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.

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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.

The Speech

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Yin and Yang

Paul Krugman is for the public option.

David Frum is against it.

Their arguments are mirrors of each other. As John Dickerson argues, even though the President has lost a lot of trust with the public on health care reform, the public is still in strong favor of reform. The question now is how and what.

Healthcare week!

Big week for Healthcare. Obama has his big speech tomorrow night in front of Congress, and he looks like he may come out guns blazing after giving a preview of his speech at a AFL-CIO Labor Day picnic on Monday. All the columnists are out in full-force giving assessments and opinions, so let's get started.

Bill Moyers wrote the President an open letter encouraging him to fight.

Joan Walsh has been very encouraged by Obama's Monday speech.

There's another piece in Salon looking at current health care costs and why we Americans get so little for such a high price.

The last post really got me thinking. If you are a conservative Republican, shouldn't you be supporting cost controls for health care? You cannot argue with the fact that Medicare, Medicaid, and Social Security are going to bankrupt this great nation of ours in my lifetime unless changes are made, and yet we aren't seeing any big ideas coming from the Republican side of the aisle in Congress. Aren't Republicans supposed to support competition? I agree that the Democrats have been really bad about getting behind a plan and showing solidarity, but all Republicans have done is spread fear, misinformation, and refusal to participate in any meaningful change. How does that help? Doing this for short-term gains and hurting Obama is really, really dumb. Now, I would argue that simply adding the 45 million people to the current health care system without any other changes is also really, really dumb. I do see some middle ground in there though. I've talked about different ways to have middle ground several times on this blog.

Ezra Klein has a post about how the public option does not mean cost control, and I have to agree with him. He also takes a look at Max Baucus' new health care bill. He also says that the problem with getting health care reform passed doesn't have as much to do with Obama as it does Congress, who actually writes and passes legislation.

David Frum says that regardless of what kind of speech Obama gives, he must face up to the reality that he has helped create.

Al Franken talks down an angry healthcare group who crashed his tent at a Minnesota fairground.

For those who still think our current system is just fine the way it is, see today's front page of USA Today, Bill Moyer's presentation of Critical Condition, the documentary by Roger Weisberg that takes an unflinching look at healthcare in America. Matt Taibbi of Rolling Stone has his new piece that looks at health care.

Link madness

So it's a busy day. I'm a little miffed because the weather forcast for the weekend has completely scuttled my family's plans to go camping on the coast. Oh well. Onto today's topic.

Tim Geitner has laid out his plans for financial regulation. As The Atlantic notes, he does it in an op-ed in the Financial Times in an attempt to get the European banks on board before the G20 summit later this month. The Atlantic also helpfully notes various responses to Geitner's plans. My take: This is very encouraging and somewhat unexpected, as I thought that we had passed the point where reform would happen. Reform hasn't happened yet, but the fact that it is now being pushed on hard is really good. My opinion of Geitner has just gone up. (Maybe something similar will happen with health care, where it looks to late and then stuff happens that is great. Still too early to tell on both.)

Paul Krugman has an excellent story in the NYT magazine this week that examines how economists were so wrong about the economy.

And finally, David Brooks has some pointers for Obama's speech to Congress next week. He cites this Atlantic story about healthcare and this Brookings Institute study.

People don't like more government...

But if you cry out for reforms in the private industry (banking, healthcare, war) then what else is there? As Noam Scheiber notes in response to David Brook's recent NYT column:

All of these things do increase the role of government in the economy. But once you concede that the problems need to be addressed, there isn't much of an alternative. And Obama's approaches are pretty scrupulous about not increasing that role more than necessary, which seems to be the whole conceit. Sure, you could do these things in marginally less centralized ways. But, as Brooks concedes, that probably won't matter PR-wise, since, "Voters often have only a fuzzy sense of what each individual proposal actually does." So the idea that there's some less-centralized way of achieving Obama's goals that would be much more popular politically — which Brooks suggests — seems pretty unlikely to me.

Ok, so this video has some problems with it, and the health insurance as fire insurance analogy is a little bit wierd (I do like the part where you have to call around and find a fire station that is in your plan while your house burns). But it does raise a good point about the government being able to run some services ok. Now, a lot of people would argue that the police don't do a good job doing something, or that water treatment is on the verge of collapse, but you do get the idea here. I do think that if those 10 ways to fix health care are done, then you don't need a public option or government-run healthcare, because those 10 ways really will take care of the costs and improve care.