Fixed-income comments

A month ago,  I attended the SF Fed/Bank of Canada conference on fixed income. I had the chance to comment on Michael Bauer and Jim Hamilton's "Robust Bond Risk Premia.” My comments here.

As usual when faced with a really nice paper, I used most of my discussion time to survey the field and give my views on current facts and challenges, which is why my comments might be interesting to blog readers.

Some highlights: I reran regressions of bond returns in the style of Joslin, Priebsch, and Singleton, forecasting returns with the first  three principal components of yields, and growth and inflation. Here are the results:

First row: the slope factor forecasts returns with the usual 18% R2. Second row: Inflation and growth do not forecast returns at all. Third row: in combination with the first three principal components, the R2 rises to 0.26 by adding growth and inflation. Inflation now becomes a significant predictor, and its presence raises the coefficient and t statistic on the level and slope factors. This is an interesting OLS puzzle.

If you plot inflation, you see it is mostly a downward trend in this sample period. So, it occurred to me, what if I used a trend instead? The last two rows of the table add a trend. Indeed, with the trend, growth and inflation disappear. In fact, we can drop growth, inflation, and the third principal component, forecast returns with amazing t statistics and an R2 of 0.62, which must be an all time high.

What's going on here? Is the trend just picking up a trend in returns? Here is a plot of expected returns (a + b x_t) and actual returns (r_t+1) for four of the models in Table 1.

The point: the trend is not just picking up a trend in returns. And the 62% R2 is not a pathology of one big outlier, a trend, or something else.  Instead, the trend serves to filter the level factor, and to a lesser extent the slope factor. The message is not "a trend seems to forecast a trend in returns" but "the cyclical variations picked up by detrended level and slope factors seem to forecast returns."

So what does this all mean? Is this proof growth and inflation don't work because they are driven out by trends? No, the trend is after all a proxy for something economic.  (This is roughly Cieslak and Povala's point, who get over 50% R2 in a longer sample with smoothed inflation.) Is this all a big econometric goof, because serially correlated right hand variables are a mistake? No, and my comments go into this at length. Bauer and Hamilton's point is this econometric problem, but they don't get close to t statistics of 10. OLS cares about serial correlation of the residuals, but not of the right hand variables.  In the end, it's a interpretation issue, not an econometric one.

The biggest point of my comments: It's time to get past forecasting returns one at a time. Classic finance got past "is AT&T a good investment?" in the 1960s, after all, and moved on to portfolios and covariances. Here, the more interesting outstanding question is the factor structure of expected returns  -- do expected returns on all bonds move together over time? -- and the risk premium question -- what are the factors, covariance with which drives that variation in expected returns?

To this question, perhaps we should take a lesson from the VAR literature of the 1980s, and stop worrying tremendously about equation by equation parsimony in forecasting. Instead, accept that forecasting regressions will be a somewhat overfit, but put our attention in the cross-equation structure of forecasts.

To be specific, the next graph shows the expected returns of bonds with maturity 1-10 years -- the fitted value of each bond's return-forecasting regression. The graph is clear: these are not 10 different series. The expected returns on all bonds move in lockstep. There is a strong one-factor structure in expected returns.

Finance 101: Expected return = covariance of return with something, times risk premium. What's that something? In this context, the bonds whose expected return moves most over time should have returns that covary proportionally more with some factor. What is it? The next picture plots how much each bond moves with the common factor shown in Figure 11 against the covariance of the 10 bond returns with innovations in the bond principal components, growth, and inflation.

Again, the pattern is pretty clear: time-varying expected return corresponds completely with covariances with the level factor. Covariances with the other factors are all about zero, and do not vary in the same way as expected returns.

In sum, this simple exploration shows a pretty strong pattern: 1) There is a strong one-factor model of expected returns -- expected returns on bonds of all maturity move together over time. 2) There is a strong one-factor model of risk: the single time-varying risk premium in all bonds corresponds to covariance with a single factor, innovations to the level of interest rates.

This is all very simplified of course. The point: This kind of characterization of the joint behavior of bonds of various maturities -- and later of bonds, stocks, and foreign exchange -- seems like a more interesting unanswered question than the precise identity of forecasting variables for each security, taken in isolation.

These points are a bit of a rehash of older papers, Decomposing the yield curve and more generally  Discount Rates. But they are also an extension --- the "Decomposing the yield curve" point holds using the JPS forecasters and factors, and updated data.  This kind of inquiry needs a lot more work.

A wise comment

Scott Sumner passes on a wise comment from his blog:

...the main problem in America is that the public, including its highly educated members, is social-scientifically ignorant. Most people I talk to about policy do not even realize that there is anything non-trivial about policy analysis. They want the government to make sure that four phases of rigorously designed RCTs be performed before drugs are made available to the public, for fear of unintended consequences of intervening on a complex system like the human body, yet they think they understand the consequences of highly complex interventions on human societies by introspection alone. Not only do they think they understand the consequences of alternative policy choices, but they're so confident that their understanding is right and that its truth is so obvious that the only explanation for disagreement is evil intentions.  

When I point out that on virtually every policy issue, at least somewhat compelling arguments for many conflicting points of view have been made by relevant experts, people usually react in disbelief or denial, or immediately retreat to questioning the motives of these experts ("of course they say that, they're on the payroll of Big Business" or whatever). These patterns of speech and behavior are uniformly distributed across the political spectrum, even if intelligence and knowledge of well-established facts is not. Even many experts in particular areas of social science evince no awareness of the lack of expert consensus on almost anything in their field, and give the impression of unanimity to an unknowing public.

(Emphasis in the original.) The rush to bulverism (evil intentions or corruption of people who disagree) is particularly noticeable in economic commentary.  Uncertainty about policy is especially strong in macroeconomics and finance.  That doesn't mean anything goes. Many arguments do violate basic budget constraints or suffer other obvious logical flaws.

How do you know economists have a sense of humor? We use decimal points.

Hounded out of business II

Nathaniel Popper at the New York Times Dealbook, writes "Dream of New Kind of Credit Union Is Extinguished by Bureaucracy" It's a worthy addition to the series of anecdotes on how regulation, especially discretionary actions of regulators, are killing investment and businesses.

Again, we collect anecdotes as a challenge to measurement. There is no data series on numbers of businesses driven away by regulation. Yet.

This is a good anecdote, as it illustrates a too little reported underbelly of financial regulation.

Mr. Kahle saw how hard it was for the employees at his firm to obtain loans, and more broadly, how the existing financial system had helped contribute to the financial crisis. He thought he could do things differently, and he aimed to prove it when he began applying to open a credit union in early 2011.

Since then, the credit union has faced a barrage of regulatory audits and limitations on its operations, ...Now, Mr. Kahle is giving up on his dream of creating a new kind of bank, ...

...the troubles faced by his Internet Archive Federal Credit Union point to how difficult it can be to try out anything new in the heavily regulated industry.
After an 18-month application process, regulators let the Internet Archive Federal Credit Union open in 2012, but with restrictions that did not allow it to offer basic banking products, such as debit cards and online banking.

Mr. Modell said that during the 18-month application process, he and Mr. Kahle made 4,756 changes to their application and made it through only because of Mr. Kahle’s wealth.  “I could afford to say yes at every turn — every time they made some weird demand,” Mr. Kahle said. 

When they did get their charter from the N.C.U.A. in August 2012 — the first new credit union chartered that year — the Internet Archive Federal Credit Union was limited by the regulators to loans of $5,000 or less, and it could generally serve only people in a small area around New Brunswick, N.J., where the credit union was located.

It's a wonder that the US is still only in the mid 40s on the world bank's list of how hard it is to start a new business.  But just getting going, with restrictions that make profitability essentially impossible, is only the beginning.

it [the credit union] has faced a steady stream of official exams since: 11 in 14 months. In August, the credit union, by its own count, spent 187 hours dealing with regulators and only 61 hours dealing with customers.

The credit union’s other ideas for expansion were also shot down. In 2014, the Internet Archive Federal Credit Union tried to team up with an organization for migrant workers, the Farmworker Support Committee, to offer bank accounts and cheaper money transfers, but the idea was eventually rejected by an N.C.U.A. examiner.

And when the regulators turn against you, they know how to turn the screws:

Mr. Modell and Mr. Kahle said the red flags raised by the N.C.U.A. examiners had been over small discrepancies and record-keeping issues — and often turned out to be factually wrong.

“None of the compliance issues listed in the report were correct,” the credit union wrote in an appeal sent to the N.C.U.A. in May, after the agency lowered the credit union’s regulatory rating.

The N.C.U.A. sent its examiners on an increasingly frequent basis and requested more and more monthly reports from Mr. Modell... By mid-2014, the credit union had made less than $50,000 in loans and Mr. Kahle suggested to Mr. Modell that it was time to give up

And this business seems pretty much a poster child of benevolent capitalism:

“The original vision of this thing — of helping nonprofit workers, or helping the poor — they will not allow it,” Mr. Kahle said.

Given the bad press payday lenders get, this is doubly sad. The quantifiable result:

the number of credit unions in the United States has been shrinking each year since the crisis. There are around 6,300 credit unions, down from 7,000 in 2012 and 8,400 in 2007.

The larger backdrop would be amusing if it were not tragic. While the monetary policy part of the Fed has wanted stimulus and more lending, the regulatory apparatus has apparently been busy making sure banks don't lend, at least to anyone who needs the money, new banks don't start, and financial innovations don't emerge.

Update: LabMD CEO Michael J. Dougherty has a blog and a book.

Spot insurance markets

Obamacare/ ACA was in the news last week. Some relevant summaries, and comment below.

United Health pulling out of the Obamacare exchange market

UnitedHealth reported one problem after another: An expensive risk pool that lacks the younger and healthier consumers who are supposed to buy overpriced plans to cross-subsidize everyone else....People join the exchanges before they incur large medical expenses—insurers are required under ObamaCare to cover anyone who applies—and then drop out after they receive care. The collapse of the ObamaCare co-ops is recoiling through the market.

... Commercial insurers are being displaced by Medicaid managed-care HMOs, with their ultra-narrow physician networks and closed drug formularies.

From the WSJ blog,

...Health plans say they have had more sick people, and fewer healthy people, sign up under the new rules than they need to keep prices stable. ...It’s also cited as a factor in some insurers’ decisions to withdraw products from the market or offer more limited choices of providers this year. Health Care Service Corp., which owns Blue Cross and Blue Shield plans in five states, already has pulled out in selling through HealthCare.gov in New Mexico, and yanked its preferred-provider organization offerings in Texas.

From Rising rates pose challenge to health law

Federal officials are pushing people to evaluate their options and consider switching plans to try to keep costs in check, in a message regularly summarized as “shop and save.”

In about half of the states using HealthCare.gov, people in popular plans can pay lower premiums in 2016 than they did in 2015—as long as they are willing to switch to a plan with a different insurer, usually with a narrower network of doctors and a higher deductible. 

A story:

Kimono England...said... Their health plan’s decision to withdraw its “preferred provider organization” product this year tipped her over the edge.

She said she now has only a narrow provider-network option that doesn’t include her local doctors,...she decided to enroll in a Christian health-care sharing ministry, in which members agree to pay each other’s health bills... since the ministry won’t pay for an expensive specialty shot her husband needs four times a year they are thinking of buying a health plan just to cover him.

The move by the England family would mean that five people with relatively low medical costs exit the insurance risk pool, and one person with large expenses remains—bad news for the insurance industry.

Also,  Mary Kissel interview of Holman Jenkins (video)

Comments:

Let's beyond the standard headlines -- "Millions more covered!" "But they're all medicaid or high subsidy!" (For example here.) "Premiums going up!" "Not if you shop!" and so forth.

Health "insurance" seems to be moving to a spot market, in which large numbers of people change plans, sign up, or leave every year, and in which large numbers of companies change their plans and coverage every year.

The churn on the individual side and its spiraling costs was a predictable (and widely predicted) response to the ACA, which addressed preexisting conditions by mandating insurers to cover anyone at the same price. The joke around the passage of the ACA was that health insurance would consist of a cell phone, which you use to buy coverage on the way to the hospital.

Yes, open enrollment is only once a year, but it's not really a constraint. Most conditions involve years of care, and you can wait six months to ramp up big expenses. A binding non-insurance penalty close to the cost of insurance was never going to pass.

Moreover, the problem is not so much insurance vs. no insurance, it's the right to move around between plans. Buy a bronze high deductible policy one year. If you get sick, move to a gold low deductible big network policy the next year.

The tragedy here is what was lost. Yes, individual insurance had big problems. But before the ACA, there were millions of people who bought insurance when they were healthy; that paid guaranteed-renewable premiums in a large stable health insurance companies, so that when they got sick, they would still have good affordable health insurance. Sure, it didn't work for people who moved across state lines, who got jobs with employer-provided group plans, and many suffered various snafus. But for many self-employed people and small business owners outside the big company - big government nexus, it actually worked ok.

Those relationships are all gone now. If ever we do move back to long-lasting, individual insurance, that you buy when healthy so that it covers you when sick, the millions of people who did the right thing and bought in to the system are now gone.

It's more surprising, at least to me, that annual chaos is breaking out on both sides.  Plans are discontinued, companies leave the market, coops come and go bankrupt, networks change, and many of us have the pleasure of annually sorting through health insurance policies, trying to figure out which ones cover the doctors, hospitals, and medications we are using or might need next year, all likely to do it again in the next year.

Our "federal officials" are not only not bemoaning this chaos -- they're encouraging it! "Shop and save." Shop because your plan got canceled, they changed your network, they vastly raised your premiums, and so forth. Save because they won't pay your claims.

I guess Americans need something to do between Thanksgiving and New Years. Together with shopping for cell phone contracts, cable and internet bundles, and figuring out our frequent flyer programs, this should keep us all plenty busy. Winter in the Republic of Paperwork.

Will the supply churn continue? One view of this is simply that companies need time to adapt. They made optimistic assumptions about their pools, find they're losing money and have to adjust. In time, we will again see stable offerings by stable companies.

Maybe, but I doubt it. If people keep playing games, moving to high cost policies when they get sick, health insurance for those of us not getting subsidies will be astronomically expensive. It ceases being insurance.

A different view is that the supply churn is the industry's way of solving the problem. By changing networks and coverage each year, by canceling policies frequently, by companies forming, dissolving, entering and leaving markets,  they keep us on our toes. A stable wide network plan with reasonable cost will attract too many sick people. So, the answer is, keep it unstable.  The same kind of price discrimination by complexity that pervades airlines, cell phones, and credit card contracts, might pull in healthy people who don't have time to spend three weeks a year finding out what doctors are covered by what plan.

Related, I suspect the industry is finding a way to segment the market. There are really four separate health insurance systems: 1) Expanded Medicaid. 2) Highly subsidized premiums based on income. 3) Non-subsidized individual policies. 4) Employer provided insurance for high income people with full time jobs. The first three were supposed to be parts of the same market, but it's fragmenting, with medicaid and subsidized plans giving out low cost low quality care.

This is not a grand conspiracy theory. Like most outcomes in economics, it's not obvious any of the participants understand what's going on, and an evolutionary process settles on outcomes that "work" in the regulatory environment and don't lose catastrophic amounts of money.

Health insurance really does not work as a spot market, of course.

The answer? For those who haven't been reading this blog very long (collections here and here), it is straightforward: Lifelong, deregulated, guaranteed-renewable, individual insurance, bought when you're healthy, carried along from state to state and job to job, with employers contributing premiums rather than setting up group plans. Deregulation of supply, so that for most procedures you can just pay cash and not be rooked by made up prices.

Your Active Patient Base may not be accurate

We are coming to the close of 2015 and I would like you all to start thinking about planning for next year and what that might look like. However, before we can start looking at annual planning for next year, we need to continue focusing on this year and really critiquing the numbers. If you have been reading my blog posts for a while, you know that I talk a lot about how numbers tell a story and having accurate numbers is extremely important in analyzing the health of your practice.

If you are using the Practice Advisor Report on a monthly basis for analyzing, managing, and forecasting your key performance indicators (KPI) … congratulations! If you are not yet using this amazing tool, you can read up about it by CLICKING HERE. Learning how to make the numbers on this report as accurate as possible is the key to using this report to its fullest potential.

There is one number on this report that could be skewed, depending on how you deal with your missed and broken appointments. I realize that the ADA CDT coding came out recently with procedure codes for Missed Appointment (D9986) and Cancelled Appointment (D9987). However, I am urging you not to use them. When you post a procedure code to the patient’s ledger, it automatically updates the patient’s last visit date. So if you post a D9986 to the ledger to note that the patient missed an appointment today, the family file Last Visit Date will still get updated to today. This last visit date number is used on the Practice Advisor report to calculate your Active Patient Base. You might be asking, “Well, Dayna, how would you suggest we track missed appointments?” I’m glad you asked! Here are some suggestions . . .

·        Use an adjustment code instead. You can have a maximum of 40 adjustment types listed in the definitions so if you have not met this max, then this would be my first choice. If you have maxed out on adjustment types, then I would look to see if you have any duplicates that you can combine together and then add two new ones. With an adjustment, you can post a $0 amount just to document it or you can post a dollar amount to show the fee. This would need to be a + adjustment type.

·        Make sure you are using the Break Appointment feature and not the delete appointment when a patient misses an appointment. When you break an appointment, it will make a note on the Office Journal and update the missed appointments on the Family File.  The Practice Advisor Report will also calculate your lost revenue from broken appointments.

·        Document a missed appointment in the Clinical Note. Now this will not give you a searchable code to look for, but it will give you the documentation in case the patient becomes a risk or argumentative about missed appointments. You can always print the clinical notes if needed.

Like I said, “Numbers tell a story.” If you want an accurate Active Patient Base count, stop posting a procedure code to the ledger when the patient does not keep his or her appointment. If you would like to learn more about the Practice Advisor Report, here are some other blog posts on numbers . . .

Do you know how many patients are leaving your practice?  CLICK HERE

The 5 Stats Every Office Should Monitor . . .  CLICK HERE

 

Early Fisherism

John Taylor has an interesting blog post with a great title, "Staggering Neo-Fisherian Ideas and Staggered Contracts." John goes back to a paper he wrote in 1982 for the Jackson Hole conference, on the issue of that time, how to lower inflation. He presented simulations of a model with staggered wage setting, which I reproduce below.

So as far back as 1982, here is a model in which lower interest rates correspond with lower inflation, both in the short run and the long run.  John's model has money in it, so the mechanics are a pre-announced monetary contraction.

Sargent's famous "Ends of four big inflations"  tells an even more radical story.

On solving the governments' fiscal problems, inflation ends instantly. Sargent and Wallace alas do not have interest rate data, but from the inflation data it's pretty plausible that interest rates fell like a stone when the fiscal reforms are implemented. They have money stock measures -- and the ends of these inflations did not have any monetary tightening at all. Money stock measures all expanded substantially as inflation ended.

I've been having an interesting back and forth with a correspondent about Milton Friedman's views. In  "Do higher interest rates raise or lower inflation?" I quoted Friedman's 1968 address, and said he believed that an interest rate peg is unstable. Not so fast says my correspondent, and passed on a lovely memo written by Milton Friedman -- better still once owned by Anna Schwartz. (Yes I checked that it's ok to post this)

and later

As I read this quote, Friedman emphasizes that lower interest rates come only with lower inflation in the long run, so there is some Fishery theory here. But in the short run, if the Fed lowers money growth, then interest rates will first rise but then decline as inflation declines. So the implied short run relationship goes the other way.

As I read it, then, Friedman says it is possible to target interest rates. But to do so requires particularly active money growth policy to offset the instability that would result from simply announcing a fixed interest rate.

That leads to a very interesting question, how the same interest rate path could be supported by different money growth paths.

Hounded out of business

The Wall Street Journal had a nice oped, "Hounded out of business by regulators" by Dan Epstein who was, well, hounded out of business by regulators. Excerpts:

Last Friday, the FTC’s chief administrative-law judge dismissed the agency’s complaint. But it was too late. The reputational damage and expense of a six-year federal investigation forced LabMD to close last year.

...the commission opened an investigation into LabMD in January 2010. ...the FTC refused to detail LabMD’s data-security deficiencies.... Eventually, the FTC demanded that LabMD sign an onerous consent order admitting wrongdoing and agreeing to 20 years of compliance reporting.

Unlike many other companies in similar situations, however, LabMD refused to cave and in 2012 went public with the ordeal. In what appeared to be retaliation, the FTC sued LabMD in 2013, alleging that the company engaged in “unreasonable” data-security practices that amounted to an “unfair” trade practice.... FTC officials publicly attacked LabMD and imposed arduous demands on the doctors who used the company’s diagnostic services. In just one example, the FTC subpoenaed a Florida oncology lab to produce documents and appear for depositions before government lawyers—all at the doctors’ expense.
Yet after years of investigation and enforcement action, the FTC never produced a single patient or doctor who suffered or who alleged identity theft or harm because of LabMD’s data-security practices. The FTC never claimed that LabMD violated HIPAA regulations, and until 2014—four years after its investigation began—never offered any data-security standards with which LabMD failed to comply.

...the case illustrates the injustice of the federal system that allows agencies to cow companies into submission rather than seek a day in court. During its three years of pre-suit investigation against LabMD, the FTC demanded thousands of documents, confidential employee depositions and several meetings with management. LabMD—which at its apex employed 30 people—spent hundreds of thousands of dollars meeting demands. No federal court would ever allow such abusive tactics. But this isn’t federal court—it’s a federal agency.

Furthermore, the FTC is likely to simply disregard the 92-page decision—which weighed witness credibility and the law—and side with commission staff. That’s the still greater injustice: The FTC is not bound by administrative-law judge rulings. In fact, the agency has disregarded every adverse ruling over the past two decades, according to a February analysis by former FTC Commissioner Joshua Wright. Defendants’ only recourse is appealing in federal court, a fresh burden in legal fees.

That’s what happens when a federal agency serves as its own detective, prosecutor, judge, jury and executioner.

The anecdote has two larger implications, in my view. First, many people including myself have a sense that this kind of regulatory persecution is harming economic growth. But there are no good estimates of the total number of companies put out of business, jobs destroyed, investment made worthless by regulatory persecution, or, even harder, projects not started from fear of such persecution. For the moment, we can only collect anecdotes, which is why I pass this one on.  But the measurement question is vital. Inequality is only a big policy issue because we have statistics on it.

Second, note the pretty clear charge that the FTC retaliated against LabMD for challenging the FTC. In "The rule of law in the regulatory state" (pdf, blog version here; excerpt at the insider here)  I started thinking about the political and free-speech implications of this kind of persecution.

With exceptions such as Lois Lerner at there IRS, the agencies are still first and foremost interested in protecting the agencies.

But it's easy enough these days to figure out who donates to what campaign, or who blogs about what.  To imagine that this kind of persecution will not be used for partisan political purposes -- or that fear of such persecution will not drive company owners to make political friends, make abundant contributions, pay for expensive speeches, and so forth -- is to imagine that a plate full of cookies at a children's birthday party will stay untouched when mom and dad say eat your vegetables first.  LabMD clearly needed a friend in high places to call and say "make this problem go away." Its successors will not make that mistake.

Inflation Drumbeat

Noah Smith has an interesting Bloomberg View piece on Japanese inflation. Three crucial paragraph struck me

... Japanese unemployment is very low, and the economy is expanding at or above its long-term potential growth rate of around 0.5 percent to 1 percent. So according to mainstream theory, inflation would be an unnecessary and pointless negative for Japan’s economy. Why, then, are there always voices calling for Japan to raise its inflation rate?

Actually, there are several reasons. The main one is that inflation reduces the burden of debt. Japan’s enormous government debt represents the government’s promise to transfer resources from young people (who work and pay taxes) to old people (who own government bonds). Since Japan is an aging society, there are more old people than young people. That makes the burden especially difficult to bear. Young people also tend to have mortgages, the repayment of which is another burden.

Sustained higher inflation would represent a net transfer of resources from the old to the young. That would increase optimism, and hopefully raise the fertility rate, helping with demographic stabilization. It would also decrease the risk that the Japanese government will eventually have to take extreme measures to stabilize the debt.

I like these paragraphs because they so neatly distill the language used by the standard policy establishment to advocate inflation. Noah clearly separates the usual "stimulus" arguments from the new "debt" argument, which helps greatly.

Debt is a "burden." Sort of like snow on your roof, debt appears from the sky somehow and then represents a "burden" requiring "lifting," which would be beneficial to all.

Debt "represents the government’s promise to transfer resources from young people ... to old people.." Apparently, the government woke up one morning, and said "we promise to grab about two and a half years worth of income from young people and give it to old people." Undoing such an ill-advised promise does indeed sound worthy.

But, lest these soothing words lull you into idiocy, let us remember where debt actually comes from. The Japanese government borrowed a lot of money from people who are now old, when they were young. Those people consumed less -- they lived in small houses, made do with fewer and smaller cars, ate simply, lived frugally -- to give the government this money. The promise they received was that their money would be returned, with interest, to fund their retirements, and to fund their estates which young people will inherit.

Noah is advocating nothing more or less than a massive government default on this promise, engineered by inflation. The words "default,"  "theft," "seizure of life savings," apply as well as the anodyne "transfer." I guess Stalin just "transferred resources."


Amazingly, to Noah (and the views he ably summarizes here) this "transfer" will "increase optimism." Hmm. Let's look at the evidence for that. We have seen many large inflations, which wiped out middle-class savings along with government debts. Those events have generally been regarded as economically, politically, and psychologically destabilizing tragedies, not FDR-fireside-chat "optimism"-raising sessions. No surprise that few societies have voluntarily signed up for such treatment as Noah recommends. I would be curious to hear of a single happy historical antecedent. (I mean that. Perhaps I am mistaken in my understanding of Noah's proposal. A successful example might correct me.)

How does a government default benefit young people anyway? It does so if a large amount of tax revenue is being used to pay interest or principal on the debt, and the default is accompanied by a large tax cut for young families. Not by the same level of taxes and increased government spending on more railway-to-nowhere stimulus projects.  Without tax cut, there is no transfer. Noah is strangely silent on the essential big tax cut aspect of his plan.

Quiz: Find in Japanese (or American) government finances the actual "promise to transfer resources from young people (who work and pay taxes) to old people." If you say "government bonds," you (like Noah) got the wrong answer. The right answer is Social Security, Medicare, and public employee pensions. If Noah wishes to reduce the "burden" of intergenerational transfers, no matter that governments have promised to make those transfers and people have planned their lives around them, the silence on these promises is deafening.

If the purpose is default, why not just advocate default? A massive inflation also destroys private savings and wipes out private contracts. Oh wait, that's the point:

Young people also tend to have mortgages, the repayment of which is another burden.

Like the government, young people too I guess woke up one day and this "burden" parachuted down on top of their surprisingly big house.

So, according to Noah, a self-induced hyperinflation to generate an economy-wide debt default is necessary... to "decrease the risk that the Japanese government will eventually have to take extreme measures to stabilize the debt." I find it hard to imagine what more extreme measures he has in mind.

One practical difficulty: Like most governments, Japan rolls over debt fairly frequently. So inflation must come really quickly if it is to wipe out debt. A second practical difficulty: The BOJ, like our own Fed, seems completely unable to induce any inflation. With advice like this, thank goodness.

Another puzzle: What exactly is the "burden" of Japan's debt? Japan's interest rates have been zero for 20 years. Japan's growth rate g, as low as it is, is larger than its interest rate r. Japan pays next to nothing in debt service.  Is Noah joining the despised ranks of worrywarts like me that this can't last? But if it comes to an end, in a run on Japanese government debt and consequent inflation, then Noah gets what he wants. If it does not come to an end, Japan pays no debt service and gradually grows out of the debt. Where's the fire?

Again, this is not a post about Noah. One writes columns quickly, and space often prevents a full development of arguments.  I am resolved not to discuss or even imply criticism of a writer's motives, so if you infer that, undo the inference now.

Rather, let us appreciate and dissect Noah's language, logical loose ends, insouciant willingness to upend the lives of millions, and answers in search of questions, for how well they summarize so much policy blather; and therefore not to be lulled by that blather's repetition.  

Open Letter on Economic Data

I joined a large number of economists signing an open letter supporting funding for economic data. The letter is here, twitter #SaveTheData, Financial Times story here, press release here.

Few public goods are as cheap or important as good economic data.  Much of our national policy discussion is based on government-collected data. Changes in inequality, wage growth or stagnation, employment and unemployment, growth, inflation... none of these are readily visible walking down the street.

Free, openly accessible, well-documented data, allowing comparisons over long periods of time, such as provided by the Bureau of Labor Statistics, is especially valuable.

Already, much of the data we get is based on decades-old measurement concepts. Perhaps someday internet big data will bring us alternatives. But that day is a long way away. Let's not fly blind in the meantime.

Four ways you can import a patient picture into Dentrix

You step into your reception room to bring your patient, Carrie, into the treatment room and you realize there are two patients sitting there who are about the same age. Who is Carrie? You have never met her so you just throw her name out there and see who responds. Wouldn’t it be nice if you could prepare yourself a little bit more by having a current picture of Carrie?

There are a few different ways to pull in a picture of your patients, depending on which imaging software you are using and if you want to use a webcam. There is an icon on your toolbar for Patient Picture, which has four options for importing your patient picture.

• If you have a webcam installed on your front office computer, you can use the Acquire feature and select the webcam or iPad to take a picture. I have an office that has started using an iPad as their webcam and it is working great.
• Many practices are using a digital camera for intraoral images and saving the images in some kind of image gallery software. If you know the location of the images, you can use the Import from File feature to pull in your patient picture.
• For the offices that are using DEXIS, using the Copy from Clipboard feature is the easiest feature to use in my opinion. From your Dentrix patient chart, double click on the image you want to use as your patient picture (many of my offices are using their intraoral camera to take a face shot), then click on the arrow on the top toolbar and click on copy to clipboard. Then, open the Patient Picture icon and click on Paste from Clipboard.
• For the offices that are not using DEXIS for your imaging software, using the Screen Capture feature to acquire the patient picture will be the best option for you. Open your imaging software so you have the picture you want to import in view, then open the Patient Picture icon in Dentrix. Click on the Screen Capture feature and your cursor will change shape so you can make a box around the picture and it will appear in the Patient Picture window.

Click Save and you now have a current snapshot of your patient. This will eliminate the guesswork when you walk out to the reception room to summon your patient.

Permazero

St. Louis Fed President Jim Bullard gave a very interesting paper at the Cato monetary conference, with this great title.

Jim starts with this great picture. It's a simulation of the standard three equation new Keynesian model as we go from 2% interest rate to zero. This is an upside down version of the first graph in my "Do higher interest rates raise or lower inflation." (Blog post) But Jim makes a new and insightful point with it, that had not occurred to me.

Jim reads this as an account of what happened in 2008, not (my) tentative prediction for what might happen in 2016 in the other direction. It's compelling: The Fed lowers rates. This boosts output (black line) over what it would otherwise be, overcoming the horrendous negative shocks to the economy from a financial crisis. Inflation gently declines, which is also what inflation did after a one time shock in 2009, related to the output shock which the Fed was offsetting.

Jim then ties that together with my Figure 3 in an artful way. The same model that accounts well for slow disinflation in the recovery suggests that raising rates now, in the absence of other shocks, would just raise inflation and lower output.

Jim goes on to present some data averaged across a variety of countries. Here you see a pattern quite similar to the model's prediction. After recovering from the severe shock, inflation starts its gentle decline.

Like me, Jim is nervous about these conclusions. The data seem to be telling us that interest rate pegs are not unstable. The standard model turns out to have that prediction, but also predicts that raising interest rates, while lowering output as we have long been told, will just smoothly raise inflation. It's very hard to turn around decades of contrary doctrine -- that pegs are unstable, and raising rates lowers inflation. One should be nervous about such conclusions. Maybe inflation is, finally, just around the corner. So Jim makes very clear he's not yet recommending a rate rise to cause more inflation!

But one should also start thinking about what these conclusions mean if they are right, and Jim summarizes with a number of such implications. A few that seem especially important, with comment:

Third, longer‐run economic growth would still be driven by human capital accumulation and technological progress, as always, but without the accompanying stabilization policy as conventionally practiced from 1984‐2007. In principle, the economy would still be expected to grow at a pace dictated by fundamentals.

A little more bluntly, Japan-bashers cannot blame 20 years of poor growth on the zero bound. Nor should we worry that permazero will cause lower growth. (The other way around is much more likely: low marginal product of capital leads to low rates.) Japan's growth and inflation, like our own for the last seven years, has also been quite stable, raising the next question of just how much stabilization this policy was doing.

Fourth, the celebrated Friedman rule would arguably be achieved, so that household and business cash needs are satiated. In many monetary models this is a desirable state of affairs.

Yes!! Shout it from the rooftops.

Just what is so terrible about zero rates and very low inflation? Zero rates are the optimum quantity of money. They have financial stability benefits too. Banks sitting on huge piles of cash don't go under.

Conventional modeling has been treating the zero bound as a "trap," or a terrible outcome to be avoided. But it's a honey trap, at least in these models. The main complaint one could make is that they don't last, that they lead to spiraling deflation or hyperinflation. But the models said "trap" -- they last -- and the data seem to agree.

Fifth, the risk of asset price fluctuations may be high. In the New Keynesian model, the near‐zero interest rate policy with little or no response to incoming shocks is associated with equilibrium indeterminacy. This means there are many possible equilibria, all of which are consistent with rational expectations and market clearing. In a nutshell, a lot of things can happen. Many of the possible equilibria are exceptionally volatile. One could interpret this theoretical situation as consistent with the idea that excessive asset price volatility is a risk.

This is spot on. In the models, the trouble with the zero bound "trap" is not high unemployment, low growth, or spiraling inflation or deflation -- it has none of these. The problem is "indeterminacy," the possibility that inflation can bounce around a bit, each time returning stably back again. That's also what we seem to see, and it hasn't been a huge problem: We don't see any more inflation, output, or asset market volatility in the last 7 years than in the period before the crisis.

And this is a simple problem to solve in the theory. Add back the missing fiscal theory of the price level -- deliberately thrown out in the theory -- and you have determinacy again. In words, a jump to an alternative equilibrium requires that fiscal policy expectations also jump. If people's expectations of long-term fiscal policy are stable, then we have determinacy and no more volatility at the zero bound too.

Sixth, and finally, the limits on operating monetary policy through ordinary short‐term nominal interest rate adjustment in this situation would surely continue to fire a search for alternative ways to conduct monetary stabilization policy. The favored approach during the past five years within the G‐7 economies has been quantitative easing, and there would surely be pressure to use this or related tools.

I.e. in permazero, eventually markets get tired of reacting to whispers that the Fed might someday raise rates. Monetary policy overall becomes ineffective, leading central banks to try other levers. Which may not be such a great idea!

Taylor Truman Medal Speech

John Taylor's speech  on receiving the Truman medal for economic policy is noteworthy. John thinks about the institutions that govern monetary and financial policy. We spend too much time on the will-she-raise-rates-or-won't-she sort of decisions that we forget how important this institutional structure is to good, predictable and (as John might put it) rule-based policy.

John reflects on the institutions of postwar policy:

Seventy years ago Harry Truman signed the Bretton Woods Agreements Act of 1945. It officially created two new economic institutions: the International Monetary Fund and the World Bank. A year later he signed the Employment Act of 1946. It created two more new institutions: the President’s Council of Economic Advisers (CEA) and the Congress’s Joint Economic Committee (JEC). And in 1947 came the General Agreement on Tariffs and Trade (GATT) and the Truman Doctrine, and in 1948 the Marshall Plan.

Prewar problems:

... One serious economic evil leading up to World War II arose from competitive devaluations and currency wars...

A second economic evil stemmed from extensive “exchange controls,” in which importers of goods were forced to make payments to a government monopoly in foreign exchange. The government would determine what types of goods could be imported and how much to pay exporters. Exchange controls also involved multiple exchange rates, government licenses to export and import, and even officially conducted barter trade. They deviated from the principles of economic freedom, and caused all sorts of distortions and injustices...

Bretton Woods:

Each country—each party to the agreement—would commit to two basic monetary rules... First, they would swear off competitive devaluations by agreeing that any exchange rate change over 10% from certain values, or pegs, would have to be approved by a newly-created IMF. ... It was called an adjustable peg system.

Second, countries agreed to remove their exchange controls, with a transition period because many had extensive controls in place. The countries, however, did not agree to remove capital controls, which include restrictions on making loans, buying or selling bonds, and equity investments.

John's judgement:

In important respects the blueprint succeeded. Exchange controls were removed, though it took more than a decade, and the currency wars ended, though the adjustable peg system itself fell apart in the 1970s and gave way to a flexible exchange rate system. The 1970s were difficult because monetary policy lost its rules-based footing and both inflation and unemployment rose. 

But in the 1980s and 1990s policy became more focused and rules-based and economic performance improved greatly. Though not part of the blueprint, virtually all the developed countries that signed the original agreement—and others like Germany and Japan—also abandoned capital controls. By the late 1990s, many emerging market countries were adopting rules-based monetary policies, usually in the form of inflation targeting, and entered into a period of stability. Some emerging market countries, such as Brazil, began to remove capital controls, and the IMF recommended adding their removal to the articles of agreement.

I'm a bit skeptical of this judgement. (And I think I've persuaded John, so we'll see what happens in later writings.) Bretton Woods featured pegged exchange rates, something of a gold standard to the dollar, and capital controls to lessen exchange rate pressures. All three blew up by 1970. The basic structure of Bretton Woods failed.

The restoration of order in the 1980s featured important reforms to monetary and fiscal policies internationally, and the Bretton Woods institutions (IMF, CEA, etc.) may have had something to do with it. But Bretton Woods was gone.

Bretton Woods did, however, help to keep the chaos of the 1930s from returning. John's point may be that bad rules are better than no rules.

On to the present:

Unfortunately this benign situation has not held, and today the challenges facing the international monetary system eerily resemble those at the time of the creation...

Consider currency movements. Quantitative easing (QE) started in earnest in 2009 in the United States. It was followed by a period where the dollar was low relative yen. It was followed by QE in Japan in 2013 which depreciated the yen, as was the expressed intent of Japan governor Haruhiko Kuroda. That was followed by QE in the Eurozone in 2014 which depreciated the euro, as was the expressed intent of ECB president Mario Draghi. The dollar- yen-euro story from 2009 to 2014 looks a lot like the pound-dollar-lira story from 1931 to 1936, even though U.S policy makers today consider the exchange rate effect to be by-products of their actions, not the direct intent. So QE begets QE, which begets QE, and so on.

There is a big challenge understanding just how QE affects currencies. Notice John says "followed by." But if you regard QE as signals of future interest rates, it is easier to understand. Exchange rates are a sort of present value of future interest differentials.  Continuing

Interest rate decisions at central banks around the world also resemble currency wars. Whether you ask them or watch them, you can tell that central bankers are following each other. Extra low U.S. interest rates were followed by extra low interest rates in many other countries, in an effort to prevent sharp currency appreciations. Those low interest rates appear to have resulted in a boom-bust pattern in emerging market countries evident in the recent commodity cycle...

Capital also flows in response to interest rate differentials—even if attenuated by policy reactions. .. A host of government interventions and restrictions on housing markets have been used to prevent the low interest rates from causing bubbles. Macro-prudential regulations, which have legitimate purposes, are also being used to counter the effects of the low interest rates.

Worse,

There’s also been a revival of capital controls. Even the IMF has endorsed capital controls, calling them “capital flow management” or CFM for short.

John's conclusion

In my view we need a new strategy to deal with these problems.

So as in the 1940s we should forge an agreement where each country commits to certain rules... 

. A second reform would set up rules for eventually removing capital controls. Currently, 36 countries now have open capital accounts, but 48 are classified as “gate” countries and 16 as “wall” countries with varying degrees of capital controls.

John rethinks the role of the 40s institutions.

.. recreating the ‘40s founded institutions for today’s global economy must go beyond the IMF. The World Bank was originally created to supplement private capital flows for reconstruction and development. But today capital flows and savings to finance investment are abundant—some even see a glut.

He goes on to rethink the roles of CEA, JEC, GATT, WTO, and so forth.

Last but not least, international economic policy and foreign policy are intertwined. The Bretton Woods generation understood that.

...we see the same international cross-border encroachment on freedom, including economic freedom. In my view the United States should commit to promoting economic freedom as part of its foreign policy strategy. It should also strongly support economic leaders who are committed to economic freedom in their own countries. This is the lesson learned from the transitions from government control to market economies two decades ago, especially in Poland. The U.S. government strongly supported Polish economic reforms—the removal of price controls, of barriers to new businesses, and of subsidies of old state enterprises, along with a restoration of the rule of law and property rights. Today international support packages tend to do just the opposite: encourage more government subsidies and controls.

It is amazing just how much of the international financial and monetary architecture resides in institutions set up in the 1940s. Good rules need good institutions. But institutions need rethinking on occasion.

Top 10 features in Dentrix you are not using

In 2003, my dental practice converted from an archaic DOS-based dental software to the impressive and robust Dentrix practice management software. To say the least, I was completely overwhelmed. Two years later, in 2005, I still felt like I hadn’t even scratched the surface of my new powerful software’s potential so I applied to become a Certified Dentrix Trainer in order to learn everything there was to know about the Dentrix program. What better way to learn than to get a certificate?

Now I know that not everyone has the opportunity to become a Dentrix trainer like I did, but with a little self-motivation and some tips from me, you will be well on your way to being a “Dentrix super user.” Since I am working with dental practices every day, I have the unique opportunity to see what features they are using, what features they are not using, and what features they have no idea even exist. My goal today is to give you my top 10 you might not even know exist.

1. Quick Letters and Letter Merge – Maybe this sounds familiar . . . you have a folder on your desktop with all of your office’s letters you send out to patients, including collection letters, welcome letters, and letters to specialists. When it is time to send a letter, you edit the date, enter the patient’s name, address, and salutation, then sign the letter and scan it into the document center. That process sounds like a lot of work to me. Why not add your custom letters into the Quick Letters or Letter Merge with the proper merge fields and let Dentrix do all the work for you? The best part is it will automatically put a note on the Office Journal and you can “Send to the Dentrix Document Center” without scanning (see #5 on the list).  Here are some more blog posts related to this feature . . .
1. Send letters that make an impact . . . CLICK HERE
2. Can you write me an excuse note . . . CLICK HERE
2. Dentrix Mobile – Have you ever been sitting in the comfort of your home watching the weather forecast and hoping that the power doesn’t go out … then suddenly there’s nothing but darkness. You check the office and the power is also out there … so how are you going to let your patients know not to come in? Has your doctor ever been out of town and received a call from a patient requesting a drug refill but he or she has no way of checking the last prescription or the patient’s last visit unless he or she goes into the office? Both of these two common scenarios can be solved just by registering for Dentrix Mobile. It’s included in your Dentrix customer support plan so there is absolutely no excuse for not using this service.
1. Three reasons you should be using Dentrix Mobile . . . CLICK HERE
2. A lifeline to your patient info . . . CLICK HERE
3. Payment Agreements – I wrote an article called “Get it out of your head and into the computer” back in April 2014. The theme of the article was speaking to office managers who store all their verbal payment agreements in their head. What I am seeing is this is still happening, but I am also seeing new doctors purchasing practices with a significant amount of the accounts receivable over 90 days past due or new office managers taking over a practice where there has been no management of the accounts receivable. Using the Payment Agreement feature in Dentrix will not only help you get organized with patients who are making payments, but also allow the entire team to see on the ledger what the arrangement is with the account.
1. Two options to help you manage your A/R . . . CLICK HERE
2. Get the info out of your head and into the computer . . . CLICK HERE
4. Tracking Gratuities and Referrals - Do you know where your new patients are coming from? Are they hearing about you from friends, Google Search, or the ValPak flyer that cost you $15,000 to send out? Your marketing dollars depend on where patients are being referred from so you should know where to continue spending money and where to stop. When a patient refers a new patient, do you give him or her a thank you gift? Would you like to track if you gave the referral source a Starbucks or Home Depot gift card last time or be able to track a referral source’s gratuity history? Tracking referrals and gratuities in Dentrix is super easy and gives the doctor a lot of good information about where to spend marketing dollars … but I find most offices never use this useful tool.
1. Building relationships one referral at a time . . . CLICK HERE
2. Keep tight reins on your referred patients . . . CLICK HERE
5. Sending to the Dentrix Document Center – This will save your team a ton of time in unnecessary scanning, unnecessary wasted paper, and unnecessary hard drive storage space. When you scan a document into the Document Center, it takes many more steps and the file size of a scanned document is about 100 times larger (just a guess) than that of a file send electronically through the Dentrix Document Center printer driver. Anything you want to print can be virtually printed to the Document Center for file storage. This is such an amazing yet underused feature.
1. A little known secret . . . CLICK HERE
6. Perfect Day Scheduling – Close your eyes for a moment and imagine if you could see your patients on time, complete 80% of your production goal before lunch, get out for lunch on time, and finish your day without pulling the roller skates out of the closet. This can be a reality if you create it. Take control of your appointment book with Perfect Day Scheduling. When you use perfect day scheduling, your team knows exactly how to schedule because you have mapped it out for them. There is no room for error.
1. What if everyday could be a perfect day . . . CLICK HERE
2. The new patient experience, scheduling the appointment . . . CLICK HERE
7. Goal Tracking – Every dental practice has production and collection goals they need to meet in order to keep the financial state of the business healthy. I always encourage doctors to share these goals with the team and be transparent with the key performance numbers with the team. There are several places in Dentrix to watch and monitor your practice goals so the team can strategize and work together on exceeding the goals. You can monitor your goals on the monthly calendar, Practice Advisor Report, and the Daily Huddle.
1. Let's do some goal setting . . . CLICK HERE
2. Looking ahead to  . . . CLICK HERE
8. More Information Button – Have you ever been on the phone with a mom and she wants to know when her three kids and husband are scheduled next for all their future appointments … but you’re not sure what’s the most efficient way to find all these appointments for the entire family? Try the More Information button and I can guarantee you will fall in love with this super quick search tool. You can find the More Information feature on all Dentrix modules. When you are selecting a patient anywhere in Dentrix, you will see it at the lower left corner of the window.
9. Create Batch of Primary Dental Claims – Are you sure you have batched and sent off all your insurance claims from last week? How about last month? Use this second pair of eyes to double check and make sure all your claims have been sent out. Not only will this give you peace of mind, but also keep your accounts receivable out of the 90-day past due column.
1. Are all your insurance claims going out . . . CLICK HERE
10. Patient-Friendly Descriptions – Do your patients often ask what a “resin 2surf, post” or a “Crown-porc fused noble metal” is? Or is your practice in an area where English is not the primary language for many of your patients? If you would like to create a treatment plan that your patients would more easily understand and helps them understand what each procedure is, then start using patient-friendly descriptions. With Dentrix G6.1, it is even easier to use because you can edit these descriptions in the procedure code edit.
1. No speak English, no worries . . . CLICK HERE

Have fun experimenting with these features and working toward increasing your level of efficiency and customer service. Drop me a line at dayna@raedentalmanagement.comif you have other questions. I’m happy to help.

The 13 Trillion Dollar Question

On Tuesday Nov 10 there will be a conference in Chicago on "The $13 Trillion Question: Managing the U.S. Government’s Debt" hosted by the Initiative on Global Markets at Chicago Booth, and the Hutchins Center on Fiscal and Monetary Policy at Brookings. (The Brookings announcement here.)

Robin Greenwood will present "The Optimal Maturity of Government Debt and Debt Management Conflicts between the U.S. Treasury and the Federal Reserve" arguing that the Fed and Treasury are working to cross-purposes -- the Fed buys what the Treasury sells -- and that the government  should go after low rates on long term bonds rather than the budget insurance of issuing long term bonds.

(The government faces the same decision a homeowner does: borrow at near-zero floating rates,  but maybe rates shoot up and so do your payments, or borrow long at 2% rates, and pay more if rates don't go up. Robin and Larry favor the former. I'm more risk averse. Maybe living in California has sensitized me  that just because you haven't seen an earthquake recently doesn't mean you shouldn't buy earthquake insurance. But it's a good argument to have qualitatively -- what's the risk, and what's the reward.)

I will present "A new structure for Federal Debt," arguing for an overhaul of which instruments the Treasury issues, to make them more useful for financial markets and financial stability as well as for government borrowing and risk management. (Earlier blog post about this paper here.)

There will be extensive discussion and broader issues, and (the big draw) a panel of Seth  Carpenter, Charles Evans, and Sara Sprung, moderated by David Wessel.

The conference is by invitation, but you can still sign up here until they run out of room, or email Jennifer (dot) Williams at chicagobooth (dot) edu. It will also be viewable by live webcast, link here, starting 1:30 central.

Update: Video of the event here.



Program

Session I - The Optimal Maturity of Government Debt and Debt Management Conflicts between the U.S. Treasury and the Federal Reserve

Speakers

Robin Greenwood, George Gund Professor of Finance and Banking, Harvard Business School
Samuel G. Hanson, Assistant Professor of Business Administration, Harvard Business School

Discussant

Guido Lorenzoni, Breen Family Professor, Northwestern University

Moderator

Austan Goolsbee, Robert P. Gwinn Professor of Economics, University of Chicago Booth School of Business

Session II - A New Structure for U.S. Federal Debt

Speaker

John H. Cochrane, Senior Fellow, Hoover Institution and Distinguished Senior Fellow, University of Chicago Booth School of Business

Discussant

James J. McAndrews, Executive Vice President, Federal Reserve Bank of New York

Moderator

Anil K Kashyap, Edward Eagle Brown Professor of Economics and Finance, University of Chicago Booth School of Business

Session III - Panel Discussion

Panelists

Seth B. Carpenter, Assistant Secretary for Financial Markets, Department of the Treasury
Charles Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago
Sara Sprung, Managing Director, Neuberger Berman

Moderator

David Wessel, Director, The Hutchins Center on Fiscal and Monetary Policy, Brookings Institution

Inequality and Economic Policy Published

The Hoover Press put up for free the chapters of Inequality and Economic Policy: Essays In Memory of Gary Becker, edited by Tom Church, John Taylor, and Christopher Miller. You can of course still buy the book for a reasonable $14.95.

This includes the published version of my essay Why and How We Care about Inequality, also available on my webpage.  Bryan Caplan was kind enough to cover it positively last week, now you can read the original. I put a draft up on this blog last year, so I won't repeat it all today. As usual, the published version is better.

The rest of the contents:

Chapter 1: Background Facts By James Piereson

Chapter 2: The Broad-Based Rise in the Return to Top Talent By Joshua D. Rauh

Chapter 3: The Economic Determinants of Top Income Inequality By Charles I. Jones

Chapter 4: Intergenerational Mobility and Income Inequality By Jörg L. Spenkuch

Chapter 5: The Effects of Redistribution Policies on Growth and Employment By Casey B. Mulligan

Chapter 6: Income and Wealth in America By Kevin M. Murphy and Emmanuel Saez

Chapter 7: Conclusions and Solutions By John H. Cochrane, Lee E. Ohanian, and George P. Shultz

Chapter 8: Contents by Edward P. Lazear adn George P. Shultz

Imagine if your patient could book a hygiene visit just like making dinner reservations?

I was in an office this last week that is using a web-based software solution for their email, text messaging, appointment reminders, and appointment requests. It integrates well with Dentrix. However, when a patient requests an appointment, it becomes a challenge communicating with the patient if the appointment time isn’t available in the Dentrix appointment book. Often, what happens is that the patient assumes he or she will get the time requested when probably 9 out of 10 times the office is fully booked during the requested time. Then the patient either shows up for the appointment anyway and has to be rescheduled or the patient is frustrated because the appointment time he or she wanted is not available. There is a big difference between requesting an appointment and online booking.

What if booking your dental visit was just like making dinner reservations through OpenTable? If the patient could see only open times, then it would eliminate the frustrations between the office and the patient when the patient requests an appointment time that is not available. I know that, with the office I was in last week, this would make a world of difference. The amount of emails and voicemails that were going back and forth to try and get this patient booked was extremely time-consuming.

Now close your eyes and imagine what it would look like if the email or text message continuing care reminder contained a link where the patient could book an appointment with his or her favorite hygienist on a day and time that not only worked for the patient but is also open in the office’s Dentrix appointment book. Keep your eyes closed for a minute and imagine that you are still in full control of the situation. Yes, you say what is open and what isn’t (I know this is important because I was a scheduling coordinator once J).

Now open your eyes and let me bring you into reality with Dentrix Online Booking . . . launching in the first quarter of 2016. You can be a part of this technology movement by pre-registering for this service and receive 50% off the price. CLICK HERE to reserve your place in line.