ABM fundamentalism [feedly]

Agent based modeling (ABM) in the social sciences uses rules based simulations (i.e. GENERATING models in numerous social science domains where agents operate computationally like "humans", but with simpler "rulesets" than in real life).

Simplification, if done right (Read Paul Krugman's columns explaning complex economic phenomena for examples of a world class simplifier), much can be and has been learned, that equation approaches cannot easily reveal. Some good "socialist" agent-based modeling would be very interesting.....try to find some of those if I can, although Dan Little -- the author of the blog below -- is a plenty progressive scientist and intellectual.

  

ABM fundamentalism
http://understandingsociety.blogspot.com/2019/07/abm-fundamentalism.html

I've just had the singular opportunity of participating in the habilitationexamination of Gianluca Manzo at the Sorbonne, based on his excellent manuscript on the relevance of agent-based models for justifying causal claims in the social sciences. Manzo is currently a research fellow in sociology at CNRS in Paris (Centre National de la Recherche Scientifique), and is a prolific contributor to analytical sociology and computational social science. The habilitation essay is an excellent piece of work and I trust it will be published as an influential monograph. Manzo has the distinction of being expert both on the philosophical and theoretical debates that are underway about social causation and an active researcher in the field of ABM simulations. Pierre Demeulenaere served as a generous and sympathetic mentor. The committee consisted of Anouk Barberousse, Ivan Ermakoff, Andreas Flache, Olivier Godechot, and myself, and reviewer comments and observations were of the highest quality and rigor. It was a highly stimulating session.

One element of our conversation was especially enlightening to me. I have written a number of times in Understanding Society and elsewhere about the utility of ABM models, and one line of thought I have developed is a critique of what I have labeled "ABM fundamentalism" -- the view that ABM models are the best possible technique for constructing social explanations for every possible subject in the social sciences (link). This view is expressed in Joshua Epstein's slogan, "If you didn't grow it, you didn't explain it." I maintain that ABM is a useful technique, but only one of many methods appropriate to the problem of constructing explanations of interesting sociological outcomes (link). So I advocate for theoretical and methodological pluralism when it comes to the ABM program. 

I asked Gianluca whether he would agree that ABM fundamentalism is incorrect, and was surprised to find that he defends the universal applicability of ABM as a tool to implement any sociological theory. According to him, it is a perfectly general and universal modeling platform that can in principle be applied to any sociological problem. He also made it clear that he does not maintain that the use of ABM methods is optimal for every sociological problem of explanation. His defense of the universal applicability of ABM simulation techniques therefore does not imply that Manzo privileges these techniques as best for every sociological problem. But as a formal matter, he holds that ABM technology possesses the resources necessary to represent any fully specified social theory within a simulation.

The subsequent conversation succeeded in clarifying the underlying source of disagreement for me. What I realized in the discussion that ensued is that I was conflating two things in my label of ABM fundamentalism: the simulation technology and the substantive doctrine of generative social science. Epstein is a generativist, in the sense that he believes that social outcomes need in principle to be generated from a representation of facts about the individuals who make it up (Generative Social Science: Studies in Agent-Based Computational Modeling). Epstein is also an advocate of ABM techniques because they represent a particularly direct way of implementing a generativist explanation. But what Gianluca showed me is that ABM is not formally committed to the generativist dogma, and that an ABM simulation can perhaps incorporate factors at any social level. The insight that I gained, then, is that I should separate the substantive view of generativism from the formal mathematical tools of ABM simulations techniques. 

I am still unclear how this would work -- that is, how an ABM simulation might be created that did an adequate job of representing features at a wide range of levels -- actors, organizations, states, structures, and ideologies. For example, how could an ABM simulation be designed that could capture a complex sociological analysis such as Tilly's treatment of the Vendée, with peasants, protests, and merchants, the church, winegrowers' associations, and the strategies of the state? Tilly's historical narrative seems inherently multi-stranded and irreducible to a simulation. Similar points could be made about Michael Mann's comparative historical account of fascisms or Theda Skocpol's analysis of social revolutions.

So there is still an open question for me in this topic. But I think I am persuaded that the fundamentalism to which I object is the substantive premise of generativism, not the formal computational methods of ABM simulations themselves. And if Gianluca is correct in saying that ABM is a universal simulation platform (as a Turing machine is a universal computational device) then the objection is misplaced.

So this habilitation examination in Paris had exactly the effect for me that we would hope for in an academic interaction -- it led me to look at an important issue in a somewhat different way. Thank you, Gianluca!  

 -- via my feedly newsfeed

China vs. United States: A Tale of Two Economies [feedly]

A great graphic comparing US and China economies.

China vs. United States: A Tale of Two Economies
https://ritholtz.com/2019/07/china-vs-united-states-a-tale-of-two-economies/

Source: Visual Capitalist     While comparable in total size, the makeup of each economy is totally different. United States is a sophisticated and highly diversified economy that is based on services, finance, and consumption from the middle class. China has similar aspirations in the future, but right now it is resource-intensive growth engine making the transition…

Read More

The post China vs. United States: A Tale of Two Economies appeared first on The Big Picture.

 -- via my feedly newsfeed

Thomas Pikety: Will money creation save us? [feedly]

As expected from Brother Piketty,  a much clearer summary and critique of MMT (modern monetary (creation) theory) than from some.

Will money creation save us?
https://www.lemonde.fr/blog/piketty/2019/07/09/will-money-creation-save-us/

Before the 2007-2008 crisis the balance sheet of the European Central Bank (that is, the totality of securities owned and loans granted by the ECB) was approximately 1000 billion Euros, or barely 10% of the GDP of the Euro zone. In 2019 it had risen to 4700 billion Euros, or 40% of the GDP of the zone. Thus between 2008 and 2018, the ECB has implemented a monetary creation equivalent to over one and a half years of the French GDP, one year of German GDP, or 30% of the GDP of the Euro zone (or 3% of GDP in additional monetary creation each year for 10 years). These considerable resources are for example three times higher than the total budget of the European Union during the same period (1% of GDP per annum, all categories of expenditure taken together, from agriculture to Erasmus to the regional funds and research). These resources have enabled the ECB to intervene massively on the financial markets, to buy public and private debt securities and to make loans to the banking sector to guarantee solvency.

These policies have probably prevented the "great recession" in 2008 from becoming the "great depression" as was the case between 1929 and 1935. At the time, the central banks were shaped by a liberal orthodoxy based on non-intervention and had allowed a wave of bank failures to take place. This precipitated the collapse of the economy, the explosion of unemployment, the rise of Nazism and the march towards war. The fact that on this point at least history has taught us a lesson and that in 2008 (almost) nobody suggested a repetition of this « liquidationist » experience is obviously a good thing. Confronted with the extreme weaknesses of global financial capitalism, the central banks were in fact the only public institutions capable of avoiding a cascade of bank failures in the emergency.

The problem is that not all problems can be settled by monetary creation and the boards of directors of central banks and that these episodes have profoundly and permanently disrupted the collective representations in this respect. Before 2008, the prevailing opinion was that it was forbidden (or at least highly unadvisable) to carry out a monetary creation of such magnitude. This conception had been imposed in the 1980s following the "stagflation" of the 1970s (a mix of slow growth and high inflation).  This was the climate in which the Maastricht Treaty (1992) which was to give birth to the Euro in 1999-2002 was conceived. The huge monetary creation which has taken place since 2008 has shattered this consensus. Following the creation in the click of a mouse, by the ECB of 30% of the GDP to save the banks, in Europe today, many voices clamour (for example with the project of the finance-climate pact) for a repetition of the same thing to finance the energy transition, to reduce inequalities or invest in research and training. Similar demands are also being expressed in the United States and in other regions of the world. They are natural and legitimate and it will not be possible to simply dismiss them.

Several points must however be clarified. It is very possible that the central banks may again increase the size of their balance sheets (these have already risen to 100% of GDP in Japan and in Switzerland) in order to deal with financial crises to come, or simply to follow the evolution of the balance sheets in the private sector (over 1000% of GDP at present, as compared with 300% in the 1970s). There is nothing in the slightest reassuring about this rational of a never-ending high-speed chase: it would be better to set up the regulations required to end this hyper-financialisation and to reduce private balance sheets.

Furthermore, in a context of sluggish growth, of near-zero interest rates and non-existent inflation, it is legitimate for the public authorities to take on more debt to invest in the climate and in training, with the support of central banks. It is particularly paradoxical to observe that the total public expenditure in education (primary, secondary and higher) has been stagnating in the richer countries at around 5% of GDP since the 1980s, whereas the proportion of an age group entering higher education has risen from less than 20% to over 50%. In the European context this will however demand an in-depth intellectual and political reform. The questions of investment, debt and of money must be discussed openly in the context of a parliamentary body in place of the automatic budgetary rules (constantly circumvented) and the usual closed doors. These discussions involve the whole of society and cannot be left to councils of ministers of finance or governors of central banks.

Finally, and above all, the monetary expansion which took place in the period 2008-2018 must not lead to a new form of monetarist illusion. The considerable challenges which are ours (global warming, the rise of inequalities) do not simply demand that we mobilise adequate resources. They also demand that we build new norms of justice in the distribution of effort, which involves the adoption by elected assemblies of progressive taxes on income, financial assets and carbon emissions and by the implementation of a new system of financial transparency. The creation of money can help, provided that it is not a fetish and remains in its proper place: namely a tool within a collective system in which taxes and parliaments must retain the main role.

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US Multinationals Expand their Foreign-based Research and Development [feedly]

US Multinationals Expand their Foreign-based Research and Development
http://conversableeconomist.blogspot.com/2019/07/us-multinationals-expand-their-foreign.html

decades, US multinational corporations (MNCs) conducted nearly all their research and development (R&D) within the United States. Their focus on R&D at home helped establish the United States as the unrivaled leader of innovation and technology advances in the world economy. Since the late 1990s, however, the amount of R&D conducted overseas by US MNCs has grown nearly fourfold and its geographic distribution has expanded from a few advanced industrial countries (such as Germany, Japan, and Canada) to many parts of the developing world ..."

Lee G. Branstetter, Britta Glennon, andJ. Bradford Jensen discuss this shift in "The Rise of Global Innovation by US Multinationals Poses Risks and Opportunities" (June 2019, Peterson Institute for International Economics,  Policy Brief 19-9).

Here's the quadrupling in foreign-based R&D by US multinationals in the last couple of decades:

Another measure looks at what share of the patents files by US multinationals are based on cross-border collaboration. It used to be less than 2%; it's now more than 10%--and rising. 

It used to be that almost all the foreign R&D of US multinationals was in five high-income countries Germany, the UK, Japan, Canada, and France.Now, less than half is in those five countries.

The shift here shouldn't be exaggerated. "While US MNCs' foreign R&D expenditures have increased dramatically, they still conducted about 83 percent of their R&D in the United States in 2015 (down from 92 percent in 1989)."

But the shift is still a real one. Of course, it's driven in part by the fact that US multinationals are building supply chains across borders and selling output in other countries. Emerging market have been growing faster than the US economy in recent decades, and with some stops and starts, will probably continue this pattern of faster "catch-up" growth in the next few decades. Another factor is that an interconnected world economy, research is more likely to cross borders than research in older industries.

Your reaction to US multinationals expanding their overseas R&D efforts may be shaped by whether you are a half-empty or a half-full kind of person. US multinationals accounted for 57% of total US R&D spending in 2015. 

The half-empty concern would be that when US companies shift their R&D overseas, there is a danger of losing US-based technological leadership, with potentially negative consequences for US workers and the US economy. There is a legitimate concern that technology developed outside the US may offer less benefit to the US economy, and may be harder to protect with intellectual property rules.

The half-full response is that centers of technological excellence are developing all around the world, with or without participation by US firms. If US firms wish to stay at the technological cutting edge, they need to  engaged with the researchers and expertise all around the world. not to be separated from it. Also, if US multinationals by basing some of the R&D in other countries, US multinationals are building connections to supply chains and to consumers in those markets. 

 -- via my feedly newsfeed

A way out from rock bottom: Economic policies can reduce deaths of despair

Research shows a strong connection between low wages and the diseases of despair: addictions, abuse, suicide.

A way out from rock bottom: Economic policies can reduce deaths of despair

William H. Dow, Anna Godøy, Chris Lowenstein, Michael Reich 07 July 2019

Policymakers and researchers have sought to understand the causes of and effective policy responses to recent increases in mortality due to alcohol, drugs, and suicide in the US. This column examines the role of the minimum wage and the earned income tax credit – the two most important policy levers for raising incomes for low-wage workers – as tools to combat these trends. It finds that both policies significantly reduce non-drug suicides among adults without a college degree, and that the effect is stronger among women. The findings point to the role of economic policies as important determinants of health. 

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Since 2014, overall life expectancy in the US has fallen for three years in a row, reversing a century-long trend of steadily declining mortality rates. This decrease in life expectancy reflects a dramatic increase in deaths from so-called 'deaths of despair' – alcohol, drugs, and suicide – among Americans without a college degree (Case and Deaton 2015, 2017). Between 1999 and 2017, the age-adjusted rate of drug overdose deaths increased by 256%, while suicides grew by 33% (Hedegaard et al. 2017, 2018). 

In their pioneering work first highlighting these trends, Case and Deaton point to declining economic opportunity among working class non-Hispanic whites – combined with an increase in chronic pain, social distress, and the deterioration of institutions such as marriage and childbearing – as primary drivers of these trends. Case (2019) further notes that inflows of cheap heroin and fentanyl interacted with ongoing poor economic conditions among less-educated workers to perpetuate mortality due to these causes. Other scholars have questioned the explanatory focus on distress and despair, especially for drug-related deaths (Roux 2017, Ruhm 2019, Finkelstein et al. 2016). These researchers point instead to place-specific and 'supply-side' factors of the drug environment, particularly the role of new, highly addictive and risky drugs. Others have also pointed to the role of the obesity epidemic and the lagged effects of the HIV/AIDS crisis as drivers of these trends (Masters et al. 2018). 

We contribute to this discussion by examining how two economic policies that increase after-tax incomes of low-income Americans – the minimum wage and the earned income tax credit (EITC) – causally affect deaths of despair. 

Our study

To estimate the causal effects of minimum wages and the EITC on mortality, we adopt a quasi-experimental approach, leveraging state-level variation in state economic policies over a 16-year period from 1999-2015. Our primary data source consists of geocoded CDC Multiple Causes of Death files linked with state-level demographic, economic, and policy variables from a variety of sources (see Dow et al. 2019 for a full description of data sources and methods). 

The restricted-access mortality files we use contain various demographic characteristics including race, ethnicity, age, gender, and education. Education is of particular relevance to our analysis as it serves as a proxy for exposure to the EITC and the minimum wage. We focus specifically on mortality among adults aged 18-64 without a college degree, as this is the population most likely to be affected by minimum wage changes and the EITC. While the term 'deaths of despair' typically includes deaths from drug overdoses, suicides, and alcohol-related illness (Case and Deaton 2015), we focus here on drug overdose deaths and non-drug suicides, which are more likely to be responsive to recent policy changes in the short-run. 

Our analysis follows the standard difference-in-differences approach to estimate models of cause-specific mortality over time. Our estimates suggest that both policies significantly reduce non-drug suicides among our lower-educated sample (adults without a college degree). Specifically, we highlight three findings. First, a 10% increase in the minimum wage reduces suicide deaths by 3.6%, while a 10% higher maximum EITC reduces suicides by 5.5%. Based on the average annual suicide rate in this population over the study period, this translates to a reduction in over 1,200 suicides annually.

Second, the effect of these policies on reducing suicide is stronger among women. A 10% increase in minimum wages (state EITC credits) leads to a 4.6% (7.4%) reduction in suicide deaths. This is consistent with differences in exposure to these policies, as women are more likely to work minimum wage jobs and to be eligible for the EITC.

Third, we do not find any differential effects of minimum wages on suicide for white non-Hispanic and other racial/ethnic groups, yet there is suggestive evidence that the EITC may have larger effects among people of colour. 

Overall, we find that the reduction in suicides is greater among the groups that are more likely to be affected by higher minimum wages and generous EITCs. We find no significant effects of these two policies among adults with a bachelor's degree or higher – a population less likely to work minimum wage jobs or to be eligible for the EITC. This finding lends support to our hypothesised mechanism that these policies reduce suicides by lifting low-income groups out of poverty. Importantly, neither policy significantly affected drug-related deaths, which have increased in the US with the greater availability of illegal opioids, heroin, and fentanyl. These null effects are consistent with the arguments made by Ruhm (2019), Finkelstein (2016), and others highlighting the supply-side drivers of the dramatic increase in drug overdose fatalities. It is likely that other policies are needed to combat these trends.

Evidence of causality

Our study provides the first causal evidence of the beneficial effects of these policies on fatalities attributable to non-drug suicide. Underlying our study design is the fundamental assumption that we can obtain causal estimates of policy effects by comparing states that have different minimum wages and EITC rates within the same year. For this approach to be valid, the parallel trends assumption must hold – that is, changes in state minimum wages and EITC rates should be uncorrelated with unobserved drivers of mortality. 

We provide strong evidence of the parallel trends assumption by estimating an event study model that captures the time path of effects around the time of minimum wage or EITC change. The intuition behind these models is that higher minimum wages or EITC rates should not have any effects on mortality in the years leading up to the policy changes, but we should observe a discontinuous shift in the outcome at the time of implementation. This pattern is shown in Figure 1 plotting the estimated effects (and their 95% confidence intervals) for the minimum wage (panel A) and EITC (panel B), each stratified by gender.

Figure 1 Event study models of non-drug suicide

Concluding remarks

Our finding that minimum wage increases and EITC expansions significantly reduce suicide rates are consistent with recent research identifying economic correlates of suicide – non-employment, lack of health insurance, home foreclosures, and debt crises (Reeves et al. 2012, Chang et al. 2013). 

More generally, these findings further an emerging body of literature examining the relationship between economic policies and related health behaviours and outcomes. For example, recent research has found that minimum wage increases lead to reduced self-reported depression among women (Horn et al. 2017), reductions in suicide (Gertner et al. 2019), and do not have harmful effects on teen alcoholism or drunk driving fatalities (Sabia et al. 2019). In general, a majority of the recent papers on the effects of minimum wages on health have identified beneficial effects, though many of these studies use questionable methods that cast doubt on their validity as credible causal analyses (Leigh and Du 2018, Leigh et al. 2019). 

Expansions of the EITC have been found to significantly improve the health of mothers and birth outcomes (Evans and Garthwaite 2014, Hoynes et al. 2015, Markowitz et al. 2017), and a recent study by Lenhart (2019) finds that EITC expansions improve self-reported health. Taken together, these findings point to a substantial public health benefit of increasing the minimum wage and expanding the EITC. 

The minimum wage and the EITC each raise incomes for low-wage workers. Economists have generally found that minimum wage policies increase income and reduce poverty, while having very little to no negative effects on employment. The new findings in this study suggest that the benefits of minimum wage and EITC policies are broader than previously thought and can help combat the high and increasing levels of deaths of despair.

References

Case, A, and A Deaton (2015), "Rising Morbidity and Mortality in Midlife among White non-Hispanic Americans in the 21st century" PNAS, 112 (49), 15078-15083. 

Case, A, and A Deaton (2017), "Mortality and Morbidity in the 21st Century" Brookings Papers on Economic Activity, 397- 477.

Case, A (2019), "Deaths of Despair and the Future of Capitalism" Haas Institute Lecture, University of California, Berkeley, March 1.

Chang, S-S, D Stuckler, P Yip, and D Gunnell (2013), "Impact of 2008 global economic crisis on suicide: time trend study in 54 countries", BMJ, 347 (2013), f5239.

Cooper, D, M J Luengo-Prado, and J A Parker (2019), "The local aggregate effects of minimum wage increases", NBER Working Paper no. 25761.

Dow, W H, A Godøy, C A Lowenstein, M Reich (2019), "Can Economic Policies Reduce Deaths of Despair?" NBER Working paper no. 25787.

Evans, W, and C Garthwaith (2014), "Giving Mom a Break: The Impact of Higher EITC Payments on Maternal Health", American Economic Journal: Economic Policy, 6 (2), 258-290.

Gertner, A, J Rotter, and P Shafer (2019), "Association between State Minimum Wages and Suicide Rates in the US", American Journal of Preventive Medicine,56 (5), 648-54.

Hedegaard, H, S Curtin, and M Warner (2018), "Suicide Mortality in the United States, 1999-2017", NCHS Data Brief no. 330, 1–8.

Hedegaard, H, M Warner, and A Miniño (2017), "Drug Overdose Deaths in the United States, 1999-2016", NCHS Data Brief no. 294.

Hoynes, H, D Miller, and D Simon (2015), "Income, the Earned Income Tax Credit, and Infant Health", American Economic Journal: Economic Policy, 7 (1), 172-211.

Leigh, P, and J Du (2018), "Effects of Minimum Wages on Population Health", Health Affairs, October 4.

Leigh, P, W Leigh, and J Du (2019), "Minimum Wages and Public Health: A Literature Review", Preventive Medicine, 118, 122-34.

Lenhart, O (2019), "The effects of income on health: new evidence from the Earned Income Tax Credit", Review of Economics of the Household, 17 (2), 377-410.

Markowitz, S, K A Komro, M D Livingston, O Lenhart, and A C Wagenaar (2017), "Effects of state-level Earned Income Tax Credit laws in the US on maternal health behaviors and infant health outcomes", Social Science & Medicine, 194, 67-75.

Masters, R, A Tilstra, and D Simon (2018), "Explaining Recent Mortality Trends among Younger and Middle-Aged White Americans", International Journal of Epidemiology, 47 (1), 81–88.

Reeves, A, D Stuckler, M McKee, D Gunnell, S-S Chang and S Basu (2012), "Increase in State Suicide rates in the USA During Economic Recession", The Lancet 380, 9856, 1813-1814.

Roux, A (2017), "Despair as a Cause of Death: More Complex Than It First Appears", American Journal of Public Health, 107 (10), 1566–67.

Ruhm, C J  (2019), "Drivers of the fatal drug epidemic", Journal of Health Economics, 64, 25-42.

Sabia, J J, M M Pitts, and L M Argys (2019), "Are minimum wages a silent killer? New evidence on drunk driving fatalities", Review of Economics and Statistics, 101 (1), 192-199.

--

John Case
Harpers Ferry, WV

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Dean Baker: The Financial Industry Preys on 401(k) Fees. It Doesn’t Have to Be This Way. [feedly]

Dean Baker: The Financial Industry Preys on 401(k) Fees. It Doesn't Have to Be This Way.
http://cepr.net/publications/op-eds-columns/the-financial-industry-preys-on-401-k-fees-it-doesn-t-have-to-be-this-wayDean Baker

Truthout, July 8, 2019

See article on the original site

Many people studying retirement income have long warned about the risk to future retirees from the collapse of the traditional defined benefit pension. Middle-class workers have generally been able to enjoy reasonably comfortable retirements due to the income these defined pensions provided, in addition to their Social Security.

However, with defined benefit pensions rapidly disappearing, and Social Security benefits replacing a smaller share of income, the prospects for future retirees looks considerably worse. An increase in the percentage of health care costs not covered by Medicare also does not help.

Conservatives have long argued that the loss of defined benefit pensions was no big deal since 401(k)s and IRAs would fill the gap. Many actually claimed that these retirement instruments were superior to pensions since workers have more control over these defined contribution systems, where workers decide how much they want to contribute and how quickly they draw it down.

That claim is harder to make now that 401(k)s have been in existence for almost four decades. The situation for near-retirees does not look very good. They are going to have to work until age 67 to collect full Social Security benefits.

Last year, economist David Rosnick looked at the most recent Survey of Consumer Finance from the Federal Reserve Board. It showed that the middle quintile of households in the 55 to 64 age range had, on average, just $99,000 in retirement savings.

That amount of retirement savings could provide a boost of roughly $5,000 to $6,000 a year above Social Security income. That is roughly half as much as the middle quintile of current retirees receives from defined benefit pensions. (This group of current retirees already gets over $2,000 a year, on average, from defined contribution plans like 401(k)s or 403(b)s.) It is also worth noting that the homeowners in this group now have an average of just 58.5 percent of their home paid off, compared to 81.0 percent in 1989. We can expect a serious decline in retiree living standards.

There are two reasons why 401(k)s have not filled the gap created by the loss of traditional pensions. The first is simply that many workers don't have them at their workplace. Either employers don't enroll workers until they are employed for a year or two, or businesses find the paperwork associated with a 401(k) to be too big of a headache. As a result, only 50 percent of workers currently contribute to a 401(k).

The second big problem is that financial industry fees eat up much of what gets contributed to these accounts. Average expenses of 401(k)s run over 1.0 percent of holdings and in some companies as much as 2.0 percent. This is a huge deal.

For someone saving $3,000 a year, the 1.0 percent pulled out by financial industry fees will reduce retirement savings by almost $30,000 after 30 years. A worker paying 2.0 percent in annual fees will have handed almost $50,000 to the financial industry after 30 years.

The losses would be even larger for workers making bigger contributions. A worker putting $6,000 into their account for 30 years, and paying 2.0 percent in fees, will have made a gift of $100,000 to the financial industry.

This is where the Oregon story comes in. Oregon has established a system of state-managed accounts where employers who do not have their own retirement plan are required to enroll their employees. The plan has a default 5 percent contribution from workers. While workers can opt out of this contribution, the overwhelming majority have chosen not to do so. By having workers contribute every year, and by having a system with far lower costs than privately managed 401(k)s, workers can expect retirement incomes of close to 80 percent of their working income when the system is fully phased in.

It is great to see this system in place in Oregon, but similar systems will also soon be in operation in California, New York, Illinois and several other states. These systems will likely require adjustments as time goes on, but by ensuring that workers contribute in most years of employment and that costs are low, workers can use these systems to replace the retirement that used to come from traditional pensions.

Ideally, this sort of system could be implemented nationally, but with the current president and Congress, that is out of the question. Even if the Democrats retake the White House in 2020, they may not have the ability to get a system like this through Congress.

As a result, we are likely to see the same sort of divide with retirement income that we already see with minimum wages, paid family and sick leave, and other benefits for workers and families. Progressive states are moving forward with measures that ensure their residents a decent standard of living. Meanwhile, the states controlled by Republicans are going as fast as they can in the opposite direction.

This is not a good story for the tens of millions of workers and their families that happen to live in Republican states. But we should at least be glad that workers in some states are benefiting from progressive policies and hope that the rest of the country will follow the same path before too long.

 -- via my feedly newsfeed

Obamacare Mess Irks Judges. It’s Complicated, U.S. Lawyer Admits [feedly]

Moderator: just one more example of the trial ahead getting either Medicare for All or the Green New Deal done: Unless the fascist, "the people are entitled to Nothing", trend is smashed -- and I mean smashed, removed from office, and prosecuted -- even Obamacare will not survive. Trump must be defeated by a healthy margin, and the victors must NOT temporize. This COULD happen in the 2020 election and aftermath. If it does not, it will still have to happen later, but the term "trial" is going to take on some old meanings again

Obamacare Mess Irks Judges. It's Complicated, U.S. Lawyer Admits
https://www.bloomberg.com/news/articles/2019-07-09/obamacare-court-fight-pits-blue-states-against-red-plus-trump

The U.S. appeals court judges tasked with deciding the fate of the hot potato known as Obamacare had some choice words Tuesday for Congress and the Trump administration.

"Why does Congress want the judiciary to be a taxidermist for every big-game legislative accomplishment it achieves?" the rookie on the panel, Kurt Engelhardt, an appointee of President Donald Trump, asked the lawyer representing the U.S. House of Representatives during a lively hearing in New Orleans.

Another judge didn't understand how the federal government thinks it can administer a law it believes is completely unconstitutional in just parts of the country.

"You want to strike it down, only in certain states, in its entirety?" U.S. Circuit Judge Jennifer Elrod, appointed by President George W. Bush, asked a lawyer for the Justice Department.

"A lot of this stuff has to be sorted out, and it's complicated," replied the attorney, August Flentje, as he shifted uncomfortably. "We haven't gone down that road yet."

The third judge, Carolyn King, a Jimmy Carter appointee, didn't utter a word during a 90-minute hearing that's supposed to help the court decide whether President Barack Obama's signature health-care law, the Affordable Care Act, lives or dies. The panel didn't issue a ruling Tuesday.

Texas and 18 other mostly Republican states asked the court to do what Trump and a GOP-controlled Congress couldn't in 2017 -- kill Obamacare.

Access to health care for millions of Americans through the Affordable Care Act hangs on the court's decision. The fight may well escalate to the Supreme Court in time to become a political test for the 2020 elections.

California and 19 other mostly Democratic states, along with the District of Columbia and the U.S. House of Representatives, now controlled by Democrats, jumped in to defend the law after the Trump administration decided to side with the red states that want it struck down.

More: Obamacare's Survival May Hinge on Some Technical Legal Questions

More than 20 million Americans obtained health coverage starting in 2014 through the ACA's independent insurance exchanges, federal subsidies or expanded Medicaid. The exchanges must take all applicants and charge them the same rate, regardless of pre-existing health conditions. Citizens who chose not to buy health insurance had to pay a penalty, a provision the U.S. Supreme Court upheld in 2012 as lawful under Congress's taxing authority.

With Trump's encouragement, Republican lawmakers repeatedly tried to repeal the law, ultimately failing in July 2017 when the late John McCain, the maverick from Arizona, made a thumbs-down gesture on the Senate floor. The GOP succeeded only in eliminating the penalty later that year, leaving the rest of the ACA intact.

A judge in Fort Worth, Texas, concluded in December that wiping out the penalty undermined the ACA's constitutional basis and invalidated the whole law. Although the federal government initially said some parts of the ACA might be worth keeping, the Trump administration shifted in March and said it would no longer defend any part of Obamacare in court.

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Engelhardt voiced frustration that lawmakers haven't resolved the situation on their own.

"Can't they do this tomorrow?" asked the former Louisiana trial judge, who joined the appeals court last year. "There's a political solution and you're asking this court to roll up its sleeves and get involved in it."

Samuel Siegel, the lawyer representing California, responded that it isn't the appeals court's job "to do what Congress repeatedly refused to do, which is to repeal the Affordable Care Act."

Douglas Letter, a lawyer for the House of Representatives, told the judges there's no need for Congress to take further action if lawmakers believe the law is already clear. When Congress eliminated the tax penalty for not buying health insurance, but left the rest of Obamacare intact, Congress created the version of Obamacare it wanted, he said.

If one part of the ACA is subsequently declared unlawful, that's no reason to toss out the entire law, Letter told the panel. Instead, the House's lawyer said, it is the judges' responsibility to "save everything you can unless it is evident Congress didn't mean that and would've preferred no statute."

Texas Solicitor General Kyle Hawkins warned the judges that "congressional intent is not monolithic, and it's a very difficult and dangerous game" to try to second-guess what Congress really meant.

"I'm not in a position to psychoanalyze Congress, and this court is not in a position to engage in psychoanalytical tasks," Hawkins said.

While the red states and the Trump administration are technically adversaries in this challenge, their lawyers sat at the same table during the hearing and told the judges they both think Obamacare is unlawful. However, Hawkins took pains to highlight inconsistencies that have developed in the Trump administration's position, which left Flentje, the Justice Department lawyer, occasionally struggling to explain himself.

When the challenge was in the lower court, the Justice Department said it didn't need a specific judicial order halting the ACA because the federal government would treat the judge's decision as a nationwide injunction. Later, the Trump administration shifted gears and said it will keep enforcing Obamacare until a court orders it to stop. And last week, the administration shifted positions again to insist that lower-judge's order only blocks Obamacare in states that sued to overturn it.

Several times, Flentje seemed to almost beg the judges to resolve the impasse between the White House and Congress, as the Supreme Court did when Obama refused to defend the federal law denying recognition to same-sex marriages.

"The courts then said this was a reasonable way to let the judicial branch have the final say," Flentje said. "The Supreme Court discussed this conundrum and said it's a reasonable way, especially when we have a complicated statute that covers a lot of ground."

The case is Texas v. U.S., 19-10011, U.S. Court of Appeals for the Fifth Circuit (New Orleans). -- via my feedly newsfeed