Things to Read Rather than Go Outside as Arctic Air Staggers Drunkenly Around America Over the Night of January 6-7, 2014

Must-Reads:

1. Ezra Klein: Let’s Celebrate Medicaid’s Success: “So far, Obamacare’s biggest success is the one that neither Democrats nor Republicans seem to want to talk about. As of Jan. 1, more than 2 million people had signed up for insurance through the Affordable Care Act’s insurance marketplaces… less than the 3.3 million the administration had projected…. Meanwhile, in October and November alone, more than 4 million people signed up for Medicaid coverage. This number will be much higher when December’s totals are released…. It’s ‘the biggest ACA success story that has not yet been told’, says Ron Pollack, head of Families USA, a nonpartisan health-care advocacy group…. If expanding Medicaid is so much easier, why was the administration so intent on focusing on the exchanges — and, for that matter, why were exchanges needed in the first place?… It’s a perverse truth of the U.S. health-care debate that the solutions that have worked both here and around the world are the only solutions the political system refuses to consider seriously…. What we’ve seen isn’t that the government has trouble delivering health insurance. It’s that it has trouble setting up multifaceted e-commerce websites that help people verify their eligibility for public subsidies, shop for regulated private products, and then interface with the computer systems run by dozens of insurers. Compared to all that, simply extending health insurance to people through existing programs is easy…”

2. Ryan Chittum: The NYT spreads AEI’s Big Lie of the Crisis: “What in the world is The New York Times doing running an op-ed from AEI’s Peter Wallison that perpetuates his thoroughly discredited argument about what caused the housing crisis? It’s the high/middlebrow equivalent of forwarding on to millions of people a chain email your crazy uncle sent—without even clicking over to Snopes.com. The Times lends Wallison the most valuable space in journalism… lets him claim yet again that government policies caused the housing crisis—a line so blatantly false that Barry Ritholtz dubbed it the Big Lie of the Crisis. And that’s seriously problematic.”

3. Emily Atkin: Everything You Wanted To Know About The ‘Polar Vortex’: “If climate change is real, then how did it get so cold?… Greg Laden… [says] the Arctic air that usually sits on top of our planet is ‘taking an excursion’ south for a couple of days, leaving the North Pole ‘relatively warm’ and our temperate region not-so-temperate. ‘Go Home Arctic, You’re Drunk’, he titled the explanation: ‘The Polar Vortex, a huge system of moving swirling air that normally contains the polar cold air, has shifted so it is not sitting right on the pole as it usually does…. We are not seeing an expansion of cold, an ice age, or an anti-global warming phenomenon. We are seeing the usual cold polar air taking an excursion…'”

4. Matthew Yglesias: Secular stagnation debate: How to understand it: “Start with the idea that there’s a ‘natural rate of unemployment’ such that when the actual unemployment rate is below this rate, you get fast-rising inflation, but when it’s higher, you don’t…. During the pre-crisis years we left achieving that primarily in the hands of the Federal Reserve, which manipulated interest rates to keep joblessness in check. The “equilibrium interest rate” is the interest rate the Fed needs to achieve to push unemployment down to its natural rate. That equilibrium rate is currently very low…. Summers’ contention is that if you keep interest rates that low for a long time—he specifically mentions the idea of interest rates that are lower than the growth rate of the economy—you generate unsustainable credit booms and asset price bubbles…. Summers, coming very much from the political center, seems to have rederived the left-wing ‘post-Keynesian’ view… [a] position [that] has traditionally appealed to left-wing people since it implies that the state rather than the market needs to direct the bulk of investment activity in the economy…”

Should Reads:

1. Joe Romm: 60 Minutes Hit Job On Clean Energy Ignores The Facts: “The only thing in cleantech that is crashing is the cost of key components. This price crash has enabled explosive growth in wind power, solar power, LED lights and electric vehicles… this boom is so self-evident that just Saturday the New York Times published a front page story on ‘the solar power craze that is sweeping Wall Street’…. But for 60 Minutes, this incredible boom is a bust…. LESLIE STAHL (over pictures of solar panels, biofuels, wind turbines): ‘It’s called clean tech. And the new technologies that were developed in the energy sector were supposed to create jobs, and help America break its reliance on fossil fuels. The government supported it, and billions of tax dollars were spent. So how is the investment going? Solyndra went through half a billion dollars before it failed. Then I’m going to give you a list of other failures. Abound Energy. Beacon Power. Fisker. VPG. Pfff… I’m exhausted.’… CBS explains that ‘the venture capital model is that for every 10 startups, nine go under’–except that CBS appears to see that as a bug, not a feature, failing to understand that the successes more than pay for the failures.”

2. Simon Wren-Lewis: Monetary versus Fiscal: an odd debate:”Before the recession, what I have called the consensus view was this: Under flexible exchange rates, monetary policy was the instrument of choice for demand stabilisation… not because fiscal policy cannot stabilise demand, but because (in fairly simple cases) monetary policy is better at doing so. From a welfare point of view, it dominates…. The qualification that monetary policy is unconstrained is critical, of course. If you are a member of a monetary union, it is a completely different game…. The other example of a constrained monetary policy is of course the Zero Lower Bound…. Given the uncertainties here, the only reasonable approach to take in advising policymakers is to use a combination of both policies…. What I do not understand is why there are others who take a different view, and want to argue that monetary policy is still all you need. Where does this certainty about the powers of unconventional monetary policy come from? As I have already noted, it does not come from the theory that I know. So maybe it comes from a belief about parameter values, but given how untried this policy is, how can you be so certain as to not want to hedge your bets with fiscal action?…

   “Perhaps it’s not the effectiveness of unconventional monetary policy that is crucial here, but a profound mistrust concerning the effectiveness of fiscal actions. Yet I cannot see the macroeconomics behind that either. In its purest form, all fiscal stimulus involves is bringing forward public spending, just as monetary easing encourages the private sector to bring forward their spending. That is bound to be effective in combating demand deficiency. Is the fact that the spending takes place this year rather than in five years time that costly, particularly if the spending is investment like in character? So I remain mystified where this desire to downgrade the usefulness of fiscal policy at the ZLB comes from. I suspect I am missing something, and would like to know what that is.”

And:

• Bruce Sterling and Jon Lebkowsky:: The WELL: State of the World 2014

Should Be Aware of:

1. Jonathan Chait: Obamacare No Longer Doomed, Will Become Scandal: “Obamacare — actual, real, Obamacare, with doctors and cards and everything — has been operational for nearly a week now. It has been… extremely boring. It does not look like Stalinist collectivization. There aren’t even any beheadings. It looks like regular medical insurance, except several million more people now have it than before. How conservatives will respond next to this mundane new world has become the subject of combative speculation…. Obamacare will neither collapse, nor will Republicans accept its legitimacy, but the nature of their opposition will instead slowly morph. Gleeful predictions of imminent collapse will give way to bitter recriminations at the nefarious tactics used to make the law work. Obamacare will cease to be the something certain to destroy Obama and become something Obama has gotten away with.”

2. Nick Sullivan: How the NSA (may have) put a backdoor in RSA’s cryptography: “Dual EC-DRBG… was published by the NSA with two ‘random’-looking points P1 and P2…. The values for the points P1 and P2 could have been chosen randomly or they could have been chosen with a deliberate relationship. If they were chosen deliberately, there is a backdoor. If they truly were chosen randomly, then finding the internal state is as difficult as breaking elliptic curve cryptography. Unfortunately, there is no way to identify if the two points were chosen together or randomly…. The authors did not provide any proof of randomness for the two points P1 and P2. This could have easily been done by choosing P1 and P2 as outputs of a hash function, but they did not. This is just one of many flaws in the design of this algorithm. The evidence is mounting for Dual EC-DRBG being well-suited for use as a back door…. Up until recently, Dual EC-DRBG was the default random number generator for several cryptographic products from RSA (the security division of EMC), even though cryptographers have long been skeptical of the algorithm’s design. There are reports of impropriety connecting a $10 million investment by the United States government and RSA’s decision to use this obscure and widely maligned algorithm in their widely distributed products.”

3. Heebie-Geebie: The Fragile Fundamentalist Christians: “Growing up, I was taught absolutely not to talk about religion. And if religion came up in conversation, I should keep my mouth shut about my beliefs. The reasons were serveral-fold: not to invite negative reactions, or get myself written off, or invite mean behavior. But also to protect the more religious Christians and their fragile sensibilities. This is north Florida in the 80s, which probably decently resembles mid-Texas in 2014…”

And:

• John Mearsheimer: America Unhinged
• Manifesto for an Accelerationist Politics
• Ken Thompson: Reflections on Trusting Trust

bspencer: For God’s Sake, Somebody Please Give Victor Davis Hanson His Meds | Wolfgang Munchau: What eurocrisis watchers should look for in 2014 | Tim Duy: A Weekend of Fedspeak | Richard Mayhew: Medicaid leak-through | Christopher Wimer et al.: Trends in Poverty with an Anchored Supplemental Poverty Measure | Dan McCrum: Smart enough to avoid a zombie bite? | Felix Salmon: The payments impasse | Yellen Confirmed as Fed Chief |