know what you are talking about.

17 Rahul October 22, 2013 at 2:53 pm

I suspect one reason is people vividly associate only anthropomorphic robots with automation. Lots of PIDs & thermocouples & sensors controlling valves & actuators via a DCS or PLCs doesn’t strike people as “automation”.

If you insist on robots there’s still tons of ROVs tending to subsea pipelines & welding robots and stuff on rigs.

18 Tim October 22, 2013 at 2:59 pm

*heavily* being the key word. If you have massive numbers of low-wage workers than you by definition have not automated to the level of say – the steel industry.

19 dirk October 22, 2013 at 3:04 pm

Tim, who are these low-wage workers in oil and gas? What jobs are they doing? Even roustabouts make about 100K.

20 Ryan Vann October 22, 2013 at 7:11 pm

Armies of low wage workers in petroleum? What are you talking about.

21 Chris S October 22, 2013 at 9:18 pm

The high pay is mostly due to the boom nature of extraction based on recent technology gains. Not enough qualified laborers leads to high pay. If the boom is stable labor rates will come down. That, and the job can be truly difficult and hazardous.

22 Abelard Lindsey October 22, 2013 at 2:20 pm

Are you kidding? Lots of automation products and software is used in oil and gas industry. PLC’s and DCS’s as well as various kinds of SCADA. Indeed, the oil and gas industry are among the largest consumers of such automation technology.

Manufacturing, not just oil and gas, is the largest employer of real engineers and scientists (chemical, electrical, and mechanical engineers, physicists, chemists, etc.) as well as software/IT people (SCADA and MES engineers). There are FAR more of these kinds of jobs in Texas than in California (check job sites if you don’t believe me). There is even very little semiconductor manufacturing in “Silicon Valley” these days. “Silicon” Valley seems to be limited mostly to internet and social media stuff as opposed to REAL engineering and technology (e.g. manufacturing, including semiconductors).

23 Tim October 22, 2013 at 3:02 pm

Reporting on “silicon” valley seems to be limited mostly to internet and social media stuff. I guess this goes to the root of the problem. So we should mimic the oil and gas industry rather than IT even though oil and gas is driving huge numbers of jobs in the IT field (some of which are undoubtedly in Silicon Valley)…

My point was just the article was stupid.

24 Abelard Lindsey October 22, 2013 at 5:40 pm

The article was not stupid. Kotkin was explaining that IT and manufacturing/energy are compliments of each other, not competitors. Thus, the hostility on the part of some of the silicon valley people towards the manufacturing and especially energy industry is counterproductive and stupid.

25 byomtov October 22, 2013 at 6:34 pm

Actually, the article is stupid, as is another one he self-linked to about the growth of college-educated populations in various cities. Apparently he doesn’t understand that it’s easy to have high percentage growth form a low base, and that that shouldn’t be compared with growth rates from a much higher base. For example, he exalts Las Vegas’ growth of 78% in the number of graduates, but neglects to note that this leaves Las Vegas with a college graduate percentage of 21%, 91st among metropolitan areas, and about half that of the places he sneers at.

While praising Exxon’s profits in comparison to a few tech firms he never bothers to mention such concepts as ROI or the like.

Kotkin is a buffoon.

26 Ted Craig October 22, 2013 at 7:39 pm

Care to expand on what you mean by “concepts as ROI or the like”? Or do you, as usual, feel your pronouncement of somebody being “stupid” is sufficient?

27 byomtov October 22, 2013 at 9:38 pm

My point is that comparing the absolute dollar amount of profits of Exxon to that of a few selected tech firms really tells us almost nothing.

Kotkin seems to think that the fact that there exist some companies whose profits add up to less than those of Exxon tells us something useful. It doesn’t. Among the many reasons it doesn’t is that it tells us nothing about the return on the capital invested. In other words, he is making, yes, a stupid argument. Sorry if that upsets you.

28 SmellsLikeWetPussy October 23, 2013 at 12:20 am

Butt-plug say what?

29 Brandon Berg October 23, 2013 at 1:53 am

As a rule of thumb, the phase “fastest-growing” should alert you to the fact that you’re being sold a bill of goods.

30 Ted Craig October 23, 2013 at 6:59 am

byomotv,
I’m not sure you have an actual point. His profit argument is actually secondary in the two paragraphs discussing Exxon. First he discusses jobs. He even qualifies his statement on profits by calling them “supposed holy grail of business.” The “few tech companies” he names are among the highest profile in the Valley. He choses them because this piece is for a general readership.

31 Derek October 23, 2013 at 9:57 am

Exxon is in a commodity business. Any high tech commodity business has long ago left the US.

32 dirk October 22, 2013 at 2:36 pm

“So an economist is recommending we all follow Texas’ unreproducible oil and gas industry?”

-Kotkin merely suggests we don’t adopt policies which destroy jobs in the oil and gas industry, although, yes, California and other coastal regions might do better if they allowed offshore drilling. California (and most other coastal states) has unknown amounts of hydrocarbons offshore and they will remain unknown as long as the drilling ban stays in effect.

“And how exactly are Texas’ oil and gas jobs different from IT?”

There is an order of magnitude more of them. The market is vastly bigger and demands more knowledge workers working on more projects.

“It’s still science and engineering driving a massive industry of low paid jobs.”

Which jobs in oil and gas are low paying? I’m not aware of any.

“Oil and gas just haven’t felt enough of a pinch to start heavily robotizing and automating.”

Rather, it already uses more robots than any other industry and will likely remain the cutting edge of robot technology, not because the robots replace humans, but because a robot in an underwater field can do things humans can’t.

33 fwiw October 22, 2013 at 4:54 pm

Which jobs in oil and gas are low paying?

gas station attendants

34 Jay October 22, 2013 at 11:02 pm

Gas station attendants are retail employees. Learn NAICS before making an a$$ of yourself.

35 Roy October 23, 2013 at 7:54 pm

You forget the paid interns, the guy who runs the floor waxer, and the lady who cleans the toilet. They are pretty low paid too. Of course tech firms have such workers too, I guess Google has lots of low paid jobs too.

36 Axa October 23, 2013 at 8:47 am

Hahahahaha, do you know how many people is need to operate an oil refinery? 4 or 5 people supervise computers that control valves and pumps everywhere to control the processes. Indeed, more people is needed to sweep and do clerical maintenance work in the refinery grounds than for actually operating it.

This automation case was not caused by labor cost savings but by risk management. A group of people by themselves can not operate safely such a complicate facility.

37 Derek October 23, 2013 at 9:54 am

If suggest that you do a bit of research before making a fool of yourself.

38 Derek October 23, 2013 at 9:48 am

Un reproducable? California has all kinds of undeveloped hydrocarbon resources.

This reminds me of when british columbia politicians were blathering on about fostering a vigorous high tech sector to replace the nasty forestry industry. Someone brought up the fact that just less than 50% of the existing high tech industry sales were to forestry industry businesses.

39 Millian October 22, 2013 at 2:16 pm

“I agree with him that numerous decades later, things will be fine.” This. This is what we are here for.

40 Arjun October 22, 2013 at 2:37 pm

#1: “The economist Tyler Cowen suggests that the 85% of the population without the proper cognitive pedigree will need to adopt the survival strategies of the poor in Latin America, including a diet heavy in beans.”

I must have missed this–was this in “Average is Over”? I would like to read more on Cowen’s argument here, if anybody has a link handy.

In general, I agree with the sentiment that social media companies seem to dominate the popular imagination of the market (whatever that means). Although I try not to say it to their faces, I am increasingly appalled that all my computer science friends–dedicated and brilliant people–are moving onto career paths that seem to have them working 10 hours a day to make Internet ads more clickable. The market can speak however it wants, I will always see this as a pathetic waste of human talent. I really wish more CS folks would follow me and my engineering peers into the realms of space exploration, renewable energy, and robotics.

Although I definitely don’t understand the article’s fixation on fossil fuels. Sure, fracking and the new era of American oil extraction has been a boon–but is anybody really thinking this can be a long-term thing? Any discussion of fossil-fuel use has to include a discussion about climate change, and how natural gas–although cleaner than coal by around 50%–will not get us off our current road to an ecological catastrophe. And ultimately there is simply no point to investing billions into an industry today that will wreck the economy a few decades down the line.

41 Keith October 22, 2013 at 5:46 pm

“how natural gas–although cleaner than coal by around 50%–will not get us off our current road to an ecological catastrophe”
The number is more like 99% if you put natural gas in one of these: http://www.fuelcellenergy.com/

42 Mark Thorson October 22, 2013 at 9:07 pm

You can’t use the commercial fuel gases we have now in fuel cells because they are way too contaminated. You’d have to replace the entire pipeline and distribution infrastructure to deliver a product clean enough for fuel cells.

http://cars.rasoenterprises.com/Propane-Residuals.htm

43 Keith October 22, 2013 at 9:58 pm

Hmmm, I am not sure about that. I believe Fuel Cell Energy manufactures fuel cells that can run on natural gas.

44 Mark Thorson October 22, 2013 at 10:37 pm

I’m talking about gas that’s been through the distribution network. Their web site refers to cells that can run on “clean natural gas”. Gas that has been through the distribution network is not clean, even if it was clean when it went in.

45 TMC October 22, 2013 at 6:24 pm

“Any discussion of fossil-fuel use has to include a discussion about climate change”

About 10 years too late on the alarmism?

46 JWatts October 22, 2013 at 8:20 pm

About 10 years too late on the alarmism?

More like 15 years too late. But of course, Peak Climate change alarmism only happened in the last 5 to 10 years, so maybe he’s not that far off.

47 mulp October 23, 2013 at 12:11 am

So, you are counting on China and India to keep increasing their climate cooling acid production pollution that creates smog and cloud to reflect the sunlight and significantly reduce insolation?

Aren’t you worried that the Chinese are beginning to see pollution is life threatening and no longer a sign of job creation and growth? In several parts of China, the pollution is clearly shortening life spans.

Also, the heat of fusion to warm ice from 0C to 0C water is 80 times greater than warming ice from -1C to 0C. Something like an estimated 200 trillion kilograms of ice has been heated from 0C to 0C in the past decade and that won’t be reversed, so the weather has and will change due to the huge increase in open water in the Arctic. The melting of the tundra in Alaska, Canada, Siberia is also absorbing lots of heat, and that won’t be reversed, turning large parts of them into the same open water the 200 miles of march protecting New Orleans has become.

This is new territory in warming that requires coming up with methods of estimating the mass of ice turning to water, compared to the temperature rise of the ice and the depth that has warmed from below 0C to 0C and above in the past century.

But typical of economists, the trend of the past few weeks of years devoid of any explanation is always sufficient proof that things will go on for ever. Housing prices have been going up since 1990 to they will keep going up forever. The memory of the 80s is wiped away because housing prices rose then crashed because the free lunch of constantly rising house prices is so desired. So, grasping at every twig that climate change stopped by magic or God’s will is all that is required to keep on pillage and plunder and burning capital (fossil carbon) because it is quick money from nothing. And you are hoping China keeps on polluting because if the Chinese refuse to die from pollution, that ends the free lunch of cheap imports from polluting over there.

48 Arjun October 23, 2013 at 2:09 am

+10

49 Steve Sailer October 22, 2013 at 6:49 pm

Tyler Cowen’s vision for average Americans:

Let them eat beans!

50 Chris S October 22, 2013 at 9:24 pm

Fortunately, everyone will know to look for those beans at low-rent suburban strip malls in only moderately crowded restaurants populated by ugly women.

51 Abelard Lindsey October 22, 2013 at 2:44 pm

Information technology and manufacturing/energy industries are not direct competitors. Indeed, lots of information technology, in the form of routers, networking, and SCADA, along with automation such as PLC’s and DCS’s, not to mention all kinds of software; go into the manufacturing and energy industries. In other words, the resurgence of energy and manufacturing is additional market for information technology, not some kind of direct competition with it. The manufacturing and energy industries create REAL engineering jobs (e.g. chemical, electrical, mechanical) as opposed to only software/IT jobs. Indeed, there may well be more job opportunity for software/IT people as well in these fields. There are more semiconductor fabs in Texas, including 300mm ones, then there are in California.

That the IT industry people in silicon valley should view manufacturing/energy industry as some sort of hostile competition is mystifying. Indeed, it is irrational. Industrial-driven economic growth around the country generates more demand and, hence, more markets and job opportunities for the IT/software providers in silicon valley. Not only in direct opportunities for automation software (SCADA and MES) but even in internet social media as well. Wealth creation is a positive-sum game. it is stupid for the silicon valley people to oppose the on-going energy revolution in shale gas and oil, let alone the manufacturing resurgence in the U.S.

It is also worth noting that mean salaries in Midland, Texas are now higher than those in silicon valley.

52 Albigensian October 22, 2013 at 3:11 pm

David Romer’s paper on why do firms prefer more able workers explains why (other than government regulation) there is so little work available for mentally
handicapped individuals. It might seem that someone with limited cognitive ability would do well at a job that’s repetitive and boring, but that’s really not the case, as high general intelligence seems to improve one’s ability to do just about anything.

Although such persons can do many tasks, they often do them more slowly and often with a higher error rate. Even aside from minimum wage laws and such, an employer just couldn’t pay a low-output worker what that person’s work was actually worth without at least generating public outrage at “exploiting” handicapped persons.

And so, in some ways the pre-industrial world better succeeded in integrating mentally handicapped people into the everyday social fabric than ours can.

53 mike October 22, 2013 at 3:52 pm

“And so, in some ways the pre-industrial world better succeeded in integrating mentally handicapped people into the everyday social fabric than ours can.”

That’s probably mostly because the “pre-industrial world” consisted of intelligent compassionate humans rather than mindless faceless “markets”

54 Alex' October 22, 2013 at 3:59 pm

Where do you find evidence for the compassion shown by pre-industrial societies? Is it from the Old Testament? Assyrian inscriptions at Ninevah, the Atlantic Slave Trade, or infanticide in general?

55 mike October 22, 2013 at 4:22 pm

^ The ne plus ultra of shit-for-brains pedantry

56 Alex' October 22, 2013 at 5:06 pm

If you have a substantive point, then make it.

57 msgkings October 22, 2013 at 10:03 pm

Or just call him a shitlib

58 Roy October 23, 2013 at 8:01 pm

…or because pre modern peasant farming has a lot of jobs perfectly suited for the feeble minded and crippled when the feeble minded and crippled are close blood relatives of peasant producers. An orphaned childless handicapped person usually had a very brief unpleasant life.

59 Roy October 23, 2013 at 8:03 pm

As someone who has worked with the mentally handicapped in a restaurant, some can make excellent dishwashers, the problem is not that they can’t do the work, but rather when things go wrong it is a disaster and the problem of dealing with other employees.

60 Slocum October 22, 2013 at 3:48 pm

@6. But there are cases where employers do prefer less capable workers — specifically in refusing to hire someone who is overqualified and will likely leave for a better job when an opportunity opens up.

And then there’s the possibility that workers who are too dedicated could be bad for morale:

http://www.wired.com/wiredscience/2010/08/do-gooder-dislike/

61 Max Factor October 22, 2013 at 4:50 pm

Any comments on @5? The labor force participation rate remained the same, but it’s still at a 35 year low and the vast majority of new jobs are not of the highest quality. Personally, I blame automation and offshoring of jobs but I know that’s not a popular viewpoint around here.

62 Ryan Vann October 22, 2013 at 7:16 pm

This is a good deal Larry!

63 Go King Go! October 22, 2013 at 5:06 pm

Hey, you didn’t link to TMQ’s review of Average is Over, it’s down column under “New Books” (but why scroll down when you can read down?).

Also in TMQ’s column a bit on Nobel economists that is a path-breaking work in intellectual history, the best contribution to the history of modern economics in recent memory, fascinating as intellectual biography and autobiography, and should be snapped up immediately by some enterprising publisher.

64 Wonks Anonymous October 22, 2013 at 5:15 pm

The EMH is implied by rational actors, but doesn’t require it. People can be biased in opposite ways, and they will cancel each other out. And I don’t think Fama is much involved in the “public-policy aspects of economics”. He teaches asset price theory to MBAs at a business school, and claims to have given up doing macro long ago.

65 Silas Barta October 22, 2013 at 7:01 pm

Re #1:

To be sure, in large part due to the Fed, the Bay Area and Manhattan are awash in money.

*What?* Did he look up who actually funds Bay Area/SV startups? Hint: it’s not well-connected banks with cheap access to Fed money; it’s VCs investing their own money. Even the few that do read IPO stage (rather than bomb or be hoarded by founders) aren’t getting cheap Fed money; they would kill to be able to borrow at 15%, let alone 0%.

66 Curt F. October 22, 2013 at 7:19 pm

I was also surprised by that sentence. I’m not sure it’s true. However, it also isn’t true that VCs invest “their own” money. They have limited partners. Those LPs might be rich guys, rich institutions, or maybe possibly the high risk venture arm of some bank(s). I don’t know. And then there is the question of where rich guys, rich institutions, and maybe banks get their money.

So while I am suspicious of the claim that Fed policy has anything to do with VC fund sizes, I don’t think the claim can be rejected on its face as you have done.

67 Ted Craig October 22, 2013 at 7:38 pm

I believe what he meant is that easy money policy are fueling VC investment, the same way they make Verizon’s massive bond issue possible. Tech start-ups tend to eat up money.

See here:

http://finance.yahoo.com/news/why-billion-dollar-start-ups-105604789.html

68 bxg October 22, 2013 at 9:17 pm

But let’s get back to Silas Barta’s point (I think).
If interest rates were not 1%, but rather 5%, or 10%, or 15%, or even 25%, do you think Silicon Valley would be very different? I can state from close knowledge that the actions of most founders and CEO’s would not change one iota. There’s no one here evaluating an investment saying “gee, this returns 4% on cost of capital, but we pay 5% to borrow, so let’s not go ahead”. I mean, perhaps in the very biggest of established companies here, but anywhere lower down that would be treated as (un)seriously as someone consulting the daily newspapers’s horoscope for help.
Now, much more reasonably, interest rate differences affect the willingness of funders (i.e. investors in VC funds) to put up capital. So maybe QE and such(i.e. Fed actions) affect Silicon Valley in a significant way through this channel. That’s plausible, but hardly self-evident.

69 msgkings October 22, 2013 at 11:56 pm

It’s a lot more than plausible and pretty close to self-evident. It’s pretty hard not to see that one of the primary consequences of ZIRP and QE is the creation of massive amounts of low cost capital looking for returns. If interest rates were higher then much of that capital would take the low risk fixed return over the risky VC investments, or stocks, etc. It’s probably the primary reason global stock markets are up so much the last 5 years. If rates were 10% VCs would see a lot less money to invest, and a lot fewer Silicon Valley startups would be getting funded.

70 ChrisA October 23, 2013 at 5:11 am

MS
I think this is backwards in terms of cause and effect. ZIRP and QE are being required because of a lack (or perceived lack) of decent investment opportunities by investors in general, due to the financial crash. Low interest rates and QE are attempts by the monetary authorities are trying to create inflation to encourage people to invest (by increases in asset prices, lowering real wages etc), rather than putting their money into treasuries. I don’t believe that the removal, say of QE, will effect the willingness of VC and their clients to invest in start ups as long as there is still the potential for real returns. The removal of QE should be seen as a bullish sign, that the economy is recovering enough that it is no longer needed. Increasing interest rates would be an even more bullish sign, since we would have the economy then in danger of overheating. This of course assuming that the FED is acting in accordance with monetary theory and has not become suddenly under the control of a “hard money” type.

71 Ted Craig October 23, 2013 at 7:08 am

ChrisA,

You’re missing the point. Yes, higher rates won’t prevent VCs from investing “in start ups as long as there is still the potential for real returns.” But the last part of your statement matters the most. Do you take more risks playing Monopoly or playing poker?

72 ChrisA October 23, 2013 at 7:43 am

@Ted
I don’t think I am missing the point. The point I am making is that the VCs are investing in tech opportunities despite the moribund economy, because the potential returns in this sector are attractive (at least to them), meaning that they hope to get back several times what they invest. QE and low interest rates are not the driver for their investment, indeed the existence of a QE program implies a poor economy, which all things being equal, would tend to reduce returns rather than increase them. So reducing QE would not necessarily affect the willingness to invest, indeed if QE is being reduced because of a strengthening economy it could result in even more investment in the sector. Investors are not getting “free money” from QE to invest in tech, there is always an opportunity cost to investing in something, the investors could simply put the money in the bank or even spend it.

73 Donald Pretari October 22, 2013 at 10:39 pm

#4:” Indeed, as this paper shows using just the kind of method Chetty recommends, looking at other channels through which unemployment benefits can affect employment yields a much less positive result for advocates of expanding these benefits.”

I didn’t see the NBER Paper as Political, but as trying to see if there are ways of seeing the issue differently. That seems like a good idea to me. However, once you come to the Policy Decisions, it gets hard to decide what to do. I simply think the NBER Paper is More Complex/ Less Compelling, than other More Direct Approaches. It could be used, perhaps, to address the issue of making the Extended Benefits less compelling should additional jobs actually be available.

74 mulp October 23, 2013 at 2:22 am

3: Salam almost gets the issue on Medicaid that Tyler doesn’t seem to understand, and I admit to not fully understanding it either, but I had a mother dependent on Medicaid and SS and Medicare – a “dual eligible”. She had dementia, probably Alzheimers, but it doesn’t matter, because she also fell broke her hip and became bed ridden even after a very expensive hip replacement.

She was placed in a care facility with security doors and a significant staff in a HUD funded retirement project from back in the 60s-70s era. It was a very good facility that due to the HUD financing had to be not-for-profit and had to accept a certain percentage of low income. The costs were actually not that scary initially, but my parents started spending their meager savings (which in the 60s would have been huge) rapidly, so they had to split their assets so she could qualify for the State Medicaid. The welfare case workers then figured out how her assets were to be spent until Medicaid picked up the difference between SS and Medicare.

This was one part of Medicaid created by the Medicare Act to help the States with their indigent elderly care of the infirm and disabled. Another part of the Medicare Act reformed part of Federal aid to the States for public health, creating subsidies for State care for individuals, not just hospitals and clinics. Clinton hammered out health care for children through Medicaid – SCHIP.

While Medicaid is a huge cost, the different parts have different costs to the States. SCHIP is pretty cheap – a huge bang for the buck. Medicaid to mothers is pretty cheap. Some States provided benefits to working low income adults which was pretty cheap.

The big costs come from the elderly and disabled who need care, and for a State like Florida and Texas with significant elderly, that cost is a killer. In NH where the poor are swamped by the influx of older wealthy middle age workers who become retirees, the big Medicaid burdens are the disabled and mental cases. NH hopes the elderly move south when the cold and snow become a problem.

My guess is Tyler proposes Federalizing the Medicaid for independent individuals and family units, not the special care provided to those unable to be independent. What portion of State Medicaid budgets that Federalizes is unclear.

If the proposal is to Federalize all of Medicaid including the “nursing care”, then the Federal costs will be much higher than the State costs and it will require an army of Federal case workers to manage the care “in home”.

75 Andrew' October 23, 2013 at 8:24 am

“why do firms prefer more able workers?”

I just love economists.

76 Jim Manzi October 23, 2013 at 10:33 am

@2

The WaPo review appears to me to make factually incorrect claims about the banking industry with respect to ATMs and bank tellers that matter to the argument.

The review says that: “From 1999 to 2009, the number of tellers increased 123,000 to 577,000 despite the recession” I

t links to a general BLS web page as a source. According to the BLS, there were 453,000 bank tellers in 1999. (http://www.bls.gov/oes/1999/oes433071.htm) I assume this is an apples-to-apples source comparison, as this same BLS source has the identical number of 577,000 for 2009 as the reviewer cites (http://www.bls.gov/oes/2009/may/oes433071.htm).

Also, the review says that “The ATMs have reduced the number of tellers needed to operate a bank branch, reducing their cost. The banks, taking advantage of these lower costs to expand their markets and to compete more effectively, have dramatically increased the number of branch offices.”

According to the FDIC, the number of commercial bank branches in the United States has increased in an almost exactly linear fashion since at least 1966 (well before broad-based rollout of ATMs), until the last couple of years when branch count has, at least for the moment, reached a plateau. (http://www2.fdic.gov/hsob/HSOBRpt.asp). Retail bank network planning decisions are driven by a variety of considerations, and while the cost effects of tellers vs ATMs are on the list, they do not dominate other factors, including: rate of demographic change, changes in commuting patterns, evolution Internet / direct banking vs. branch banking, changes in distributions of small businesses and patterns of cash vs. card transactions at these businesses (small businesses are a key driver of the workload at many physical bank branches), alternative channels for HELOCs and other loans, etc.

77 Mr. McKnuckles October 23, 2013 at 12:57 pm

Is the Texan economy really that much more stable? I think the 1980s oil bust and S&L crisis suggests maybe not.

And comparing current profits of Exxon to some new tech companies is a bit silly without providing some context. The reason Google, FB and other tech companies employees and founders have a lot of money is that investors think these companies will mint huge profits in the future. And the market also thinks Exxon won’t replace its reserves over the medium term, and there’s the real risk we enter a decarbonized world sooner than most expect.

I’m so tired of articles making the CA vs TX comparison. And I hate articles that make polemic assertions based on a small slice of time.

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long distaance move. Moving long distance is obviousaly challenging, that’s why
you have to make sure your cross country changers are well experienced to deal with your cross country
moving needs successfully. Several moving companies, the vast
majority of them, will inform you that they could handle long
distance moves and they are great cross country movers, unfortunately that’s incorrect.

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Also occasionaply packing pricey technology and antiquues is much better to become done by the moving corporation other than oneself.

You might think that you will pack everything
vigilantly, but thrust me on this, if you moving company is experienced, they’ll
know very well what moving techniques and materials to make use of, to make certain that your possessions are safely transported to your new place.

Obtaining the most useful of one’s cross-country movers depends upon
what moving company are you currently going to choose.

Examinbe cross-country moving organizations now is easier with
My Moving Reviews. Just fill the free moving price form along with the site forr
multiple moving price rates.

Do your own personal bunch, unload and load. Self-moving options typically cost significantly less than full-service moving.
In case you are able to do the loading, loading and unloading on your own, the expense of your transfer lowers dramatically.
Only allow U-Pack do the driving!

Fuel your personal automobile, noot a rental truck. Rental trucks are known
for getting horrible gasoline mileage—24 foot rentaal trucks get 6 to 10 mpg.
Thus if your cross-country shifft is 2,800 miles, it is possible to expect to spnd around $1,300 simply to
gas the rental pickup. (Browse the leasing vehicle gas calculator to view the coet tto
your move). You’ll pay around $600 to fuel your personal automobile for your same drive.

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veterans
Move on an off-peak morning. Just like air companies and
resorts, there are off-peak and peak times for going.
The best days to go with U-Pack are usually Wednesdays, Tuesdays and Thursdays at
the beginning of the month. Your cost to maneuver cross
country reduces by preventing high instances like Fridays
and holidays at the end of the month.

Move terminal to terminal. While this program isn’t for everyone,
if you have a tiny move you’ll visit a significant savings when you load and unload your items at your neighborhood
ABF service middle.

Moving cross-country is actually a massive strategies
concern When selecting x-country movers, expertise is everything,
because moving three thousand kilometers is a lot more complicated than
moving 30miles. It is a huge logistics challenge to have all areas of your forthcoming go lined and this is
why we’ve prepared this guide that will help you stay organized.

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