Monthly Archives: July 2015

The Greek Crisis and the Subprime Crisis

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Ana Swanson writes,

Matthijs compares the situation to the U.S. subprime crisis. Who was really at fault for the housing crisis in the U.S.: The subprime borrowers who bought houses they couldn’t afford, or the predatory lenders who encouraged them to take them out?

I, too, see parallels with the subprime crisis. However, I do not think that predatory lenders are to blame for either. In both cases, bank regulators were responsible for allocating credit. In the first instance, the regulators encouraged banks to treat mortgage loans as low risk. In the second case, they encouraged banks to treat all European sovereign debt as low risk. See The Regulator’s Calculation Problem.

The irony is that after messing up credit markets, the regulators ask for and receive more power. With the sub-prime crisis, the regulators were rewarded with Dodd-Frank. I presume that the ultimate outcome of the Greek crisis will be similar.

Vickies, Thetes, and Artisans

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Allison Schrager writes,

Harvard economist Lawrence Katz thinks that when the economy shifts, those who lose out experience “retroactive unemployment” in pursuit of jobs that no longer exist; however, he anticipates a bright future for men in the new economy. As an expert in the ways technology affects the middle class, Katz predicts the rise of the “new artisan” as a substantial trend in middle-class employment.

His theory holds that technology will commoditize and cheapen products in all industries but that artisanal workers will offer a superior interpersonal experience coupled with unique goods and services, commanding premium prices in turn. Men, he notes, are especially well suited to such roles.

Pointer from Tyler Cowen. This sounds like something straight out of Neal Stephenson’s The Diamond Age, except that Katz’s vision strikes me as more fictional.

Is Futile Care the Issue in Health Costs?

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Timothy Taylor writes,

The gains from reducing costs of end-of-life care shouldn’t be overstated. The proportion of Medicare spending that goes to end-of-life care has been roughly the same for the last few decades at about 25%. This regularity suggests that while overall health care costs have been rising, end-of-life care is not an increasing part of that overall issue. Intriguingly, Aldridge and Kelley report: “Medicare expenditures in the last year of life decrease with age, especially for those aged 85 or older … This is in large part because the intensity of medical care in the last year of life decreases with increasing age.” Indeed, older adults as a group are a minority of those with the highest health care costs in any given year

Read the whole thing. His Aldridge-Kelly citation is to a report of the sort that only Tim Taylor seems to dig up.

Uncharitable Behavior on Twitter

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James Poulos says much with which I agree.

Twitter is a megaphone for the worldview wars. It fosters constant competition among our claims that everyone should care and act as we do.

Read the whole thing. I would like to thank a commenter who told me about “unfollowing,” which is one of many useful but hidden options on Facebook. I have been unfollowing friends, left and right, who use Facebook only to post political views.

I think of myself as anti-elitist. But I am even more anti-mobist. When the mob emerges, I cease to be libertarian and instead become ultra-conservative. There is no phenomenon more barbaric than the mob.