Brad DeLong — Between Greece And Zimbabwe

Brad DeLong takes MMT seriously.

But suppose that you are in an intermediate case, where the Treasury and the central bank do not want to peg the currency (and the internal price level) but do not want to let it (them) do their own thing without limit either? Suppose the Treasury Secretary believes that a strong dollar* is in America’s interest. What you then have is a mix of the polar gold-standard and MMT cases. But what are the proportions of the mix?

Grasping Reality with Both Invisible Hands
Between Greece And Zimbabwe (very short)
Brad DeLong | Professor of Economics and chair of the Political Economy major at the University of California, Berkeley
(h/t Mark Thoma at Economist's View)

* Bob Rubin and his protegés favor a "strong dollar" in order to "keep borrowing costs low," which translates to running a balanced budget or even a surplus, as Rubin advised Democrats in the Clinton administration to do, setting the stage for the first depression of the 21st century. This goes by the name "Rubinomics." See also the Roosevelt Institute piece with links on Rubinomics. The Rubinites are now deficit doves that think moderate austerity is called for now rather than the austere austerity of the sound money crowd.

Steve Forbes solves America's problems

Never let it be said that we are one-sided here. Here's Steve Forbes on resolving America's problems. Zero Hedge sums up his position:

Steve Forbes has a quintessentially American policy prescription rooted in American history. The answer to America’s economic problems is—and has always been—new wealth creation. New wealth creation doesn’t come from the government or from the Federal Reserve’s printing press. New wealth creation is what happens naturally with stable money based on the gold standard, lower taxes on individuals, a simplified tax code, reduced bureaucracy and free markets.

The Hera Research Newsletter interview with Forbes is short and there is just chock full of other good stuff, like his flat tax.

Read it at Zero Hedge
Steve Forbes: How To Bring Back America
by Tyler Durden

Here's an argument to ponder:

HRN: How would you go about deregulating health care?

Steve Forbes: ...Patients should have more choice. The insurance companies don’t compete freely for business. We should allow people to shop nationwide for health insurance. I live in New Jersey, which has a lot of senseless regulations. Why can’t I buy a health insurance policy in Pennsylvania that costs less?

Apparently, Mr. Forbes is unaware of how insurance is priced. It's priced on actuarially based on risk and costs, which he seems to realize, and he gets that it the the premium depends on where one lives as a cost determinant.

Typically health care costs are higher in suburban and urban areas then rural areas due to differences in cost of living, so one is charged on the basis of where one lives and is expected to be treated. If Mr. Forbes doesn't move, he won't see his rates change materially, because I would assume that in his neck of the woods living standards, hence costs like hourly wages, physician fees, and hospital fixed costs, are relatively high in comparison to other areas.

This is also true of Medicare supplemental insurance. I get my supplemental through Blue Shield of California. When I moved from rural Northern California (Ukiah) to Boston the rates were different, and when I moved to Iowa City, the rate was still higher than rural California.

And Mr. Forbes, being a billionaire, would really shop for the least expensive health insurance available in the country?

Mr. Forbes is talking his book again while pretending that he has the best interests of everyone at heart.