Glenn Greenwald explains the healthcare debate. It's what Obama wanted. Makes a lot of sense to me.

Kevin Drum nails the income inequality argument over at Mother Jones. This is the best bit:

Ask an economist what's responsible for increased productivity, and the most likely answer you'll get is: new technology. So if we really wanted to reward the people who are responsible for productivity growth, we'd shower riches on engineers and scientists. But we don't. We shower riches on the CEOs who buy their products and make use of them.

But buying a new inventory control system is hardly a sign of managerial brilliance. It's just something that every company eventually does once a better one is invented, and the CEO who signs the purchase order to buy it is no more responsible for productivity growth than the workers who use it. They're both piggybacking off of someone else's invention, and there's no special reason why either one should be thought more deserving of sharing in the rewards. They both should.

Politics as usual = a busy, busy day

Our Congress is disgusting. Very few people in either the House or Senate deserve our respect or support. I must admit that both Senators from Washington state have been doing ok, but any Republican Senator currently serving is disgraceful.

Republicans don't care about your health, just winning.

Joe Lieberman is a hypocrite of the highest order.

Republicans won't take responsibility for their fiscal follies.

Obama is all show when it comes to dealing with bankers. Today Obama met with the 6 heads of the big banks and scolded them and urged them to do more, including more lending. So that results in a statement from the banks that makes Obama look stupid: "He can say what he wants, but we're not going to go back to the kind of lending that put us in this mess." Brilliant.

A conservative magazine wants to reenact post-depression regulations in a modern light. Marvelous idea!

The fellers over at Minyanville are seeing double-dip recession possibilities.

New Majority examines how the Republicans can't support the status quo on health care. Good read.

Andrew Ross Sorkin in tomorrow's NYT confirming that Wall St. owns Washington.

Bonus:

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

VAT

Today in the NYT, Catherine Rampell discusses how it works. Then she says that it will never happen because both sides of the isle have promised no new taxes. It's a great read but her conclusion about it never happening is frustrating. Taxes have been treated as a hot potato. Nobody likes hearing about tax increases, but lots of people like hearing about entitlement increases. For a country that spent the last 30 years aquiring stuff on credit, this disconnect about where the money for entitlements comes from isn't surprising. Both the American people and the government have been spending and spending and not worrying about where the money comes from (except when it's politically damaging to the other party) and this is going to come to a head at some point in the future when the baby boomers cash in on social security and medicare. Baby Boomers day of reckoning is coming, and it won't be pretty for any of us.

Matt Tiabbi's latest from Rolling Stone is now online: Obama's Big Sellout

Mother Jones has a great follow-up to Tiabbi's piece.

Bonuses, Taxes, and Goldman Sachs

So Goldman Sachs is giving bonuses in the form of stock. Seems like they were just caving to the populist outcry against Wall Street bonuses. Then yesterday in the WSJ the British made the case for doing a one time 50% bonus tax on bank bonuses. Today France is joining the tax bandwagon. So now it seems to me like Goldman is hedging against a possible tax on bonuses by hiding the bonuses in the stock awards. We'll see.

Job and taxes and Medicare

People all over the place are going after Obama on the jobs front:

Dan Gerstein at Forbes.com

Bruce Bartlett

Michael Maiello at Forbes.com


Economix.com looks at how much taxes we pay and surprise! Rich people pay more than super rich people.

David Frum sums up how the Washington Republican's strategy of 'no no no' to Democrats is hurting the party. The article is good but the comments section of the article is even better. I disagree with most of the comments, but it just shows how broken Republicans are.

Since the Senate has a tentative deal on health care reform that kills the public option in favor of letting people age 55-64 buy into Medicare, there is debate as to whether this is good or bad. As noted above, Mr. Frum thinks this is a bad deal, since Medicare is unsustainable. Ezra Klein thinks the deal is a good thing. My take: I think the deal is a good thing, too. Letting folks buy into medicare will force more hospitals to take Medicare, which they don't like because they don't make as much money. But if you think that making lots of money in healthcare is a bad thing as I do, then this is good. I also think that taxes will increase sometime so that we can pay for our entitlements. This increase should make forming commissions to actually do cost reduction (which this is not) in Medicare more politically feasible as people will want to make sure their taxes are being spent wisely. These commissions should lower the costs of Medicare by cutting out the waste and going after all the fraud that is in Medicare. There is a lot of fat in our government that should be cut out. The neat thing about the Medicare buy in is that it could turn into a sneak single-payer ideal. The more people in Medicare, the more single payer will gain traction as a good idea. David Vitter is arguing for single payer right now on the floor of the Senate, using the facts that single payer will reduce costs.

Supply siders won't die! They are still peddling their 'what ifs' as economic facts. At least the people who left comments on this farce have common sense and call out the author for his delusion.

Taxes and wages

Paul Krugman and David Frum disagree on how to go about current climate change legislation. Paul Krugman takes a realistic view that while a carbon tax would be much more effective, it's politically impossible so going with cap and trade is the better option since it has a good chance to pass. David Frum agrees that the carbon tax is better, but he thinks that cap and trade is a boondoggle and not worth the time. What's funny about Mr. Frum's article is the comments. People have gone nuts over the carbon tax. I tend to think that most of the comments on Mr. Frum's article are from folks who would consider themselves conservative, which probably means they are hawkish on deficits. But their railing against taxes rings hollow. If you have credit card debt, you don't pay it off sooner by just paying the minimum payment. Arguing that adding taxes in a recession is unhelpful is just another argument by the trickle down crazies. Yes, if you impose a tax on companies, they would be inclined to pass those costs along to consumers in the form of higher prices. Couldn't you structure the tax to say that companies can not pass on the increase to consumers? Could you structure the tax so that it is taken out of company executives pay? Or how about instead of dividends to stockholders, you pay the tax? There has got to be a way to make those that benefit most from higher corporate earnings pay their share here. Of course, as an American I should be paying more considering how much oil America consumes.


Ezra Klein talk about how rising health care costs impact us all directly in lost wages.

Estate tax explained

What's that, you say? Never heard of the Estate Tax? How about the Death tax? Heard of that? Does it make you angry that after you die the government is going to be taxing you? Here's something else that will make you angry then: If you believe that, you deserve to be taxed in death. The myths surrounding the estate tax are just that, myths. Who is spreading the myths? The insanely rich people who are the only ones who will be impacted by the tax: Those that leave behind more that $3.5 million to their heirs when they die. Don't believe me? Fine, go join Pailin and the Birther movement.

Bank of America paying back TARP + Jobs report

In a post on Baseline Scenario, James Kwak explains why Bank of America is paying back it's TARP money.

I support restrictions on the form of compensation in financial institutions, such as requiring them to be distributed in restricted stock that vests over several years (which is already standard practice at some banks, such as Goldman Sachs) and making bonuses in good years subject to clawbacks in bad years. But those restrictions have to apply to all financial institutions, not just some of them; otherwise, you get this situation where Bank of America is making a silly financial decision because it has to in order to hire a new CEO. (The fact that nobody will be CEO of America’s largest bank because of executive comp restrictions is another issue, but there’s not much we can do about that. I would do it, but I don’t want to move to Charlotte.)

In other news, Bruce Bartlett examines the stimulus' effect on unemployment and concludes that the stimulus was a good thing, but that it was foolish for the Obama Administration to throw around numbers as to what the unemployment rate would be with and without a stimulus back in March. He also concludes that the tax cuts that were included in the stimulus have had very little if any impact on the unemployment rate.

Indeed, one can argue that the failure of the stimulus to create or save more jobs occurred largely because Obama included too many non-stimulative tax cuts in the stimulus package. These tax cuts, such as the Making Work Pay Credit, accounted for more than 40% of the cost of the $787 billion stimulus package. Based on the CBO analysis, I don't think there is any question that the economy would be much worse off today if Republicans had gotten their wish and 100% of the stimulus had been in the form of tax cuts.

Pay now not later

For Republicans (or anybody really) to lambast Obama for spending money, then refuse to support a tax increase to pay for wars that they support is the height of hypocrisy and doesn't deserve my vote or respect. Bruce Bartlett agrees.

The Medicare Commission, which could do some serious cost control has been seriously weakened in recent weeks. I love these politicians of ours. They rail against health care reform, point out how wasteful Medicare is, then prevent any attempts to rein in the waste. Morons! Morons! Morons! How the heck is it right that people who do such dumb things get rewarded, but the rest of us gets screwed? I keep having Bill O'Reilly's confrontational interview question bounce around in my head, "Why do you hate America?" Well, it's because of people like you, Mr. O'Reilly. The more I learn about how this country works, the less hopeful I am for the future. I'm not kidding.

Frontline's latest program examines the history and direction of credit cards. Good stuff.

Monday after the long weekend

The Senate actually begins debate on the healthcare bill, after debating about whether to begin debate on the bill. Gotta love that one. Obama is going to announce on Tuesday at Westpoint troop increases to Afghanistan while explaining that this is how to leave the country. Merry Christmas!

As an aside, why do Project Managers and Resource managers at my office assume that December is a full month for planning and delivering projects? Hello? Everyone is gone, or key people will be out at some point during the last 2 weeks of December and 1st week of January. This always happens, yet it's planned that people will be available and working. Come on! If getting this work done was so vital to year end goals, it should have been done in September and August and October, not November and December. New Rule: When planning, December is only 2 weeks long. Anyways...

Paul Krugman is pounding on the jobs creation platform. He's completely correct. This is yet another indictment of so-called 'trickle-down theory'. Look, we've given the banks BILLIONS of dollars in free money, and yet where's the money going? To the top! David Frum says that the Bush tax cuts should be extended by 5 years and not expire next year, because taxes are bad bad bad. His last point argues for more TARP, because the banks kept all the initial TARP money for themselves. And so more TARP does...what, exactly? Mr. Frum has really started to go oddly backwards in his ideology in the last couple of posts. Trickle-down theory is DEAD, Mr. Frum. It doesn't work. Why is it that when rich people screw up, the demand a do-over? When other people mess up, too bad! Welcome to capitalism. David Brooks admits he is a die-hard Bruce Springsteen fan. Great. Now how can he be a fan and Republican? Does he just ignore the lyrics? Does he just pretend that Springsteen is liberal? I'm confused. Wait, I just realized how: I like Mr. Brooks, but like all Republicans, he can hold conflicting ideologies in his head with no problems whatsoever. Wait, that holds true for Democrats, too. So is being a pundit just his day job, then? Augh!

Finally, the CBO is saying that Health Care Reform would lower costs! How about that?

Daniel Mitchell over at the right-wing think tank the Cato Institute is defending Obama and blaming Bush for the colossal deficit we find ourselves in. He then goes on to say that Obama will probably be worse than Bush in the long run. We'll see.

Tuesday links

So I've got a new fire in my soul for posting. After a few weeks of not much, I feel compelled to share lots and lots. Maybe because it's the holidays!?!?

David Frum panders to his wealthy readers (very disappointing).

Barry Ritholtz shares a drawing that he used during his recent visit to Europe and got a lot of laughs. The image is below:
Nearly 1 in 4 home owners are underwater. That's sobbering.

David Brooks looks at the healthcare bill Plinko'ing its way through the Senate. It's about the values, dummy.

NPR looks at the healthcare bill, too. It's about affordability, dummy.

I already know that my generation is getting screwed, but this is surprising.

Andrew Sullivan analyzes the GOP's new 10 commandments. Good stuff.

Monday Links

Thomas Friedman is jumping on the higher taxes bandwagon.

Barry Ritholtz returns from Europe, where they think we are weird but still follow us anyways.

Ezra Klein has a wildly interesting thought on Joe Lieberman's nonsensical positions.

And finally, Planet Money has a great idea for taxing the rich. Rich people have gotten us into a lot of messes, so it's ok with me if they actually have to (gasp!) pay for it.

The notion that lower-income people make up the majority of our armed forces has led to sayings like "rich man's war, poor man's fight."

Now, Senator Carl Levin (D-Michigan), chairman of the Senate Armed Services Committee, has an unsual idea to equalize the cost of war: a war tax on the rich.

An "additional income tax to the upper brackets, folks earning more than $200,000 or $250,000" a year, could fund more troops, Levin proposed in an interview for Bloomberg Television's "Political Capital With Al Hunt," this weekend.

White House Budget Director Peter Orszag has estimated that each additional soldier in Afghanistan could cost $1 million, for a total that could reach $40 billion if 40,000 more troops are approved.

The tab, Levin said, should be paid by wealthier taxpayers. "They have done incredibly well, and I think that it's important that we pay for it if we possibly can," the senator said.

They don't get it

Lots of people wonder why the younger generation (under 30) are so cynical and anti-establishment. Let me help them reach some understanding on this.

The current ruling generation (baby boomers) has the appearance of wanting its cake and eating it too. We (the Gen Y) were brought up by these folks being told that anything is possible if you work hard and be honest. We were taught that if we could dream it, we could do it. We were taught that morals were important, and that not having morals was evil and those who chose that path would not succeed. Now that my generation is coming of age, we are realizing that that was just a bunch of smoke and mirrors created not for our benefit, but for our parents' benefit. Maybe this is just our coming-of-age moment, this realization that our parents' generation is so terribly off base and self-centered.

Health care is paid for, but Republicans don't like it. Even the Republicans that voted for the deficit-funded Medicare Part D benefit are fighting against the current Health Care reform. Bruce Bartlett even takes Republicans to task over the health care debate. Hypocrisy at the highest levels of government. Isn't this what Jesus taught us was bad? The current Right-wing "moral high ground" pundits talk, the more I associate their justifications with an 'eye for an eye' Old Testament basis, not a New Testament 'turn the other cheek' basis that I was taught growing up. We have hard-core Farm Belt Republicans railing against big government, yet they happily lobby Washington for increases in the Farm Bill. Raising taxes is the the devil's work, yet we continue to spend ungodly amounts on the defense budget and two wars. Our economy is tanking, while the rich get more and more. The rank and file middle class wages are kept in check with 'pay for performance' while upper class wages skyrocket based on abysmal performance. Our Congress is broken, with our out-of-touch rich folk Congress wringing their hands over whether or not the government should be funding abortion, meanwhile unemployment has risen to 10.2%. This doesn't seem to matter much, because Wall St. is pretty happy with how things have gone, and what is good for Wall St. is good for Main St, right? Obama talked about change, but its become more and more of the same.

The worst part is, which health care prolonging people's life spans, the baby boomer generation will stay in power for a longer period than any previous generation. This means that me and my son will be paying the price for this incompetence for decades. Is it any wonder why Gen Y'rs run and hide in Facebook and MySpace? That is the only solace we have left. The more you look at how we got to this point in our American history, the more sad and angry one becomes. I hope that the crisis of 2008-2009 moves us in a different direction, but as we move into 2010, things aren't looking that way.

Monday reading

Today in the NY Times, drug makers are raising the prices of brand name drugs by 9%. This equates to about $10 billion dollars in rising costs, effectively eliminating first year savings that the companies promised to provide in striking a deal with Obama to be left out of health care reform. Isn't America great?

Bruce Bartlett is still advocating the VAT.

Ezra Klein rants on Senators who voted for the debt-funded Medicare Part D and are now railing against Health Care reform. Hard to argue with him.

Robert Reich has an open letter to Harry Ried on Health Care.

In Dilbert I Trust

Scott Adams is scary good.

Paul Krugman agrees

Paul Krugman takes it to his critics that claim that his assertion that growth was better before 1980 is a lie. Um, no. This is something that I have also come to agree with. America did better with higher tax rates and lots of regulation.

The GOP has a health care refrom plan

So the GOP bill does less that the Democrats bill. Not a good move. Now they go from the party of no ideas to the party of bad ideas. David Frum explains how Republicans have fallen from their perch, and what they can do to change (become Moderates) I don't think this will happen until the leadership changes. It's going to happen the same way that same-sex marriage or legalized pot is going to slowly become accepted and normal. People resist change and resist change, even if the change is good. Then after the change is made and people get used to it and experience how it is better, then it becomes accepted and the new norm.

Oh, and it is in vogue now to pretend that the postwar era (1946 - 1970) didn't happen if you are a Republican arguing economic policy.

Planet Money gives a history of how our Doctors get paid, starting in 1968 when Medicare began. It is one of their best podcasts.

Special Interest groups SUCK. They are worse than lawyers.

The Keyboard Commandos question Obama's resolve with Afghanistan.

See? See!?!?

I told you this would happen.

Lessons forgotten

Here is a slide deck on the 10 lessons already forgotten from the financial crisis, meltdown, fiasco, I don't know what to call it.

Monday links

Why Keep Geitner? - Why is Tim Geitner still the Treasury Secretary?

Get American to work - Robert Reich argues that getting Americans back to work is more important that getting good health care reform passed.

If Best Buy sold healthcare - Ezra Klein does a fascinating look at healthcare from a retail standpoint.

Friday's Bill Moyer's Journal looked at the economic recovery so far in 2009.

I've been trying to figure out what happened in the 1970's that caused wages to stay flat while productivity increased. This page argues that high tax rates = high economic growth. David Rothkopf also argues that the high taxes during the period from 1946-1973 really helped America become strong during this Q&A back in March of 2009:

Q: I think one reason for our lack of leadership is the possibility of immense reward, i.e. greed. We need much higher marginal tax rates so executives do not have the ability to accumulate wealth that would embarrass an Oriental potentate. They make short term decisions that are bad for the US, the world and even their own institutions, but are good for their own balance sheet.

During the period 1946 - 1973 taxes were much higher. Marginal rates averaged 70%; they were 93% under Eisenhower. The economy was better than what we now have. For example, median wages went up 3 times as fast as since 1973. Also I recently saw a graph of the national debt as a percentage of the GDP from 1946 to the present. It started high, went straight down until 1973, and then flatten out and in 1980 made a sharp turn and went straight up except for a wiggle during the Clinton administration. CEOs earned 50 times what their workers earned; it is 500 times today. Staring in 1973, the percent of wealth and income taken by the richest 10%, 1%, and 0.1% has gone up at an ever increasing rate. This is a recipe for disaster.

David Rothkopf: I agree. In fact, much of my most recent book, Superclass, is devoted to this issue of growing inequality in the U.S. and internationally and the risks it poses. I'm not sure we need to consider 70 or 93 percent tax rates...and our economy is at a fundamental level much more dynamic and strong than it was in the 50s...but we do need to rethink senior executive compensation, what we let our pension funds pay hedge fund managers, and also what obstacles need to be removed to close the gap for those on the bottom.

And now, David Horsey of the Seattle PI:

Waste cleanup will pay the way

Reuters is reporting on an article today stating that Medicare wastes up to $800 billion a year. $800 billion a year. While the Congress frets over health care reform that could cost $1 trillion over 10 years, we could be tossing away 8 times that amount over the same period in Medicare waste. Wow. Imagine what could be done if you could cut that waste to $100 billion a year. $700 billion a year to play with. You could actually do Medicare for all (single payer). You could reduce the deficit. You could fix Social Security.

60 Minutes even ran a story on how easy it is to do fraud in Medicare.

Of course, this is proof that government can't be trusted to run these programs because look at the waste! Also, any cuts to Medicare either by cutting funding or trying to implement programs that would reduce waste will be interpreted by Republicans as rationing care. It's all bunk. I would agree with you if we were funding the fraud divisions of Medicare properly and they weren't catching this stuff. But the fact is, fraud detection is not funded properly and the teams are very small.

FIX THIS NOW!!!

Rich people are human, too

Which means that rich people have idiots and smart people. Anyone who disputes that is one of the former, not latter types. So they next time you hear someone say "The markets are effcient. It will fetter out the fraud and waste on it's own." is one of the former too. Alan Greenspan used to say this, but after last fall, he wised up. Wall Street is full of idiots. Why our elected officials are listening to some of these people must put them in the former group too.

Matt Taibbi has a great rant that sorta relates to this. Elizabeth Warren for President!

Inside the auto bailout and why drug companies will win

Steven Rattner gives an inside look at the restructuring of GM and Chrysler in this month's issue of Forbes.

Time has an article on the drug companies and their efforts in Washington.

Slash and Tax

So we are going after the paychecks of big firms that received tax payer assistance. I think that is addressing the symptom, not the cause. We should have busted up these firms, not bail them out then come at them later. This is populist pandering. This is a move that the banks will scream about, but they know that in the long run this is a sign that things won't change, that they can keep betting like they did to get in this mess and get bailed out when their bets go bad in the future. Of course, since Goldman already paid back it's assistance, it won't get pay cuts. The firms that are getting the paycuts have no real hope of recovery. This is a bait and switch move by the Administration. The real players (Goldman) have already left the coop. Forbes.com has some thoughts on how to address the crazy pay.

Mr. Volker is advocating the breaking up of the big banks.

I'm a new fan of Bruce Bartlett. You should be too.

Frontline on the Economy

Last night's Frontline. Watch it now.

This American Life looks at Healthcare, plus links

So the past 2 weeks of This American Life take a look at healthcare. Both episodes are terrific and worth a listen.

October 9

October 16

Extra: Senator Ron Wyden (D) of Oregon is trying to get choice into the current health care bills. Go Wyden!

Here's a dumb senator that sounds, only sounds smart. So how do you not give a 25% pay cut and reform the system? Anyone? Anyone?

Ezra Kelin explains the Cadillac plan excise tax and how the tax will make money when no one pays it.

Bruce Bartlett is trying to kill supply-side economics.

Salon has a great article on why the government needs to start creating jobs NOW.

If we can bail out the employees of Wall Street, we can bail out the unemployed on Main Street. And we had better do so quickly, if we don't want that rotting sound to be followed by a sudden snap.

Heads they win, tails we lose

Does anything really matter? Does worrying about what amount a health care reform bill will cost over 10 years matter?

How about the proposal to give $250 checks to seniors this year since Social Security won't increase because cost of living has not increased. I am starting to really dislike Social Security. I never thought I would say that. I don't blame the current group of seniors. These folks are the Greatest Generation, and do deserve our support. But does the next generation, the Baby Boomers really deserve to receive these benefits? They have done so much harm to this country. Why should they collect? Baby Boomers don't set good examples for others to follow. That's a blanket statement, and unfair to some, but if you look at who our current leadership is at local, state, and national levels, what do you see? Do you see great leadership making hard choices, willing to put things on the line? No, you see bickering, deceit, mud slinging, pandering. It's all a thinly disguised lie. Where is the responsibility?

If you are in government, and you can give money to people willy-nilly because you are worried about how they vote, then why get all worked up over what a bill will cost over 10 years? It's not like that 10-year projection is set in stone. Not when you can (and will) change it whenever it's most politically convenient. Obama sucks. Democrats suck. Republicans suck. I think the only path we are going down is one of ruin. Typical. This is 'uniquely American.' Do nothing until people die and and things are so bad that you have to make changes. Then we will pick up the pieces, try to make a change, and limp along until the next disaster. That's America.

So now that I'm all depressed, more than I was when I started this post let's move on to links.

Robert Reich has a great post on the fact that Obama should renege on his deal with health care industry players, since the costs are going way up and the fact that the people (middle class) who were supposed to be helped by the reform will get screwed instead. I agree, but I bet you real money Obama won't do a thing.

Paul Krugman discusses why Citi and BofA are reporting losses in Q3 after making profit in Q1 and Q2. Now Larry Summers is denouncing the big trading banks since they are reporting record bonuses. He quotes Mr. Summers with this nugget.

“There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support for the financial system.”

So if someone tells me that it is not my business to question how much someone in this industry makes, I say yes it is. It's my money they are gambling with. It's my money that saved their reckless ass when their bets went bad. Don't tell me to shut up. We should shut these bastards down. I don't have much hope from the Obama Administration to supply leadership on real reform in the financial industry. The casino will remain open. These people in these companies are thieves and gamblers and do not deserve our respect or tolerance.

Here is a bizarre article at Minyanville on how another recession is going to come in the next few years because of the Obama policies. It's a weirdly compelling read, in that it supports trickle-down theory (when won't this idea die?!?!) and how deficiets are going to harm America. This seems to me like old-school thinking being applied to a reality that doesn't fit the old-school model.

Daniel Gross with an excellent article on the current losses reported by GM, Citi, and BofA.

Government ownership doesn't cause catastrophic losses; catastrophic losses cause government ownership

Economist quotes from a gathering in New York. I don't have hope. These are hollow words.

John Maynard Keynes still has good ideas.

How Moody's sold out.

Barry Ritholtz wonders if the White House is finally taking financial regulation seriously.

Friday links

Krugman on the crazy AHIP report released this week by PW

98% of banks are left out of the Financial Consumer Protection Agency's purview. This leaves only the big banks that would get the annual regulation review. Makes sense, as the big banks are mostly responsible for the crisis. Could this drive nefarious schemers to go to small banks and cause trouble? Maybe, but there just isn't enough capital in the little banks to do much damage, certainly not on a national scale.

NYT Op-Ed on why the financial sector melted down. Hard to find any argument with that.

The Maestro says we should think about breaking up banks.

I've been railing on the insane supposed $80 billion dollar deal that the NYT reported the White House made with the Pharmacuetica industry a couple of months ago, but New Majority has a point. Where is the money (ads) that that deal would have produced?

Here's a walkthrough of how key member's of Congress are owned by the bank and insurance industries. Here's another pretty graph.

What I'm reading

I'm reading the book The Looting of America. It's a pretty good read. Gives a 101 course in how derivatives work and how Wall Street brought on the economic crisis.

News today: The House Banking Panel just approved the regulation that derivatives must be regulated, which means they must be traded on an exchange with all the involved parties and counterparties disclosed. This is surprising, as I th0ught it wouldn't have been possible to get this passed this late in the game. Barney Frank

Go Vandals!!

Over at ESPN.com, Pat Forde has a great little writeup about the Vandals in his recent column. Here is the writeup in its entirety:

Miracle In Moscow

With each passing victory, The Dash becomes an even bigger bandwagon fan of resurgent Idaho (31), the punch-line-turned-powerhouse of the WAC. (Or, if not powerhouse, at least respectable member of the WAC. That's pretty much a first in its own right.)

If you missed it -- and shame on you if you did -- the Vandals improved to 5-1 with a comeback victory at San Jose State on Saturday, 29-25. It was damn near enough to make The Dash endow a blocking sled at a school that hasn't been this good through six games since 1994, when it was an FCS program.

The Vandals also improved to a league-best 2-0 in WAC play, with both victories coming on the road. Given the embedded history of woe at Idaho -- eight straight seasons with at least eight losses, including 21 defeats the previous two years -- these are giddy times in Moscow.

Jesse Beals/Icon SMIRobb Akey and the Vandals are 5-1 and 2-0 in the WAC.

"We've woken up the place a little bit," said The Dash's current Coach of the Year, Robb Akey (32).

Akey traversed the eight miles across the Palouse from Washington State two years ago to become the latest head coach at Revolving Door U. He's the fourth coach this decade, following alleged staff-puncher Tom Cable (Oakland Raider), I'd-rather-be-an-assistant Nick Holt (who returned to USC after two years) and loyalty-is-overrated Dennis Erickson (who fled after one for Arizona State). And here in Year 3, Akey's methods are paying dividends.

"It'd been rough for the kids, because they'd had so many head coaches," Akey said of his first two years, which included one WAC win. "We had to make football be fun for them and give them a reason to believe in us."

When Akey got the job, it was Christmas break. He sat down with a media guide and a list of phone numbers and began calling every player to introduce himself.

"A couple of guys had the courage to say, 'Why are you any different from the last guy?'" Akey said. "And they were right. We had to prove we cared about them and that we could help them."

Part of that included weeding out a healthy number of players who weren't into Akey's way of doing things. Another part was playing a lot of young guys early in their careers and taking lumps. The third part was upgrading the talent.

Part of the upgrade was Washington State transfer running back DeMaundray Woolridge (33), whose measurements read like fiction: 5-9, 241 pounds. The human bowling ball carried five times on the game-winning drive for 28 yards, including the last 5 yards for a touchdown.

(Not all news is good news for the Vandals, however. The WAC reprimanded linebacker Tre'Shawn Robinson (34) for throwing a punch during the game against San Jose State, an act that earned him an ejection from the game and carries with it the threat of suspension if he acts up again.)

Idaho has four of its final six games at home as it strives for its first bowl bid since 1998. The Vandals also get a road shot at Boise on Nov. 14 -- and if things get really haywire, the two teams could be a combined 18-1 at that point. Could there be anything stranger than the national media descending upon Boise for Broncos-Vandals?

Rhetorical question.

Why do these bastards deserve this?

Wall Street is to make record profits this year, according to the Wall Street Journal. While the rest of the country suffers, these people are using our dime to make bigger sums of money than before the meltdown. They really are stealing. NO regulation changes from Washington. Kevin Drum says it very well:

I sort of feel like I've run out of things to say about this. There's an insanity here that's almost beyond analysis. Wall Street can spark an economic slowdown that misses destroying the planet and causing a second Great Depression only by a hair's breadth — said hair being an 11th hour emergency infusion of trillions of taxpayer dollars — and then turn around and use those trillions to return to bubble levels of profitability within 12 months. And they can do it even though the rest of the economy is still suffering through the worst recession since World War II. It's mind boggling.

Is there any silver lining here? Probably not, but I'll try: If Wall Street can shrug off the worst recession of our lifetimes as if it's a minor fender bender and get the party rolling all over again in less than 12 months, it means the next bubble is already in the works and its collapse will be every bit as bad as this one. That in turn means it will almost certainly happen while today's politicians are still in office. So maybe news like this will finally spur lawmakers to realize once and for all that the financial industry needs to be cut down to size. Half measures won't do it. Self-regulation won't do it. Compensation limits won't do it. Byzantine, watered-down rules won't do it. Something like a Morgenthau Plan for Wall Street is the only thing that has even half a chance of working.

Monday and Tuesday links

This picture is from a Slate article describing how the Right is saying that the Stimulus hasn't worked and more stimulus would be a waste. Of course, at most only about 25% of the stimulus has been spent as that is when the stimulus was designed to be spent. One could argue that the timing of when the stimulus would be spent has been done poorly, but to call the stimulus a failure is dumb and simply a political stunt.

On the health care front, the NYT has an article about how health care lobbyists are flooding Washington to get last minute changes into the bills so that the reforms will fall flat. The article makes me feel more and more supportive of a government-run health plan. In support of this news, and article at Truthout.org is claiming that these lobbyists are telling Congress that rate hikes will be inevitable if the reforms pass as they are currently proposed. And now, the health care industry has released a report by PriceWaterhouseCoopers (PWC) that claims that utter chaos will ensue if the current reforms do get passed. That set off quite a firestorm, and PWC is now backing away from it's own report. Hee Hee. Robert Reich says that this report is quite a bomb, but one that has exploded under the insurers. He is saying that this report does nothing except strengthen the case for a strong public option. Since the report claims that if the current reforms will cause premiums to increase faster and higher, it's hard to argue against him. It seems like insurance companies are getting desperate, as the Senate Finance Committee is voting on the Reform bill today and it's looks like it will pass the committee and move on to a floor vote. This is the farthest any kind of health care reform has gotten, and the tactics of the insurance industry are getting more and more desperate. From Reich's post:

Now's the time for Congress and the White House to say to the insurance industry: You want to play hardball? Okay. We'll play it, too. You didn't want a public insurance option. That was one of your conditions for supporting the bill. You wanted gigantic profits from having thirty million new paying customers and the market to yourself. The Senate Finance Committee and the White House agreed because they wanted your support and were afraid of the negative ads and hurricane of opposition you could finance. But you're even greedier than we imagined. And now you've demonstrated that greed to the American people. They don't want to turn over even more of their hard-earned money to you. So, insurance companies, we've got news for you. We're going to make sure Americans have the freedom to choose a public insurance option that's cheaper and better, and you're going to have to work hard to keep them your customers.

UPDATE: Timothy Noah at Slate looks at the PWC report and details how the report shows that the government is better at containing costs than the private market. The more this gets looked at, the worse the health care industry looks.

Too Big to Regulate?

Simon Johnson has a thought-provoking piece up today discussing whether the current direction of financial regulation is going in the right direction. What do you think? Has Wall Street changed after a year since the meltdown began?

It looks like the current health care reform bill is becoming more like health insurance reform as David Brooks sees it. So health care is also too big to regulate. I find this conclusion amusing, because I seem to remember Obama changing to calling health care reform health insurance reform a few months ago. Ok, so what? The rhetoric changed. Buy why? Is the timing coincidental? Does it really matter what reform is called. Actually, yes. The timing is suspect because 2 weeks after the name change, the story was confirmed that the Administration had struck a behind-the-scenes deal with the drug industry to block any reforms that could affect the drug industry. Well, so what? The industry promised to make changes and help with the deal. That's good, right? Yes, but when you look at it from standpoint of what the industry has to gain, things get less encouraging. This Vanity Fair piece details what different parts of the heath care industry make in dollars. Which part of the industry makes the most profit? Drug companies.

It seems to me that the Administration started out with health care reform, got hit with a bunch of threats from lobbyists. Grew fearful that the reform would go the way of Clinton in 1994. Since the Administration is filled with former Clinton staffers, the strategy changed to include the big health care players from the beginning. This necessitated that they make huge concessions to these players in exchange for a chance at success. But in order to make effective your rhetoric to the public, you have to find a common enemy, one that both the public and Congress could gang up on. The weakest of the health care players from a dollars perspective is the insurance companies, and they were chosen. Yes, they do deserve their criticism, and their practices of recission and are disgusting, but they are only a small part.

Think of the health care like the Golden Gate Bridge. There are lots of little pieces that are necessary for the bridge to work. You are told that the bridge is in imminent collapse. The pillars that hold the bridge up are rusting through. The cables are fraying. The road surface has holes that cars fall through. It's obvious to all that the bridge will fail in the future. Billions of dollars are spent maintaining the bridge each year, yet it just gets worse and worse. What do you do about it? Do you replace the bridge? Do you build a new bridge next to the old one? Do you just patch up the existing bridge?

Right now, it seems like the current proposal (The Baucus Bill) is going to patch up the current bridge, with the hope that the patches hold. But the problem is that the patch is only fixing the road surface (which I am analogizing to health insurance). It does nothing to the columns that are rusting, or the frayed cables. This is the deal that has been struck. Maybe it will prolong the current bridge, but there is still a collapse in the future. Maybe the hope is that people will see how nice the road is, they will want to patch the columns and fix the cables. But the foundation is still rotten. The bridge is too big to fix.

Also, both Brooks and Ezra Klein are lamenting the loss of the Wyden-Bennet bill.

I'm on the air!!

So the wonderful folks over at NPR's Planet Money have used a question I asked them about one of my health bill's as part of their podcast yesterday. Very, very cool.

In response to their answer, I posted to them another question. Which became a sort of rant, then a suggestion. Here's what I wrote them:

I would just like to say thanks for putting my question up on the podcast yesterday. It was a real treat, and the answer was enlightening. I do have one follow-up question in response. If the insurance negotiates with the hospital on what amounts it will pay for given procedures, doesn't that validate the argument for a public option insurance plan? Costs will be kept in check because the public option will be able to negotiate prices just like the other insurance companies.

I think I'm in danger of going on a rant here but whatever, here goes. The more I think about the health care debate, the more uncomfortable I am with the idea that you should make a profit off of sick people. Let me be clear here. There is a huge difference between making a living off of sick people (paying doctors and nurses) and making a profit (paying dividends to stockholders, working to increase the stock value, etc). Why do we insist on making a profit? Is the argument that healthcare is so huge that the only way for a company to raise enough capital to deal with healthcare costs is to go public and sell shares? If so, then I think that means that since the necessary size is so huge, you either have to go public or use the government. But since I think that making a profit is not the best way to do healthcare, then that only leaves the government. But then this leads to another point: I have a 401(k) and a Roth. I expect to get a return on those investments, which means that I want to see profits from the companies that I am invested in. I could have some healthcare stocks in my 401(k), but I don't know that for certain. Now I have a dilemma, because I disagree with having healthcare be run as a profit entity, yet I want profit so that my 401(k) will grow. How do I deal with this conflict? I don't really know. Sure, I could find out what stocks I have and then dump the healthcare stocks, but that could mean that my pool of risk just got smaller, which is a bad idea for investing. What to do, what to do... I also work for a company that has a pension plan, but to get that pension, I have to work for this company for the rest of my life. Is that an option? Maybe. I'm 29 and have a long career ahead of me, and staying with one company might not always suit me. So the only hope of having retirement is through my 401(k) and Roth.

The tough part about all this is that the only people who can really answer these questions is me and you. Not Wall Street, who only seems to have short-term gains in mind. Not Congress, who seems to only think as far as the next election cycle. Us. Society at large. It's easy to be passive. Passive stockholder, passive voting citizen. It just feels that to me, the healthcare debate is touching on something that is much more than just keeping ourselves healthy. It is something fundamental about how we as a society want to move forward as citizens/investors. I've read Robert Reich's book "Supercapitalism", where he really examines this issue. I highly recommend this book. Hey, there's a thought: how about a Planet Money book club, where you guys read a book and then use a podcast or do an extra podcast to discuss your thoughts? There are lots of great books coming out about the crisis, like Andrew Ross Sorkin's "Too Big to Fail" and Henry Paulson's memoir.

So in closing, healthcare is huge and mysterious. I think the government will have to play a big role. I think that we as a society need to look at some fundamental issues that we have put ourselves in and make some tough, tough decisions. I think that Planet Money should have a book club. And thanks for putting me in your podcast, that was AWESOME!!

In other news, I just finished reading Michael Smerconish's book "Morning Drive: Things I wish I knew before I started Talking" It's a great read, and I found myself agreeing with him on most of his points. His best quote is at the end on page 257. Here is the quote:

Most importantly, I think the Republican Party needs to be more libertarian on social issues. Stay out of people's individual choices and for goodness' sake, stop being a party of litmus tests. How about we get a handle on stemming heterosexual divorce before telling same-sex couples how to lead their lives? Speaking of families, let's recognize that single-parent households pose more of a threat to safety than firearms. Why not have room in our tent for both pro-life and pro-choice views? Stop treating cells bound to a petri dish with the same rights and inherent dignities afforded to people. And let us resolve that never again will we stand for politicians trying to determine for any American what his or her end-of-life plan should be.

Speaking of politicians, I continue to believe that we need citizen politicians, not professionals. Two Senate terms and six in the House will ensure we get grounded folks who are capable of earning a living when they're not serving us. And when it comes to those elections, let's give up trying to regulate donations. Someone will always find a loophole. Let anyone spend whatever he or she wants, as long as there is full and immediate disclosure.

Then I read this completely stupid article in New Majority. Read it here. Then read my response, which I haven't yet decided if it's worth posting in the comments:

I think it is wrong to lay all these problem's at Obama's feet. He's not a dictator with absolute control. Implying that the stimulus is only 40% spent because of Obama misses out on how our government works. Obama didn't write the check. He proposed the bill and Congress passed it. Congress stipulated how and when the money would be spent. Obama signed that bill, but I think the Obama team went along with the delayed spending because they wanted to get something out ASAP. Compromising on when the money would go out was a risk that seemed worth it back when the legislation was passed. Remember that because of the stimulus spending so far, the number of unemployed would be even higher than it currently is. I want more of stimulus to be spent now, too. But our cozy, jobs-are-secure Congress disagrees, and so here we are. Banks are hoarding their cash because they are still thinking like we are in 2007 and that foreclosure is the best way to recoup the money from past-due mortgages. It's not Obama's fault that the banks are stupid and that it is in their best interest to modify these troubled loans. Instead they are giving themselves huge bonuses and claiming to be survivors of the recession. Give me a break. The banks don't need any more incentives. Why only focus on jumbo loans? Let's focus on the people who are just trying to stay afloat with a $200k to $300k loan. I agree that Obama should (dare I say it) take the gloves off and start playing hardball. The Copenhagen stunt was lame, but so what? It's time for conservatives and Republicans back off the criticism and offer good ideas and make compromises with Democrats and then actually vote YEA for those compromises. Being critical of Obama and not Congress is counter-productive.

National Affairs has a great piece on where capitalism stands in America right now. The end of the article wraps up nicely:

We thus stand at a crossroads for American capitalism. One path would channel popular rage into political support for some genuinely pro-market reforms, even if they do not serve the interests of large financial firms. By appealing to the best of the populist tradition, we can introduce limits to the power of the financial industry — or any business, for that matter — and restore those fundamental principles that give an ethical dimension to capitalism: freedom, meritocracy, a direct link between reward and effort, and a sense of responsibility that ensures that those who reap the gains also bear the losses. This would mean abandoning the notion that any firm is too big to fail, and putting rules in place that keep large financial firms from manipulating government connections to the detriment of markets. It would mean adopting a pro-market, rather than pro-business, approach to the economy.

The alternative path is to soothe the popular rage with measures like limits on executive bonuses while shoring up the position of the largest financial players, making them dependent on government and making the larger economy dependent on them. Such measures play to the crowd in the moment, but threaten the financial system and the public standing of American capitalism in the long run. They also reinforce the very practices that caused the crisis. This is the path to big-business capitalism: a path that blurs the distinction between pro-market and pro-business policies, and so imperils the unique faith the American people have long displayed in the legitimacy of democratic capitalism.

Unfortunately, it looks for now like the Obama administration has chosen this latter path. It is a choice that threatens to launch us on that vicious spiral of more public resentment and more corporatist crony capitalism so common abroad — trampling in the process the economic exceptionalism that has been so crucial for American prosperity. When the dust has cleared and the panic has abated, this may well turn out to be the most serious and damaging consequence of the financial crisis for American capitalism.

Paul Krugman answer's readers questions. Ezra Klein looks at an article in the NYT about where that hamburger you are eating comes from.

Ezra Klein then looks at how the current reform proposals look a lot like how the Dutch do their healthcare. As an aside, I think that claiming the only way to get reform is to create something that is 'uniquely American' is a load of bull. Who cares if the reform is like a European country's? I want something that works, not just something that is different.

Daniel Gross looks at how banks are screwing us again with high ATM fees. I hate banks.

David Frum declares the era of the Private Sector over. My response: So what? Didn't do too much for the middle class, so good riddance!

Monday links

Robert Reich has some interesting ideas on how to get more stimulus without having Congress pass a second stimulus.

Paul Krugman looks at how the Republican part works today, and I find myself agreeing with him. Here's a bite:

Think about just how bizarre it is for Republicans to position themselves as the defenders of unrestricted Medicare spending. First of all, the modern G.O.P. considers itself the party of Ronald Reagan — and Reagan was a fierce opponent of Medicare’s creation, warning that it would destroy American freedom. (Honest.) In the 1990s, Newt Gingrich tried to force drastic cuts in Medicare financing. And in recent years, Republicans have repeatedly decried the growth in entitlement spending — growth that is largely driven by rising health care costs.

9.8%

That is the announced unemployment rate given by the government today. This is pretty bad. Even though the recession is officially over, people are still fearful of losing jobs. Planet Money and other experts say that the 9.8% isn't a true reflection of the employment situation, as large numbers of people are giving up even looking for work, are underemployed, or are taking pay cuts. So if you add all that up, the rate of "unemployment" is closer to 17%. As a result of the unemployment and fear, spending is down as people save more and pay off debt as opposed to buying. This results in more job losses, as businesses aren't selling stuff and their profits drop. So they shed more jobs and the cycle continues. Still with me? So how do you stop that cycle? If you agree with the situation that I just described, then you cannot say that the market will self-correct and turn itself around on it's own. It can't. At least, it can't in any amount of time that people would be willing to give it. The only way to get this trend to stop is government intervention. Nothing else exists that can fill the void. Robert Reich and Paul Krugman have been shouting this for months, and its getting more and more absurd to argue against their points. I don't like debt, but the consequences of letting things go as they are has much scarier implications to the future than the implications of running up more debt now do. We are not in normal times where debt is just bad bad bad. We've pulled back from the brink, but we aren't heading away from the brink. We are coasting parallel to it and can still veer back. I do not want another bank bailout, but another stimulus is a good idea. But for God's sake let's make it go into effect NOW, not in 2010. Let's be sensible about this and that when the economy does pick up, let's figure out how to get this debt paid off.

As an aside, I am always amused to hear people who voted for Bush seem to have no problem with the waste and irresponsiblity of that administration. As soon as a Democrat gets into the White House, then all is lost and the government is dumb and irresponsible. Please. I agree that there is waste, but there is waste either way. Oversight will always be necessary, not when it is politically useful.

Bill Moyer's Journal - past shows that are worth watching

So I've been catching up on Bill Moyer's Journal lately.

Sam Tanenhaus talks about his new book, the Death of Conservatism.

Money-driven Medicine is a film based on a book of the same name by Maggie Mahar. The film looks at why costs are so high.

Critical Condition is a movie about how health care is breaking families and our fellow citizens in this country, and how lacking insurance is killing our friends and families.

The Case for Deficeit spending

Paul Krugman has a brief bit on why deficit spending right now is a good thing.

On another economics note, This American Life revisited some of the people they interviewed for their "Giant Pool of Money" segment 18 months ago, this time called "Return to the Giant Pool of Money."

Completely unrelated: Mike Blowers is the next Carmack the Magnificent!

Rush on Jay Leno

So Rush Limbaugh was on the Jay Leno show the other night.

It was an interesting discussion, but one thing that struck me was when Jay started to talk about how bankers make too much money. Rush interrupted him and said that it was nobodys business how much people make. At the time I didn't think much about that, but I thought about that comment earlier and a thought struck me: It IS our business what these bankers are making. As someone who has a 401(k), these firms are using my money to make their profits. As a taxpayer, they are using my money to make their profits. It is, and ALWAYS will be (as long as I have a 401(k)) my business what these people make, because it is my money they are using.

Healthcare

PBS ran a great special on healthcare last night. Watch the full program here.

Ezra Klein reports that a new CBO reports shows that a good public plan costs less than what was originally thought.

I'm trying to understand why people are against fixing health care. They say that big government is bad. They say that having the government take over healthcare will bankrupt the country. But the country is going to go bankrupt without any change, but it will be the constituents who are going bankrupt first, not the government. So what is the solution here, folks? Tell me alternatives, not just 'no, no, no.' If you aren't part of the solution, you are part of the problem. And if you think I'm wrong with that last statement, read the latest from Ezra Klein on what is coming out of the Republican House leadership.

One other thing. The federal government says that if a person goes to the ER, they must be treated. So then why doesn't the government help hospitals pick up the tab on some of these patients that can't pay? That burden of paying is falling on the states and hospitals to pay, even though the rule to treat is federal. (by the way, that rule makes it illegal to not treat illegal immigrants, so right there you have to confront the illegal immigrant issue, which is something the federal government has yet to address).

Here is a list of least-liked folks (in order of least disliked to most disliked) who are considered to be right-of-center, according to 260 right-wing bloggers. I think if the republican party wants to turn things around with a majority of Amercians, they should listen to these folks, not reject them.

Thursday is the new Monday

Now that I'm back from vacation...

This is why I like David Frum. I don't agree with him completely, but his views on how conservatives current state of being are dead-on. Mr Frum stands by his principles and isn't afraid to speak out against his party when they betray his principles. How can you bash that?

We lost in 2008 in large part because we had not governed successfully over the previous eight years. More than political tactics, more even than media, what matters in politics is results. If national incomes had grown by 1% a year under George Bush instead of stagnating, Al Franken would have lost in a landslide. Populists like Sarah Palin may excite a TV audience, but they cannot govern. They don’t like it and are not good at it. (That’s why Sarah Palin did not even complete one term in office, let alone run for a second.) Limbaugh and Beck style politics can gain ratings. It will not win re-elections.

If BOTH parties were willing to do this kind of instrospection, I think we would all be better off. I think that Al Franken is just fine as a Senator. The guy put his money where his mouth is and ran for Senate and won. Yes, the election was very close and it could have gone either way. But what is done is done. At least he is a talk radio host who doesn't just bitch and moan about everything (like anti-establishment Glenn Beck), but actually is doing something to help change things. Let's see how he does.

On an aside here, I consider myself a centrist, but I cannot align myself with the current Republican party simply because they aren't conservatives. I think George Bush was a disaster. I don't agree with gay marriage, but they should have the same rights as married couples, because they AREN'T threatening my marriage. I don't like big government, but I detest big business even worse. I am pro market, not pro business (there is a a huge difference there, by they way). Some Republicans would consider what I say to mean I am a crazy liberal. My response is that they are so fart to the right that they consider centrists liberals. Anyways, that's where I stand.

Now onto other things.

Lots of talk about the new book from Matt Latimer. Here's the link to the GQ excerpt, and now Bruce Bartlett has his comments. This is extremely entertaining and interesting to read. Mr. Bartlett also has a great piece in Forbes.com about why we can't just cut Federal spending.

Over at the Vanguard Blog, Steve Utkus tells us not to worry too much about health care spending, as it's on an unsustainable arc and will self-correct (my interpretation, not his). This leaves me wanting a little bit, as you could argue that last year's market crash was self-correcting, and I don't want to go through something like that with healthcare, as lives do depend on that even more than financial markets. Maybe I'm interpreting what he is saying incorrectly, but I think a little more involvement is necessary here.

Ezra Klein has been very busy, with a look at how the CBO works, an awesome interview with my senator hero Ron Wyden of Oregon, and an interview with Jay Rockefeller.

Ron Wyden has a great op-ed piece in last week's NYT.

Paul Volker is going rogue against the Obama Administration is speaking out against preserving 'too big to fail' financial organizations. Maybe Obama will finally listen.

What Economics is

The Baucus Bill

So...Senator Baucus has put his health bill out into the wild, and the results are not looking good. James Kwak at Baseline Scenario calls the bills 'savings' a $140 billion tax on the middle class. Caitlin Kennedy of Planet Money has lots of links that look at the bill. Ezra Klein looks at 5 ways the bill needs to improve.

In other news, Arlen Specter says that a single-payer plan should be put on the table. Yeah!

Meanwhile, Matt Taibbi talks about how Obama has pulled what appears to be a bait-and-switch with people he had on his campaign that were progressive on topics like banking, defense, and health care, and who now have been marginalized and shelved.

What's for lunch?

David Frum muses on why Bush's economic record during the span of his tenure is so bad: healthcare.

GQ has an interesting piece on what it was like to be in the Oval Office last fall when the collapse was taking shape.

The managing editor of Fortune magazine goes after the government and the financial sector, calling what is going on as knowing what number and color to call at the roulette table.

SERWER: I mean, it's amazing to me that as we recover, you know, come out of this financial crisis, you know, you'd expect a company like Goldman Sachs maybe things are improving, make a little money. But they have a record quarter. In other words, they made more money in this three month period than they ever had in any other--

SCARBOROUGH: [archly] But they just made some good guesses, right?

SERWER: Well, I don't know if it's okay or not, but I think what happened is that the government has telegraphed to Wall Street, not only Goldman Sachs but the other firms what it was doing, what was going on, what the program was, and so, essentially, it's like telling a Goldman Sachs, "Hey, put your money on 32 Black" at the casino, at the roulette wheel. And the thing spins and lo and behold, where does it end up, Joe?

SCARBOROUGH: 32 Black?

SERWER: 32 Black.

Wendell Potter discusses how the health care industry uses non profit PACs to distort information for their own good.

We can break up 'too big to fail'

The Lehman Anniversary

So today is the anniversary of when Lehman Brothers was allowed to fail. So far, not a lot has been done to fix the system that took us to the brink.

Robert Reich doesn't have much hope. Neither does Dylan Ratigan, who interviews Elizabeth Warren about what has been done and what still needs to happen in the MSNBC video below.

Here is an examination of how Ayn Rand has influenced a lot of economic thinking during the past few decades. Here's a good bit:

Countless conservatives and libertarians have adopted this premise as an ideological foundation for the promotion of their own interests. They may believe the consequentialist arguments against redistribution--that Bill Clinton’s move to render the tax code slightly more progressive would induce economic calamity, or that George W. Bush’s making the tax code somewhat less progressive would usher in a boom; but the utter failure of those predictions to come to pass provoked no re-thinking whatever on the economic right. For it harbored a deeper belief in the immorality of redistribution, a righteous sense that the federal tax code and budget represent a form of organized looting aimed at society’s most virtuous--and this sense, which remains unshakeable, was owed in good measure to Ayn Rand.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Cash for Chunkers

David Brooks liked the speech, but he sees the changes as being ways to expand the current system, not fix it. Hard to argue with that.

David Frum has 4 great ideas on how to fix health care. One idea: Let's get thin! This has a huge amount of merit for me, as America is the fattest nation in the world. Our incidence of diabetes is climing, heart disease is a huge killer, and a lot of this is preventable if we would just eat less. The NYT agrees, too. Of course, getting Americans to get thin could mean going after the American food industry, which has WAY more money than health care companies. Plus that could mean looking at government subsidies for corn (AKA high-fructose corn syrup) that is in almost everything we eat. That is a sticky situation! Ta-da bah! So I propose a government program similar to the highly successful Cash for Clunkers. It would encourage people to get healthy through direct tax breaks. First, you would have to prove you are unhealthy by showing that your doctor says so. (The first step to solving a problem is admitting you have one) then you show a program that you and you doctor have set up to improve your health. Then you would submit reports each month showing that you are following your plan and that it is working. After you reach certain targets, you can either recieve a direct cash subsidy or deduct from your taxes the equivalent amount, with a cap at, oh $5k or something. Cash for Chunkers! How about that?

On a completely different note, David Frum goes after Glenn Beck for attacking Cass Sunstein. Beck seems to be high from his last czar hunt, in which he seems to have been partly responsible for the resignation of the so-called 'green jobs czar'. This is why I like David Frum. He is not afraid to call out the fringe loonies on both the left and right.

Free Movie: Super-size me:

Putting the trickle-down theory to bed

As I have argued in the past, trickle-down theory is bull. After a decade of wild market ups and downs and 2 huge tax cuts, a new Census Bureau report shows that median household income fell from $52k to $50k. That $50k is less than the income level from 1998, which was at $51k. Now, you could argue that 1998 was on the bubble upswing, and that last year's value is due to a result of the market crash, but I think that misses the fact that the Bush tax cuts are still in effect. Trickle-down theory states that giving rich people tax cuts allows them to take the money that would be taxes and to reinvest it in business and hire new workers. So where is this money going? It looks to me like it's staying at the top, with the top 1% of earners in the U.S. getting more than 27% of all income.

Speech Aftermath

So the speech last night... What did you think? I liked it. I thought it was strong. He sounded in control, and left me wondering, 'Hey, there's the Obama I like.' His concessions are interesting, and I think they are in the right direction. I also think that Joe Wilson should be fighting for his political life after that ridiculous outburst after Obama stated that illegal immigrants won't be covered. What was that about? Agreeing to fix malpractice lawsuits is an easy concession because it just makes sense. I agree that it's not a silver bullet, but it should help. Some on the left are incensed that Obama is now pushing a mandate that everyone must care insurance. This is a flip from his campaign, but one that I'm not upset about. I liked how he said that we are already paying for people who don't have insurance through emergency room costs. That was good. I like how some people cheered when he talked about single-payer, but of course he wasn't endorsing single-payer, which is disappointing. To say that we can't do single-payer because it's a radical shift is stupid, because our current system is broken and we need a radical shift if we are truly going to fix it. That's not possible politically (although if the Republicans were in charge and wanted it, I think it would get done, as the Democrats lack the Republican discipline for good or for ill). It was tempting to think that he would finger out Palin and Grassley directly about their lunatic death panel claims.

In an aside, it's hard to watch the speech with Pelosi in the background. I do not like her, and she is not a good leader for the house Democrats. Both her and Reid have been terrible for the Democrats and we need better leadership from the Democratic congress.

Who cares? Let's go to the Pundits!!
John Dickerson looks at Obamacare 2.0
The Huffington Posts bloggers give their soundbites.
THe New York Times has it's say.

And here is a nice graph that shows just what health care reform means right now.