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The Impact of Automation

Automation is poised to deliver a deep economic disruption lasting decades and taking millions of jobs, according to a recent batch of studies. Axios offers this historical context. “It took about six decades for U.S. wages to recover after the first industrial age automation of the 1810s. And the agriculture-to-industrial shift of the 20th century lasted four decades.” While the economy will eventually rebalance and create new jobs, they may not be good ones: “Wages for most jobs may be too low to sustain a middle-class lifestyle.”

A Tale of 50 Healthcare Insurance Marketplaces

A natural experiment? A chaotic hodgepodge? It was the best of times, it was the worst of times in the U.S. healthcare insurance market. Some states are rebuilding the policy bulwarks of the semi-dismantled Obamacare. Some states are stripping it further. The New York Times has an overview.

Yale SOM’s Fiona Scott Morton proposes an option for Connecticut that might work elsewhere, too.

Can Businesses Do Healthcare Better?

Last month Amazon, JPMorgan Chase, and Berkshire Hathaway announced plans to create an in-house healthcare service to provide their 1.2 million total employees with “simplified, high-quality, and transparent healthcare at a reasonable cost.” Apple has made a stealth launch of what’s believed to be a similar endeavor. Quartz wonders whether these companies are “growing as impatient as their employees with the state of American healthcare” and simply aiming to control costs—or if these services are intended to allow them to test health products and services that will eventually be sold to the rest of us. 

Whom Do We Trust?

“The United States is enduring an unprecedented crisis of trust,” writes Richard Edelman, summarizing the results of this year’s Edelman Trust Barometer. “The root cause of this fall is the lack of objective facts and rational discourse.” However, trust in one group has inched up: employers. “There’s an interest for businesses to solve larger problems for society,” says Kim Hart of Axios.

What's the government worth?

"Government shutdown follies feed an ideologically loaded narrative that government is hopelessly incompetent and can never be counted on to do much that is useful,” writes Washington Post columnist E.J. Dionne. Despite the recent kerfuffle, Dionne argues that the public sector is critical and competent. As evidence he points to an underappreciated government success in “keeping capitalism from flying off the rails.”

Is There an App for Ending Poverty?

Can Silicon Valley deal with society’s intractable problems? Apps and other tech tools can be invaluable to low-income populations, yet existing business models have produced little innovation. Fast Company examines startups breaking Silicon Valley’s rules to do better fighting poverty.

Understanding Economic Inequality

We’re thinking about economic inequality all wrong, says Nobel-laureate Angus Deaton. Economic inequality emerges from both positive processes, like innovation and invention, and negative ones, like monopolistic behavior and badly designed policies. “Inequality is not the same thing as unfairness; and, to my mind, it is the latter that has incited so much political turmoil in the rich world today,” Deaton told Quartz.

Who Benefits?

Whatever one thinks of the politics of the Republican tax plan, it seems certain that the major changes in individual and business tax rates will create plenty of work for accountants and tax lawyers. Washington Post columnist Catherine Rampell writes, “Congress has once again taken pity upon the nation’s poor accountants and guaranteed them all lifetime employment.”

Upending Economic Thinking

Richard Thaler won this year’s Nobel Memorial Prize in Economic Sciences for his foundational contributions to behavioral economics. The key insight of the growing field is that contrary to traditional economic models, humans don't always act rationally.

That seemingly self-evident insight has transformed economic thought, though not easily. Robert Shiller, also a Nobel winner and a pioneer in behavioral economics, wrote after Thaler's win that “there has been antagonism—and even what appeared to be real animus—toward our research agenda.”

In conversation with the New York Times, Thaler explained how seemingly silly things can lead to serious insights on sunk costs, supply and demand, and choice architecture that improved economic theory and had real-world policy implications.

Back in 2009, Yale Insights talked with Thaler about how governments and businesses can use “nudges” to encourage better outcomes.

After the Equifax Breach

Is there any way past the cycles of breach and contrition? Equifax let hackers steal the private financial and personal details of 143 million Americans by leaving a hole in its system unpatched for months.

Bryce Covert’s New York Times op-ed notes, “We are not the customers of credit reporting companies, but the product.” In her view, there shouldn’t be a private credit rating industry. “Given how poorly they operate and how little incentive their business model gives them to improve, their duties should be handed over to public institutions.”

Even such a significant shift would not be a fix alone, according to experts consulted by Knowledge@Wharton. They call for laws clarifying the obligations of companies, harsher penalties for firms that don’t fulfill their duties, and a defined role for the military in securing our digital borders.

What about those who were exposed in the breach? Ron Lieber of the New York Times has been fielding reader questions and explaining what to do next ("freeze" your credit file at all three major agencies, when you can get through.) He has been struck by a sense of "helplessness" among consumers—"the recognition that we are at the mercy of an industry that makes money off our data, treats us with disdain and answers to no one."

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