Law

There is a new edition out, edited and translated by Stuart Warner and Stéphane Douard.  This eighteenth century bestseller could hardly be more relevant today.  Is it possible to lead a philosophic life?  How do political leadership and wisdom intersect?  How do Christianity and Islam differ politically?  How does politics reflect gender relations in a society?  Is there a case for optimism in modernity?  I still am not sure we have improved on Montesquieu’s investigations, although I cannot claim he gives us final answers.  This is a volume of polyphony, with travel as a source of learning and liberation as a major theme throughout.

Harems play a role too, here are the final paragraphs from Roxane to her sultan master Usbek:

You were astonished not to find in me the ecstasies of love.  If you had known me well, you would have found in me all the violence of hatred.

But you have had for a long time the advantage of believing that a heart such as mine was submissive to you.  We were both happy you believed me deceived, and I was deceiving you.

This language, without doubt, appears new to you.  Could it be possible that after having overwhelmed you with grief, I could still force you to admire my courage?  But it is done: poison consumes me; my strength abandons me; the pen falls from my hand; I feel even my hatred weaken; I am dying.

The introduction and notes are outstanding, and also of interest for those of you who are piqued by Straussianism.  You will note that the book was first published anonymously.

“Jokes in a serious work are acceptable on the condition that they hide a profound sense beneath a trivial form. It is in this way that Montesquieu, in his novel, Persian Letters, has written one of the most philosophical books of the eighteenth century.” – Alexis de Tocqueville [link]

I am pleased, by the way, to have once had the chance to spend two days with co-editor Stuart Warner discussing Persian Letters and nothing but (thank you again Liberty Fund!).  I cannot think of any person more qualified to have undertaken this endeavor.

You can order the volume here.

Here is a long and very interesting post with many distinct points.  Here is one of them:

So the entire corporate tax is pre-paid, or borne, by the stockholders who are unfortunate enough to be around when the corporate tax is announced.  Anyone who buys shares after the corporate tax is imposed gets the shares at a lower price, so his or her return is entirely unaffected by the corporate tax.

People who buy shares after the corporate tax is imposed bear no burden of the tax. The corporate tax does not affect the rate of return received by current owners at all, because they got to buy at low prices.

So much for corporate taxes soaking the rich. This is an important fact, missing in all the distributional analysis I have seen.

Here is another:

Pietro Peretto reminds me there is an active literature on optimal taxation in endogenous-growth economies, including his Corporate taxes, growth and welfare in a Schumpeterian economy , Schumpeterian Growth with Productive Public Spending and Distortionary TaxationThe Growth and Welfare Effects of Deficit-Financed Dividend Tax Cuts and Implications of Tax Policy for Innovation and Aggregate Productivity Growth.  Nir Javinovich and Sergio Rebelo have a nice recent “Nonlinear effects of taxation on growth,” in the JPE, Nancy Stokey and Sergio have “Growth effects of flat-rate taxes” also in the JPE, and I have inside information that Chad Jones is working on it too. So, there is no lack of academic literature on the question just which kinds of taxes reduce growth, which of course leads to huge distortions.

Worth a full read.

Here is a new and very important paper by Yuyu Chen and David Y. Yang (and note how they named the link):

Media censorship is a hallmark of authoritarian regimes. We conduct a field experiment in China to examine whether providing access to an uncensored Internet leads citizens to acquire politically sensitive information, and whether they are affected by the information. We track subjects’ media consumption, beliefs regarding the media, economic beliefs, political attitudes, and behaviors over 18 months. We find 4 main results: (i) free access alone does not induce subjects to acquire politically sensitive information; (ii) temporary encouragement leads to a persistent increase in acquisition, indicating that demand is not permanently low; (iii) acquisition brings broad, substantial, and persistent changes to knowledge, beliefs, attitudes, and intended behaviors; and (iv) social transmission of information is statistically significant but small in magnitude. We calibrate a simple model to show that, due to the low demand for, and moderate social transmission of, uncensored information, China’s censorship apparatus may remain robust for a large number of citizens receiving unencouraged access to an uncensored Internet.

Those results are fully consistent with my own anecdotal observations.

How foxes guard

by on October 28, 2017 at 11:32 am in Current Affairs, Law, Political Science | Permalink

If Whitehouse had chosen to pursue a complaint against the senator, she would have discovered a process unlike other parts of the federal government or much of the private sector. Her complaint likely would have been thrown out because interns have limited harassment protections under the unique employment law that Congress applies to itself.

Congress makes its own rules about the handling of sexual complaints against members and staff, passing laws exempting it from practices that apply to other employers.

The result is a culture in which some lawmakers suspect harassment is rampant. Yet victims are unlikely to come forward, according to attorneys who represent them.

Under a law in place since 1995, accusers may file lawsuits only if they first agree to go through months of counseling and mediation. A special congressional office is charged with trying to resolve the cases out of court.

When settlements do occur, members do not pay them from their own office funds, a requirement in other federal agencies. Instead, the confidential payments come out of a special U.S. Treasury fund.

That is from Michelle Ye Hee Lee and Elise Viebeck at The Washington Post.

That is another reader request.  I would emphasize the following points:

1. A property tax already is a wealth tax.  This form of taxation works fine, although as much as possible value taxes on land should be replaced by taxes on the unimproved value of land, for the reasons suggested by Henry George.  California in particular should tax land more and income less.  Read Noah Smith on this.

2. The actual impact of capital gains taxes is complicated, but in practice they often act as wealth taxes, especially if they are not indexed for inflation.  The next time the Democrats hold all branches of government, they are likely to try to raise these tax rates to an excessive level.

3. The French try to tax wealth per se, and that is a big reason why so many French people have ended up in London.  People hate this, feeling they’ve already “given at the office.”  A higher and more progressive income or consumption tax, if needed, usually is better than a wealth tax.  The wealth tax hurts savings and investment to a disproportionate degree, plus it makes all property rights insecure.  You never know when your earnings are safe from further taxation.

4. Taxing wealth is another way of running a higher implicit government deficit, and this is dangerous.

So #1 aside, overall I am not crazy about wealth taxes.  Compare them to sovereign wealth funds.  You may or may not like SWFs, but at least the government is then trying to augment wealth rather than take away from it.

Foreigners are set to be banned from buying houses in New Zealand as part of a phase of new policies outlined by Prime Minister-elect Jacinda Ardern.

The 37-year-old, who was elected as part of a coalition government on 23 September, said the new plan was designed to stop rising house prices and will apply to non-residents.

‘We have agreed on banning the purchase of existing homes by foreign buyers,” said Ms Ardern, according to AFP.

Here is the full story.  Will the Kiwis be returning to their mercantilism of the 1970s?  She also wants to renegotiate TPP.  And here is the immigration update.

The corporate income tax could be reduced to zero if all corporations were treated as pass-thru’s. However, for a variety of technical and practical reasons (too lengthy to discuss here), that is not feasible. Under the current regime, many businesses have the option to be treated as pass-thru’s (e.g., LLC’s and partnerships) and thus taxed only once at the individual rate, but for most publicly traded and very large entities, entities with foreign shareholders, etc., that is not possible or practical. One could also consider an imputation system such as used by the UK, but that is also messy.

The ideal system should treat all income at the same rate, regardless of the form of business. Currently, corporate income (including distributions) is subject to a higher rate than income from non-corporate entities. The federal marginal rate is currently 48 percent (35% + (.20 x .65) = 48%) compared with a marginal rate of 39.6% on ordinary income. These rates should be equalized and, preferably, the rate of corporate tax and the rate on distributions should also be roughly equal in order not to discourage corporate re-investment over distributions or vice versa and therefore avoid undue distortion regarding decisions on the allocation of capital. Thus, at the current marginal rate of 39.6%, the current proposal of a corporate rate of 25% would roughly achieve this with the current dividend marginal rate of 20% (25% + (.20 x .75) = 40%). Progressivity can be achieved (as it currently is) through progressive rates on the dividends/capital gains.

As someone who spent an entire professional career in the business, I find it amusing and naive that economists who lack any detailed knowledge of the Code or practical experience with its administration think it’s easy to radically “simplify the tax code”, make it “fair” to everyone, eliminate all tax avoidance, all at the same time! The three are simply not feasible simultaneously. As a wise man once said, “the life of the law has not been logic, but experience”.

The experience has also been that we need more than one type of tax in order to prevent the inevitable tax planning around one or the other. The system is complicated, but it is a result of a considerable amount of trial and error and political compromises. It can be made better, yes, but Trump’s promises are more credible than those who promise a one page tax code.

That is from Vivian Darkbloom.  And from another Vivian comment:

1. “…so just tax that person”. Please explain how, absent a corporate income tax, the US is going to effectively tax foreign investors, if they invest via a US or foreign corporation. This is a major practical problem of eliminating the corporate income tax completely. It would be very difficult to get one’s ounce of tax flesh out of non-US investors and put them on equal footing with US investors (the same issue arises with a system relying solely on consumption tax). It would be very impractical to abrogate the 68 or so bilateral tax treaties the US is party to today or the treaties of friendship and commerce.

On the mark.

Eric Posner and Glen Weyl recommend a version of this idea in their recent paper “Property is Only Another Name for Monopoly.”

The core proposal is you announce how much each piece of your property is worth, and you are then taxed as a percentage of that value (say 2.5%).  At the same time, you have to sell your property for that same value, if someone bids for it, thereby lowering or eliminating the incentive to under-report true values.  If you think this through, you can see it minimizes holdout problems.

I think of the proposal as trying to force “willingness to be paid” people to live at “willingness to pay” valuations.  Microfoundations as to why WTBP and WTP so diverge would be useful!

In the meantime, my main worry concerns complementarity.  Say I own eighty pieces of property, and together they constitute a life plan.  The value of any one piece of property depends on the others.  For instance, if I lived in a more distant house, the car would be of higher value.  The ping pong table would be worth less in Minnesota, and having a good slow cooker enhances the refrigerator.  Don’t get me started on the CDs, but of course they boost the value of the stereo system and for that matter all the books.  I’ll leave aside purely “replaceable” commodities that can be replenished at will, and with no loss of value, through a click on Amazon (Posner and Weyl in any case think those replaceables should be taxed at much lower rates).

So how do I announce the value of any single piece of that property, knowing I might have to end up selling its complements?

In essence, I have to calculate how much the rest of the economy values each piece of my property, for me to know how much any single piece is worth.  That recreates a version of the socialist calculation problem, not for the planner, but for every single taxpayer.  And you can’t rely on the status quo ex ante as a readily available default, because that status quo can be purchased away from you.

The authors do consider related issues on pp.76-78 and 89-90.  For instance, they allow individuals to announce valuations for entire bundles when complementarity is strong.  You choose the bundle: “My house and all its items for three million tokens.”

But your human capital and your personal plans are non-marketable, non-transferable assets that can’t be put in this bundle.  So the incentive is to assemble highly idiosyncratic assets that no one else can quite fit together, and so no one else will wish to buy from you, and then you can announce a low valuation.

If that strategy works, the tax system doesn’t yield enough revenue and furthermore you’ve had to distort your consumption patterns.  If that strategy doesn’t work, someone might buy your life’s belongings/plans from you anyway, leaving you without your beloved customized snowmobile, your assiduously assembled music collection, and what about all those shoes you thought fit only you?

Ex ante, individuals are forced to assume huge, non-diversifiable risk, namely that someone will snatch away their whole “commodity life” from them.  So many of us, even if we could bear the asset loss, just don’t have the time to rebuild that formerly perfect mesh of plans and possessions, the one that took decades to create (think about risk-aversion in terms of time).  Furthermore, what if a wealthy villain or personal enemy wished to threaten to denude you in this manner?  Or what if you simply make a big mistake reporting the value of your bundle?  Isn’t this much much harder than just doing your income taxes?

To protect against these risks, ex ante, people will value their wealth bundles at quite high levels, and the result will be that wealth taxation will be too high.  Since I don’t favor most forms of wealth taxation in the first place, why push for a method that also will tax people on the risk of losing most of their carefully assembled personal wealth and plans?  Is “planning plus complementarity” really something we wish to tax so hard?

Don’t forget the “planning plus complementarity” process as a whole tends to elevate the value of assets, not reduce them.  Posner and Weyl boast that their scheme lowers the value of assets (p.88: “Under our system, the prices of assets would be only a quarter to a half of their current level.”).  Lower asset values may boost turnover, but is it not prima facie evidence that the value of aggregate wealth has gone down?  (I am not convinced by the way, that once lower rates of income taxation are taken into account, that asset prices would in fact be lower in their system.)  Why is that good?

So I wish to announce a high valuation for keeping the current system in lieu of this reform.  My personal plans depend on it.

Addendum: I consider several of Glen’s ideas too much along the lines of what Hayek labeled “rationalist constructivism.”  Here is my earlier post on quadratic voting.

Second addendum: You might instead prefer this method for only a limited set of issues, such as eminent domain.  But then you have to end up taxing wealth values, if only for credibility and future reporting incentives, even when efficiency may dictate simply transferring the resources with compensation.  There just aren’t that many situations where a wealth tax is what you optimally should be seeking to do.  And keep in mind, so often the real preference revelation problem is not for the homeowners, but whether the government really needs your asset or wealth!  Or maybe they are just taking it because they can.

That is a reader request.  I used to think the ideal tax rate on corporations should be zero, but that is no longer my view.  For one thing, too many individuals would find ways to self-incorporate, thereby avoiding personal income taxes on labor income.  Note that a small corporation controlled by you can return real income to you in a variety of non-taxable or less-taxed ways.

Furthermore, tax-exempt institutions such as non-profits and pension fund would end up owning too many corporations, to the detriment of (non-tax) efficiency.  While pension funds eventually must pay out that income in the form of pensions, those often go to high-wealth, low income elderly individuals, and thus would never end up taxed at such a high rate.

I now think that for the United States the tax rate on corporate income should be in the range of 18-25 percent, depending of course on what other decisions we make with our budget and tax systems.  It also would work to simply target the OECD average of the corporate rate.

A further question is whether the case for a zero corporate rate would be stronger if we shifted from income to consumption taxation.  That depends how easy it might be to partially evade the consumption tax, say by spending money abroad.  In general, to the extent evasion is possible that favors lower marginal tax rates but levied on a greater number of distinct points in the system, including in this case on the corporate veil.

I thank Megan McArdle for a useful conversation related to these points.

That is the new Peter Leeson book, and it is just out.  Here is the Amazon summary:

This rollicking tour through a museum of the world’s weirdest practices is guaranteed to make you say, “WTF?!” Did you know that “preowned” wives were sold at auction in nineteenth-century England? That today, in Liberia, accused criminals sometimes drink poison to determine their fate? How about the fact that, for 250 years, Italy criminally prosecuted cockroaches and crickets? Do you wonder why? Then this tour is just for you!

Here are the book’s rather spectacular blurbs.  Here is a short Peter piece on medieval ordeals.  Here is a Reddit thread on whether medieval ordeals actually were an effective test of guilt.  And he has this piece on superstition and Friday the 13th in Newsweek.  I would like to see a media outlet excerpt his piece on the rationality of gypsy culture.

I would say that Peter has written a very effective book within the Beckerian tradition, namely trying to explain economic phenomena in terms of a neoclassical rational actor model.  Nonetheless I am much less of a Beckerian than Peter is, at least for the socially-oriented issues he is considering.  Here is a simple typology of approaches:

1. Beckerians and the rational actor model.  I slot Peter in here, along with many Chicago School economists, Marvin Harris, and much of public choice economics.  An explanation shows how a social outcome stems from the interaction of means-end maximizing individuals, translated into some aggregate result.

2. Behavioral economics.  By now this is old news, but these researchers find what I consider to be relatively small deviations from the rational actor model.  This is usually done by measurement, rather than through more complete models.

3. Cultural economics, anthropologists, and many sociologists.  Peer effects are paramount, and Frenchmen see the world differently than do Americans, not to mention Bantus or Pygmies.  This is due to a social contagion of perception that does not boil down to rationality in the sense that economists understand it (you can build a model in which social mimicry at young ages is rational, but that model won’t generate much insight into the particular phenomena we are trying to explain, nor does that model pick up the mimicry mechanism very well).  Historical study plus thick description plus economic rationality at various margins (but margins only) plus some statistics is the way to go.  Mostly we’re trying to understand how and why other groups of people see the world in fundamentally different terms.

The economists who can best grasp other points of view thus are the masters of explaining macro-phenomena (by which I mean something quite distinct from traditional macroeconomics).

I am much closer to #3 than are most economists.  Furthermore, I view economists as patting themselves excessively on the back for #2, when #3 is far more important.  Peter has written a very good book mostly in the tradition of #1, though due to his Austrian background with periodic forays into #3.  I once wrote to Peter: “Gypsy culture rational?  How about Episcopalian investment bankers in Connecticut being rational?”  Probably neither are.

Emailed to me:

What do you think would happen if we returned to a world where commercial bank leverage was much reduced? (E.g. 2X max.) Or, maybe equivalently, if central banks didn’t act as a lender of last resort? Is that “necessary” for a modern economy?

Asset prices would fall a lot (presumably). What else? How much worse off would current people become? (Future people are presumably somewhat better off, growth implications notwithstanding—they are less burdened with the other side of all these out-of-the-money puts that central banks have effectively issued.) > > How should we think about the optimization space spanning growth rates, banking capital requirements, and intergenerational fairness?

My response:

First, these questions are in those relatively rare areas where even at the conceptual level top people do not agree. So maybe you won’t agree with my responses, but don’t take any answers on trust from anyone else either.

I think of the liquidity transformation of banks in terms of two core activities:

a. Transforming otherwise somewhat illiquid activities into liquid deposits. That boosts risk-taking capacities, boosts aggregate investment, and makes depositors more liquid in real terms. Those are ex ante gains, though note that more risk-taking, even when a good thing, can make economies more volatile.

b. Giving private depositors more nominal liquidity, but in a way that raises prices and thus doesn’t really increase real, inflation-adjusted liquidity for depositors as a whole. There is thus a rent-seeking component to bank activity and liquidity production.

Less bank leverage, you get less of both. In my view a) is usually much more important than b). For those who defend narrow banking, 100% fractional reserves, or just extreme capital requirements, a) is usually minimized. Nonetheless b) is real, and it means that some partial, reasonable regulation won’t wreck the sector as much as it might seem at first.

There is however another factor: if bank leverage gets too high, bank equity takes on too much risk, to take advantage of bank creditors and possibly taxpayers too. Or too much leverage can make a given level of bank manager complacency too socially costly to bear. This latter factor seems to have been very important for the 2007-2008 crisis.

So bank leverage does need to be regulated in some manner, and the better it is regulated the more the system can dispense with other forms of regulation.

That said, the delta really matters. Requiring significantly less bank leverage, at any status quo margin, probably will bring a recession. The recession itself may make banks riskier than the lower leverage will make them safer. In this sense many economies are stuck with the levels of leverage they have, for better or worse. It is not easy to pop a “leverage bubble.”

I don’t find the idea of 40% capital requirements, combined with an absolute minimum of regulation, absurd on the face of it. But I don’t see how we can get there, even for the future generations. We’ll end up doing too many stupid things in the meantime; Dodd-Frank for all its excesses could have been much worse.

I also worry that 40% capital requirements would just push leverage elsewhere in the economy. Possibly into safer sectors, but I wouldn’t be too confident there. And reading any random few books on “bank off-balance sheet risk” will scare the beejesus out of anyone, even in good times.

Now, you worded your question carefully: “commercial bank leverage was much reduced.”

A lot of commercial bank leverage can be replaced by leverage from other sources, many less regulated or less “establishment.” Overall, on current and recent margins I prefer to keep leverage in the commercial banking sector, compared to the relevant alternatives. It may be less efficient but it is socially safer and held within the Fed’s and FDIC regulatory safety net, probably the best of the available politicized alternatives. That said, there is a natural and indeed mostly desirable trend for the commercial banking sector to become less important over time, in part because it is regulated and also somewhat static in basic mentality. (Note that the financial crisis interrupted this process, for instance Goldman taking up a bank charter. I would still bet on it for the longer run.)

Obviously, VC markets are a possible counterfactual. This all gets back to Ed Conard’s neglected and profound point that “equity” is what is scarce in economies, and how many troubles stem from that fact. Ideally, we’d like to organize much more like VC markets, partly as a substitute for bank leverage and the accompanying distorting regulation, and maybe we will over time, but there is a long, long way to go.

One big problem with attempts to radically restrict bank leverage is that they simply shift leverage into other parts of the economy, possibly in more dangerous forms. Should I feel better about commercial credit firms taking up more of this risk? Hard to say, but the Fed would not feel better about that, it makes their job harder. This gets back to being somewhat stuck with the levels of leverage one already has, until they blow up at least. There are pretty much always ways to create leverage that regulators cannot so easily control or perhaps not even understand. Again this bring us back to “off-balance risk,” among other topics including of course fintech.

I view central banks as “lenders of second resort.” The first resort is the private sector, the last resort is Congress. I favor empowering central banks to keep Congress out of it. Central banks are actually a fairly early line of defense, in military terms. And I almost always prefer them to the legislature in virtually all developed countries.

I fear however that we will have to rely on the LOLR function more and more often. Consider how it interacts with deposit insurance. If everything were like a simple form of FDIC-insured demand deposits, FDIC guarantees would suffice.

But what if a demand deposit is no longer so well-defined? What about money market funds? Repurchase agreements? Derivatives and other synthetic positions? Guaranteeing demand deposits is a weaker and weaker protection for the aggregate, as indeed we learned in 2008. The Ricardo Hausmann position is to extend the governmental guarantees to as many areas as possible, but that makes me deeply nervous. Not only is this fiscally dangerous, I also think it would lead to stifling regulation being applied too broadly.

But relying more and more on LOLR also makes me nervous. So I view this as a major way in which the modern world is headed for recurring trouble on a significant scale, no matter what regulators do.

I am never sure how much of the benefits of banking/finance are “level effects” as opposed to “growth effects.” It is easy for me to believe that good banking/finance enables more consumption at a sustainably higher level, in part because precautionary savings motives can be satisfied more effectively and with less sacrifice. I am less sure that the long-term growth rate of the economy will rise; if so, that does not seem to show up in the data once economies cross over the middle income trap. That said, if there were an effect, since growth rates slow down with high levels in any case, I don’t think it would be easy to find and verify.

A few of you have asked about Trump decertifying the Iran deal.  I think it is a big mistake, keeping in mind the old chess maxim “The threat is stronger than the execution.”  If we slap them, they slap us back by doing something like, say, green-lighting the Iraqi invasion of Kurdistan.  Whatever next level of escalation we might consider, I don’t think it would do us much good.

That said, I find most defenses of the Iran deal shocking in their naivete or perhaps self-deception.  The deal didn’t do much good in the first place, and came to pass because the Europeans weren’t going to uphold the previous sanctions anyway.  As it stands, the Iranians continue to enrich uranium and develop and test long-range missiles, and they could buy a bomb from North Korea as quickly as it would take to deliver the package.  Furthermore, they still support terrorism on a large scale, talk gleefully about the destruction of Israel, and in general their citizenry favors the idea of the government having nuclear weapons.  They simply decided that a slower path toward nuclear weapons, rooted in stronger international economic relations, was in their national interest.  However much you think they have or have not violated the formal terms of the treaty, they’re using the treaty to get a better, richer, and more stable version of nuclear weapons.  Israel and Saudi Arabia, the two countries that don’t have the luxury of wishful thinking on these issues, understand this quite well.

The thing is, Trump’s action won’t change any of this, and will only make us seem less reliable, should someday further action be required.  It is a foolish, high time preference move, but those who support it — Trump included — often have a better understanding of the underlying realities than do the critics.

The subtitle is A History of U.S. Federal Entitlement Programs, and the author of this new and excellent book is John F. Cogan of Stanford University and the Hoover Institution.  It is the single best history of what it covers, and thus one of the best books to read on the history of U.S. government or for that matter American economic history more generally.

How did the American entitlement state get built?  In multiple, discrete pieces:

The House and Senate overwhelmingly approved a modified version of President Truman’s Social Security proposals in June 1950.  The Social Security Amendments provided a mammoth across-the-board increase in monthly benefits.  The law’s sliding scale of benefits…averaged 77 percent per recipient…The 1950 Act also rewrote Social Security’s eligibility rules to enable hundreds of thousands of workers with little history of contributing payroll taxes to begin collecting benefits.

And:

…from 1969 to 1975, inflation-adjusted federal entitlements pending grew annually at a remarkable 10 percent, registering an 86 percent increase in six years…Total annual inflation-adjusted entitlement expenditures grew 20 percent faster under President Nixon than they had under President Johnson.

And:

The eligibility liberalizations from 1997 to 2008 produced sharp increases in the food stamp and Medicaid rolls.  From 1998 to 2008, the food stamp rolls increased to 28 million people from 20 million and the Medicaid rolls increased to 59 million from 40 million people.  The liberalizations enacted during the Great Recession have lasted well beyond the recession’s end in 2010.  In 2016, the number of food stamp recipients ballooned to 44 million, and the number of Medicaid recipients rose to 73 million in 2016.

Here is a good sentence:

In 2015, 41 percent of the nation’s nonelderly-headed households received entitlement benefits.

This book is well-written and has useful and important information on virtually every page.

Her earlier prediction:

Obamacare would not, and could not, be the program that had been promised or intended. It had already failed to deliver on key promises for coverage, affordability and of course, the infamous promise that “if you like your doctor, you can keep your doctor.” It was also dangerously unstable, requiring steady executive intervention just to keep the program from collapsing. I argued that these executive interventions, enthusiastically supported by the law’s proponents, were setting a precedent that would eventually be used against it. Worried that health care was too hostage to the vicissitudes of the markets, Democrats had instead made it the prisoner of politics.

“Essentially they’ve made it so that Republicans can undo two-thirds of this law with a stroke of the presidential pen,” I said at the close of my opening statement. “Obamacare is now beyond rescue. The administration has destroyed their own law in order to save it.” Four years later, we are watching those dominos fall.

Here is the full Bloomberg piece.

  • The Puerto Rico Electric Power Authority (PREPA) declined to ask for help from mainland electric utilities in the days after Hurricane Maria, instead turning to a small Montana-based contractor to carry out grid restoration practices.
  • Earlier this week, PREPA CEO Ricardo Ramos told E&E News that his bankrupt utility did not reach out to munis on the continental U.S. because he was unsure it could pay them back for assistance. About 90% of the island remains without power weeks after the storm hit.
  • The American Public Power Association (APPA), the trade group for U.S. munis, confirmed that mutual assistance programs were not activated, but said PREPA had already contracted with Whitefish Energy by the time the trade group convened a conference call to coordinate aid. PREPA did not respond to requests for comment.

Here is the full story, and here is a related piece, via Brian S.