From MSNBC we have Will the Senate go nuclear?

Chris Hayes talks about the “nuclear option” with Senator Jeff Merkley Dahlia Lithwick and Alan Frumin.

Of course MSNBC is just a shill for the sane, but what are you going to do?

It’s amazing what you find posted on people’s Facebook pages.   Thanks to Dante Comparetto for putting this on his Facebook page. The title and quote come from Amazing Oasis.

A little girl donates some coins to a street musician and gets the best surprise in return. Well, that’s certainly money well spent.

I just enjoyed the music. I’ll let you think of any political connection that merits me posting it here.

I received an email from Arun Muralidhar in response to my sending him a link to my previous post Elizabeth Warren: We should be talking about expanding Social Security benefits.

Hi Steve:

Thanks for the email and for the link to Sen Warren’s comments on Social Security. I totally agree with her that benefits need to be preserved, but sadly preserving benefits without making any changes to the current system will place an unfair burden on our kids. The only way to do so would be to implement our plan immediately as every delay adds to the cost of bolstering the program.

On your idea about allowing the Social Security investment option to be an offering for 401(K) plans, Franco and I had anticipated this kind of need. In fact, the World Bank pension fund was reformed in 1999 to allow such an option so that even retirees in 401Ks could be protected from market volatility, and it became the default option for staff who did not want to select equity/bond funds.

Thanks again for your thoughts.

Arun Muralidhar
Founder
Mcube Investment Technologies

Arun is co-author with Franco Modigliani of the book  Rethinking Pension Reform. I was glad to hear Arun confirm that the idea of a 401K public option is not farfetched at all.  The fact that the World Bank offers this type of investment in its pension plan, is as close as I know to an existence proof that such a plan is possible  on a national scale.

I note in Arun’s comments the use of an insight I first read about in the works of behavioral economists.  That is, that when you offer a bunch of complicated options to people, the best outcome happens if you make a good option be the default option.

Reader RichardH sent me the link to The Guardian article Academics back students in protests against economics teaching.

The Academics said in a letter to the Guardian that a “dogmatic intellectual commitment” to teaching theories based on rational consumers and workers with unlimited wants “contrasts sharply with the openness of teaching in other social sciences, which routinely present competing paradigms”.

They said: “Students can now complete a degree in economics without having been exposed to the theories of Keynes, Marx or Minsky, and without having learned about the Great Depression.”

Before reading the article, I had no idea that the teaching of economics had deteriorated so badly since I first learned economics in the early 1960s. Perhaps this article explains why I was so mystified by what Paul Krugman had to say as noted in my previous post How Milton Friedman Fooled The Economists. In that post I marveled at how Krugman was seemingly only recently remembering what he learned in the early 1960s just as I had learned it.

If the award laden economists who had learned all of this in their youth could forgot it as they advanced in their careers, I guess I shouldn’t be so harsh on President Obama for his failure to understand economics.  After all he was taught by these forgetful bozos.

I can imagine in other disciplines that what previous scholars may have taught can go in and out of fashion, but it was hard for me to imagine that the teaching of fairly recent historical events can go out of fashion.

It’s as if some grad student in an economics class would say, “Professor, I just read in the news about the elimination of the Glass-Steagall act during the Clinton administration.  What was that all about, and why did we think we needed a Glass-Steagall act in the first place?”  Would the Professor say, “Oh we don’t teach about that anymore.  That pertains to historical events that can never happen again, because things like the Glass-Steagall act was created to prevent a recurrence.”

No wonder there was not a whole generation of new economics students reacting to the abolition of Glass-Steagall the way I reacted to it.  As it was happening, I was thinking, “How can they do that?  Do they want to repeat the Great Depression?”