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Think tank

(1) How financial innovation leads to financial crises.

(2) Fannie Mae's survey of American attitudes toward housing. (Bonus: An astonished Felix Salmon comments!)

(3) Jon Gruber makes the case for the individual mandate.

(4) Raghuram Rajan's prescient 2006 paper arguing that finance makes the world riskier.

(5) Is behavioral economics laying the groundwork for a more paternalist state?

By Ezra Klein  |  April 12, 2010; 11:33 AM ET
Categories:  Think Tank  
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Your link to Gruber's post has a spurious " at the end.

Posted by: dal20402 | April 12, 2010 11:38 AM | Report abuse


What are your thoughts on Fannie Mae survey, and Felix Salmon's comments?

I think Salmon is incorrect in his assessment of all the bad things he believes are caused by home ownership. I think the bad things of home ownership have much more to do with crazy lending practices and the government underwriting said practices than they have to do with home ownership. Ergo, home ownership--by responsible folks who put 10% down (on a first home and 20% on the second) and have a fixed mortgage--these people represent an economy good, not a bad. It's the folks who get into homes with zero down and a big fat balloon payment coming around the corner that turn a net positive into a net negative.

Salmon seems to think that people owning homes, or wanting homes, causes these problems.

Posted by: Kevin_Willis | April 12, 2010 12:04 PM | Report abuse

and that's not a link to the Rajan paper, its a link to Raj Date's brief against the GSE's. The Rajan paper can be found at

Posted by: rwclayton7 | April 12, 2010 12:05 PM | Report abuse

The Rajan paper was presented at (and prepared for) the 2005 Kansas City Fed annual macro/finance shindig at Jackson Hole. A link to the published version is at

Posted by: bdballard | April 12, 2010 12:30 PM | Report abuse

and on the behavioral econ stuff, always remember that the plural of "nudge" is not "policy"

Posted by: bdballard | April 12, 2010 12:32 PM | Report abuse

I don't understand why defenders of the so called individual mandate are so blind to fundamental inequality of requiring those who don't have someone else paying the bills to purchase insurance with after-tax dollars.

It's one thing to say that everyone must be covered if the thing is going to work. It's a completely different thing to say that if you aren't eligible for tax-free coverage through an employer or eligible for public subsidy, you must use after-tax dollars to buy coverage or be fined by the federal government.

44% of current individual subscribers work for small businesses that do not offer coverage and almost 30 more are unemployed. In other words, fewer than 30% of those who are paying their way today are self-employed and can claim premiums as a deduction.

Unless Congress exempts premiums paid by individuals in the same way it does for employers (i.e. an above the line exemption), the individual mandate will never make it into practice.

Posted by: Athena_news | April 12, 2010 9:49 PM | Report abuse

Ezra -- you've got a dead link for the Jon Gruber piece. You need to lose the end quote on the URL. Nice to see someone suggest that the mandate is something other than a giveaway to insurers. Under EMTALA, we call get treatment. Now we all have to pay. The cross-subsidy is probably not right yet, but it has to exist in some form to make this work.

Posted by: GetitStraight1 | April 13, 2010 10:25 AM | Report abuse


I think you can write off what you pay, if I'm not mistaken. Though, if I'm wrong, I'm with you, that is an inequality worth revisiting...

And that Gruber piece was atypically fluffy (once I found it), more a critique on his writing there than the idea I suppose...

Posted by: ThomasEN | April 13, 2010 8:20 PM | Report abuse

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