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.