Friday, July 26, 2013

This American Life Nostalgia

The 500th episode and clip show for This American Life made me remember my first memory of my favorite NPR show. I was still in high school, and I realize now it was one of the first This American Life shows. Back then, I wasn't even aware of NPR's existence (a little sad given that I've listened to it obsessively ever since I discovered it), radio meant music, and the only alternative to music was conservative talk radio. I guess the local NPR stations were always staticy in my home town so it was only when I was driving somewhere, and happened to flip to to This American Life, and I had that moment, that this was something transcendent. The show was backstage at some high school musical. And it was so lovingly reported, taking such great care to listen hard to the stories of the everyday, of the mundane, somehow elevating it, like a Hopper, to the sublime. I've been an addict ever since.

Thursday, July 25, 2013

The Economic Consensus - Mankiw edition

I often remark that one nice thing about economics is that all economists (left and right) are trained to think alike. That's also a bad thing about economics too I suppose. But in any case, I just like this line from Makniw's recent ny times article on this subject. "It forever sets you apart — for better or worse — from mere muggles."

Adverse Selection in Action

This article attributes the steep decline in health insurance prices in New York to "competition" when the far bigger effect is simply adverse selection. Before Obamacare, insurers had to sell to anyone who wanted to buy in NY, but not everyone was required to buy, so only the least healthy would buy individual insurance, driving the prices up. The real change was requiring healthy people to buy insurance as well.

Monday, July 15, 2013

The origins of Obama's climate policy

Another recent column applauding Obama's energy policy made me start several conversations pointing out the origins of Obama's policies. I'll discuss the big ones, his CAFE fuel economy standards for cars, and his pledge for renewable electricity and curtailing coal. The main themes is that most of his policies are simple continuations or implementation of past policies, or otherwise simply taking credit for trends that were happening anyway.

Many (like Thomas Friedman) call Obama's Cafe standards for cars Obama's defining climate policy. It probably is the one that has the biggest impact, but really, the CAFE update was passed in 2007, based on a proposal by the Bush administration (that I helped write)  If you follow the trend line, you find the Obama regulations are pretty much right on the exact same trend line as the Bush proposal and subsequant energy policy act passed by Congress in 2007. Though I'm not saying Bush is responsible either, our policy came about due to pressure from a democratic congress, and from various supreme court rulings, based on laws written 40 years ago, and based on public pressure from high gasoline prices, and tensions in the middle east, all factors that probably would have led to roughly the same policies regardless of who happened to be sitting in the president's chair.

As for the policies on coal powerplants, the authority to use executive power is based on a 2007 supreme court ruling that carbon can be regulated under the clean air act of 1970. The bush administration threatened to use that authority to regulate carbon in 2007 but said that it would be better to do so through legislation (which we got) since executive power is controversial and subject to more litigation. (it is notable that Obama campaigned against Bush era executive overreach but like every president happily embraces it himself).

Also, the main provisions in the new Obama plan for electricity are the ones that basically ban conventional coal power plants, but that's disingenuous because coal power plants became uneconomic with the advent of natural gas fracking, so the regulation mostly has no teeth unless natural gas prices somehow reverse themselves (a possibility but unlikely).

This is similar to Obama's pledge to double renewable electricity by 2020. These were the federal government projections back in 2008 before Obama was elected: (see page 70) The doubling was projected for 2020 even then. We played the game too when I was in the Bush administration. Look at the projections (like oil imports or emissions) and take credit for the trends that were already happening anyway.
It's also worth noting that doubling a very small number is still a very small number.

Sunday, July 14, 2013

Obama's Climate achievements?

Grunwald argues in Time Magazine that Obama deserves more credit for his climate achievements..

I agree the climate debate rarely troubles itself with facts, but Grunwald's commentary in Time doesn't help at all. Many of the grand achievements for the Obama administration he claims (like vehicle and appliance standards) are based on the Energy Policy Act of 2007 (a bill proposed by Bush and passed with bipartisan support that I happened to help write). And yet Obama deserves the credit? It's also fair that the greens aren't impressed by Obama's climate actions, a rough calculation of the other policies you mentioned might reduce global emissions by a quarter percent?