Unconventional views that Tyler Cowen doesn't want to talk about
Matthew Martin 2/25/2015 08:49:00 AM
2b. Ok, some of what he said here was conventional. I just want to single out this: "it has served as an inefficient form of wealth insurance for some lower-income groups," as well as this "on net, the negative health consequences of the disemployment effects of the law could easily counterbalance the direct positive health care access effects." These aren't obviously unreasonable hypotheses, but far from conventional! They deserve blog posts, if not whole books, written about them. On the former, I've written before on why it's optimal to have health insurance as part of the social wealth-insurance bundle--does Cowen have a different view? And there's a lot packed into that second part: the health effects of disemployment are empirically inconsistent, especially when considering only the portion of the effect unrelated to changes in insurance coverage. Moreover, the relation of that literature to the ACA is somewhat mixed too: most employment effects of the ACA are either volunary (job lock) and not likely to have negative health effects, or on the intensive margin (the phase out of exchange subsidies and the 30-hour employer mandate) rather than extensive margin studied in those health effects studies. The fact that Cowen thinks these are conventional views makes me suspect that he gets all his health econ news from Casey Mulligan.
3. "The Supreme Court will rule against the current version of Obamacare and send the matter back to Congress." Is Cowen talking about King v Burwell? The conventional view on King and Halbig has always been that they are "reach" cases that have little chance of a favorable SCOTUS ruling. And it would be historically unconventional as well. Historically, SCOTUS has always liked creative arguments that rely on neither literal nor intentional arguments. Think about Bush v Gore, where a white man used a civil rights amendment to halt a legitimate vote count. That creative reinterpretation of the equal protection clause is the kind of reasoning the court likes. King v Burwell is the exact opposite: a case that depends on hair-splittingly literal textual interpretation that even Amelia Bedelia wouldn't buy. The court won't buy it either, because they don't want that standard as a precedent.
5. "But with nominal gdp well, well above its pre-crash peak, it is not demand-based “secular stagnation.” It just isn’t, I don’t know how else to put it. And the liquidity trap is still irrelevant and has been since about 2009." I think Cowen knows this is all highly unconventional--that's why he reiterated "it just isn't," as if already arguing with everyone about this.
8. "I am sticking with my recent Grexit prediction."