Baum's View on Money
Good morning, and welcome to the Wednesday edition of what I'm reading.
Those tectonic plates are shifting in Asia.
You know all the talk about how important it is for a country to produce goods, not just subsist on providing services? Well, Asia's emerging economies are catching the developed nation disease, according to Bloomberg News. In the next year or two, services industries will account for more than 50 percent of gross domestic product. As societies become more affluent, exports become a less important part of GDP. Don't tell that to the U.S., where nominal goods exports set a record in the second quarter.
Is the goal of housing finance reform to reward mortgage bankers?
Once all the budget deadlines, phony scandals and to-be-delivered attack on Syrian are resolved, Congress plans to take up housing finance reform. Arnold Kling, an affiliated senior scholar at the Mercatus Center, poses four questions for lawmakers, starting with: Why reward mortgage bankers, whose fingerprints are all over the last scandal, by creating a new government guarantee for mortgage securities? Good question. "If mortgage securitization is really a safe and efficient mechanism as its advocates claim, it should be able to survive without a government guarantee," he writes. Answer: The housing finance industry has a well-organized and supported lobby.
Don't believe everything you read.
Especially when it comes to how Obamacare is turning the U.S. into a part-time nation. The Philadelphia Inquirer looked at the data on part-time employment and found that, contrary to popular belief, for most part-timers, the decision was voluntary, not due to the inability to find full-time work. And in the past year, "all of the additional people who took part-time positions wanted those part-time jobs," according to the article. That doesn't mean Obamacare isn't creating disincentives to hire and work (see next item). It's just that sometimes the facts do get in the way of a good story.
Past performance is no guarantee of future results.
During the 2012 presidential election, Republican candidate Mitt Romney never fully explained why he was for Massachusetts universal care reform, passed in 2006 when he was governor, and against the Affordable Care Act. The University of Chicago's Casey Mulligan could have given him some help. Mulligan compares the ultimate impact of each plan on marginal income tax rates: an increase of less than 1 percent in Massachusetts compared with 12 percent in the U.S. once Obama's health care act is fully implemented. Tax something more and you get less of it (in this case, work). His conclusion: Don't assume the negligible impact on Massachusetts employment to be as benign for the country at large.
The American Action Forum has a quiz for you.
Take a look at the four sets of restaurant menus. Your job is to figure out which one in each set violates the Affordable Care Act. Good luck. May the best man win.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)