Politics with Marc Ambinder

Derek Thompson

Derek Thompson is a staff editor at Atlantic Business, where he writes about economics, business and technology. Derek has also written for BusinessWeek and Slate. You can email him at dthompson@theatlantic.com, or follow him on Twitter at www.twitter.com/DKThomp.

Recently by Derek Thompson

Nov 19 2009, 1:34PM

November's Unemployment Rate in 2010 (...and 2012)

The OECD has new estimates about America's GDP and unemployment rate over the next two years. Good news: Their GDP projections grew by 150%. Bad news: They still project growth will be 50% lower than during the 1984 recovery. Free Exchange pulls out the key stats. I have some thoughts toward 2010 and 2012.

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Nov 19 2009, 1:32PM

Geithner, Republican Congressman Clash Over Bailout

Treasury Sec. Tim Geithner, speaking at a Joint Economic Hearing, got into a quite the tizzy with Rep. Kevin Brady (R-TX). On one level, it's just two guys yelling at each other. On another level, it's a glimpse at why an idea as basic as "We should reform our profligate banking system" can break down when you run it through the political sausage factory.

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Nov 13 2009, 4:01PM

Maybe Unemployment Doesn't Matter for Democrats, After All

I've been railing on the White House to pass a job stimulus if they want to protect the Democrats' advantage in Congress. But this great work form Enik Rising suggests that employment means bubkes for midterm elections. Bubkes! Here's his evidence.

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Nov 10 2009, 4:09PM

Health Reform "Heavy on Health and Light on Reform"

Democrats are now accusing the White House of tolerating a bill that is all health subsidies and no cost reform. Unfortunately, I think they're right about the bill. But this is strange accusation. The White House isn't writing this legislation. It's setting guidelines. House and Senate Democrats are angry about the failure of bills written by the House and Senate Democrats. It's a bit like having your mother tell you to clean your room, then coming home from school to see your room isn't clean, and accusing your mother of tolerating a dirty room.

I like Rahm Emanuel's line a lot:

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Oct 26 2009, 11:15AM

What Happens to Health Care (and Obama) after Reform?

Today Paul Krugman asks: What happens to health care after health care reform? (He assumes -- and I agree -- that its passage is a matter of when, not if.) Krugman writes:

If the Massachusetts experience is any guide, health care reform will have broad public support once it's in place and the scare stories are proved false. The new health care system will be criticized; people will demand changes and improvements; but only a small minority will want reform reversed.
I think it's more complicated than that.

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Oct 23 2009, 3:34PM

Taking the Long View of the Stimulus

I'd like to revisit my post on Christina Romer's testimony and the stimulus. Commenter John Thacker keenly notes that a few months ago, I praised the British stimulus and pointed out that the UK was recovering faster than any other country in Western Europe. This was, I think, a bit hasty. I wrote:

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Oct 20 2009, 10:14AM

WaPo: The Public Still Loves the Public Option

Another opinion poll of the public option is out. And guess what? The public still loves it. This is surprising to nobody except, it seems, the Washington Post. Dan Balz writes:

A new Washington Post-ABC News poll shows that support for a government-run health-care plan to compete with private insurers has rebounded from its summertime lows and wins clear majority support from the public.
Those "summertime lows" were sixty-two percent support in June, 52 percent support in August, and 55 percent in September. Those would be summertime lows if they were measuring, say, Washington, DC, temperature in Fahrenheit, but as support for a "controversial" and revolutionary health insurance reform, I'd call it a lasting majority.

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Oct 15 2009, 1:45PM

Climate Change Reform Will Be Tougher than Health Care

As health care's passage shifts into not-if-but-when gear, we can all look forward to the next wild rumpus on Capitol Hill: Climate change reform. The conventional wisdom seems to be that the Democrats' cap-and-trade bill will have to run, skip and jump through the same obstacle course as health care: Socialism rumors, liberal in-fighting, special interests teaming, fake deadlines and pressure to scale back ambitions. Democrats will probably feel like Bill Murray waking up to "I Got You, Babe" for the umpteenth time in Groundhog Day. Except instead of inching closer to winning the affections of that Andie Macdowell character, the Democratic protagonists will find the next iteration of reform will be a lot tougher.

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Oct 9 2009, 12:42PM

What the Next Stimulus Could Look Like

As health care reform moves from historic longshot to fait accompli, Democrats can feel the next crisis percolating: It's the jobs, stupid. Unemployment is going to hit 10 percent, and it's going to stay there for a while. Nobody questions this inevitability, they can only wonder (1) how high over 10 percent it's going to get and (2) how long it will stick around double digits. With the 2010 election-cum-referendum on the Obama administration now about 380 days away, what are they doing to help the job market? Let's count possibilities:

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Oct 8 2009, 10:20AM

CBO Report Reveals an Un-Radical Health Care Bill

When the souffle cools and health care reform is a signed law whose success will be determined by reality rather than the CBO and judged by historians rather than bloggers, I think one thing that will come into focus is how fundamentally unrevolutionary the bill is. The standard Republican attack is that Democratic health reform is radical, that it "dismantles" the health care system, and that it represents the training wheels on the bicycle of socialism. It's just not so.

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Oct 7 2009, 4:06PM

Pelosi Open to a Value-Added Tax

Here's something you don't have a chance to say every day: Nancy Pelosi and Alan Greenspan agree! They both think a value-added tax -- which is basically a tax on consumption -- is worth a good look to increase government revenues. On Monday, I considered a consumption tax to be a huge political challenge, despite Greenspan's support, but maybe a small VAT has a chance in Congress after all.

Here's the Pelosi exchange on the Charlie Rose show:

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Sep 24 2009, 3:02PM

What Will Health Reform Do to Medicare Advantage?

The next reform battle will be fought in a peculiar trench of the health care landscape: Medicare Advantage. The latest controversy began when Humana Inc., an insurance company, sent a note to its enrollees predicting that health care reform would kick millions off Medicare Advantage -- an option for seniors to buy private insurance with public money. Some lawmakers castigated the company and a sterner whipping could be forthcoming. The Wall Street Journal op-ed page is spearheading the conservative indignation and some liberal blogs are playing defense.

But is it true? Will health care reform cut into Medicare Advantage?

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Sep 16 2009, 2:47PM

Does Anybody Actually Like the Baucus Health Care Bill?

Behold the agony of compromise! Sen. Max Baucus was the supposed gang leader of the Senate's Gang of Six, a group of three Democrats and three Republican senators charged with reaching a bipartisan compromise on health care. Today Baucus released his health care proposal, and the Gang of Six appears to have dwindled to a Wolfpack of One. Let's review the loudest gripers:

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Sep 8 2009, 11:52AM

Why BaucusCare Should Worry Democrats

Labor Day presented a good opportunity for President Obama to talk to one of the Democrats' more important -- and most ticked off -- constituents: Labor. It was, by all accounts, a fiery speech to the AFL-CIO union about the necessity of health care reform and the nasty special interests that were blocking its essential passage. What do the unions want from health care reform? Tim Fernholz has the goods:

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Sep 4 2009, 4:15PM

What's So Bad About Obama's Education Speech?

President Obama's planned Sept. 8 speech to the nation's students has sparked what I'd call an automated controversy. The controversy isn't that Obama has announced something controversial, but rather than he's announced something. Full stop. He would like to speak to children about "the need to work hard and stay in school," according the AP, and conservatives are screaming as though playing the tape backward will unveil the subliminal message "Capitalism is deeeaaddd" or "Organize your communityyyy" or something. I'm sorry, I've recently pledged to avoid offering caricatures of the opposition, but this time I'm really struggling to find an opposition that doesn't caricature itself.

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Sep 4 2009, 1:43PM

Joe Biden, Republicans Tying Stimulus to Healthcare Reform

Democrats celebrated the 200th day of their $787 stimulus plan this week, and the reception was surprisingly cheery. Both the Wall Street Journal and the Washington Post ran stories that quoted economists praising the stimulus for turning the economy around. Goldman Sachs' chief US economist went so far as to say that without the stimulus, our third quarter GDP might be flat instead of projected to rise by 3 percent. So what are the Democrats doing? Bringing it all back to health care, of course!

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Sep 3 2009, 2:06PM

How to Pass a Health Care Bill

How hard was it to pass Medicare? Harry Truman failed to pass universal health coverage multiple times into the 1950s. John F. Kennedy failed to push Medicare through as a senator, and again as president. Even Lyndon B. Johnson couldn't pass the bill without "unseemly deal-making" and "a big pay-day to hospitals and doctors," writes David Leonhardt in the New York Times. And that was only after his 23-point landslide victory in 1964 coincided with the Democrats picking up their 68th seat in the Senate. In other words, it took a super-duper-majority in Congress and a hugely popular president. Matt Yglesias takes this history as evidence that Democrats needn't cling to the "get it right the first time" mantra.

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Sep 2 2009, 11:52AM

Losing the Practical Case for Healthcare Reform

You can think about the healthcare bill as two overarching principles. The first is moral: Extending care to those who can't afford it; and keeping insurance companies from denying based on preexisting conditions or rescinding care when costs run high. The second is about fiscally practical: Making this year's bill deficit-neutral over ten years and limiting health care inflation in the years that follow. I think the moral argument is probably the better case for the public (it's much easier to tune out statistics than inspiring rhetoric laced with moral maxims) but recently I've been thinking more about the cost controls: Will they work? Which ones should we support? And will there be rationing?

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Aug 31 2009, 12:24PM

Do Presidential Approval Ratings Follow Gas Prices?

Last week I found these graphs which mapped the fluctuations of the Dow against approval ratings for the last six US presidents. In short: The two had almost nothing to do with each other. That's a little surprising, inasmuch as Americans allegedly vote on the economy, but when you think about it, the Dow isn't the most immediate indicator of economic strength. If anything, it's a leading indicator because its value represents what investors expect in the coming months, or years. But when it comes to voting (or approval in a poll) Americans will probably turn to something more immediate and tangible, like unemployment or inflation.

Like gasoline prices!

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Aug 28 2009, 4:18PM

Do Presidential Approval Ratings Follow the Dow?

Not really! That's the conclusion you'd have to draw from a new Gallup poll today (via Economix). Take a look at these graphs and tell me if you see any kind of relationship between Dow fluctuations and presidential approval ratings. I certainly don't.

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Aug 5 2009, 8:10AM

The CBO Might Be Wrong, But Orszag Might Not Be Right

A group of health economists finally gave the president some good news with a letter arguing that we can bend the long-term costs of health care with Obama's proposed Independent Medicare Advisory Council (IMAC). The IMAC would be like a Supreme Court for health care, delivering binding recommendations to doctors and insurers affecting procedure and cost. Some liberal blogs are counting this a win for Obama and budget director Peter Orszag against the Congressional Budget Office, which had expressed doubts about IMAC's ability to restrain costs. But I'm not as optimistic about the council.

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Aug 3 2009, 1:16PM

The Senate Should Kill Cash for Clunkers

As Republican senators rush to kill Obama's wildly popular Cash for Clunkers, which gives new car buyers up to $4500 for their old cars, it's time to think seriously about whether we should spend another $2 billion on this giveaway. I wrote a fair amount about this program last week including an FAQ and an update, but now I'm pretty sure that Cash for Clunkers is a bad policy that doesn't deserve a $2 billion double-down.

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Jul 30 2009, 2:46PM

Obama to Business: Be Grateful I Saved This Economy

Does President Obama hate businesspeople? No, according to President Obama. The second thing that I took away from that BusinessWeek interview was a sense that the president seemed a little irked by suggestions that he was anti-business.

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Jul 23 2009, 1:06PM

How Relationships Help Explain Obamanomics

This I learned from the Washington Post interview with Barack Obama: Our president is really into MedPAC! That's the Medicare Payment Advisory Commission, a independent federal agency that advises Congress about issues involving Medicare and private health insurers. Obama says he would like to it expanded and empowered. Is it me, or does Obama suddenly have a thing for empowered, independent agencies?

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Jul 22 2009, 1:40PM

The Three Things Obama Should Say About Health Care

President Barack Obama will hold a prime-time news conference tonight to sell health care reform to Americans, as support for his trillion-dollar measure is wilting. Health reform is a tricky political sell for a couple reasons; 1) Most voters have health care already; 2) It costs more than a trillion dollars on the back of tax increases; 3) Obama doesn't have a strong enough case that a trillion spent today will bend the cost of health care. So what's Obama's pitch? Here -- with graphs! -- are three ideas Obama should put forth and three ways reporters should push back against his arguments.

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Jul 20 2009, 2:08PM

Why Obama is Facing Friendly Fire on Health Care

President Barack Obama is launching a counter-offensive on health care reform, as resistance movements have come pouring out of his own ranks. Let's review the two most recent news-grabbing gripes, from Democratic governors and Democratic representatives, and the economic soundness their arguments:

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Jul 20 2009, 11:02AM

Making Only Millionaires Pay For Health Care

Americans might despise bankers and disdain our elites, but we've always been squeamish about taxing the rich. So when the House of Representatives proposed a surtax on the top 1.2 percent of the population to pay for about half of its health care reform bill, moderate Democrats immediately pounced on the measure as unsellable to their constituents. And so, Speaker Nancy Pelosi now says she's looking to squeeze only millionaire families for the precious billions needed to keep heath care deficit neutral over the next ten years. Is this realistic?

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Jul 9 2009, 10:02AM

Should Incumbent Senators Be Worried about 2010?

Via Matthew Yglesias, we have this report from the IMF with a very simple story: This recession is slowing, but recovery will be sluggish -- especially in the world's advanced economies, where the hurt has been deepest. Yglesias concludes: "If I were an incumbent U.S. Senator running for re-election in 2010 I would be terrified by these projections." Is that right?

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Jul 7 2009, 8:15PM

Why Unemployment Could Hit 14%

Today unemployment stands at 9.5 percent. That's awful, and it's far worse than the Obama administration envisioned at this point, even without a nearly $800 billion stimulus package passed in January. But it's not the worst we've had in the last 30 years. In late 1982, unemployment hit 10.8 percent. Some economists suspect we could hit that mark by early next year. How high could unemployment climb in this recession? Twelve percent? Thirteen percent? Here's the argument for a 14 percent peak:

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Jul 6 2009, 9:33AM

The Politics of a Second Stimulus

Three things are clear: 1) Job losses in this recession are already much worse than the Obama administration anticipated; 2) The stimulus designed to slow the pace of job losses has either proven too weak or too slow in its effectiveness; 3) The idea of passing a second stimulus, once a baby of the liberal blogosphere, has grown up to occupy the attention of major figures like George Stephanopoulos on ABC. Still, I would put my money on a second stimulus not happening, for the following three reasons:

First, the Obama administration would be going back to the Congress with some humbling data. The White House predicted that the stimulus spending would dampen unemployment, and they provided a clear graph to show just how crucial stimulus spending would be to save jobs. But the last few months have seen unemployment sky-rocket almost a full percentage point higher than the administration envisioned without a stimulus at all. This graph below could act as a kind of negative political capital, discouraging conservative Democrats from throwing more money at the recession.
actualunemployment.png Second, it's not a given that the money from a second stimulus would be spent any quicker than the first. Take a look at this graph of stimulus spending, which is provided by the Obama administration at their site recovery.gov. It seems that every week, the administration makes "available" about $6 billion and spends about $3 billion.
paidoutrecovery.png As of late June, we had only paid out about one-third of the available funds, and about 15 percent of all spending allocated in the recovery bill. To be sure, Obama has promised that the pace of spending would increase this summer. But if we can't spend all of the stimulus even by November 2010, as the administration admits, how much faster would another couple hundred billion be spent? That's a question I expect the Obama administration will have to answer if they get their second stimulus.

Third, I expect that the politics of shifting attention away from one of the three big issues of the docket -- health care, climate change and bank regulation -- are dangerous. Conservative Democrats -- and a solid majority of Americans -- are getting nervous about deficits at a time when the Obama administration is pressing them to help pass a trillion-dollar health care reform bill and a potentially even more costly climate change bill to cap carbon emmissions. Say what you want about the long-term impact of climate change and health care reform, but they're going to cost an intimidating sum over the next few years. If Obama presses for a second stimulus, I expect he'll meet plenty of resistance from his own party. Politicians should be nervous about these job losses, but come 2010, they'll be most worried about losing their own.

Jun 22 2009, 12:52PM

Health Care 2009 = Social Security 2005?

The prevailing concern among liberals is that health care reform in 2008 will follow in the footsteps of the 1993 debacle. This is a legitimate concern, and health care reformists would be wise to draw lessons from the Clintons' failure, but we don't need to reach back the 1990s for allusions to failed entitlement reform. Beleaguered Republicans could always sink health reform the way beleaguered 2005 Democrats torpedoed Social Security privatization: Paint the other side as radical conspirators against America.


George Will's Sunday column -- entitled We Don't Need Radical Health Care Reform -- accuses the Obama adminstration of coyly presenting a public "option" that will presage a universal public "system," a single-payer health apparatus entirely run the by the government. Obama's policies are far too ambitious given the problem of uninsured Americans, Will says, which could easily be solved with tax credits. In other words, for the most part, we should practically do nothing.

Will is right, for sure, that cutting a check to millions of Americans is a lot more politically feasible than trying dramatically change the landscape of private health care. And if you reach back one presidential term, the idea that a first-year attempt at entitlement reform threatens to change America for the worse sounds quite familiar.  Here's Paul Krugman's 2004 op-ed on the Bush administration's attempts to walk Social Security toward privatization.

Privatizing Social Security - replacing the current system, in whole or in part, with personal investment accounts - won't do anything to strengthen the system's finances. If anything, it will make things worse ... But since the politics of privatization depend on convincing the public that there is a Social Security crisis, the privatizers have done their best to invent one.


[Privatizers] come to bury Social Security, not to save it. They aren't sincerely concerned about the possibility that the system will someday fail; they're disturbed by the system's historic success ... And that's why the right wants to destroy it.

The elements are all there. Krugman then (like Will now) railed against a radical plan to give an entitlement system a facelift and beat the conspiracy drum to alert readers that the government was't being honest about their plans. In both cases, opponents argued that* dramatic entitlement reform wasn't necessary, but it was a microcosm of the perverse ideology that ruled the White House and sought to change the face of America forever.

Of couse, even if history echoes it doesn't exactly repeat itself. Social Security reform in 2005 was always a battle against public opinion. But as this NYT poll demonstrates, the public is far more willing to reform health care in 2009.

public health plan.png
*Updated: Over at the Washington Monthly, Steve Benen takes me to task for saying that health care reform is just as unnecessary today as Social Security reform was in 2005. The thing is, I never meant to say that! And when I did, I was paraphrasing George Will. I did mean to say that the arguments against today's health care reform are remarkably similar to the arguments against Social Security reform, for all the reasons I state above. That's not to say the need for reform is equivalent at all -- only that the opposing arguments are similar, with Republicans now playing the role of spoiler. Just to be clear. Thanks Steve.

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Jun 19 2009, 3:23PM

2009 State Tax Tsunami Already Hitting 23 States

With state budgets feeling the pinch and the federal government refusing to bailout even California, the national mascot of state deficits, 23 states have raised taxes in 2009, with 13 more states considering increases. There's every reason to think that eventually almost all states will raise income, sales or business taxes, considering that in the far milder recession of the early 1990s, 44 states raised taxes by more than one percent. Where are taxes rising this time?

Check out the map below to find out. Some takeaways: Every state west of Colorado has passed or proposed a tax increase. State governments are often passing the tax increases over painful spending cuts. California is raising income taxes by .25 percent on top of almost $15 billion in service cuts. Sales taxes are also getting creative, from raising the price of beer and wine (New York) to eliminating exemptions for hybrid vehicles (Washington) to extending the sales tax to music downloads and periodical subscriptions (Wisconsin). For more from the Center for Budget and Policy Priorities report, go here.

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Jun 18 2009, 2:20PM

Obama's Grand Rhetorical Strategy: It's All Connected

Christopher Beam at Slate makes the excellent observation that President Obama excels at selling his policy reforms as the solution to a complex web of issues extending far beyond the core policy. Health care reform, for example, is always about more than health care. It's about corporate competitiveness, a nimble job market that isn't tethered to precious employer benefits, more disposable income for families, freed up state funds for education and infrastructure, diminished deficits, diminished reliance on foreign owners of the deficit, and so on. Beam quips, "the only thing left for Obama to cite is some statistic showing most terrorist attacks are the result of high premiums."

Beam hits on most of the advantages of Obama's karmic approach to selling policy, but I wanted to highlight two distinct drawbacks. First, it forces him to promise too much from his reforms. Second, as anybody who's played Jenga knows, interconnectedness has its risks.

To be sure, promising too much from your policies is a prerogative of governing. But in Obama's case, where no stone should be left unturned by reform, I think it threatens to raise public expectations to a level where reality will prove to be a consistent disappointment. Take his cap-and-trade policies. Obama sees it creating five million jobs, reducing emissions by 80 percent by 2050, and saving Americans $130 billion on energy bills.

Now wait. The point of cap-and-trade (or carbon taxing) is to price the negative externality of carbon pollution to discourage profligate production by firms and over-use by consumers. That means creating a little bit of hitherto unfelt pain to teach both sides the true cost of carbon. How do you raise the market price of carbon nearer to its environmental "cost" and save Americans money on their energy bills in the short term? It's not possible, really. Whether you auction the carbon allowances and kick back to consumers or don't auction the allowances and foot consumers with a larger bill, the price of energy has to rise. In the long term, perhaps, "everybody wins." In the short term, everybody pays.

jenga.jpg There are other risks that follow inevitably from the everything-is-connected school of speaking. If every reform is balancing on another policy, what happens when that Jenga piece comes loose? Beam quotes Obama tying the GM bailout to health care reform. On the one hand, he's right to do so. GM pays $65 per hour to its employees when you factor in its bloated health care costs to current and retired workers, which contributed to its money woes. But it's ominous that today the New York Times released a poll finding that the public is falling behind the Obama administration on two key issues: GM and health care reform. While the president's overall approval rating is still a healthy 63 percent, views of the president's job with the auto industry and health care hover in the mid-to-low 40s, and this before what will be a sweltering summer of negotiations in DC.

Obama's ability to explain himself through narratives rather than sound bites is, on the whole, a distinct advantage, and Beam is right to focus his piece on the positive aspects of Obama's karmic worldview, in which we are all connected in the great circle of policy reform. But, as we head into a health care process where Obama clearly has more convincing to do, I wonder whether he'll continue to sample from a buffet of interconnected benefits of reform, or pick one theme and run with it.

Jenga! Flickr image from 416style.

Jun 11 2009, 7:58PM

Can Google Change Election Outcomes?

Outside of Virginia, there was little reason to notice that Creigh Deeds won the state's Democratic primary for governor. But here's something that political campaigns and marketers across the country should pay attention to: He did it partly with a technology called Google Blasting, an eleventh-hour strategy to blanket Google-affiliated webpages in an area with a single ad campaign to impact voters' final decision. This is now the second time in three months that a Democratic underdog has used Google blasts to seal a surprising victory. Goodbye robocalls, hello Google surges?

First, let's understand what happened with Creigh Deeds, who just a month ago was running a distant third in the VA primary. First the Washington Post endorsed him, creating a huge boost in northern Virginian support. But with most polls predicting a neck-in-neck race, even the outliers had Deeds in the low 40s. He ended up trouncing Terry McAuliffe and Brian Moran by more than 20 points, capturing 50% of the vote. How can we explain the incredible surge? Was it Google? The Washington Post lays out the argument:

Starting at 3 p.m EST Monday, hours before polls opened across Virginia, Deeds's campaign bought what's called a 'Google blast.' Or, more appropriately, a Google attack. If you live in Northern Virginia (or, like many voters, work in D.C. but live in NoVa), Deeds has been almost inescapable on highly-trafficked sites such as washingtonpost.com, the blog Talking Points Memo and Oxygen.com, which is popular among women. Capitalizing on his Post endorsement, he peppered those sites with banner ads reading 'The Washington Post endorsed one Democrat -- Creigh Deeds' until polls closed.
As Taegan Goddard's Political Wire points out, the same strategy was used by Democrat Scott Murphy in his upset victory in the New York Congressional seat vacated by Hillary Clinton's replacement, Sen. Kirsten Gillibrand. In that election surprise, Murphy covered Google content network pages in the New York's 20th district with promotions, something operatives called a "Google Network Blast" or "Google Surge." Although most polls in the month leading up to his win had him behind, Murphy won the election by less than 1000 votes.

So how can this change elections going forward? I would wager that Google blasting works best in elections precisely like Virginia's Democratic primary for governor, when most potential voters had low barriers-to-persuasion and some might not even be aware of the significant differences between the candidates until a few days before the election. But maybe I'm overestimating the ability of voters to make up their minds early for major elections, too. I was consistently surprised to hear about the supposed legions of undecided voters in 2008 and anybody who has worked on a campaign knows operatives never underestimate the power of last-minute pushes in toss-up areas, like North Carolina and Missouri in 2008. An effective Google surge would like dispatching thousands of volunteers to paper entire districts with fliers, minus the eye-sore and littering. It's just one more reason to either fear Google or learn to appreciate its awesome power.

Jun 10 2009, 10:55AM

Do Republicans Need Their Own Bill Clinton?

Via Andrew, Richard Posner isn't too worried about the country's leftward drift. In fact, he thinks that if Obama shifts America too far from the center, it will be good for conservatism, opening the door for a Republican Bill Clinton. But what would a Republican Bill Clinton even look like?

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Jun 3 2009, 11:29AM

Mitt Romney Won't Run GM

Atlantic editor James Bennet wrote a really smart and provocative piece about why President Obama should tap Mitt Romney to run General Motors. His reasons are all good, chief among them: 1) GM needs a leader that wasn't present at the uncreation, 2) Romney needs a way to distinguish himself from Republican rivals, and 3) Obama needs some political cover to properly shrink the company, and seems to love coopting enemies.

I'm not going to disagree with my editor, because 60 percent of me thinks he's right, and the rest of me really likes my job. Instead I'll name the reasons why Mitt Romney will never run General Motors.

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May 4 2009, 11:51AM

The GOP's Future: Let The Discussion Begin

On Saturday morning, in a packed pizza joint in northern Virginia, I watched as three Republican superstars -- Rep. Eric Cantor, Mitt Romney and Jeb Bush - kicked off a "national conversation" with Americans to find out what happened to their party, where it's going, and what platform it will run on. The answers from Saturday were, in short: they're not entirely sure, they don't really know, and they're open to suggestions.

Since the defection by Sen. Arlen Specter pushed Republicans to the brink of irrelevance in DC, the GOP decided that if it's going to get back in the game, it should get out of the city. But what struck me was the tension between the party's eagerness to hear new ideas and the conviction that the ideas they have are really fine, already. After all, following a question from the restaurant's manager about how to help small businesses, a friend leaned over a whispered, "Do you think he'll say cut taxes?" A couple minutes later, Romney intoned: "The right thing to do is lower taxes.

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Apr 24 2009, 10:25AM

David Brooks' Words Of Wisdom For Republicans

So David Brooks' last two columns have both taken on the broad subject of how Republicans should feel about Obamanonics (mostly sad) and their chances to get back in power (mostly bad). Four days ago, their odds were truly dismal. Today, much better. What changed? A poll, of course.

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Apr 23 2009, 1:57PM

What is Obama's Grand Economic Theory?

That's a question that's bugged a lot of economists recently. He's either a socialist revolutionary or a Wall Street poodle depending on whom you read. But this excellent piece from the New Republic is the best I've read explaining why he's neither -- why we're about to embark on four years of an economic policy that is unlike any other this country has ever seen, and why he could introduce a new American paradigm: boyfriend-economics.

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Apr 22 2009, 3:14PM

Is Education Costing Us More than Health Care?

It is, if you factor in the failure of our education system. That seems to be the incredible conclusion from McKinsey's new report on what America's notorious international education gap really costs us. "If the United States had closed the international achievement gap between 1983 and 1998 and raised its performance to the level of such nations as Finland and Korea, US GDP in 2008 would have been between $1.3 trillion and $2.3 trillion higher, representing 9 to 16 percent of GDP." How much do we spend on health care again? About 16 percent of GDP. Damn.

Or think of it this way: the McKinsey report is concluding is that if we erased our countries' racial and economic achievement gaps, and suddenly our students could read and multiply and write and solve for X as well as the Finnish, our GDP would add the economic equivalent of Italy. To be honest, I'm a little skeptical about these figures. The education gap is measured with international tests, and it would seem very difficult to attach a domestic product number to a four-year old international testing score. (Presumably, students aren't contributing much to GDP until they've graduated from college, four years after an international test from high school.)

And on to the pundits. Without flinching, Thomas Friedman plugs the numbers into his long-term theory of American decline, but he holds out some hope for Obama:

President Obama recognizes that we urgently need to invest the money and energy to take those schools and best practices that are working from islands of excellence to a new national norm. But we need to do it with the sense of urgency and follow-through that the economic and moral stakes demand.
I have no problem with that paragraph, in spirit, but the words bug me. Invest is a great term for Friedman, because it's a nice way to say spend money without using dreadful words like spend or money. But the United States already spends more per student than any country except France and Switzerland (more than Finland and South Korea, in fact), and there is really truly scant evidence that higher spending within the United States correlates with higher student achievement. And, strangely, we'll have to invest even more if we want public education spending to keep up with personal income and private sector wages.

That's why I'm largely excited about Chicago's creative Arne Duncan taking over the education czar role for the White House. Unfortunately, his op-ed today filled me with such a sense of ... nothing. The piece is dimly called "School Reform Means Doing What's Best for Kids," which sounds almost sing-songy its vapidness. I struggled to find one meaningful statement in the whole piece besides: "everything is on the table." OK, fine. I like much of what's on that table -- like paying teachers more, and firing the bad ones, and extending the school day, and setting a national standard. But ultimately, the piece is as wishy-washy as Friedman's. Closing our "trillion-dollar" international achievement gap will require a strategy. What we have instead is a buffet.

Apr 21 2009, 12:10PM

Why Health Care Costs Are Hurting Education

I never really thought about health care costs and education trends as being fundamentally interrelated, but this point, from Peter Orszag's blog post on "The Case for Reform in Education and Health Care," just makes so much sense:

For years now, there has been a long-running trend toward declining State investments in public universities, as growing health care costs come to crowd out States' investment in higher education.

If you're more of a visual person like me, maybe you'd like to see some graphs:

The images below illustrate the crowding out effect pretty effectively. Here's a graph of "Dollars of higher education appropriations per $1000 of personal income" since 1978 from Orszag's presentation.
Picture 4.pngAnd here's the the ratio of public salary to private salary for assistant, associate and full professors since 1978.
Picture 5.pngWhat we're seeing in these graphs is pretty clear: state investments in public education have not kept up with private sector salaries or personal income. And, as Orszag notes, you'd be wise to pin the downward slope in these graphs to skyrocketing health care spending.

You can argue over the relationship of education spending to student achievement (DC's exorbitant per-student spending is always ground zero for that discussion) but I think the more important point here is that clearly rising health care costs necessitate trade offs and budget cuts that have an terribly negative impact in policies that have nothing to do with health care. Our inability to control health costs is directly feeding our inability to field, among other things, an effective public education system. If Obama can make this case - that health care spending is more than a health care issue - he might be able to build a reform coalition large enough to finally bring the issue to the forefront on Captol Hill.

Apr 20 2009, 11:58AM

Should Obama Defend The Banks

Last week Brad DeLong said the government had three distinct narratives to explain the bank plan to carping foreign governments and a persnickety media. In short: "1) The banks have us by the plums; 2) The government has a chance to make a fortune; and 3) We have to play out the hand before we ask for a new deal." I don't know about the last two (Geithner shouldn't be promising any kind of fortune and ix-nay on the ationalization-nay) but I'm most interested in the first lets-praise-the-banks narrative because, frankly, I find it the most convincing.

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Apr 8 2009, 12:23PM

Hey Pundits, Why The Long Face?

Americans are feeling more optimistic about the economy, according to a New York Times poll Tuesday that found President Obama's approval rating -- 66 percent -- at its highest ever.

But it raised a question: Are the leading opinion makers leading this wave of optimism or not? We looked at nine prominent writers -- three conservatives, three moderates, and three liberals -- and compared statements about Obama that they made between November and January with statements they've made in the last few weeks to determine whether they're feeling rosier about the administration's direction.

What emerges is a punditocracy that has soured toward Obama's policies as the public has lightened up on the economy. Across the spectrum, pundits are finding plenty to gripe about, with conservatives balking at Obama's alleged socialism, moderates wearying of his administration's unpredictable approach to the banking crisis, and even liberals wondering whether he is too cool for comfort.

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Apr 6 2009, 5:23PM

Are Republicans Struggling to Find An Enemy?

In the wake of increasingly vitriolic Republican attacks on Obama's budget and auto bailout, Mother Jones' Kevin Drum had an interesting question: 

There is something different about [Republicans'] tone these days, and I can't quite put my finger on exactly what it is. My tentative take is that there's an inchoate quality to their fears that's new. In the past they were fighting against specific things: communism, hippies, Bill Clinton, Islamists, abortion, etc....Who, exactly, is their enemy these days?
Let's take a look at what some notable Republicans have said:

Michelle Malkin: "Obama: I'm not a socialist, I just play one on TV."

Glenn Beck, Fox News: "People once again are feeling oppressed by an out of control state. We're afraid to the government growing larger ... They're marching us toward 1984. Big brother."

Rep. Paul Ryan, WSJ: "If this agenda comes to pass, it will mark this period in history as the moment America turned European."

Charles Krauthammer, WaPo: "His goal is to rewrite the American social compact... He's here to warranty your life."

AmSpecBlog, American Spectator: " There is a whiff of Fascism emanating from the Obama White House."

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Mar 23 2009, 4:04PM

How Geithner's Plan Leads to Nationalization

The reaction to Timothy Geithner's new bank plan from liberals has been largely despairing, but there's an interesting contingent arguing that even if the bank plan isn't great economics, it's still good politics. The argument would be that not only does the plan bypass Congress and free up capital (political and otherwise) to devote to health care and energy, as Matthew Yglesias suggests, its failure might also make nationalization inevitable.

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Mar 3 2009, 2:07PM

Paterson's Free Fall

NY Gov. Paterson's approval rating just plummeted to the lowest rating of any governor in the history of Marist polling (and worse than Eliot Spitzer mid-scandal).

The NY Times' explanation makes sense on its face: Paterson has been dealt a terrible hand with the economy; the stock market has been collapsing since he stepped into office; he's had some internal scandals (including the Caroline Kennedy snafu); and he's obviously run out of money to do things, so he's suggesting all sorts of extravagant spending strategies and conservative media is trashing him wherever they can. So, obviously, it makes sense that his approval rating is at 26%.

On the other hand, consider Obama. He's been dealt a terrible hand with the economy; the stock market has has been collapsing since he stepped into office and fallen another 20% or so since his stimulus plan passed; he's had all sorts of internal scandals (Daschle, Geithner, Gregg, who needs to count them?); and he's obviously run out of money to do things, so he's suggesting all sorts of extravagant spending strategies and conservative media is trashing him wherever they can. So, obviously, his approval rating is at 62% - eerily the exact palindromic opposite!

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