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 24 2009, 3:35PM
Sixty-Five Percent of Nevada Homeowners Underwater
Today more than a quarter of all homeowners are "underwater." That is, the value of their house is less than what they owe in mortgage payments. That means 10.7 million people with negative equity in their homes. Ruth Simon and James Hagerty of the Wall Street Journal explain the larger implications:
Nov 24 2009, 12:25PM
Do We Agree that the Stimulus is Working?
In a poll last week, 51% of respondents said that eliminating the stimulus would create more jobs. I called those respondents insane. Commenters called me worse. Things got real. A week later I regret some diction in that post, but not the substance. The stimulus helped. It has juiced production. It has created jobs. And, for better or worse, only a quarter of it has been spent.
The NYT interviewed some economists about the stimulus and found a tentative consensus that the stimulus is helping the economy. Let's look at some graphs:
The NYT interviewed some economists about the stimulus and found a tentative consensus that the stimulus is helping the economy. Let's look at some graphs:
Nov 24 2009, 11:50AM
Time, Conde, Hearst to Create an "iTunes for Magazines"
The three biggest magazine publishers in the country -- Hearst, Time Inc and Conde Nast -- are investing in a separate company that is being touted as an "iTunes for magazines." Or a Hulu for magazines, if you prefer. It would be a online storefront for digital versions of these publishers' magazines (Esquire, Time, Vanity Fair, etc) that you could read on your computer or smartphone. The site would also try to sell print subscriptions to readers.
But if these publishers want to make money, they can't sell a product (online news) that's already free. Does that mean we're about to see a deluge of paywalls across magazine websites?
But if these publishers want to make money, they can't sell a product (online news) that's already free. Does that mean we're about to see a deluge of paywalls across magazine websites?
Nov 24 2009, 9:56AM
This Map is Bad News for Cap and Trade
This is a fun blog post from Free Exchange with some heavy implications for worldwide carbon emissions and our efforts to reduce them. Here's FE:
HAVE a look at the picture below, put together by Jean-Marie Grether and Nicole Mathys. What we're looking at here are points representing the world's "pollution centre of gravity" (yellow) and it's "economic centre of gravity" (pink). The aim is to demonstrate that economic development in Asia is relatively dirty.
Nov 24 2009, 9:23AM
Revised! Third Quarter GDP Grew at 2.8 %, Not 3.5%
The recession is still over, but the recovery's first step wasn't as strong as we thought. The second estimate of GDP growth in Q3 revised the figure down to 2.8% from 3.5%. GDP tries to measure the value of all goods and services produced, and it turns out that consumer spending, commercial construction and our trade deficit (hurt by rising gas prices) were all worse than we thought. Analysts had predicted the economy to grow by at least 3% earlier this quarter, but these revised figures will likely temper that enthusiasm.
There are two small lessons here.
There are two small lessons here.
Nov 23 2009, 4:04PM
Obama to Save Science Education (Good Luck with That!)
President Obama announced that he wants to see companies and organizations across the country step up to improve our nation's math and science scores. Critics of the program say he needs to do more to change curricula and teaching methods, and while they're right, that criticism is also a bit unfair.
Nov 23 2009, 3:13PM
When Do We Get Serious About the Debt?
It seems to me that the pieces are in place for debt reduction to be one of the major issues of President Obama's first term. The NYT reports that in 10 years, the government will have to pay $700 billion in interest on the debt, up from $200 billion this year. But the recession puts policy makers in a precarious spot. Like a guy with his feet on two ice sheets floating in opposite directions, the White House wants two things: (1) to keep up aggressive deficit spending to fill the gaps in private demand and (2) to keep its eye on a long term deficit reduction plan than it considers politically feasible.
Evan Bayh wants to get Idea #2 rolling, so he's floated the idea of a Budget Commission: a binding, bipartisan resolution that would (in his words) "force members of Congress to take -- or reject -- a single gulp of politically difficult medicine to treat the fiscal problems that are ailing our country." Matt Yglesias isn't impressed.
Evan Bayh wants to get Idea #2 rolling, so he's floated the idea of a Budget Commission: a binding, bipartisan resolution that would (in his words) "force members of Congress to take -- or reject -- a single gulp of politically difficult medicine to treat the fiscal problems that are ailing our country." Matt Yglesias isn't impressed.
Nov 23 2009, 1:09PM
In Health Care, Even Common-Sense Reforms are Hard
In a column about whether our government can solve crises, Washington Post editorial chief Fred Hiatt writes:
[M]aybe the country isn't all that divided -- most of us would welcome common-sense improvements in health-care delivery and insurance -- but the system feeds on and exacerbates our differences.Stop right there. Would most Americans "welcome" common-sense improvements in health-care delivery and insurance? No way.
Nov 23 2009, 11:50AM
Is Murdoch's Bid to Join Bing and Ditch Google Doomed?
Bless you, Rupert Murdoch, you really do keep things interesting. The News Corp media maven is threatening to take all of his newspapers' content off Google and give Microsoft Bing exclusive rights to index his news. This is the second Big Murdoch Threat recently, the first being his brazen announcement to put all of his news behind a pay wall. What is Murdoch thinking? I think I know.
Nov 23 2009, 10:30AM
Barnes & Noble Nook is Sold Out Already? Hmmm.
Barnes & Noble's e-reader Nook is already sold out, and Sony's is in short supply just four days before Black Friday, according to the Financial Times. Analysts estimate that this year's holiday season could move as many as 1,000,000 e-readers -- a third of all e-reader purchases this year -- and some of them are blasting Barnes & Noble for rushing the product to market before they set up supply chains to meet demand.
I suppose that's unarguable -- it is a little embarrassing to sell out the Monday of Thanksgiving week -- but this story presents two silver linings for B&N.
I suppose that's unarguable -- it is a little embarrassing to sell out the Monday of Thanksgiving week -- but this story presents two silver linings for B&N.
Nov 20 2009, 3:19PM
How Inaccurate GDP Figures Can Lead to Inflation
There is a lot of concern about how the Federal Reserve plans to reign in the deluge of money it's dumped on the economy to stimulate lending and spending. When will the Fed sell the securities it took off the banks' balance sheets? When will it raise interest rates to stave off serious inflation? These are crucial questions, and as the Economist's Buttonwood blog explains, it's incredibly hard to know when to start tinkering with monetary policy because the information we get about the economy's health -- quarterly GDP estimates -- can be wrong. Sometimes, it can be very wrong:
Nov 20 2009, 12:59PM
Are Fat People Good for America?
So there's this Wall Street Journal column about how we should be nicer to obese people because Winston Churchill was pretty fat, and he did a good job during World War II, and where would we be without Alexandre Dumas' chubby little fingers and Catherine the Great's heft, and so on. It took me a while to see that the piece was written by Joe Queenan, a satirist, and was not meant (I think?) to be a terribly weighty contribution to the obesity-in-America discussion. But I think it inadvertently raises an important point. Those historical fatties were mostly really rich.
Nov 20 2009, 10:40AM
Obama Flubbed His 1st Stimulus. Can He Pass a 2nd?
Nov 19 2009, 4:59PM
Can We Kill Unemployment With 1000 Paper Cuts?
With unemployment at 10.2%, pressure is mounting on the president from many corners (including this page, if my rants may politely be called "pressure") to stoke job creation. Will he do something about joblessness? Almost certainly, says the Wall Street Journal's economics editor David Wessel. Will it that stimulus be as big as Obama's liberal critics hope? Don't hold your breath, he says.
Nov 19 2009, 4:20PM
House v. Senate: Who Should We Tax for Health Care?
Nov 19 2009, 1:20PM
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.
Nov 19 2009, 12:43PM
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.
Nov 19 2009, 12:17PM
Sometimes, the Majority of Americans Are Really Stupid
I cannot believe this Rasmussen poll:
51 percent believe canceling the rest of the stimulus money would create more jobs.That is insane.
Nov 19 2009, 11:11AM
The Apple Tablet: Not Dead Yet!
"The Apple Tablet is Dead!"
So screams PCWorld about the machine that some suckers (OK, me included) predicted could transform the market for netbooks, e-readers and all-in-one devices in one fell swoop. Less hysterically, BusinessWeek points out that the device is merely delayed until the second half of 2010. Rumor is the delay is all about cutting costs for the screen technology, which was slated to add $500 to the final cost, while Apple wants the product to sell for as close to $1000 as possible.
So screams PCWorld about the machine that some suckers (OK, me included) predicted could transform the market for netbooks, e-readers and all-in-one devices in one fell swoop. Less hysterically, BusinessWeek points out that the device is merely delayed until the second half of 2010. Rumor is the delay is all about cutting costs for the screen technology, which was slated to add $500 to the final cost, while Apple wants the product to sell for as close to $1000 as possible.
Nov 19 2009, 10:57AM
AOL To Lay Off a Third of Employees. Then What?
As AOL spins off from Time Warner, it's undergoing a dramatic overhaul as an online content provider. But like many a makeover, this will require shedding some weight. Well, a lot of weight. AOL is looking to lay off about 2500 employees -- a third of its staff. What is AOL trying to do, again?
Nov 19 2009, 10:20AM
Will Obama's "Jobs Created" Debacle Hurt the Next Job Stimulus?
The Wall Street Journal op-ed page is to the Obama administration as Inigo Montoya was to the guy who killed his father -- not simply critical, but obsessively, menacingly critical, and often to hilarious effect. But hey, they have a point about the White House's debacle over jobs "created or saved" by the stimulus. There are jobs in made-up Congressional districts, jobs counted (or double-counted) that simply never existed, and -- most colorfully -- a $890 shoe order that allegedly spawned nine new jobs.
But what is the WSJ getting at exactly? Just because the first round of stimulus hasn't been an efficient job creator doesn't mean we don't need another round of job-creating stimulus.
But what is the WSJ getting at exactly? Just because the first round of stimulus hasn't been an efficient job creator doesn't mean we don't need another round of job-creating stimulus.
Nov 18 2009, 4:30PM
Would Cap and Trade Persuade China To Reform?
Cap and trade, if it passes at all, will be an imperfect and politically compromised attempt to slow the growth of carbon emissions. It might be "the most important piece of environmental legislation" in all of spacetime, but it will hardly put a dent in worldwide emissions if China and India and other large countries don't take measures to control their own carbon output.
According to Edward L. Glaesar, a Harvard economics professor, that's precisely why passing a climate change bill is so essential. It's not about the policy. It's about sending a message.
According to Edward L. Glaesar, a Harvard economics professor, that's precisely why passing a climate change bill is so essential. It's not about the policy. It's about sending a message.
Nov 18 2009, 12:15PM
Can You Sue Me If I Lie on Twitter?
Don't throw stones if you live in a glass house, goes the old saw. But in the days of Facebook and Twitter and blogs, the world is a glass box and the stones are flying, anyway. Courtney Love is being sued for libel after accusing a fashion designer of a cocaine addiction on Twitter. In Chicago an apartment resident who Tweeted a crack about moldy smells faces a $50,000 suit from the apartment's management company. Oh brave new world! That has such Tweeple in it!
Nov 18 2009, 11:14AM
Economists Gang Up on House Health Care Bill, Praise BaucusCare
The New York Times Economix blog publishes an open letter to the president from 23 prominent economists about how to fix health care costs. In a nutshell, the message is: Pass BaucusCare. The economists' four priorities are already features of the bill that passed the Senate Finance Committee -- and got roundly slammed by Republicans, unions, liberal electeds, governors, medical device makers and more.
Here are the economists' four recommendations, unedited.
Here are the economists' four recommendations, unedited.
Nov 18 2009, 10:28AM
$98 Billion: Embarrassing Wasteful Spending for White House
Health care spending isn't just the main driver of our debt. It's also the main driver of our waste. The federal government made $98 billion in improper payments in 2009, about 5 percent of total spending. Improper payments are funds that "go to the wrong recipient, the recipient receives the
incorrect amount of funds, or the recipient uses the funds in an
improper manner," according to the White House. And more than half of the waste -- $54.2 billion -- came from Medicare and Medicaid.*
How did this happen?
How did this happen?
Nov 17 2009, 4:33PM
Merrill Lynch, Vindicated?
Looking back at Bank of America and Merrill Lynch's troubled courtship, Dan wonders whether we all lost site of the big picture a year ago: This was destined to be a bad honeymoon and a great marriage. I think Dan's right.
Nov 17 2009, 3:53PM
Don't Blame Goldman Sachs. Don't Blame Us. Blame the Meltdown.
I suppose it is a truth universally acknowledged that Goldman Sachs is what would happen if Darth Vader had a particular skill in managing IPOs. The toxin-dripping animosity toward the bank partly stems from the way Goldman made out like gangbusters when the government bailed out AIG and awarded Goldman 100 percent of securities that had depreciated. I've had mixed feelings about the Goldman hate for some time now, but I think Felix Salmon hits the nail on the head:
Nov 17 2009, 3:00PM
Immigration: Good for Productivity, Good for Wages
It's commonly understood that immigration reform is going to be hellish for Democrats in 2010. There are a couple reasons for this. One is that most efforts to allow temporary work programs or to streamline naturalization are referred to, in the cable news vernacular, as "amnesty." Another is that nobody will want to talk about helping illegal immigrant workers while one-sixth of the legal workforce is unemployed. Illegal immigrants take jobs from legal residents, right? They drive down wages across the country, right? Not according to this research from NBER:
Nov 17 2009, 12:00PM
Time to "Unfriend" Oxford's Word of the Year?
"Unfriend" is the Word of the Year from the Oxford University Press, beating out nominees like paywall, funemployed and sexting (OMG OUP!). Adrian Chen points to the last five winners -- 2005: podcast; 2006: carbon neutral; 2007: locavore; 2008: hypermiling -- and concludes "these are all just hacky trend pieces from that year." Well, yes. You have rediscovered the purpose of electing a word of the year.
Nov 17 2009, 10:46AM
Producer Prices and Industrial Production Disappoint Analysts
Never mind inflation. Producer prices are barely budging -- up 0.3 percent last month after a 0.6 percent drop in September -- and industrial production slowed in October, with manufacturing falling for the first time in four months. What does that all mean? It means that Ben Bernanke has every incentive to keep interest rates low for the foreseeable future, as weak demand and stalling production are mitigating any inflationary temptation that would require a tightening of monetary policy.
Nov 17 2009, 10:15AM
Is Google the Next AT&T?
Google's acquisition of Gizmo5, an online phone company like Skype, puts the search giant in position to challenge AT&T and Verizon as the most affordable and comprehensive phone company in the country. That's according to Wired, which has the details here. The bottom line is that Google would let you make and receive Internet-based calls that "bypass the per-minute billing on your smartphone."
Nov 16 2009, 3:38PM
Ben Bernanke's Double Talk on the Dollar
Nov 16 2009, 2:34PM
Should We Try to Make More Public or Private Sector Jobs?
Alan Blinder writes in the Wall Street Journal that the two big ideas in Washington for creating jobs are (1) public-service employment and (2) a tax credit for companies that hire. (For the record, I can think of a few more, including a payroll tax holiday, state relief and job sharing.) The first idea fights unemployment by adding public sector jobs. The second idea adds private sector jobs. Let's talk about their problems.
Nov 16 2009, 12:00PM
Don't Blame Obama for Climate Change Failures
Last year President Obama said delay on climate change "was not an option." This year, it's an option. So notes Jeffrey Goldberg, as world leaders say there will be no binding agreement to address global warming in Copenhagen. The Atlantic Wire's Mara Gay has an excellent round-up of other commentators using this perfectly predictable occasion to bash multilateralism or call Obama weak. This is crazy. It's like calling your friend frail because he can't lift a Ford F-150.
Nov 16 2009, 11:24AM
Obama's Agenda, Held Hostage By Jobs
The New York Times' Ross Douthat writes in his Monday column:
I think this is right, but I'd add that it's also hard to imagine any legislation that the GOP won't attack as "job-killing" unless it's a bill explicitly designed to create jobs, in which case the GOP will attack as "budget-killing." It's a crowded hostage room.It's hard to imagine any legislation that might be attacked as "job killing" -- like the Employee Free Choice Act, immigration reform or even cap-and-trade -- finding traction in Congress next year. This means that the broader Democratic agenda is essentially a hostage to the unemployment numbers.
Nov 16 2009, 10:50AM
Retail Sales Up, But Where Are the Consumers?
Here's more evidence of a schizophrenic recovery. Even with unemployment surging to 10.2 percent, October retail sales beat expectations riding a wave of auto sales. That's the good news. The bad is that sales in September were revised downward to a 2.3% decrease from an estimated 1.5% drop. The ugly news? We're still slogging through the worst two-year retail plunge in the last 50 years.
But how about that good news!
But how about that good news!
Nov 13 2009, 4:16PM
Rock Music, Oil Production and Causation Fallacies
I've been serving a lot of public policy vegetables this week, so here's some economic dessert. There are a lot of graphs out there that claim to prove causation when all they can surely demonstrate is correlation (take these, perhaps). But here's a graph via Gawker that elegantly explains how misleading some of these graphs can be:
Nov 13 2009, 2:38PM
Why are Consumers Down if Production is Up?
The Great Recession is over. GDP is rising at a 3.5 percent clip. Planned layoffs are slowing. Manufacturing is expanding. This is all good news! So why is the American consumer so sad?
Nov 13 2009, 12:59PM
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.
Nov 13 2009, 11:22AM
Could Job Sharing Help Fight Unemployment?
Paul Krugman today solidifies his membership in the Job Squad, that growing contingent of bloggers and policy mavens calling for a new stimulus directed at employment. I've shared many of the Job Squad's ideas -- direct state aid, a tax credit for companies that hire, a payroll tax holiday, public work projects -- but here's one I haven't given much attention to: Job sharing. What is that and how would it work?
Nov 13 2009, 10:22AM
Y2K's Lessons for Health Care, Climate Change
I really like this thoughtful Farhad Manjoo article on the lessons of Y2K for current debates about health care and global warming. Y2K might seem like a shining example of the government's ability to be prescient and proactive about future crises, but the closer Manjoo looks, the fewer happy lessons he finds. I think he's right.
Nov 12 2009, 5:50PM
Australia's Wine Industry in Crisis. Seriously.
Once upon a time, when you thought Australia, you thought beer. Certainly Marge Simpson had trouble ordering something in Australia that didn't begin with B-E in this classic Simpsons clip. But today Australia is drowning under the surplus of a fruitier fermentation. Yes, Aussies are actually having a "wine crisis."
Nov 12 2009, 2:42PM
Two-Year Itch: Unemployment Benefits Hit 99 Weeks
Even though I fully supported -- and still support! -- the latest extension of jobless benefits, this is still a terrifying statistic. The new bill extends unemployment benefits by 20 weeks for those living in states with unemployment rates greater than 8.4%, which means "the maximum a person in one of those states could receive is now up to 99 weeks, or nearly two years -- the most in history." Just as strikingly, more than a third of the nation's unemployed have been out of work for more than six months.
This statistic is tragic, and it has short and long term implications for our economic policy and our national identity.
This statistic is tragic, and it has short and long term implications for our economic policy and our national identity.
Nov 12 2009, 1:06PM
America's Fundamental Problem, in a Sentence
CBO chief Doug Elmendorf's one-sentence diagnosis of America's Big Problem is making the rounds, so I thought I'd share it, along with a few thoughts.
The country faces a fundamental disconnect between the services the people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance those services.
Nov 12 2009, 10:02AM
White House to Use TARP to Fight the Debt
This year's $1.4 trillion deficit sounded an alarm for both the White House and its opponents that next year will be a war over debt. So the administration is getting creative. Freeze current spending? The OMB is demanding it. New taxes? There's already a bipartisan commission. How about setting aside money originally intended to rescue failing banks through the Troubled Asset Relief Program? There's an idea.
Nov 11 2009, 4:14PM
10 States Hurtling Toward California-Level Disaster
California was only the beginning.
Nine more states are "barreling toward an economic disaster" according to a new Pew poll that sees deep service cuts and temporary tax hikes to avoid fiscal calamity. Some of these states will be familiar to Atlantic Business readers. I've been leading the funeral cry for the united states of MichiCaliFlAriVada (that's Michigan, California, Florida, Arizona and Nevada), and all five states are on Pew's list. Rounding out the ten are Illinois, New Jersey, Oregon, Rhode Island and Wisconsin. Here's the graph from the Pew Center on the States:
Nine more states are "barreling toward an economic disaster" according to a new Pew poll that sees deep service cuts and temporary tax hikes to avoid fiscal calamity. Some of these states will be familiar to Atlantic Business readers. I've been leading the funeral cry for the united states of MichiCaliFlAriVada (that's Michigan, California, Florida, Arizona and Nevada), and all five states are on Pew's list. Rounding out the ten are Illinois, New Jersey, Oregon, Rhode Island and Wisconsin. Here's the graph from the Pew Center on the States:
Nov 11 2009, 3:30PM
Jeffrey Sachs on Obama's "Inadequacy"
Esteemed economist Jeffrey Sachs has a column in the Financial Times today on Obama's failure to apply the breaks to the runaway train of unemployment. In a nutshell, he says both Republican's tax cut orthodoxy and the White House's misguided stimulus fail to address the structural changes we'll need to create jobs that last. I'll meet Sachs halfway here.
Nov 11 2009, 12:50PM
No Unemployment Recovery Until 2013
How will this recovery feel? TNR's Noam Scheiber says: Surprisingly breezy for job seekers. Noam and I agree on a lot of points, but I don't share his optimism. Unemployment has just crossed 10%. The last time that happened in 1982, it stayed in double digits for 9 months, and that was a historically swift recovery. The last two recessions -- in the early '90s and early '00s -- were characterized by plodding recoveries in the job market as deep-seeded structural changes to the economy prevented workers from easily rediscovering positions in their old industries. I see little reason to think that this recession, an earthquake that's left ruptures in real estate, manufacturing and finance, will be different. But not even a pessimist like me was ready for Mike Thoma's prediction.
Nov 11 2009, 11:30AM
Could You Balance the Federal Budget?
I write a lot about the intractability of military and entitlement spending and the need to raise taxes to pay down the deficit. This would seem to be an opportunity to walk the walk on the budget talk.
The Budget Challenge game at FederalBudgetChallenge.org puts next year's budget in your hands and tallies the budget implications of your chosen policies. More helpfully, the folks at FBC include a sidebar that explains some of the consequences of each measure. Obviously the game isn't an all-inclusive menu of spending and tax options -- and balancing the federal deficit during the rump of a recession is a long-term project rather than a check-off list for a single fiscal year -- but it's an interesting game, nonetheless.
The Budget Challenge game at FederalBudgetChallenge.org puts next year's budget in your hands and tallies the budget implications of your chosen policies. More helpfully, the folks at FBC include a sidebar that explains some of the consequences of each measure. Obviously the game isn't an all-inclusive menu of spending and tax options -- and balancing the federal deficit during the rump of a recession is a long-term project rather than a check-off list for a single fiscal year -- but it's an interesting game, nonetheless.
Nov 11 2009, 10:48AM
Should We Listen to Murdoch's Google Threat?
When Rupert Murdoch makes threats, people listen. But as Jack Shafer points out, that doesn't mean we should take him seriously. So when Murdoch threatened to block Google bots from scanning stories in the Wall Street Journal this week by erecting pay walls around the bulk of his online content, the reaction was one part "Can he really do that?" and three parts "What an adorably dopey idea."
That's my take, too. Here's one small reason why.
That's my take, too. Here's one small reason why.
Nov 10 2009, 4:56PM
Scary Charts! What Do They Mean?
I found these alarming charts on Barry Ritholtz's The Big Picture blog. They track the impact of the Great Recession on real retail sales (worst in the last half century) and state government tax revenues (worst in the last half century). What are the implications?
Nov 10 2009, 3:45PM
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:
I like Rahm Emanuel's line a lot:
Nov 10 2009, 1:02PM
The University with the Best Media Buzz Is ... (Not Harvard)
Harvard University took a hit in a new survey from the Global Language Monitor, ceding its top spot in the college "media buzz" rankings to the University of Michigan. As a Big Ten grad who's school didn't make the list, I'll bitterly add that the GLM clearly isn't factoring in college football reputation, since the University of Michigan is in danger of posting its second straight losing season for the first time since the Johnson administration. Ahem.
Let's take a look at these rankings and decide whether they mean anything.
Let's take a look at these rankings and decide whether they mean anything.
Nov 10 2009, 11:56AM
Is the Jay Leno Experiment Imploding?
This Bloomberg story leads with bad news for the Jay Leno Show, but in the fragmented world of digital television and cable TV, even the network "winners" are treading water. Here are the hard numbers for the 18-49 demographic at 10PM:
-- NBC has lost 1.8 million viewers in the with the Jay Leno experiment (down 45%)
-- CBS has lost 162,000
-- ABC has gained 245,000
Worse, NBC's 10PM advertising rates are down as much as 70 percent:
-- NBC has lost 1.8 million viewers in the with the Jay Leno experiment (down 45%)
-- CBS has lost 162,000
-- ABC has gained 245,000
Worse, NBC's 10PM advertising rates are down as much as 70 percent:
Nov 10 2009, 10:39AM
How to Get Free WiFi in Airports on the Holidays
For many holiday travelers, an hour-long wait at the airport presents a critical choice: a couple grande white chocolate lattes or $10-a-day WiFi access? (At least, that's my choice.) This year the (er, my) choice is simple. Google announced that it is giving away free WiFi access in 47 airports until mid-January 2010. Lifehacker reports that users can log in for free, bypass a couple invitations to try out Google Chrome, and browse for free through the inevitable snow delays.
But wait! Some key cities -- including Chicago, New York and Washington, DC -- aren't on the list. Is there another way to finagle free Internet from the terminal?
But wait! Some key cities -- including Chicago, New York and Washington, DC -- aren't on the list. Is there another way to finagle free Internet from the terminal?
Nov 9 2009, 4:35PM
Should We Tax Soda and Fruit Juice?
The United States has a serious deficit crisis, and there are only two ways to fight a serious deficit. You can (1) cut spending or (2) increase revenues. Unfortunately most of the growth in federal outlays comes from military and entitlement spending. But we're fighting a war on terror abroad with an aging population at home, which puts military/entitlement spending in a laser-fortified lockbox. That leaves increasing government revenues, which is the most anodyne way to say "raising taxes." Which taxes should we raise? The ones on our sins. Yes, even the ones that promise us 100 percent of our daily Vitamin C.
Nov 9 2009, 2:53PM
The Bad Politics of Health Care Reform
Fareed Zakaria is an admirably efficient thinker and simple writer. Tis a gift to be simple, but tis not a gift to oversimplify, and sometimes the straitjacket of column inches puts the squeeze on complex analysis. Here's a paragraph on health care from his latest column on Tuesday's elections and America's resurgent centrism:
Nov 9 2009, 1:14PM
Why Google's AdMob Buy is Smart
Google announced today that it bought AdMob, a mobile display advertising company, to extend its online advertising dominance into the next frontier of web browsing. While the buzz over Google rings loudest over its new smart phones and revolutionary operating systems and innovative forays into online media, it's easy to forget that from a revenue perspective, Google is in the advertising business.
Nov 9 2009, 11:52AM
Why is America So Bad at Job Stimulus?
What do the Economist, the Washington Post and Paul Krugman have in common? They all think Congress and the White House are doing a bad job combating joblessness. They say that instead of direct subsidies to employers and big public works projects, the government is relying on indirect infrastructure spending and the extension of meager unemployment benefits. What more could they do? Let's consider.
Nov 9 2009, 10:45AM
Are Wages Rising?
David Leonhardt has been following a bizarre trend that offers a mythical silver lining to the jobocalypse of 2009. Wages are rising -- sort of! As always, Leonhardt offers a sensible and clear-minded breakdown of what's going on. In a nutshell, we're seeing sticky wages, sticky jobs and sticky deflation. The result is the illusion of rising wages.
Nov 6 2009, 3:17PM
Hey Obama, We Need a Job Stimulus, Now!
I think Megan's absolutely right about this. In November 2010, the weight on voters' minds will be one part health care reform, one part climate change reform, and one hundred parts the state of the economy. It's the jobs, stupid, and if 10 percent of the workforce doesn't have one, the Democrats are in a lot of trouble. That's why this bit of unwisdom from Democratic Sen. Ben Nelson (via Matt Yglesias) makes no sense:
"When the economy's not strong there's a lot of interest in controlling spending," Nelson said.
Oh hi, Republican Rep. Paul Ryan. What's it like inhabiting the body of Sen. Nelson?
Nov 6 2009, 12:30PM
The Meaning of 10.2% Unemployment
Nov 6 2009, 12:15PM
You Get a Tax Credit! You Get a Tax Credit!
Congress has extended homebuyer tax credits to incent more first-time home buyers to take a chance in the distressed market. It's important that the government continue to use its coffers to stimulate the economy with unemployment at 10 percent, but the housing credit's record is rife with fraud. (A good roundup of the boondoggle is here.)
TaxVox, a Tax Policy Center blog, sighs that this extended tax credit, which follows on the heels of Cash for Clunkers, a credit for car swaps, presages a future in which tax credits are handed out like cars on a special episode of Oprah.
TaxVox, a Tax Policy Center blog, sighs that this extended tax credit, which follows on the heels of Cash for Clunkers, a credit for car swaps, presages a future in which tax credits are handed out like cars on a special episode of Oprah.
Nov 6 2009, 11:41AM
Leave the Deficit Hawks Alone! (Some of Them, Anyway)
Slate's biz man Daniel Gross delivers an ornithological smackdown to Washington's flock of deficit hawks. It is very amusing! It is also, like the morning bird who starts chirping outside my bedroom window around 6AM every morning, prematurely and cloyingly cheery. Chirp away, Mr. Gross...
Nov 5 2009, 3:31PM
Who's the Boss on Health Care? (You Are, Boss!)
As Congress wrestles with how to make substantial cuts to Medicare over the next decade while improving its quality of care, this should be sobering. It's an article from Kaiser Health about why Medicare reforms are so hard to implement. But compare and contrast to this, another KH article about how some innovative corporate wellness reforms are improving employee health and holding down health care costs. I see a lesson here. Teaching moment!
Nov 5 2009, 11:53AM
Three Reasons to Support a Soda Tax
And now, from the Department of Unsurprising Things: The food lobby is against a soda tax to help pay for health care reform. That's fine. This is a food tax. They are a food lobby. It's their job to scream right now. But let's shelve the politics and look at the policy for a second. A small tax on sugary soda drinks -- and on alcohol -- would be a really good idea. Here are three reasons:
Nov 5 2009, 10:40AM
Why Verizon's Droid Falls Short
Enough with the "iPhone Killer" alerts. It's not happening. Not any time soon. And if there is an iPK out there, it's a case of latent fratricide, because the iPod Touch combined with a portable wifi device like the Verizon MiFi can essentially perform all the phone functions of the more expensive iPhone over a wireless network rather than through AT&T.
If we don't yet have a true iPhone Killer, at least we have a serious iPhone competitor in the new Motorola Droid. NYT's David Pogue gushes:
If we don't yet have a true iPhone Killer, at least we have a serious iPhone competitor in the new Motorola Droid. NYT's David Pogue gushes:
Nov 4 2009, 4:47PM
The Recovery Will Be Worse Than You Think
The consensus is that unemployment will hold back our economy, but let's hear a word from the optimists. David Leonhardt sees some silver linings in the recovery: Pent up demand in America, rising spending in China, forthcoming stimulus plans and wondrous, distant technological breakthroughs could all make 2010 a lot more roaring than 2009's whimpering economists expect. I love a good optimist, but I think I agree with the skeptics here.
Nov 4 2009, 2:57PM
The Good and Bad of Tax Credits for Clunkers, Homes, Etc
I was worried the government's Cash for Clunkers program was paying people to move the next six months of car purchases into a few weeks and gutting the auto market for the next half year. But here's some good news for Cash for Clunkers, auto dealers, and the economy: I might have been wrong! This bit of evidence the stimulus did not steal from future sales as I anticipated:
Nov 3 2009, 1:30PM
Sick? Work at Home. Your Colleagues Will Thank You!
I'm blogging from home today because I caught a nasty cold in Chicago. But I'm lucky. I'm young, I'm nobody's breadwinner, and the Atlantic Media Company offers paid time off. The New York Times explains why that's particularly good news for my cubicle colleagues Dan Indiviglio and Chris Good. When sick people come into work because they think they need the money, proximate workers catch the bug.
Nov 3 2009, 12:22PM
Would You Pay $199 for a Twitter-Only Device?
James Fallows and I have been e-sparring over my prediction that we continue to inch toward an all-in-one device with music listening, web browsing, phone calling, e-book reading, picture taking, and so on. Fallows' readers have weighed in with arguments for both sides. It seems to me that most readers agree with his assessment that the "Swiss Army Knife-ification" of technologies will advance somewhat like Zeno's Paradox, always approaching but never reaching the goal of an all-in-one device.
But I hope we can at least agree on this: A new $200 mobile device designed exclusively for Twitter and nothing more is a hilariously bizarre idea.
But I hope we can at least agree on this: A new $200 mobile device designed exclusively for Twitter and nothing more is a hilariously bizarre idea.
Nov 3 2009, 10:40AM
Is US Manufacturing Growing?
The big question about the economy used to be: When will GDP grow? Now that third quarter GDP is positive, the next question is: When will employment grow? Many analysts think it won't be until the second quarter of next year, after it crosses the 10 percent barrier, but here is some rare good news for the job economy. The US manufacturing sector is expanding -- and it's expanding faster than almost every country in Europe.
Oct 29 2009, 3:59PM
Why 3.5% GDP Growth Is Not Sustainable
You should relish today's news that GDP grew by 3.5% last quarter for two reasons: 1) Three percent growth is really good news, and 2) it probably won't last. This morning I explained why high unemployment will likely hold down GDP growth in the next few months. The Financial Times John Authers explains in even clearer terms why the third quarter of 2009 is an unsustainable blip in GDP.
Oct 29 2009, 2:55PM
Should Health Care Tax Rich Income or Rich Plans?
Whether we get the House or Senate version of health care reform, the tax man cometh. But in what form? The House health care plan unveiled today leans on a surtax on rich people to pay for the expansion of Medicaid and insurance subsidies for less fortunate Americans. The Senate Finance plan dreamed up an excise tax on richer insurance plans. Those might sound similar because I described them both using the words "tax" and "rich," but they're very different ideas, for a couple reasons.
Oct 29 2009, 10:59AM
California Gets Closer to Passing Marijuana Law
I'd love to write the authoritatively suggestive lede to the story that California could be on the verge of legalizing marijuana, but Jim Sanders of the Miami Herald beat me to the punch:
Dude, that is some seriously good stuff. But seriously, legalizing pot is a good idea for California.Legislation to make California the first state to legalize marijuana for recreational use lit up a Capitol committee hearing Wednesday with three hours of lively but mellow debate.
No joint consensus was reached.
Oct 29 2009, 9:48AM
GDP Up 3.5%, But Don't Be Too Optimistic
US GDP grew by 3.5 percent in the third quarter (July through September) of 2009, buoyed by government stimulus, consumer demand and thawing in the housing market. That's a little better than the 3.3 percent analysts expected it to grow and much better than the 0.7 percent it fell in the second quarter of this year. In fact GDP grew by the fastest clip in exactly two years. So why is everybody so down on the economy?
Oct 28 2009, 5:03PM
Obama's Pander to Seniors Is the Wrong Stimulus
Was Obama smart to give Social Security recipients a $250 check? Politically perhaps -- nobody needs to be reminded how often seniors vote -- but from an economics stimulus perspective it was a drop in the wrong bucket, according to David Leonhardt. His logic is simple and, I think, correct.
The buying power of Social Security checks could increase with next year's deflation even without the extra $250. Moreover, to stimulate the consumer economy, you want to put money in the hands of the people most likely to spend their next marginal dollar, and unemployed people are most desperate for cash. Using that $14 billion on extending unemployed benefits (something Congress is debating) would almost certainly be best idea for stimulating the consumer economy as it emerges from the slog.
The buying power of Social Security checks could increase with next year's deflation even without the extra $250. Moreover, to stimulate the consumer economy, you want to put money in the hands of the people most likely to spend their next marginal dollar, and unemployed people are most desperate for cash. Using that $14 billion on extending unemployed benefits (something Congress is debating) would almost certainly be best idea for stimulating the consumer economy as it emerges from the slog.
Oct 28 2009, 3:10PM
The 20-Year Decline of Newspapers, in a Graph
Twice a year, the Audit Bureau of Circulations reports the number of subscribers to each major newspaper. The Awl collected their data going back 20 years for the Wall Street Journal, New York Times, LA Times, Washington Post, Daily News, and New York Post, and drew this really cool graph (after the jump). The WSJ is up over two decades. The New York Post is unchanged. The NYT sort of bobs around. Everybody else follows the general trajectory of a ball tossed off a 50-story building.
Oct 28 2009, 2:35PM
The Best Health Care Reform is Impossible
I'm reading Bruce Bartlett's crowd-sourced interview with Economix readers, and this part strikes me as a reasonable -- and familiar -- conservative critique:
I also believe the administration has done a poor job of addressing what I think is the biggest problem with the American health case system: It costs too much for what we get. We spend in total twice as much of our gross domestic product on health as most other major countries without getting much in return for the extra spending.Hey, that reminds me of something!
Oct 28 2009, 12:30PM
The Excise Tax Wants to Make You Rich!
The Communications Workers of America just forwarded me this Harold Meyerson column that says that excise tax on expensive, or "Cadillac," health care plans "targets a lot of Chevy plans as well." Meyerson elaborates:
Oct 28 2009, 10:44AM
Can France Save Newspapers by Giving Them Away?
France's plan to give free newspapers to 18- to 24-year olds to turn them into regular customers is the latest government effort to save the news, and it won't be the last. Is it a good idea? I have a lot of doubts.*
Oct 27 2009, 5:10PM
What We Need to Know About the Crash
Eliot Spitzer says the report from the Angelides Commission, or Financial Crisis Inquiry Commission, must investigate four broad areas of failure if it seeks the same legitimacy as the Pecora commission, which in the Great Depression helped produce the FDIC and SEC. They are:
1) What did the banks' corporate boards know, when did they know it, and what did they divulge to their shareholders?
1) What did the banks' corporate boards know, when did they know it, and what did they divulge to their shareholders?
Oct 27 2009, 3:07PM
SuperFreakonomics Author: "Your Job is to Attack Us."
"How many of you wash your hands?"
Stephen Dubner, co-author of Freakonomics and the new SuperFreakonomics, was prodding the Monday night audience at the Washington Post Conference Center in Washington, DC. A forest of hands sprung from the seats. "Maybe I should rephrase," said co-author Steven Levitt, an economist. "How many people don't wash their hands." Two young men raised their arms in mock pride. Audience members alternatively chuckled and grimaced, but Levitt turned the joke on them.
"We know that a whole bunch of you are lying," he said. Studies show as little as 9 percent of men really, truly wash their hands. The audience laughed again, this time with a hint of discomfort (nine percent?). And in a moment, we had a microcosm of the night's three lessons: People lie. Conventional wisdom is asking for it. We should all laugh more about economics.
Stephen Dubner, co-author of Freakonomics and the new SuperFreakonomics, was prodding the Monday night audience at the Washington Post Conference Center in Washington, DC. A forest of hands sprung from the seats. "Maybe I should rephrase," said co-author Steven Levitt, an economist. "How many people don't wash their hands." Two young men raised their arms in mock pride. Audience members alternatively chuckled and grimaced, but Levitt turned the joke on them.
"We know that a whole bunch of you are lying," he said. Studies show as little as 9 percent of men really, truly wash their hands. The audience laughed again, this time with a hint of discomfort (nine percent?). And in a moment, we had a microcosm of the night's three lessons: People lie. Conventional wisdom is asking for it. We should all laugh more about economics.
Oct 27 2009, 12:20PM
SuperFreakonomics Authors Take Heat on Global Warming
Last night I attended a Hooks Books event with Steven Levitt and Stephen Dubner, the authors of SuperFreakonomics, the sequel to Freakonomics. The book has stirred early controversy with its portrayal of the global warming debate. Levitt and Dubner suggest that carbon dioxide's role in warming the planet is vastly overrated and they take a long look at geoengineering to help reverse climate change. Opponents think they're willfully misrepresenting science.
The night's only question on climate change came from a young man at the Union of Concerned Scientists, a non-profit that wrote this long blog critique of SuperFreakonomics. He acknowledged the two sides' differences and asked the authors to help clear the air and work toward a common understanding of climate change. Dubner took the response, which crescendoed from a sound discussion of carbon dioxide basics to surprisingly defensive repudiation of the question.
The night's only question on climate change came from a young man at the Union of Concerned Scientists, a non-profit that wrote this long blog critique of SuperFreakonomics. He acknowledged the two sides' differences and asked the authors to help clear the air and work toward a common understanding of climate change. Dubner took the response, which crescendoed from a sound discussion of carbon dioxide basics to surprisingly defensive repudiation of the question.
Oct 27 2009, 11:20AM
Extend Jobless Benefits Now!
The New York Times' editorial on the need for more stimulus measures is very, very good. They don't grapple with a tax credit for new hires, or a payroll tax cut, which would fill the pockets of both employers and employees. But that's OK. We've debated those measures before on this page, and we'll debate them again. But NYT editorial gets the big thing right: We need to extend unemployment benefits and we need to do it now.
Oct 27 2009, 10:35AM
Health Care, Cost Control and Sneakiness
Yesterday I might have been a little harsh on Fred Hiatt's health care op-ed, but I wanted to underscore my last point. Hiatt says
Single-payer national health insurance may be the best outcome, but we should get there after an honest debate, not through the back door. (my emphasis)I didn't like that sentence for two reasons. (1) The country has spent the last six months debating health care reform in town halls, Congress halls, cable shows, morning shows, blogospheres, and dining rooms. I just don't know what "honest debate" Hiatt holds his breath for; (2) What's wrong with a little sneaky public policy?
Oct 26 2009, 5:30PM
Fred Hiatt Should Read the Health Care Bills
Weird column today by Fred Hiatt.
First he criticizes the Democrats for not trying to tax employer-provided insurance plans, but he doesn't mention the phrase excise tax. That is weird, because the excise tax in the Senate Finance bill is a tax on employer-provided insurance plans. Hiatt is permitted to think the tax is too small, or unlikely to survive a vote, or likely cause popular backlash. But he's not permitted to write as though it doesn't exist.
First he criticizes the Democrats for not trying to tax employer-provided insurance plans, but he doesn't mention the phrase excise tax. That is weird, because the excise tax in the Senate Finance bill is a tax on employer-provided insurance plans. Hiatt is permitted to think the tax is too small, or unlikely to survive a vote, or likely cause popular backlash. But he's not permitted to write as though it doesn't exist.
Oct 26 2009, 3:50PM
The Curious Case of Bruce Bartlett
"The idea that Reagan-style tax cuts would have done anything is just nuts."
Bruce Bartlett said that. The guy who spearheaded Ronald Reagan's tax cuts. The guy who wrote a book called The Supply-Side Solution in the 1980s. He said that, and what's more, he's been saying it for three years since he predicted the Republicans would walk the country toward economic ruin in the 2006 book Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. What is he saying now?
Bruce Bartlett said that. The guy who spearheaded Ronald Reagan's tax cuts. The guy who wrote a book called The Supply-Side Solution in the 1980s. He said that, and what's more, he's been saying it for three years since he predicted the Republicans would walk the country toward economic ruin in the 2006 book Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. What is he saying now?
Oct 26 2009, 1:10PM
The Swiss Army Knife Theory of Technology
When Amazon and Barnes & Noble announced that they would soon allow e-books (and free e-book sharing) on computers and mobile devices, it sent me into a quixotic tizzy about the future of e-readers. The ability to read e-books on small computers and smartphones fit with the long story of personal technology, which says that once-disparate functions -- music listening, email checking, phone calling, etc -- are eventually integrated into multi-purpose gizmos.
I called this the Swiss Army Knife Theory of personal technology. I wrote:
I called this the Swiss Army Knife Theory of personal technology. I wrote:
Oct 26 2009, 12:00PM
How Big Banks Keep Their Biggest Customers
Why are the big banks bigger? That's easy. The government spent lots of money feeding the dying big banks, like Wachovia and Washington Mutual, to the slightly healthier and bigger banks, like Wells Fargo and JPMorgan, which made the "Too Big to Fail" banks even fatter. But James Surowiecki wants to know something else: Why have the big banks found it so easy to hang onto their customers?
Oct 26 2009, 10:57AM
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.
Oct 23 2009, 3:15PM
Taking the Long View of the Stimulus
Oct 23 2009, 11:45AM
Where is the E-Reader Revolution Leading Us?
Just days after Barnes & Noble announced that its new e-reader Nook would allow book-sharing across e-readers and personal computers, Amazon announced -- surprise! -- the exact same thing.
Amazon.com is putting out a free application that lets people read Kindle electronic books on their Windows personal computers. Microsoft demonstrated the new Kindle for PC app at the Windows 7 launch in New York City. It's the latest move by Amazon to extend its vast store of electronic books, magazines and newspapers to other devices beyond its Kindle readers.The company is expected to expand Kindle book access to Macs and BlackBerrys in the next few months. Now I've followed the smoldering e-reader revolution for a while now, but something is only now coming into focus.
Oct 23 2009, 10:42AM
What Comes After Health Care?
Conventional wisdom says the White House domestic agenda line-up looks something like this: (1) Health care reform; (2) Climate change reform; (3) Financial regulation reform; (4) Immigration reform. But via Mickey Kaus, Nate Silver has a different idea:
Oct 22 2009, 5:10PM
White House Bad News: Stimulus Effect Will Stall in '10
The stimulus will not have much of an impact on the economy in 2010, according to Christina Romer, the chair of the Council of Economic Advisers. Hard to spin that one positively. We've spent less than a fourth of the stimulus in 2009 (including tax cuts, loans and entitlements), and we don't even have enough money left over to move the economy in 2010? And unemployment should remain near 9.6 percent through the '10 election? Sheesh, most depressing Congressional testimony ever.
Oct 22 2009, 1:06PM
Why is Google Afraid of Bing?
And we're back with the tech wars. Ryan Tate reports that Google's search engine chief is feeling the heat from Microsoft Bing, a search engine that I find impressively designed, intuitive and attractive -- despite the fact that I have never used it except to write blog posts about it. I'm pleased that Google feels the urge to update its services to compete with an up-start like Bing, but I think Tate buries the lead here.
Oct 22 2009, 11:45AM
This is What the Recovery Looks Like
We're seeing the beginnings of a truly schizophrenic recovery. On the leading indicator front, things are looking peachy. Businesses are ordering more goods. Interest rates are low. Stocks are up. On the job front, they're still pretty ugly. The four-week average of first-time jobless claims isn't moving and
last week, initial claims actually inched up. Behind the unemployment
numbers, every day 7,000 people exhaust their jobless benefits, as
Congress weighs an emergency benefits extension bill. Part-time workers
are at an all-time high. So are reduced hours. Since they started
measuring, job openings as a percentage of the workforce are at an all-time
low.
The picture is coming into focus. The recovery will look less like a double-dip "W." The leading indicators are too good. It will look more like a limp "L" -- like watching a JV kid throw a bounce-pass with a really deflated basketball.
The picture is coming into focus. The recovery will look less like a double-dip "W." The leading indicators are too good. It will look more like a limp "L" -- like watching a JV kid throw a bounce-pass with a really deflated basketball.
Oct 22 2009, 11:15AM
Evidence that the Jobless Recovery is Here
With unemployment likely to hit 10 percent before the end of the year, I've been brainstorming some ideas for jump-starting the job market. To highlight exactly why an employment stimulus is critical, the Atlanta Fed's research director has a blog post counting all the reasons why this is going to be the worst. Recovery. Ever.
How many bad records are being set in this recession?
How many bad records are being set in this recession?
Oct 22 2009, 10:05AM
For 1st Time, NYT Makes More from Readers than Ads
The New York Times Co. lost $35 million in the third quarter of 2009. That's better that losing $100 million in Q3 last year, and the elimination of 100 editorial jobs will help to bring down costs for the future. But the real story, Gawker's Hamilton Nolan points out, is that for the first time ever, advertising is no longer the Times' main source of revenue*:
Oct 21 2009, 4:13PM
Which Magazines Won in the Mag-Apocalypse?
Business Insider has a slideshow of the 22 magazines who are "actually kicking butt" (industry term, folks) during the end-of-days advertising meltdown of 2009. What do we learn? That the most profitable audience these days are families where the father is a serial body builder, the wife loves to cook and home-tend while she applies age-reversing creams, and the children like to read, about celebrities.
Who won the year?
Who won the year?
Oct 21 2009, 1:50PM
How to Create Jobs: Tax Credit v. Payroll Tax Holiday
Official unemployment will likely cross the 10 percent barrier in the next few months, but if you count part-time and discouraged workers, you get something closer to 16 percent of the work force, which is horrible from any perspective and downright terminal for incumbents in 2010. Two of the most interesting ideas for fixing unemployment involve a payroll tax holiday and a tax credit for companies who hire workers. Which idea is better?
Oct 21 2009, 11:47AM
Is Google Building an iTunes-Killing Music System?
The Gizmodo guys spot rumors that Google's free music service -- currently in a test-mode in China -- could be making a journey across the Pacific in the near future. A few months ago, I suggested that Google make YouTube more like iTunes. After all, if you've got access to legal high quality music and the ability to make playlists on YouTube, why not build an interface similar to the iTunes homepage, that organizes the Top-40 music scene and viral
music world to encourage users to think of YouTube as an acceptable,
free, online alternative to iTunes and streaming music sites like Pandora?
Oct 21 2009, 10:05AM
One More Time: Health Care = Wages
In an employer-provided health care system, health care benefits and wages are the same thing. Slate's Tim Noah made this point elegantly when he beseeched readers to drop everything they were doing and look at this graph:
Oct 21 2009, 10:00AM
Why Democrats are Smart to Call Public Option "Medicare"
Are Democrats really about to re-brand the public option? According to The Hill (via Slatest), Democrats think the term "public option" is too confusing -- it certainly isn't specific -- and they'd like to replace it with something more like Medicare. Slate's Ron Rosenbaum said earlier this month that public option was the worst phrase ever, but his suggestions -- like government-run insurance program -- didn't quite tickle the pleasure centers. So I suggested my own ideas and frankly they were pretty bad, too.
But look! Commenter "mgoodfel" wrote under my article: "You could call it Medicare." Ding! What do we have for the winner?
But look! Commenter "mgoodfel" wrote under my article: "You could call it Medicare." Ding! What do we have for the winner?
Oct 20 2009, 5:04PM
Barnes & Noble Nook Looks Like a Kindle-Killer
The e-reader arms race is on, and Barnes & Noble is the latest manufacturer to unveil its shiny, super-literate weapon. The Nook might not have the razzle-dazzle of the rumored Apple Tablet, but it's got brand name gravitas, WiFi, a color touchscreen -- enough for the Gizmodo boys to gloat that it "eats the [Amazon] Kindle's lunch." But the Barnes and Noble e-reader has another especially interesting twist: Book lending.
Oct 20 2009, 2:59PM
Texas Leads the US in Thrice-Married Adults
Larry King might be a New York native, but his brand of matrimony -- the more the merrier -- turns out to be much more popular in states south of the Mason Dixon line. That's the word from this study on the state of marriage in America, which finds New York state actually has the country's smallest share of men married three or more times. In US-leading Arkansas, the share of thrice-betrothed is a whopping ten percent.
Our Richard Florida has the stats here and Catherine Rampell has a nice summary at Economix, but I wanted to pull up what I thought were the three most interesting factoids from this survey.
Our Richard Florida has the stats here and Catherine Rampell has a nice summary at Economix, but I wanted to pull up what I thought were the three most interesting factoids from this survey.
Oct 20 2009, 1:10PM
Is Global Warming Bad for American Business?
James Surowiecki, one of my favorite business writers, has a piece in the New Yorker about climate change legislation and the hooplah it's causing at the Chamber of Commerce. This is a simple story. The Chamber of Commerce doesn't like regulation of any kind, and accounting for the negative externality of carbon emissions unquestionably requires regulation. The real question is why all of a sudden climate change regulation is something that many companies support.
Oct 20 2009, 12:41PM
Is Foursquare the Future of Friendship, or Just Dumb?
Foursquare is a new mobile app that helps you follow your friends (and helps your friends follow you) when you go out. It that sense, it's not so different from other legal-stalking apps like Google Latitude, which lets your friends track your location on a Google Map through their smartphones. The catch is that Foursquare adds a funky layer of gameplay. If Foursquare sees that you're spending a lot of time at one bar, it names you "Mayor" of that watering hole, and so on.
Is this a dumb idea or a really good way to check if your friends happen to be a few blocks away? I wasn't sure myself, so I debated the issue with Government Executive's Madeleine Kennedy, who alerted me to the article. Here's a transcript of our conversation:
Is this a dumb idea or a really good way to check if your friends happen to be a few blocks away? I wasn't sure myself, so I debated the issue with Government Executive's Madeleine Kennedy, who alerted me to the article. Here's a transcript of our conversation:
Oct 20 2009, 9:59AM
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:
Oct 20 2009, 9:15AM
Why Do Girls Fall Behind Boys in Math?
Since this question catalyzed the swift firing of former Harvard President (and current Obama adviser) Larry Summers, I've found boys' and girls' math achievement a fraught subject at dinner parties and hang-outs. So I was intrigued to see that Freakonomics economist Steven Levitt teamed with another well-known academic (from Harvard, no less) to tackle the question. While they characterize their own attempts at explaining the gender gap a "failure," they manage to debunk other theories, such as less study time for girls, lower moral support from their parents, and male-biased tests.
Oct 19 2009, 6:43PM
Apple's Record Quarter Silences the Doubters (...Me)
Apple just announced perhaps its most impressive quarter ever. In the teeth of a recession that has hurt electronic sales across the board, Apple sold more Mac computers and iPhones than ever, driving up its stock 9 percent to an all-time high.
In the last few months, I've found a few reasons to rag on Apple. Its computers are too expensive for consumers who only need netbooks. The iPhone risks being overtaken by a suite of free products that allow cheap calling and streaming music. So much for all that. I'd say the moral here is: Don't bet against a company whose products you own and love. For FTC purposes, I'll stop right there.
In the last few months, I've found a few reasons to rag on Apple. Its computers are too expensive for consumers who only need netbooks. The iPhone risks being overtaken by a suite of free products that allow cheap calling and streaming music. So much for all that. I'd say the moral here is: Don't bet against a company whose products you own and love. For FTC purposes, I'll stop right there.
Oct 19 2009, 4:45PM
Wanted: Real Ways to Fight Unemployment
Robert Samuelson has an oped today with the tagline: "What to do about job creation." That looks like a declarative statement that promises bold ideas about job creation. It's not. It's more like when I get to work and wonder, "What to do, what to do about this mess of papers on my desk." That means I have no good ideas about how to clean up my desk. One might say the same about Samuelson and job creation.
Oct 19 2009, 12:01PM
Tax Goldman Sachs!
As Paul Krugman noted today, we're in the slog period of the Great Recession, and at the banks that means two things. First for investment banks that rely on trading, like Goldman Sachs, it means big profits. Second for commercial banks that rely on the strength of the general economy, like Bank of America, it means big trouble.
Krugman's frustrated and so am I. We spent hundreds of billions of dollars to save the banks in order to save the economy. But one year later, as Goldman gets ready to pay its largest bonuses ever, it seems we've succeeded mostly in saving the banks who are best at making profits while the economy continues to sputter and our deficit continues to re-write its own Guinness Record. Can we fix this by just, well, taxing Goldman Sachs a lot?
Krugman's frustrated and so am I. We spent hundreds of billions of dollars to save the banks in order to save the economy. But one year later, as Goldman gets ready to pay its largest bonuses ever, it seems we've succeeded mostly in saving the banks who are best at making profits while the economy continues to sputter and our deficit continues to re-write its own Guinness Record. Can we fix this by just, well, taxing Goldman Sachs a lot?
Oct 19 2009, 11:15AM
What the Associated Press Got Wrong
The last line of that AP piece about the stimulus and education jobs is:
Critics blame much of the deficit on anti-crisis measures, including the stimulus package.
That's a pretty rotten sentence. It's technically true -- yes, some critics are blaming the deficit on the stimulus -- but it's substantively false. It doesn't make sense to blame the deficit on the stimulus, as this NYT article explained in a very easy to read graph:
Oct 19 2009, 10:45AM
250,000 Education Jobs: Good News for White House
The stimulus allowed states to restore much of their education budget shortfalls for 2009 and '10, according to a Domestic Policy Council report. That means 250,000 saved education jobs this year.
Last week the White House reacted to another report that the stimulus saved or created 30,000 jobs in the private infrastructure sector. Even if that number seems a little low, it makes sense that the stimulus is creating/saving far more jobs in education that the private sector.
Last week the White House reacted to another report that the stimulus saved or created 30,000 jobs in the private infrastructure sector. Even if that number seems a little low, it makes sense that the stimulus is creating/saving far more jobs in education that the private sector.
Oct 16 2009, 3:31PM
Why Did Bank of America Post a Billion-Dollar Drop?
A week after JP Morgan and Goldman Sachs announced their stupendous third quarter results, Bank of America, tail between its legs, announced this morning that it lost more than a billion dollars due to lingering weaknesses in the consumer credit market. The downside of being the nation's largest consumer bank, as BofA is, is that your profits are somewhat tethered to the health of the general economy, which, even emerging from a recession, is still in critical condition. I think these paragraphs by Noam Scheiber make an excellent point:
Oct 16 2009, 2:40PM
How Can We Improve Our Math Scores?
This week's horrible math scores among 4th and 8th graders highlights America's ongoing struggle to score competitively in international standardized tests in math and science. So the New York Times Room for Debate blog brought together five education experts to offer solutions. Are they any good?
Oct 16 2009, 11:43AM
Florida's Fearsome Foreclosure Funk
The misery of MichiCaliFlArivada continues. As I've written before, the recession in the United States of America is nothing compared to the recession of the united states of Michigan, California, Florida, Arizona and Nevada. Via Ezra Klein, I see more graphs comparing godawful categories like bank card delinquencies and foreclosures. Again, MICA wins (loses) the day and Florida is just killing in the foreclosure sweepstakes.
Oct 16 2009, 10:15AM
Writedowns, Blocked Pay Make Rough Day for BofA's Ken Lewis
Bank of America, the nation's beleaguered leader in commercial lending, posted a $1 billion loss in the third quarter. Despite recent gains from its Merrill Lynch merger, the company is still dealing with commercial defaults and billions of dollars in consumer credit losses. U.S. consumers' mortgages and credit cards account for about 60 percent of the bank's loan portfolio, according to Reuters.
Oct 15 2009, 3:40PM
"Saw": Most Successful Movie Franchise of All Time?
To the excitement of nobody I know, they've made another violence-porn "Saw" movie for Halloween. Zubin Jelveh asks the question on all of our lips -- "Dear God, why?" -- and comes up with a pretty good answer. By profit margins, it's the most successful movie franchise in the history of cinema. (I repeat: "Dear God, why!?")
Oct 15 2009, 2:45PM
Is the Public Option Staging a Comeback?
This is unexpected. A while back, the public option was the only idea wackier and less realistic than the fabled death panels. Two weeks ago, it died again in the Senate Finance Committee (twice). And yet, like a cat or a Terminator, the idea is proving incredibly hard to kill off entirely. The NYT and New York magazine both report that the public option (or whatever you'd prefer to call it) is better than "mostly dead" -- it's possibly viable. How did this happen?
Oct 15 2009, 12:10PM
Stimulus Saved 30,000 Jobs. Is That Terribly Low?
The stimulus has saved or created about 30,000 private sector jobs in its first few months, according to an independent report. Earlier this year, the Council of Economic Advisers projected the stimulus would save 1 million total jobs through August. Are these numbers completely incompatible?
Oct 15 2009, 11:10AM
What's Up with The Daily Beast's Advertising?
The Daily Beast continues to fascinate and amaze me. Here's a beautiful site that elegantly combines aggregation with reams of original analysis and testimonials by a motley crew of think tankers to newsmakers and pseudo-celebrities. What more could a publisher ask for?
How about some advertising?
How about some advertising?
Oct 15 2009, 10:32AM
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.
Oct 14 2009, 5:59PM
At 10,000 the Dow is Soaring, But the Economy is Slogging
This is an exciting day for investors: The Dow finally crossed 10,000. On the one hand, this news shouldn't be entirely dismissed. In March when the market fell below 7000 plenty of people expected the bottom to be in the 5000s. Six months later, it's up 50 percent. At the very least, I hope it puts to rest the silly argument peddled in the WSJ that the stock market was allergic to an Obama presidency.
Oct 14 2009, 4:30PM
The Stimulus Has Barely Started. Is That Good?
Republicans have slammed the stimulus for throwing $787 billion of stimulus money at the recession while unemployment has grown steadily. That's not a fair criticism, because less than half of the stimulus package has been spent in the first 9 months. But is the fact that the stimulus is spending money so slowly a good or bad thing?
On that issue, Atlantic Biz colleague Megan McArdle goes head to head one of my favorite business writers, Daniel Gross of Slate. Megan's point strikes me as a good one:
On that issue, Atlantic Biz colleague Megan McArdle goes head to head one of my favorite business writers, Daniel Gross of Slate. Megan's point strikes me as a good one:
Oct 14 2009, 3:30PM
Why Can't Tech Writers Write About Facebook?
What is it about Facebook that turns tech writers into a bunch of bleating neophobes? A month ago, this blithely statistic-free New York Times piece claimed that Facebook was suffering from an exodus because the author's friends didn't like it anymore. Inconvenient fact: Facebook users grew by 150% this year.
Today an MSNBC article about poking run under the sub-headline "Plenty of Facebookers would like to see this obsolete function outlawed." As you might expect, the article quotes exactly zero poke haters. How is it so hard to find a source that you've promised in the dek? Instead we get this hilarious paragraph:
Today an MSNBC article about poking run under the sub-headline "Plenty of Facebookers would like to see this obsolete function outlawed." As you might expect, the article quotes exactly zero poke haters. How is it so hard to find a source that you've promised in the dek? Instead we get this hilarious paragraph:
Oct 14 2009, 2:10PM
Cash for Clunkers Hurts, Doesn't Kill September Retail
Retail sales took a step back in September, and the bulk of the losses came in the car market due to the end of Cash for Clunkers. Does today's news invalidate the auto revitalization program? Hardly. The drop doesn't exactly erase my doubts about C4C, but it does suggest that something I feared -- encouraging families to spend tens of thousands in August would discourage them from spending on other things in September -- isn't happening.
Oct 14 2009, 11:25AM
What Will Bloomberg Do with BusinessWeek?
It's official: Bloomberg LP, the market data and news service, has bought BusinessWeek magazine from McGraw Hill and will rename the magazine Bloomberg BusinessWeek. The next question is, what is Bloomberg going to do with its not-so-shiny and hardly-new toy? After talking to a few people from Bloomberg who declined to be named, I picked up the following slivers of information:
Oct 14 2009, 10:30AM
Google Wave Live Typing is a Fatal Flaw
I'm not on Google Wave, but Slate's Farhad Manjoo is, and he's stumbled upon something hellish. When you're chatting with a partner, he or she can see everything you write the second your finger hits the key. Wait, so talking on Google Wave is like IMing without a delete key? If this is the future of online communication, I'm going back to pen, paper and wax seal stampers.
Oct 14 2009, 9:50AM
Is VAT Something You Might Be Interested In?
The value-added tax is so hot right now. Alan Greenspan would like a VAT to close the deficit. Nancy Pelosi is open to VAT as part of overhauling our tax code. But why would a Democratic Congress ever pass a new general tax on consumption? Republicans would eat their 2010 seats for breakfast.
To answer that question, the Atlantic's Clive Crook tracks down this Washington Post column by Henry Aaron and Isabel Sawhill called Bend the Revenue Curve. Crook is right: This is a really great column:
To answer that question, the Atlantic's Clive Crook tracks down this Washington Post column by Henry Aaron and Isabel Sawhill called Bend the Revenue Curve. Crook is right: This is a really great column:
Oct 13 2009, 4:00PM
NYT Metro Cancels All Print Subscriptions. Let's See What Karma Has to Say About That
The New York Times' metro desk will no longer subscribe to any magazines or newspapers, according to a just-released memo this morning. The NY Observer has the goods. I have sympathy -- better to cut paper than people, of course -- but also one observation.
Oct 13 2009, 3:35PM
If "The Public Option" Stinks, Can We Do Better?
Slate's verbose but often very interesting Ron Rosenbaum has a windy piece about Democratic sloganeering that begins by stating that "public option" is the worst framing device ever. Americans would support government-sponsored health insurance, he argues, if we merely called it something like, well, government-sponsored health insurance. As he points out, when the Times pollsters described the public option
as "a government administered health insurance plan--something like the
Medicare coverage that people 65 and older can buy," it got two-thirds support. Time for a name change?
Oct 13 2009, 1:25PM
In White House v. Fox News War, Who Wins?
In the White House vs. Fox News war, I consider two scenarios likely. In the first scenario, both sides win: the White House gets a popularity spike among independents and Fox News solidifies its right-wing audience. In the second, more likely scenario, the White House looks petty and pathetic taking on Glenn Beck, and Fox News comes out on top. The other two quadrants of the game theory box -- (1) Fox News loses, White House wins; and (2) mutually assured destruction -- seem less likely.
In short, Fox News has nothing to lose here.
Oct 13 2009, 11:28AM
Can E-ZPass Save Your Baby's Life?
E-ZPass isn't just saving you time. It's also saving your unborn child.
At least that's the conclusion of this study that found
At least that's the conclusion of this study that found
reducing congestion and emissions through the E-ZPass system, premature births dropped 10.8% and instances of low birth weight declined 11.8% for mothers within two kilometers of the toll plaza.Seems a little dramatic, no?
Oct 13 2009, 10:44AM
What Will We Learn From BofA's Legal Documents?
Bank of America has agreed to hand over documents of the legal advice regarding its merger with Merrill Lynch. The new agreement with the Securities and Exchange Commission will also reveal the bank's dealings with the Federal Reserve and Treasury Department during the epic merger, according to the WSJ. This decision comes after a judge rejected a $33 million settlement after the SEC accused the bank of misleading shareholders, and the announced resignation of BofA CEO Ken Lewis. As I've written before, this case has me in a knot.
Oct 13 2009, 10:13AM
In Tennis for Rivals Geithner, Summers, It's Love-Love
White House economics adviser Larry Summers is considered something of a meeting room rhinoceros, a fiercely aggressive debater unafraid of charging at his opponents and goring their points with aplomb. But as Ryan Lizza revealed in his New Yorker profile of Obama's economics team last week, the rhino is really looking for repartee:
"Larry was an outstanding debater, and an outstanding debater is someone who thinks of a question from both sides." He added, "Larry does sometimes interact with people in a debating format, and expects them to reciprocate and to be able to engage in an intellectual tennis match."Actually, The New Republic's Noam Scheiber writes, he likes engaging in literal tennis, too.
Oct 9 2009, 4:30PM
City Incomes Are Catching Up to the 'Burbs. Why?
Seattle and San Francisco city dwellers earn significantly more than people in the rest of their metro area, according to this graph after the jump from Discovery Urbanism (via Yglesias). You can't exactly say the same for Detroit. But I wonder: why are city incomes across the country catching up to their overall metro areas?
Oct 9 2009, 2:55PM
It's Official: Hummer's Going to China
Six years ago, Hummer was a perfect metaphor for America: Gleefully belligerent muscle passing for greatness. Now, alas, the Chinese own it. Hey, it's still a perfect metaphor for America!
Oct 9 2009, 1:50PM
Bloomberg To Fire the Entire BusinessWeek Staff?
This news seems impossible to believe, but I'll pass it along anyway, because it's getting traction on WWD and Gawker.
Bloomberg LP remains the front-runner [to buy BusinessWeek], although the company is expected to only take on the BusinessWeek name and Web site, and none of its staff or bureaus.What?! Bloomberg is going to fire everybody?
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:
Oct 9 2009, 11:30AM
It's Not Just the Mancession. It's the She-Covery.
Is this recession especially rough on men? Chris Swan at Reuters objects. All recessions are "mancessions," he writes, and this one has actually widened the income gap between men and women. Both of those statements are true, but I don't think that's the only way to look at this whole mancession debate.
Oct 9 2009, 10:40AM
Growing Mustaches to Grow the Economy. It Works!
This is just too weird not to pass along. The American Mustache Institute (um, awesome?) came out with a study proving that mustached men make more money than their barefaced brethren and spend more of it, too. Ladies and gentlemen, the greatest two sentences in the history of macro-mustachio-economic literature:
Oct 9 2009, 9:57AM
The Public Plan Lives! Until the States Kill It
James Madison once envisioned states as the laboratories of democracy. Now Democrats envision them as laboratories of the public option. Ezra Klein points me to this Sam Stein reporting:
I think I like this idea.Senate Democrats have begun discussions on a compromise approach to health care reform that would establish a robust, national public option for insurance coverage but give individual states the right to opt out of the program. ...
Oct 8 2009, 4:40PM
Senate Plans to Extend Jobless Benefits in Every State
The Senate announced a plan to extend unemployment benefits in every state by 14 weeks, and up to 20 weeks in states with high unemployment (more than 8.5 percent). We'll see if this passes, but it's much better than the earlier version of this bill, which would have only extended benefits in states with high unemployment. That was a rotten idea. As Barbara Kiviat from TIME wrote:
Oct 8 2009, 12:08PM
A College that Pays You Not to Attend
Rough times for Ithaca College. Stuck with an entering class 20 percent larger than anticipated, Ithaca is paying 31 students up to $10,000 to take off a year of school (via NYT Choice blog.) Why?
Student matriculation in 2008 was extremely low, so Ithaca lowered its standards and sent out more acceptances this spring. But a higher percentage of kids accepted a place, and now the school's stuck with 300 more kids than it wanted without having room for all the extra bodies. It's like a desperate wannabe mom taking a fertility drug and having four times the children she expected. So you see, Ithaca is kind of like the Octomom of the American colleges.
Student matriculation in 2008 was extremely low, so Ithaca lowered its standards and sent out more acceptances this spring. But a higher percentage of kids accepted a place, and now the school's stuck with 300 more kids than it wanted without having room for all the extra bodies. It's like a desperate wannabe mom taking a fertility drug and having four times the children she expected. So you see, Ithaca is kind of like the Octomom of the American colleges.
Oct 8 2009, 11:09AM
Good Economic News in Jobless Claims, Inventories, Retail
As we emerge from the Great Recession, we're neither drowning in bad news like we were in March, but we're not exactly soaring either. Rather we're at the point where economic news bobs up and down like a buoy in choppy water. But hey, at least today is a bob in the right direction.
Oct 8 2009, 11:07AM
Building a Republican Bill Clinton, Cont.
Yesterday I riffed on this Bruce Bartlett interview where the old Reagan consigliere brainstormed ways to build a Republican Bill Clinton with enough fresh ideas and cross-over appeal to win in 2012. Bartlett's big three ideas were: 1) Shut up about tax cuts; 2) Call for smaller government and then actually deliver; 3) Enact a sales tax to repair the deficit.
My initial take was that this zero-promises/zero-fun platform would be about as popular as selling broccoli to a Kindergarten class, and I came up with two more suggestions. Then US News blogger Matthew Bandyk found my list and thought of four more. Crowd-sourcing is fun!
My initial take was that this zero-promises/zero-fun platform would be about as popular as selling broccoli to a Kindergarten class, and I came up with two more suggestions. Then US News blogger Matthew Bandyk found my list and thought of four more. Crowd-sourcing is fun!
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.
Oct 7 2009, 4:47PM
CBO: The Baucus Bill Bends the Cost Curve Down
As amended, the Baucus bill would expand insurance to 29 million people, reduce the federal deficit by $80 billion between 2010 and 2019, and bend the curve between .25 and .5 percent over the decade after that, where projections get really dicey. From the CBO Director's executive summary:
All told, the proposal would reduce the federal deficit by $12 billion in 2019, CBO and JCT estimate. After that, the added revenues and cost savings are projected to grow more rapidly than the cost of the coverage expansion. Consequently, CBO expects that the proposal, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law--with a total effect during that decade that is in a broad range between one-quarter percent and one-half percent of GDP.
Oct 7 2009, 4:45PM
Washington, DC, Leads Nation in Being Green, Hating Hitler
Less than 40 percent of workers in Washington, DC, drive to work alone, according to new figures from the 2008 Census. That is by far the lowest in the country and less than half the national average. If you've ever seen what parking looks like in DC, it is also of the least surprising stats in the world (via Economix).
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:
Here's the Pelosi exchange on the Charlie Rose show:
Oct 7 2009, 3:02PM
Would a Payroll Tax Holiday Create Jobs?
This morning, I wrote that of all these job-creating strategies for the Obama administration, the one least likely to see the artificial light of a floor debate on Capitol Hill was a payroll tax holiday. Commenter John Thacker lightly rapped my knuckles by pointing out that the holiday enjoys bipartisan support in the academic community and the political community. Reaching back to the first stimulus debate in late 2008, I see new Atlantic compadre Michael Kinsley wrote favorably of the payroll tax holiday.
Oct 7 2009, 1:17PM
With Sales Chief Out, Does GM Know Where It's Driving?
General Motors' sales chief Mark LaNeve is leaving the company and leaving behind a job opening that falls somewhere on the impossibility spectrum between handling Goldman Sachs' PR and opening a Focus on the Family chapter at Yeshiva. GM's problem isn't just that it's an old cripple of a company carrying a mountain of debt and pensions (although that's certainly a leading concern). There are so many reasons why GM is hosed:
Oct 7 2009, 11:50AM
The Secret Plan to Build a Republican Bill Clinton
The Republican Party's 2010 plan has been compared to a "political murder-suicide," but murder-suicide is a oxymoron in a zero-sum two-party system where one's loss is always the other's gain. Transforming your party into a Democratic hit-man squad might be good politics, but it's a rotten way to nurture new ideas about public policy.
But some Republicans thinking long-term about 2012 are seeing flashes of 1992, when a smooth triangulating moderate Democrat named William reinvented his party as the country emerged from a recession. What would it take to build a RepubliClinton?
But some Republicans thinking long-term about 2012 are seeing flashes of 1992, when a smooth triangulating moderate Democrat named William reinvented his party as the country emerged from a recession. What would it take to build a RepubliClinton?
Oct 7 2009, 10:05AM
AT&T Allows Internet-Calling on iPhones (Finally!)
Apple and AT&T might have the industry's most innovative internet-enabled phone, but their position on internet-based calling has been downright Luddite this year. The iPhone's keepers have tried to stiff-arm apps like Google Voice and Skype that would allow cheap online calling and they were all foot-draggy to accept music streamers like Rhapsody and Spotify this year.
But today AT&T announced it will finally allow users to download Skype and other programs that offer cheap, internet-based calling on its 3G network. This announcement comes about 24 hours after Verizon announced a significant partnership with Google to develop smartphones with Google Voice and internet-calling. Competition! Capitalism! It's all happening.
But today AT&T announced it will finally allow users to download Skype and other programs that offer cheap, internet-based calling on its 3G network. This announcement comes about 24 hours after Verizon announced a significant partnership with Google to develop smartphones with Google Voice and internet-calling. Competition! Capitalism! It's all happening.
Oct 7 2009, 9:20AM
How Can Obama Bring Down Unemployment?
The conventional wisdom that if unemployment sticks around double digits for the next year, the Democrats are hosed in 2010. I think this CW has the unexpected advantage of being not only conventional, but also legitimately wise. So the question becomes: If Democrats know their fortunes hold hands with employment, how should they try to create jobs?
Max Fisher at the invaluable Atlantic Wire harvests some ideas from around the web: More money for the states; more public works projects; more stimulus; more small business loans; a payroll tax holiday for everybody(!). Some of those sound politically unfeasible (there will be no second stimulus) or insufficient (small business loans and public work projects) or a little too left-fieldish (payroll tax holiday). But I like the idea of relying on the states.
Max Fisher at the invaluable Atlantic Wire harvests some ideas from around the web: More money for the states; more public works projects; more stimulus; more small business loans; a payroll tax holiday for everybody(!). Some of those sound politically unfeasible (there will be no second stimulus) or insufficient (small business loans and public work projects) or a little too left-fieldish (payroll tax holiday). But I like the idea of relying on the states.
Oct 6 2009, 3:30PM
Health Care Reform Is All About the Deficit
This point isn't old, but it bears repeating: Our deficit is set to skyrocket in the next ten years and the groundswell is coming almost entirely from health spending. Matthew Yglesias points out a new report from the Center on Budget and Policy Priorities about health care and the deficit. I know, I know! You've heard this song before. The first verse ends with a graph, and the chorus is me whining in high(-minded) falsetto about growing deficits. But the CBPP's cover puts a nice spin on how health care inflation hurts both the government's pocket and our ability to pad the government's pocket.
Oct 6 2009, 2:33PM
Why the Verizon-Android Deal is Big for Google
Verizon and Google have announced a partnership that could put Google's mobile Android operating system on millions of industry-leading phones, netbooks and other mobile devices. This comes less than a week after Google CEO Eric Schmidt told the audience at the Atlantic's First Draft of History event that the future of the internet wouldn't be on your desktop, or your laptop, but in your hand when you're walking down the street. That future may have been announced this morning.
Oct 6 2009, 12:32PM
Bobby Jindal's Terribly Bizarre (But Not Terrible) Healthcare Op-Ed
Via Ezra Klein's tab dump, I see Louisiana Gov. Bobby Jindal wrote an op-ed yesterday in the Washington Post about how Republicans should approach health care reform. It's unlikely that Republicans will approach health care reform in any meaningful way, but I was still interested in reading how Jindal, allegedly one of the unabashed wiz-kid wonks of the Republican Party, wanted to fix health care. At the end of the day, his ideas are good -- many of them are in the Baucus bill already -- but his understanding of the health care debate is just weird.
Oct 6 2009, 11:30AM
Should We Teach Kids How to Google?
In reviewing some of the highlights from the Atlantic's First Draft of History even last week, I'm still impressed by something Google CEO Eric Schmidt said. He was talking about how the Internet will continue to change the way we, you know, [enter any verb].
But I wasn't expecting him to touch on education. And what he said made a lot of sense.
But I wasn't expecting him to touch on education. And what he said made a lot of sense.
Oct 6 2009, 10:45AM
Facebook Wants to Know How Happy We Are. Gross.
So this is a little creepy. Facebook -- unsatisfied to know merely your interests, activities, friends, birthdays, friends' birthdays and sexual orientation -- wants to tell us how happy we are by measuring our "happy" words in status updates. I can't imagine anything more worthless and absurd than to know that Facebook is counting our yays and sad faces and adding them up like assets and liabilities on a bank balance sheet (no really, that's what this sounds like).
Oct 6 2009, 9:45AM
The Case Against the Case Against Sin Taxes
Being a libertarian I think is something like being a Wes Anderson fan. For some people, it's a phase. For others, it's a lifestyle.
For me, both were phases, but during my libertarian days, one of my favorite writers about science and public policy was William Saletan at Slate. Now I've been quietly supporting the inclusion of sin taxes in our health care bill to help extend subsidies to poorer Americans and patch up our deficit, or (if the tax collects little because it proves discouraging) keeps our mouths away from corn syrup and lard. But Saletan seems to disagree. He writes
For me, both were phases, but during my libertarian days, one of my favorite writers about science and public policy was William Saletan at Slate. Now I've been quietly supporting the inclusion of sin taxes in our health care bill to help extend subsidies to poorer Americans and patch up our deficit, or (if the tax collects little because it proves discouraging) keeps our mouths away from corn syrup and lard. But Saletan seems to disagree. He writes
Oct 5 2009, 3:54PM
BofA, Merrill Lynch Merger in Danger of ... Working?
The Bank of America-Merrill Lynch merger initially looked like the Liza Minnelli-David Gest marriage of the financial services world: A hilarious, jaw-dropping odd couple spectacle filled with gossip, intrigue, and lawsuits over strong-arming. Merrill was bleeding up to 11 digits of assets value in December 2008, and BofA CEO Ken Lewis has just resigned after being dogged by shareholders, pension funds and the SEC for months after the crisis merger.
But wait a tick. Now it seems that Merrill is hauling in up to 30 percent of BofA's profits. Is this thing going to work, after all?
But wait a tick. Now it seems that Merrill is hauling in up to 30 percent of BofA's profits. Is this thing going to work, after all?
Video
Oct 5 2009, 2:59PM
Eric Schmidt on the Future of the Internet
Google's CEO speaks to the Atlantic's James Fallows at the First Draft of History about how the Internet will continue to change our lives in wild and unexpected ways.
Video
Oct 5 2009, 2:47PM
Megan McArdle on Health Care, Debt and Obama
Megan McArdle of Atlantic Business debates The New Republic's Noam Scheiber on Bloggingheads.
Video
Oct 5 2009, 2:22PM
Larry Summers on the Global Economy
White House economic adviser Larry Summers on why open markets, global integration remain key to global prosperity.
Oct 5 2009, 1:38PM
Scenes From MichiCaliFlAriVada
The recession has been bad for the United States of America, but it's
been especially terrible for the united states of Michigan, California,
Florida, Arizona and Nevada. My general theory of the recession is that in any negative category, one or more of those states are always at the top of the list, from unemployment to foreclosure rates, making MichiCaliFlAriVada the worst state in the union. The bad news is sort of hard to escape. Even clicking around The Onion during my lunch break I found these two (real!) stories in their "What Do You Think?" feature where fake people snark on real headlines:
Oct 5 2009, 1:10PM
Service Sector is Growing, But for How Long?
The service sector of the economy is growing -- barely -- in the most recent evidence that the economy is U-turning, even though the employment rate is still inching higher. More troubling is the fact that the service sector's recent growth comes on the back of incentives like Cash for Clunkers that have expired. It's a recovery, yes, but it's fragile and jobless and sad.
Oct 5 2009, 12:30PM
Why Did Conde Nast Close Gourmet?
After a grim reaperish review by McKinsey consultants revealed that Conde Nast would have to cut up to 25 percent of its budget, the magazine company announced today that it will close four magazines: Gourmet, Cookie, Elegant Bride and Modern Bride. Most of the jaw-dropping online seems to be focused on Gourmet, an established name in the food journalism industry that has been publishing for more than 60 years. Why Conde, why?
Oct 5 2009, 11:50AM
Even Alan Greenspan Wants a Tax Increase
Last week, I attended the First Draft of History forum, hosted by the Atlantic and the Aspen Institute. With these on-the-record conferences, there's always a fraught dance the journalist-interviewers and the newsmaker-interviewees. The problem is precisely that "newsmaker" is an aspirational term -- we'd like them to make splashy news, and they would very much like to be thoroughly boring from a news-making perspective. But there were some key moments, like when Alan Greenspan, intellectual apple of the Randian tree, said we will absolutely need to raise taxes.
Oct 5 2009, 11:08AM
Did the Government's White Lies Endanger the Bailout?
Former Treasury Sec. Hank Paulson and Fed Chair Ben Bernanke misled the public about the bank bailout and damaged its "credibility" by claiming that TARP money was going to help healthy banks that later turned out to be quite troubled. I'm sure this fits snugly into the conspiracy narrative of the government's corrupt efforts to rescue Wall Street, screw the American taxpayer, and elect Goldman Sachs the crypto-chancellors of the financial underworld. But to me, this just seems redundant. On the brink of an apocalyptic worldwide financial panic, our economic leaders told us white lies about the banks' health. I'm not surprised. In fact, isn't that the point?
Oct 5 2009, 10:30AM
Are Time Inc, Conde Nast Building a Hulu for Magazines?
When some people floated the idea of an Apple iTunes for journalism this year, I thought it was a decent idea with some holes. Yes, bundling different website news stories might be the best way to convince online readers to pay for something they're used to reading for free, but news isn't like music. It's more ephemeral (you don't keep a "favorite" Associated Press story to read again and again) and it's more easily replicated (the same story often appears in the NYT, WSJ, Reuters, etc).
But today the Financial Times reports that Time Inc and Conde Nast are in talks to build something like an Apple iTunes (or is it a Hulu?) for journalism. How will this work?
But today the Financial Times reports that Time Inc and Conde Nast are in talks to build something like an Apple iTunes (or is it a Hulu?) for journalism. How will this work?
Sep 30 2009, 5:54PM
Breaking: Bank of America CEO Ken Lewis to Step Down
Embattled Bank of America CEO Ken Lewis is leaving the company, according to insiders. This is to expected. Lewis has been at the epicenter of numerous scandals and law suits since his bank's complicated merger with Merrill Lynch. You can read a full rundown of the deal and its agonies here. No word yet on replacements, which means the most undesirable job in all of finance is now open!
Also I hope this had nothing to do with the company being sued for 1,784 billion trillion dollars. Seriously, that happened.
Also I hope this had nothing to do with the company being sued for 1,784 billion trillion dollars. Seriously, that happened.
Sep 30 2009, 1:58PM
Is it Immoral to Donate to Harvard?
Harvard's endowment took at 25 percent tumble this year to $26 billion. That means it has gone from besting the GDP of Kenya to merely matching the GDP of Estonia. Should alums still give money?
No less than The Ethicist of the New York Times says: Absolutely not. Why not?
No less than The Ethicist of the New York Times says: Absolutely not. Why not?
Sep 30 2009, 12:20PM
If Not the Public Option, Then What?
Sep 30 2009, 11:50AM
Google Wave Moves Closer to "Reinventing" Email
Google Wave, a new online tool that combines email, document-sharing and photos in one program, has been released for beta testing for 100,000 developers. The Wave grew out of a challenge within Google to reinvent email by asking themselves the question: "What would email look like if we set out to invent it today?" Turns out it would look something like this:
Sep 29 2009, 4:30PM
The Public Option is Not Dead Yet
The Senate Finance Committee voted down two amendments that would have added a government run insurance plan to the Senate health care bill. Three Democrats -- Max Baucus, Kent Conrad and Blanche Lincoln -- voted against both amendments. No Republicans voted for either. That's to be expected, but it's also bad news for liberals who hitched their wagons to the public option. Still, as Billy Crystal said of Wesley in the Princess Bride, I think the plan is only mostly dead, not all dead.
Sep 29 2009, 2:10PM
Is Starbucks Instant Coffee a Good Idea?
Hear ye, mobile caffeine addicts of the world: Starbucks now sells instant coffee. It's called Via, and Starbucks thinks it could "change the way people drink coffee." Instant coffee represents about 40 percent of the global coffee market, CEO Howard Schultz said, and "Starbucks is uniquely positioned to capture a significant share of this market." Wait, didn't we just hear them shrugging off McDonald's competition by saying Starbucks is for people who care about good coffee? For a pseudo-Euro cafe with faux-Francaise decorating, that seems a touch...déclassé.
Sep 29 2009, 11:52AM
Why Some CEOs Deserve Their Big Salaries
Today CNN runs a list of the "top five most overpaid CEOs." I sort of hate this. Not because I don't like lists (I did click on it after all) but because I'm pretty exhausted with the overpaid CEO meme. Yes, corporate executives make exorbitant sums of money. But they're also in charge of companies that make exorbitant sums of money, and the difference between a well-run company and poorly run company is worth many times a CEO's salary. But even with that said, this list is weird.
Sep 29 2009, 10:18AM
Is Today the Public Option's Last Chance?
For people on both sides of the health care reform war, the battle to create a public option is a ground zero. For conservatives, a government-run insurance plan means slouching toward socialism. For liberals, it's the only thing that can provide affordable care for millions of Americans and bargain down costs at the same time. (To others in the middle, the benefits of a government run plan are entirely overblown.) Today the Senate Finance Committee will take up the public option in its markup of the health care bill. What should we expect?
Sep 28 2009, 4:33PM
HuffPo Writer: The Huffington Post is Killing Journalism
Huffington Post columnist Nancy Snow is absolutely livid that more Internet people are reading about a celebrity wedding than the death of New York Times columnist and logophile William Safire. This suggests to her "the death of an esteemed giant in American journalism is less newsworthy than a secondary tier celebrity wedding."
That would be a wonderfully cogent point if her column weren't staring directly into the headline "Who Has the Best Chest in Hollywood?" Unfortunately for Ms. Snow, her column is staring directly into the headline "Who Has the Best Chest in Hollywood?" With busty photos and a poll!
So I've got a question for Snow: Is the Huffington Post trying to kill journalism, too?
That would be a wonderfully cogent point if her column weren't staring directly into the headline "Who Has the Best Chest in Hollywood?" Unfortunately for Ms. Snow, her column is staring directly into the headline "Who Has the Best Chest in Hollywood?" With busty photos and a poll!
So I've got a question for Snow: Is the Huffington Post trying to kill journalism, too?
Sep 28 2009, 2:37PM
Are You Morally Required to Click Online Ads?
Advertisers monitor the success of their online ads partly based on clicks. The more clicks they get from a web page, the more effective they consider their advertisement and the more likely they'll continue to advertise. Does that mean clicking ads on your favorite site is a kind of small donation to the editorial team? It does!
So readers, thank you for coming and reading and all, but if you really want to do us a favor, click that Hewlett Packard advertisement on the right. Yeah, go ahead. Click it. Click it right now!
So readers, thank you for coming and reading and all, but if you really want to do us a favor, click that Hewlett Packard advertisement on the right. Yeah, go ahead. Click it. Click it right now!
Sep 28 2009, 12:22PM
The Wrong Way to Criticize Healthcare Reform
I think Robert Samuelson is a smart guy, and when the occasion calls for center-right curmudgeonly criticism, he's usually the center-right curmudgeon I seek out. But his column today is just weird.
Sep 28 2009, 10:46AM
Would the 2016 Olympics Be Good for Chicago?
President Barack Obama is flying to Denmark this week to lobby for Chicago to host the Olympics in 2016. This is the first time an American president has attended an International Olympics Committee vote, and it's expected to close the already razor-thin margin between front-runners Chicago and Rio de Janeiro. But wait. Don't the Olympics often lose money for cities?
Sep 25 2009, 5:07PM
Man Sues Bank of America for 1,784 Billion Trillion Dollars
Bank of America's legal troubles just got multiplied. By a billion trillion! Some dude is suing the bank for $1,784 billion trillion. That's a one followed by 22 digits.
Why? Oh, who even cares. Details after the jump. Have a good weekend.
Why? Oh, who even cares. Details after the jump. Have a good weekend.
Sep 25 2009, 2:08PM
The Public Loves the Public Option
Of course, polling is all about the wording. But considering that a public option for health care receives the support of only some Democrats exactly zero Republicans on the Hill, this is pretty shocking:
Sep 25 2009, 11:50AM
Could More Stress Tests Save Our Banks?
When Treasury announced it would conduct "stress tests" to assess the robustness of the country's largest banks, I thought to myself: That sounds like such an obvious idea, why don't we do it more regularly? When they resulted in a ferocious round of re-capitalization for the banks, it seemed all the clearer that more trustworthy (or at least trustworthy-seeming) information about our banks' health would make stoke investor confidence.
Hey look at that, smart people are asking the same thing!
Hey look at that, smart people are asking the same thing!
Sep 25 2009, 11:08AM
Conde Nast Might Kill Some Magazines After All
Conde Nast, the twinkling magazine publisher whose glossy covers match the shimmer of its iconic Times Square building, has been pummeled by the recession. So the firm hired a group of McKinsey consultants to examine ways to restructure the company, which is the business equivalent of phoning your local amputation surgeon.
As Megan reported yesterday, now that the doctor has examined the patient, fingers have been crossed for the severity of the diagnosis. The grapevine gossip is 25 percent cuts through the company. Yesterday's update: Hooray, no magazine closings! Today's update: Yeah, about yesterday's update...
As Megan reported yesterday, now that the doctor has examined the patient, fingers have been crossed for the severity of the diagnosis. The grapevine gossip is 25 percent cuts through the company. Yesterday's update: Hooray, no magazine closings! Today's update: Yeah, about yesterday's update...
Sep 24 2009, 2:55PM
Atlantic Story Leads to $1 Million Check for Homeless Couple
Atlantic correspondent Christina Davidson has been touring the country on a Recession Road Trip. Her post today is nothing short of astonishing.
Last week she wrote about a husband and wife living in a tent city for the homeless in Sacramento. Today she reports that a Texas senator saw the piece and contacted the Veterans Affairs Committee, which has agreed to give the husband a check for almost one million dollars to cover back pay for his last 18 years in retirement.
Here is the heart of the story:
Last week she wrote about a husband and wife living in a tent city for the homeless in Sacramento. Today she reports that a Texas senator saw the piece and contacted the Veterans Affairs Committee, which has agreed to give the husband a check for almost one million dollars to cover back pay for his last 18 years in retirement.
Here is the heart of the story:
Sep 24 2009, 2:30PM
Why Did Google Mail Fail Again This Morning?
Google mail failed for a "small subset" of users this morning (including at least 10 people I follow on Twitter and me), the second time the service has gone down in a month. Why?
Sep 24 2009, 1:36PM
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?
But is it true? Will health care reform cut into Medicare Advantage?
Sep 24 2009, 11:37AM
Why Does Congress Hate Nebraska's Unemployed People?
Unemployed Americans running out of jobless benefits are about to get a 13-week extension from the government -- but only if they live in states with unemployment higher than 8.5 percent. Rep. Lee Terry of Nebraska, who's low-unemployment blessing is now his state's curse, tweeted:
Good Tweet!Why is an unemployed person in California more worthy of help than an unemployed person in Nebraska?
Sep 24 2009, 10:25AM
Vegetarianism and Climate Change Politics
"For every newly converted vegetarian, four poor humans
start earning enough money to put beef on the table."
That bit of revelation is from Heart of Dryness: How the Last Bushmen Can Help Us Endure the Coming Age of Permanent Drought, by James G. Workman.
That bit of revelation is from Heart of Dryness: How the Last Bushmen Can Help Us Endure the Coming Age of Permanent Drought, by James G. Workman.
Sep 23 2009, 5:02PM
Bernie Madoff's a Crook, But He Didn't Lose $50 Billion
Bernie Madoff hardly seems like a real person to me anymore. He's more like a breathing allegory of evil -- an Iago for our times. But this is still an interesting thing. Remember way back to the early days of Madoff-mania when the number $50 billion was thrown around to ballpark his investors losses? Turns out that number was way, way too high.
Sep 23 2009, 3:27PM
Did Cash for Clunkers Fail?
Cash for Clunkers, the government's auto-revitalization plan, raced through $3 billion of stimulus money in a matter of weeks. As far as Keynesian economics go, it was a perfect stimulus -- it was targeted at a flailing industry, timely since it was mid-recession and temporary because the money's gone.
But was it the perfect stimulus for our economy?
But was it the perfect stimulus for our economy?
Sep 23 2009, 12:14PM
How Does Geithner Want to Fix Fannie and Freddie?
Treasury Sec. Tim Geithner spoke today on Capitol Hill about his sweeping financial regulation plans. Much of the highlights are familiar, such as higher capital requirements for the largest banks and a new agency to protect consumers. But this line about mortgage lenders Fannie Mae and Freddie Mac is cryptic:
We cannot permit weak regulation of government-sponsored enterprises like Fannie Mae and Freddie Mac that accumulate trillions of dollars of exposure that is implicitly backed by the taxpayer.To be sure, cryptic maxims are de rigueur in sweeping policy speeches. But what is Geithner actually saying? Is the thing "we cannot permit" (1) the weak regulation of the government-sponsored enterprises (GSEs), or is it (2) their very existence?
Sep 23 2009, 11:15AM
Why JPMorgan's New Overdraft Rules Are a Big Deal
Weeks after a blistering report accusing banks of racking up historic overdraft fees to the tune of $38 billion (yes, with a "b"), the nation's largest commercial banks are reforming their overdraft rules. Bank of Ameica and JPMorganChase pledged to reduce fees and let customers opt out of over-drafting all together. This is excellent news for both consumers and the Obama administration.
Sep 23 2009, 10:26AM
Microsoft Courier Tablet Looks Like a Game Changer
The electronic reader arms race was already heating up, with Sony introducing its own versions of the Amazon Kindle and Apple fanatics sweating the long-awaited Apple Tablet -- basically a big iPod Touch for video and e-books. But this could change everything:
Microsoft has unveiled its own tablet-type computer, except it's not exactly a single-faced tablet. It's an electronic booklet with two screens, a stylus and an instruction video that makes the product look something like wizardry. Trust me, you'll want this.
Microsoft has unveiled its own tablet-type computer, except it's not exactly a single-faced tablet. It's an electronic booklet with two screens, a stylus and an instruction video that makes the product look something like wizardry. Trust me, you'll want this.
Sep 23 2009, 9:45AM
How Health Care Projections Can Go Wrong
Yesterday I wrote:
Fiscally, [health care reform] is about keeping health care inflation from running away with an ever-increasing percent of government spending.A couple commenters took me to task. How could I say that health care reform would curb health care inflation when most of the current plans' are projected to add to our long-term debt?
Sep 22 2009, 4:24PM
Is Health Care Weakening Obama Abroad?
One of my favorite rhetorical hallmarks of Obama is his habit of tying policy goals together. The impact of the fiscal stimulus highlights the plight of the unemployed, which accentuates the need for universal health care, which we must use to bend the curve of health inflation down to control our debt, which is necessary to continue good relations with the Chinese ... and so it builds. I call it the Jenga! Theory of Rhetoric, because stacking your policy proposals on top of each other makes them seem more impressive and organized, but when one block slips, the tower comes tumbling down.
Sep 22 2009, 1:25PM
How to Get Re-Tweeted in Three Easy Steps
We're not afraid to be servicey at Atlantic Business, so here's something you can take with you: Three scientific -- scientific! -- ways to ensure that your cogent Twitter commentary will receive that golden laurel of social media acceptance: The Mighty Re-Tweet.
Sep 22 2009, 12:07PM
Bing Gains on Google, But Still Way Behind
Microsoft's new search engine Bing is closing in on 10 percent of the query market, as the company has reported a 4.5 percent increase over July. That's good news for the search engine, which I've tried and reviewed, and consider an excellent product. The less-good news is that, at 9.4 percent, Bing is still lightyears behind Google search, which continues to command about two-thirds of the market.
Sep 22 2009, 11:40AM
In Defense of the Soda Tax
Like a season of your favorite broadcast sitcom, rumors that the federal government might use a soda tax to help pay for health care reform largely disappeared over the summer, only to make a triumphant September return. Ezra Klein and Jon Cohn now both see a soda tax as part of the finance package to pay for trillion-dollar health care reform. Is this a terrible idea?
Sep 22 2009, 10:30AM
America's Lost Decade, Cont.
For the last few months, Atlantic Business has been running an occasional series on the last decade, which has been, in far too many ways, a lost decade for Americans. Private sector job growth in the last ten years is now negative for the first time since the Great Depression. Income for the median American household fell for the first time in four decades according to the new Census report. And it's possible we haven't hit the bottom in either category.
If you prefer your bad news in picture form, then try this.
If you prefer your bad news in picture form, then try this.
Sep 22 2009, 9:24AM
How We Will Pay for Health Care Reform
Health care reform will pass. Not because Max Baucus is the next coming of Ted Kennedy, or because President Obama is the next coming of LBJ, or because Rahm Emanuel is the next coming of Rambo. It will pass because it has to, because health care is the centerpiece of a landslide-elected president's agenda, because allowing it to die would be an astonishing allowance of weakness on the party of a super-majority, and because Democrats know that nothing makes your party look like a winner more than a Rose Garden celebration in which you proclaim yourselves (rightly or wrongly) authors of the most important piece of legislation in a generation.
But how will health care reform pass? It's all about the Benjamins.
But how will health care reform pass? It's all about the Benjamins.
Sep 21 2009, 2:50PM
A Grand Unified Theory of the Financial Crash
My colleague Megan McArdle wrote a post this afternoon reviewing the common villains of the financial crisis. It seems that for every villain -- from banker pay to securitization (the ability to turn income streams like mortgages into tradable securities) -- there is a smart, even correct, defense of said villain. Most of the explanations for the crisis, Megan observes, falls into two pat categories: (1) Bankers had bad incentives or (2) bankers didn't understand the risks. Those aren't mutually exclusive, of course, but still I lean, with Megan, toward (2). Where I suppose I break from her lead, however, is her last sentence:
But the more time we waste trying to figure out who did us wrong, the less quickly we will arrive at an actual solution.I, too, would consider it a waste if we knew exactly what happened in 2008, and all that was left was to divvy up blame between the bankers, regulators, government and public. And I thought I had heard every grand unified theory imaginable of the Crash of 2008. But this column by National Journal's Jonathan Rauch makes me think again ... again!
Sep 21 2009, 12:05PM
Should Obama Bail Out the Newspapers?
As America's newspapers continue to seek the bottom of the advertising abyss, Obama told reporters that he is "happy to look at" bills that would give newspapers tax breaks if they became non-profits. Atlantic alum Conor Clarke unpacked his thoughts on newspaper subsidies with great eloquence here. His point was pretty straightforward: News isn't just any good (like Snuggies). It's a public good (like vaccines). We subsidize plenty of public goods (like vaccines), so why not subsidize the news, too?
The Atlantic's newest member Michael Kinsley responded:
The Atlantic's newest member Michael Kinsley responded:
Sep 21 2009, 10:15AM
Would You Watch TV in 3D?
On my living room couch Sunday, glued to an all-start TV line-up of football, the Emmy Awards and a Tom Cruise marathon on TBS, I couldn't help but wonder to myself that something was missing. It wasn't popcorn. It wasn't beer. And it sure as heck wasn't Tom Cruise. Was it ... The Third Dimension?
Television makers certainly hope so. Experts expect 3-D television to hit the market in 2010, and companies like Sony and Panasonic are already just months away from rolling out their own 3-D boob tubes.
Television makers certainly hope so. Experts expect 3-D television to hit the market in 2010, and companies like Sony and Panasonic are already just months away from rolling out their own 3-D boob tubes.
Sep 18 2009, 4:24PM
What Does the Journalism Job Market Look Like?
Michael Mandel, the excellent BusinessWeek economist, is writing a three-part series about the state of the journalism industry filled with scary charts. Considering that his magazine is losing more than $40 million a year and has been put up for sale for as little as $1, this is, sadly, perhaps the 21st century equivalent of studying northern Atlantic nautical charts in your bedroom chamber on the Titanic. But these charts are still useful!
Sep 18 2009, 11:45AM
Americans with North Korea's Life Expectancy
This is a very troubling statistic, from Catherine Rampell at Economix:
The average life span for African-Americans in Louisiana today (72.2 years) is shorter than that of Colombians, Vietnamese and Venezuelans. The average life span of an African-American in New Orleans is 69.3 years, nearly as low as life expectancy in North Korea.From the American Human Development Project's "Portrait of Louisiana."
Sep 18 2009, 11:30AM
The Miserable Unemployment of MichiCaliFlAriVada
MichiCaliFlAriVada, people. You don't want to live there. Because while the recession has been bad for the United States of America, it's been especially terrible for the united states of Michigan, California, Florida, Arizona and Nevada. In just about every economic category of pain -- home depreciation, credit card debt, unemployment and so on -- those five states, or a handful of them, cluster at the top. Unemployment numbers by state are out again today. Michigan, Nevada and California are three of the top four.
Sep 18 2009, 10:39AM
In Defense of the Baucus Health Care Bill
The running joke about Sen. Max Baucus, who released his $800 billion health care reform bill this week, is that he finally created the bipartisanship consensus he's craved by creating a bill that both Democrats and Republicans hated. I offered this rundown of groups he managed to peeve: Republicans and liberals, unions and libertarians, insurers and social welfare groups -- you know, most breathing organisms.
But now, as predictable as the undertow after the wave, it's the backlash to the backlash. Out: The Baucus bill stunk. In: The Baucus bill is actually pretty good!
But now, as predictable as the undertow after the wave, it's the backlash to the backlash. Out: The Baucus bill stunk. In: The Baucus bill is actually pretty good!
Sep 17 2009, 3:43PM
Why Student Loan Reform is Essential
The House of Representatives voted today to pass a bill that effectively kills private lenders in the student loan market. That might sound terribly disruptive, but most of these student loans have always been backed by the government in the case of default and so the House essentially voted to cut out the middleman -- banks who were profiting from zero-risk student loans. This law is without question good for the the federal government, which stands to save $87 billion in the next ten years, and for low-income students who will likely reap the dividends.
Sep 17 2009, 3:00PM
Wages Are Rising! (Or Are They?)
As we peek our noses out from the dank bomb shelter of the recession, we're beginning to see some positive signs. Here's one of them, from the New York Times' David Leonhardt, we get word that year-over-year earnings are up. "Wage growth has picked up in the last several months, according to two different government surveys." Great news!
Not so fast, says Dean Baker. Leonhardt's being tricked by nominal wages as opposed to real wages. In fact "for 2009, real wages have unambiguously been falling and are likely to continue to fall as modest increases in commodity prices are not offset by nominal wage growth."
Not so fast, says Dean Baker. Leonhardt's being tricked by nominal wages as opposed to real wages. In fact "for 2009, real wages have unambiguously been falling and are likely to continue to fall as modest increases in commodity prices are not offset by nominal wage growth."
Sep 17 2009, 2:16PM
The Most Clever Part of Baucus' Healthcare Plan
One way Sen. Max Baucus expects to pay for his $800 billion health care reform plan is to tax insurance companies for expensive plans. This tax will probably be passed down to some employers and employees in the form of higher rates, but there's at least a two-part rationale: (1) To cover the cost of extending health care to tens of millions of Americans and (2) To encourage employers to shift to cheaper health care plans. But here's what's so clever about the way Baucus plans on using this excise tax:
Sep 17 2009, 11:40AM
What is the Health Insurance Exchange?
One of the most confusing aspects of the health care debate for me has been trying to understand what the health insurance exchanges will actually do. I understand the basic definition: The exchange is a government-regulated marketplace of insurance plans with different tiers, or levels of coverage, offered to individuals without health care or to small companies. Presumably, the presence of government-regulated exchanges will, like any functioning market, bring prices down so that personal and employer-provided insurance is both comprehensive (ie cannot legally skimp out on necessary care or otherwise abuse customers) and competitive (ie enough demand will force insurance companies to cut prices to compete). But what will the health insurance exchange actually look like? It'll look like this:
Sep 17 2009, 11:10AM
Kindle Beats Paper in Online Sales of Top Book
I knew the e-reader revolution was on the horizon, but I didn't realize that the horizon was right in front of my nose. The Kindle version of Dan Brown's new thriller The Lost Symbol is out-selling the hardback version on Amazon. How is that possible? E-readers are not even close to being mass market. Total e-reader ownership is something in the realm of two to three million. Who's got explanations?
Sep 17 2009, 10:30AM
Facebook Turns a Profit, Users Hits 300 Million
So much for half-baked rumors of a Facebook exodus. Facebook has turned a profit for the first time since Mark Zuckerberg founded the company in a Harvard dorm room five years ago. How exactly? Reports say the money comes from applications sold through the
website and online advertising. That's weird, because when I look at the column of ads next to my Facebook profile it's basically thumbnails of dudes asking me to turn my face into a cartoon. "Cartoonize yourself" to profit? Whatever works, Zuck.
Oh, this seems the be the key: Users have tripled to 300 million in the last year. That's a lot of moms.
Oh, this seems the be the key: Users have tripled to 300 million in the last year. That's a lot of moms.
Sep 17 2009, 9:45AM
The Recession is Over. So Why is Lending Down?
Fed Chairman Ben Bernanke says the recession is over. Hip-hip hooray, I guess. If we go by GDP, he's probably right. Just about every economist in the country expects third-quarter growth to be positive, which technically means the recession is over. But with unemployment expected to continue growing and the job market scraping the ocean floor in just about every category, it's hard to muster much joy about domestic product numbers. And then there's this: Bank lending is down for the sixth straight month.
How is that possible?
How is that possible?
Sep 16 2009, 2:50PM
Does Anybody Actually Like the Baucus Health Care Bill?
This is 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:
Sep 16 2009, 12:23PM
Lies, Damned Lies and Bank of America
Bank of America's legal team already has its hands full with New York State Attorney Andrew Cuomo filing four charges of securities fraud. Now a judge has formally rejected the $33 million settlement between the SEC and Bank of America and stated flatly that BofA lied to shareholders before they voted to approve the $50 billion merger with Merrill Lynch. The glistening new Atlantic Wire rounds up reaction from around the Internet, and the reaction sounds a lot like clapping. I'll offer a concurring opinion. I think it's fairly clear that Bank of America lied, possibly on numerous occasions. Here's the story, in all its weird glory*:
Sep 16 2009, 11:30AM
Do You Live in America's Most Frugal City?
Did you know that Chicago spends way more on books than any major US city? It's true. Or that Philadelphia spends the most on electronics? Weird. Or that New Yorkers spend the most on clothes? Well that last bit isn't so surprising, I guess.
But which cities spend the least amount on everything? Drumroll please: The winner of the 2009 Frugal Fannie Award is:
But which cities spend the least amount on everything? Drumroll please: The winner of the 2009 Frugal Fannie Award is:
Sep 16 2009, 10:03AM
Kaiser Report Forecasts Pain in Employer-Provided Care
One of the top challenges of selling health care reform is that the vast majority of Americans -- and more than 90 percent of voters -- already have health care. What's more, more than 80 percent consistently say their coverage and quality are good. So how do you sell a trillion-dollar reform of something that people already have and like? You convince them that the good times can't roll on forever, that pain is on the way. If Obama wants to persuade employees with health care that reform is necessary, he should definitely point to this survey. This is what the pain looks like:
Sep 16 2009, 9:05AM
How Warren Buffett's Cellphone Killed Lehman Brothers
On Monday, Sept. 15, 2008, the world woke up to a radically reconfigured Wall Street. Giant investment bank Lehman Brothers filed for bankruptcy. Bank of America swallowed the humongous toxic asset spill that was Merrill Lynch. The stock market plummeted 500 points. But what if the story didn't have to go that way? What if Lehman Brothers could have been saved by Warren Buffett ... if only he knew how to use his cellphone? This is a pretty extraordinary story, from TIME's Karen Tumulty:
Sep 15 2009, 12:43PM
Is Glenn Beck's Ad Revenue Imploding?
Glenn Beck has been losing advertisers for a few months now, but Fox News continues to claim that they're not losing revenue, they're just moving around advertisers to keep the sensitive companies away from Beck's unique blend of proto-patriotic neo-apocalpytic humor. But Gawker gets their hands on some information that suggests Beck's advertising revenue has cratered:
Sep 15 2009, 11:20AM
I Want "The Jay Leno Show" to Fail
NBC primetime television is in big-time trouble. Profits are cascading, the shows are objectively terrible, and they've released Ben Silverman, the supposed child-genius savior of the medium. With their 10PM spot quickly fading behind CBS' juggernaut of crime shows, they had to do something radical. So they lowered the bar, lowered their overhead and bumped up TV's reigning king of low-expectations humor into the primetime spot. Who's that big mug threatening to remake the future of television? It's Jaaaaaaaay Leno!
Sep 14 2009, 3:57PM
The Public Doesn't Understand the Public Plan
Does health care reform have a better chance of passing Congress without a public option? I don't know. But this is a really important question, so the Washington Post conducted a big poll to figure it out. The headline over the poll announces: "More support if public option dropped." What the headline leaves out is: This poll makes no sense.
Sep 14 2009, 1:23PM
Jennifer Aniston Theory of Obamaism, Part III
The President's speech to Wall Street today about financial reform has all the classic Obama touches. Linking reform to responsibility? Check. Shooting down straw men who defend the status quo? Check. Channeling Jennifer Aniston? Big fat check.
Let me explain!
Let me explain!
Sep 14 2009, 12:25PM
Four Questions About Obama's Financial Reform Speech
On Sept. 15, 2008, Lehman Brothers filed for bankruptcy, Bank of America bought Merrill Lynch and the Dow dropped 500 points. Today President Obama will speak to the country about our financial system with what should be a two-part message. Part One: Remember when our banking industry almost lit itself on fire? Thank God we unleashed the hoses before it was too late. Part Two: Let's make our banking industry a little more fireproof.
Sep 14 2009, 11:02AM
Did the Lehman Collapse Save the Financial System?
On a Monday morning, one year ago, Lehman Brothers collapsed, the stock market plummeted 500 points and the Panic of 2008 reached a feverish pitch. Conventional wisdom over the last year says that Fed Chair Ben Bernanke and then-Treasury Sec. Hank Paulson made the biggest mistake of their careers that weekend by failing to save the storied investment bank. But what if the conventional wisdom has it backward? What if allowing Lehman to fail was less like an unscrupulous shot to the foot and more like the prudent amputation of the foot to save the patient? Joe Nocera of the New York Times makes the case. Let's evaluate:
Sep 11 2009, 4:40PM
The Case for Healthcare for Illegal Immigrants
Sens. Baucus and Conrad are considering re-writing parts of the health care bill in reaction to Rep. Joe Wilson's uncouth blurt that Obama's pants were on fire when he claimed healthcare reform would not cover illegal immigrants. And liberals. Are. Screaming. I don't know about the politics of this -- it's not as though Wilson's vote matters, or will change out of deference to Conrad's thoughtfulness -- but let's consider the economics. Do illegal immigrants receive some form of health care already? Yes. Would extending Medicaid and subsidies increase the number of illegal immigrants on health care? Probably. Does that cost taxpayers money? Of course. So what should we do about it? Unclear.
Sep 11 2009, 2:11PM
The Myth of an Independent Blogosphere
Think the world of blogs is a democratic utopia where an "army of Davids" can take down big media while holding onto its indie cred? Think again. So says the Atlantic's own Benjamin Carlson, who has a dispatch today on the rise of the professional blogger. For those dreaming of a Jeffersonian landscape of independent bloggers, these stats are damning:
Sep 11 2009, 11:44AM
Why are Southern Middle-Aged People So Sad?
Sep 11 2009, 10:58AM
How Joe Wilson, Sarah Palin Killed the Healthcare Debate
In less than 48 hours, Rep. Joe Wilson's two little words have lifted the relatively obscure congressman into what could only be called Sarah Palin Status. It's a dual status. To their party, both are maverick heroes. To their detractors, they represent something between a morbidly fascinating joke and the perfect strawman. In liberal company, after all, "Did you hear what Palin said?" is the political equivalent of "A dyslexic walks into a bra." There is no punchline. The joke has already been told.
And by offering themselves up as jokes, they (and we) do the same to our health care discussion. Just as Sarah Palin's death-panel blathering obscures what should be a substantive debate over how to cut Medicare costs without harming services, Joe Wilson's locker-room shout-out caricatures the real controversy about health care for illegal immigrants.
And by offering themselves up as jokes, they (and we) do the same to our health care discussion. Just as Sarah Palin's death-panel blathering obscures what should be a substantive debate over how to cut Medicare costs without harming services, Joe Wilson's locker-room shout-out caricatures the real controversy about health care for illegal immigrants.
Sep 10 2009, 3:03PM
The Income Drop and America's Lost Decade
Private sector job growth in the last ten years is now negative for the first time since the Great Depression, Michael Mandel reports on his BusinessWeek blog. It's just not the jobs that are disappearing. It's the salaries that are flat-lining. Income for the median American household fell for the first time in four decades according to the new Census report. And the bottom for income and joblessness isn't even here yet.
Sep 10 2009, 12:56PM
What Obama's Speech Did Right and Wrong
I agree with Matthew Cooper that it's way too early to say whether last night's health care speech reset the debate or whether it was essentially a Roosevelt Room speech to Congress that some of my blogger friends happened to watch on television. My guess (and that subject has a way of jinxing whatever goes in the predicate) is that we'll see a bit of a bump in health care support next week, when Americans tune in to cable news and see pundits praising the rhetoric or wincing at the mention of Rep. Joe Wilson's bizarre efforts to import British (socialist?) parliamentary decorum.
Anyway, the most effective parts of the speech, I think, were the parts that dealt with fairness.
Anyway, the most effective parts of the speech, I think, were the parts that dealt with fairness.
Sep 10 2009, 11:00AM
Will Rhapsody for the iPhone Kill iTunes?
The 9/9/09 Apple conference was considered pretty uneventful, at least by Apple's standards, but there was one big announcement that managed to sneak under the radar: Apple will finally allow streaming music on its mobile devices in the United States. Rhapsody has arrived for the iPod Touch and iPhone, and that means that for $15 a month, you have on-demand access to just about every song in the world. Bye-bye, iTunes?
Sep 9 2009, 3:47PM
What Will the Next Economic Crisis Look Like?
Barry Ritholtz' The Big Picture is a wonderful blog. But given the name and my preference for visual learning, I've always thought it could use more, well, big pictures. So I was quite pleased to head over there today and find just that: A big fat picture of 14 of the biggest market bubbles of the last few centuries. Check it out:
Sep 9 2009, 2:52PM
Can Obama Revive the Dead Public Option?
There are at least three important points to make about a government-run insurance plan -- or public option -- before President Obama's primetime speech on health care reform tonight. (1) President Obama will endorse the public option. (2) Sen. Max Baucus, a key moderate Democrat and Senate linchpin, considers the public option impossible to pass. And (3) Even if a public option does pass, we should be very skeptical about its ability to control health care inflation.
Sep 9 2009, 12:55PM
When Economics and Democracy Don't Mix
The United States won't stand for a Japanese-style Lost Decade, James K. Galbraith, economist and historian, tells McClatchy Papers in a recent interview. You hear that, Nouriel Roubini? We won't stand for it!
Alright then, so what's Galbraith's proof? It's a little confusing.
Sep 9 2009, 12:00PM
The Looming Debate Over Tax Increases
Above health care and climate change and financial regulation, a larger debate casts its dark shadow: Taxes. President Obama says he's serious about closing the deficit. He has also said, both on the campaign trail and in office, that he has no plans to raise taxes on anybody making under $250,000 a year. Can both things be true? David Wessel, economics editor of the Wall Street Journal, said flatly: No.
Sep 9 2009, 11:09AM
The Case Against Bank of America
New York State Attorney Andrew Cuomo is close to slapping Bank of America with four charges of securities-fraud "failures" during its hectic December 2008 merger with Merrill Lynch. As I've written before, it seems quite likely that at least some of Cuomo's charges have common sense, even explicit law, on their side. Let's review the legal strangeness of this epic month:
Sep 9 2009, 9:42AM
Why Dodd's Choice to Remain Senate Banking Chair Matters
When Ted Kennedy passed away, it opened the chairmanship of the Health, Education, Labor and Pensions Committee in the Senate. Some insiders expected Sen. Chris Dodd to bolt from his perch at Senate Banking to take over for his friend. That might have been good for Dodd, who faces a tough re-election after months of PR clobberings, but it would have spelled doom for financial reform. Dodd's successor might have been South Dakota Sen. Tim Johnson, whose relationship with banks, especially Citigroup, is fairly intimate.
But good news for financial reformers. Sen. Chris Dodd is staying! Good luck with your potentially doomed re-regulation and re-reelection plans, Sen. Chris Dodd!
But good news for financial reformers. Sen. Chris Dodd is staying! Good luck with your potentially doomed re-regulation and re-reelection plans, Sen. Chris Dodd!
Sep 8 2009, 4:31PM
If You Think Health Care Is Fun, Wait for the Energy Bill
There are a couple front-pagers today bout the looming battle over the climate change bill, which is on the Congressional line-up after health care. It doesn't take a very deep read to see the climate change imbroglio is going to look less like a sequel to health reform, and more like one of those movie remakes like Psycho where different actors play the same parts but most of the movie is faithfully recreated, shot for shot.
Sep 8 2009, 2:08PM
Why Are Unions More Unpopular Than Ever?
Gallup
reports that union support is at an all-time low, having fallen to 48
percent from 59 percent last year and as high as 65 percent this
decade. What gives?
Economix has some smart thoughts. Those auto bailouts were outrageous, and Americans could be transferring their frustration over to the unions. Nate Silver has a simpler explanation: Unemployment and falling union support like to hold hands.
Economix has some smart thoughts. Those auto bailouts were outrageous, and Americans could be transferring their frustration over to the unions. Nate Silver has a simpler explanation: Unemployment and falling union support like to hold hands.
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:
Uh oh.
The AFL-CIO will only support legislation that has an employer mandate, no taxes on health-care benefits, and a public insurance option, with Trumka calling the conditions "absolute musts."But today Sen. Max Baucus, ring-leader of the Senate's bipartisan "Gang of Six" on health care reform, released his long-awaited $900 health reform plan. Let's check for "absolute musts." Employer mandate? Nope. No taxes on health-care benefits? Sorry! Public insurance option? Not exactly.
Uh oh.
Sep 8 2009, 10:06AM
Don't Read This Blog Post
Google is making us stoopid, after all. This, from a British study:
On the Internet, that leaves ... not much at all. Including this blog post. Click away! Save your brains! What's left of them, anyway.Evidence shows technology which requires a short attention span - such as Twitter and short YouTube clips - is bad for our brains.
Sep 4 2009, 3:28PM
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.
Sep 4 2009, 12:32PM
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!
Christopher Beam of Slate says that when Joe Biden talks about the stimulus plan, he's really talking about that other multi-hundred billion bill they've got in the pipeline.
Christopher Beam of Slate says that when Joe Biden talks about the stimulus plan, he's really talking about that other multi-hundred billion bill they've got in the pipeline.
Sep 4 2009, 11:22AM
Could This Graph Save Health Care Reform?
Kevin Drum has a killer big-picture post asking why it's so difficult for liberals to make the argument for health care reform. I want to begin where he ends, with a graph comparing how much countries spend on health care throughout the world. Guess who "wins" by a wide margin?
USA! USA!
USA! USA!
Sep 4 2009, 10:14AM
Why the Rising Unemployment Numbers Aren't All Bad
The unemployment rate in August jumped 0.3 percentage points to 9.7 percent. That's bad. It's the worst unemployment rate since 1983, and the economy has now bled more than 7 million jobs since December 2007. But inside the numbers, there are some interesting observations. Let's take a look under the hood:
Sep 3 2009, 1:57PM
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.
Sep 3 2009, 1:10PM
The Media's Instinct to Cover Crazy People
It's a universally acknowledged fact these days that Fox News is doing a rotten job covering the health care debate. But what about the liberal media? By constantly harping on the craziest of the crazy protesters to set them on a tee and whack their crazy lies with a three wood, maybe they're not helping to make the fundamental point, which is that crazy sideshow fanatics don't deserve to take up the bulk of every cable news hour. Matt Yglesias makes a really good point here:
Sep 3 2009, 11:38AM
How Pathetic Was the SEC's "Investigation" of Bernie Madoff?
Stephen Dubner is right. This New York Times story on the SEC's jaw-dropping inability to uncover the in-plain-sight frauds of Bernie Madoff is downright terrifying. Like watching a movie scene where you know a horrific ending is imminent as the ominous strings crescendo, the story gives me both goosebumps and an animalistic desire to scream heedless warnings at my screen. Except it's less "Don't answer the phone!"/"The axe is right behind you!" and more "Pick up the phone!"/"The false trading documents are right in front of you!" Here are the scariest paragraphs:
Sep 3 2009, 10:32AM
What Do Today's Jobless Numbers Mean for the Unemployment Rate?
Tomorrow the Bureau of Labor Statistics announces the unemployment rate for August, rounding out a rough summer for job seekers. The unemployment rate in July surprisingly fell to 9.4 percent from June's 9.5 percent, but that 0.1 percentage point drop doesn't tell the whole story. The unemployment rate does not account for part-time workers or workers who have given up looking for jobs, and the drop in unemployment really meant more people were leaving the workforce. As Dan Indiviglio helpfully pointed out last month, "In reality, those who would like a job but don't have one increased by from [10.1] to 10.2 percent."
Sep 3 2009, 10:22AM
Does the Internet Make Better Pundits?
Really interesting piece from Justin Fox at Time's Curious Capitalist blog.
I'm not sure I agree with it, but since all commentary of the subject
of "Toward a Better Future in Journalism!" is fundamentally
speculative, I thought I'd throw it in front of you and see what you
think. To set the stage, he's riffing on a blog post by Karl van
Wolferen about the changing organization of journalism and whether
America's morbid fascination with objectivity would be cured by simply letting reporters share their thoughts in their stories:
Sep 2 2009, 5:17PM
Did the Stimulus Save the Economy?
We've hardly spent $100 billion of stimulus money, but some really smart economists are arguing that the stimulus has basically pivoted the economy (sorry Tim Pawlenty!) Ezra Klein quotes from a Wall Street Journal article, arguing that, without the stimulus package, we might be stalled at 0.0 percent growth through this third quarter. Instead, we're growing at a predicted 3 percent rate. At least that's what Goldman Sachs' chief economist thinks:
Sep 2 2009, 4:25PM
Don't Worry About the Debt?
My colleague Conor Clarke has a piece in Slate today making the counter-intuitive claim that maybe our debt isn't that scary, after all. Income and quality of life improve with each generation. Our economy's nature is to grow. Improvements in technology make our work more productive (Facebook notwithstanding) and invariably make the country richer. Conor writes: "Just as there are good arguments for imposing costs on the present-day
rich for the benefit of the present-day poor, there are good arguments
for imposing costs on America's wealthy future for the sake of its
relatively impoverished present."
Boy I hope he's right! But paragraphs like this make me worry:
Boy I hope he's right! But paragraphs like this make me worry:
Sep 2 2009, 3:11PM
Guess Which Cities Lead in Unemployment?
The MichiCaliFlAriVada crisis is still rolling. Let me explain: It's long been my pet theory that the worst of the worst in the Great Recession of 2009 is focused in five states: Michigan, California, Florida, Arizona and Nevada. The first is home to collapsing manufacturing and auto giants, while the latter four represent the epi-centers of the real estate earthquake and the credit crisis.
Now the Bureau of Labor Statistics has fresh city-by-city unemployment numbers for July 2009, and you'll never guess which states face the worst damage...
Now the Bureau of Labor Statistics has fresh city-by-city unemployment numbers for July 2009, and you'll never guess which states face the worst damage...
Sep 2 2009, 2:47PM
Public or Private, Americans Love Their Health Care
Sep 2 2009, 1:19PM
Will It Ever Be OK to Use 9/11 in an Ad?
The World Wildlife Fund finds itself in a bizarre and fascinating controversy over an advertisement designed for the company featuring a gaggle of airplanes bearing down on the twin towers. It's a reference to the deadly Asian tsunami that killed "100 times more people than 9/11." "Too soon," said a couple people I follow on Twitter. They're obviously correct. The outcry over the ad has been significant, and the World Wildlife Fund indignantly claims it never approved the image. But it makes we wonder (and I hope it's not too soon to simply wonder!) when 9/11 will be an acceptable cultural reference for advertisements like this.
Sep 2 2009, 12:20PM
The Most Misreported Statistic in Economics?
Consumer spending is 70 percent of GDP. That's not just a statistic I remember hearing once in Macroeconomics class. It's something I read on a nearly weekly basis. It's something I write on a nearly monthly basis: Consumer spending is way down in the recession, and that's terrible because it accounts for 70 percent of our GDP.
But that's simply not true, writes BusinessWeek economist Michael Mandel. Consumer spending -- money coming out of our wallets and bank accounts that contributes to our GDP -- is closer to half that number. Have I been living a lie?
But that's simply not true, writes BusinessWeek economist Michael Mandel. Consumer spending -- money coming out of our wallets and bank accounts that contributes to our GDP -- is closer to half that number. Have I been living a lie?
Sep 2 2009, 11:23AM
Don't Pay Attention to the US News College Rankings
The new US News & World Report college rankings came out recently, and a new study claims to show that they really do matter in a virtuous (or vicious) cycle kind of way. If your school moves up in the top 25 national university list applications will increase, which will help your ranking next year, which will cause applications to increase, and so on. My reactions: 1) No kidding. 2) That's a shame.
Sep 2 2009, 10:34AM
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?
Sep 1 2009, 4:59PM
Could the Economic Bailout Turn a Profit?
Yesterday I wrote that early returns from banks paying back TARP money suggests the Troubled Asset Relief Program designed to provide emergency funds to banks during the crisis could make a profit. I cautioned that we shouldn't be so optimistic about the profitability of all our bailouts, which included Fannie/Freddie, AIG and the auto industry.
But today (via Curious Capitalist) I find an argument for why we should expect the Fannie/Freddie rescue to pay back its funds -- and then some! -- in the next four years.
But today (via Curious Capitalist) I find an argument for why we should expect the Fannie/Freddie rescue to pay back its funds -- and then some! -- in the next four years.
Sep 1 2009, 2:59PM
The Worst NYT Trend Story of the Year?
Here's an early autumnal contender: Virginia Heffernan's entirely anecdotal story about a massive Facebook Exodus. How serious is this Facebook exodus? Heffernan explains:
The exodus is not evident from the site's overall numbers.The exodus is not evident from the site's overall numbers! Some trend!
Sep 1 2009, 1:30PM
Why Online News Should Be More Like Cable
Peter Osnos has a wonderful piece
in our Correspondents blog about how we pay for news. The vast majority
of my liberals friends, I'm reminded, pay for Fox News (which they
hate) and won't pay for the New York Times (which they read daily).
That's because they expect to pay for cable packages including Fox News every month, while they expect to
read NYTimes.com for free online every day. And therein lies the problem:
Americans willing to pay for cable television subscriptions to channels they never watch must be persuaded to subscribe to online versions of the publications they read in print or on the Internet.
Sep 1 2009, 11:49AM
Why Did eBay Sell Skype?
EBay sold Skype to private investors today for $2.75 billion -- less than it paid to acquire the online phone service company three years ago. What prompted the sale, and was it a good move for either company?
Sep 1 2009, 11:20AM
Is FLYP the Future of Online Publishing?
The crisis of journalism's profitability is a story with many authors, and few solutions. Magazine circulation is down, newspaper revenue is plummeting, and the Internet has yet to demonstrate that it can replace the revenue model of the old media giants. Articles about journalism's downward spiral often include allusions to a game-changer -- something new and bold that will emerge from the industry's ashes of to provide quality journalism with the financial foundation it needs to support itself.
Could it be FLYP?
Could it be FLYP?
Aug 31 2009, 4:15PM
Are Regular Books Greener Than the Amazon Kindle?
Of course not. But the New York Times publishes the self-evident findings of a redundant survey on the question: Are E-Readers Greener Than Books? That's not a real question. One is basically a downloadable file living on a small computer. The other is made of dead trees and barrels of ink and printing presses, and it travels on fossil fuel-burning planes and trucks. Next week's question: Is it greener to watch Casablanca or fly to Casablanca?
Aug 31 2009, 1:42PM
Are We Turning a Profit on TARP?
For the banks, for the government, for taxpayers and for their precious debt-burdened children, this is some welcome good news: TARP could turn a profit. This article in the New York Times (see graph below) spots a 15% profit from eight of the big banks that have repaid their TARP funds. Somewhere in the Hamptons, Hank Paulson is gleefully scribbling a footnote to his memoirs.
Aug 31 2009, 12:36PM
Why Do Seniors Oppose More Government Healthcare?
Why are seniors with government-run healthcare the most nervous about a plan that includes ... more government-run
healthcare? Last week, I offered three theories.
1) They're older and more conservative. The end!
1) They're older and more conservative. The end!
Aug 31 2009, 10:05AM
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!
Like gasoline prices!
Aug 28 2009, 4:10PM
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.
Aug 28 2009, 2:57PM
How Too Big To Fail Got Even Bigger
Aug 28 2009, 12:30PM
Philadelphia Eagles Get Tax Credit for Michael Vick
Some days sports, crime and pieces of state tax law come together in interesting and unexpected ways. This is one of those days! The Philadelphia Eagles stand to receive a $10,000 tax credit for signing jailed dog-fighter Michael Vick, who was formerly one of the most electrifying players in college football history and a compulsively watchable, if disappointing, pro quarterback.
Aug 28 2009, 12:02PM
How Obama Could Really Bury Us in Debt
One trillion dollars for health care reform? Psshh. That's chump change compared to Obama's plan to extend Bush's tax cuts. As Howard Gleckman points out at the TaxVox blog, if the fiscal hawks really care about the deficit, they'll raise bloody murder over the prospect of $3 trillion of tax cuts.
Aug 28 2009, 11:09AM
Tim Pawlenty is Right About the Stimulus. Kind Of.
Minnesota Gov. Tim Pawlenty, widely considered a major contender for the 2012 Republican presidential nomination, said it would be "ludicrous" to claim that the stimulus is "what pivoted" the economy, according to Bloomberg. He's absolutely right! With barely 15 percent of the $787 billion bill spent, that would be a bold claim indeed. I'd like to know who's making it.
Aug 27 2009, 1:11PM
Why Are Medicare Recipients Against Government Healthcare?
Older voters are not only more likely to have government-provided health care, but also they're more likely to be against the government spending more on health care. Does that make any sense?
Aug 27 2009, 12:05PM
What Would the Deficit Look Like Without Bush?
The Obama administration is projecting a $9 trillion deficit over the next 10 years and a debt/GDP ratio of 77 percent by 2019. That's a pretty scary monster, no matter what kind of pretty bow you tie on it. But how much should we blame Obama's policies for that figure? Paul Krugman does some back-of-the-napkin math and concludes that without Bush's tax cuts and the Iraq War, our debt wouldn't be nearly as scary.
Aug 27 2009, 11:20AM
Which Law School Grads Have It the Worst?
How bad is the job market for graduates of top law schools? Worst in 50 years, reports the New York Times. Job fairs at top schools like Yale and Harvard are getting stood up by cash-strapped firms. The story at top East Coast law names is a slew of slashed hirings, delayed starts, and canceled recruiting. The twilight of the recession still means dark days for even the nation's most illustrious firms and it all boils down to thousands of law school grads getting crushed with nowhere to start chipping away at six-figure debt. But what really surprised me about this article was who has it the worst...
Aug 27 2009, 10:27AM
GDP, Initial Jobless Claims Signal Slowing Recession
The economy contracted by one percent, less than analysts expected, in the second quarter of 2009, between April and June, and initial jobless claims also fell last week, providing two good indicators that the third quarter is shaping up to mark the official end of the Great Recession. Today's GDP report is the second estimate of second-quarter growth (a third will come in September), and while the economy shrank for four consecutive quarters for the first time since records began in 1947, the vast improvement from Q1's negative-6 percent plunge suggests that the corner is finally being rounded. Graphs after the jump:
Aug 26 2009, 4:06PM
Could Europe Get Its Energy From the Sahara?
Energy planners seeking vast open sunny areas to set up solar panel systems are unsurprisingly turning to the vastest, most open sunny area in the world: the Sahara. Could the Saharan Desert provide power for all of Europe? Bradford Plumer of TNR takes a look at the plan and finds some problems.
Aug 26 2009, 2:59PM
Imagining the Deficit Under President John McCain
On the subway this morning, I saw a full-page advertisement in one of the free papers that said: "Obama and the Democrats Created the Economic Downturn and They Made it Worse." If that's not verbatim, it's certainly the gist. Gak. This is obviously a really stupid interpretation of events for a lot of reasons. They include, but by no means are limited to:
Aug 26 2009, 2:12PM
Will Kennedy's Death Affect Healthcare, Financial Reform?
Sen. Ted Kennedy's passing early this morning could have an impact on the health care bill. What impact, exactly, we don't know. It could galvanize moderate Democrats to support universal health care, which was famously the cause of Kennedy's life. Or Kennedy's death could leave the Massachusetts Senate seat open for months, keeping Democrats from taking from taking full advantage of their 60-seat majority. But the repercussions don't end with health care, reports the Wall Street Journal:
Aug 26 2009, 12:05PM
The eReaders Wars: Amazon vs. Sony vs. Apple...
The Amazon Kindle is getting company, whether it wants it or not. As Sony continues to add their its buffet of electronic readers, rumors are swirling that Apple CEO Steven Jobs is taking over the Apple Tablet project, which can only mean one thing: The hippest tech designers in the country are serious about rolling out a game changer in the eReader market. For whatever reason this week brought a raft of big news in the eReader world. Here's a rundown:
Aug 26 2009, 11:12AM
California Now Hawking Stuff on Ebay to Fight Deficit
California agreed last month to a deadline budget to close its $26 billion deficit gap by cutting funding for schools and social services and borrowing billions from local governments. But this week it's taking one small step for fiscal responsibility, and one giant leap for unintended humor, by having a garage sale and Ebay auction to hawk state-owned cars and equipment signed by Mr. Universe/Mr. Olympia Mr. Freeze (and star of Red Sonya!) Arnold Schwarzenegger. He's also the governor of California, of course, but that might even hurt his autograph value.
Aug 26 2009, 10:40AM
The Impossible Politics of Deficit Reduction
The country's fiscal health took a two-by-four to the head yesterday, as new estimates of our ten-year deficit jumped by $2 trillion to $9 trillion, setting the stage for what some budget experts are predicting will be the biggest deficit fight in US history. The Obama adminstration has promised a pay-as-you-go rule for new spending, which means that, as in health care reform, any new spending measures will have to be accounted for to stay deficit neutral, but an op-ed for the Washington Post says that won't be enough. Not nearly enough:
Aug 25 2009, 2:50PM
Was Bernanke the Wrong Choice for Fed Chair?
President Obama has re-nominated Ben Bernanke to serve as chairman of the Federal Reserve and everybody expects the Senate to confirm him. Although Bernanke has been widely praised for driving the expansionary monetary many think saved the financial system, he has his detractors. After all, you can't preside over the largest financial collapse since the Great Depression, extend trillions of dollars to keep our bedeviled banking system afloat and manage to escape criticism entirely. So here's one surprising critic: Stephen Roach, the chair of Morgan Stanley Asia, who writes: "It is as if a doctor guilty of malpractice is being given credit for inventing a miracle cure." Ouch!
Aug 25 2009, 1:00PM
Economic Roundup: Home Prices, Consumer Confidence Up
Home prices notched their first quarter-over-quarter rise in three years and a key indicator of consumer confidence spiked in August, sending more optimistic vibes to Wall Street and reinforcing the widely-held view that we're emerging from an historic recession.
Aug 25 2009, 12:09PM
Please Excuse This Brief Rant About Facebook-Haters
Oh look, another really insightful column about how Facebook is destroying everything. What is it this time? It's your precious friendships, writes Elizabeth Bernstein writing in the Wall Street Journal. Facebook's culture of over-sharing is polluting her relationships with loved ones. Boring status messages are putting her to sleep (how dare they?) and everyone she used to know pre-digitally turned out to be a raging narcissist blah blah blah. I'm going to go Tweet now about how much I hate this article, right after my Facebook status update about how my socks feel cold today.
Aug 25 2009, 10:08AM
Is This Google's Two-Step Plan to Take Over iPhone?
For all Google's effortless buzz, the company can't seem to make a splash in the smartphone market. Google smartphones, various designs that all run Google's mobile operating system Android, include the T-Mobile G1 and the myTouch G3, but their sales amount to three percent of all smartphones. If Google is so popular, you wonder, why doesn't anybody want to buy anything three-dimensional from them?
Aug 24 2009, 5:19PM
Bank of America's Bizarre Defense of Merrill's Bonuses
Bank of America is defending its $33 million settlement with the SEC against charges that it lied to shareholders about bonuses paid out by Merrill Lynch after BofA bought the bank for $50 billion. I find BofA's position in the SEC case fascinating and somewhat bizarre.
Aug 24 2009, 2:53PM
College Football TV Entering the Third Dimension
ESPN announces today that it will broadcast the Sept. 12 college football showdown between Ohio State and the University of Southern California in 3D. Josh Levin must be thrilled. Are you ready for some 3-D football?
Aug 24 2009, 2:00PM
The US Has Made a Profit Off of Citigroup
Surprisingly good news from the Financial Times today (via Tim Ferholz). The United States has made almost $11 billion on its 34 percent investment in the super-struggling bank Citigroup. This is, as the article points out, the the federal government's only direct stake in a large financial institution.
Aug 24 2009, 12:46PM
Why Are People Still Buying GM's Worthless Stock?
Oh, the limits of Darwinism. Investors appear to be buying stocks of General Motors, even though the government and the company have announced that the stock will eventually be worthless. Barry Ritholtz is crying. Somewhere in the infinite, so is Gottfried Leibniz. But seriously, what the heck is going on here?
Aug 24 2009, 10:35AM
Don't Let Health-Care-for-Illegals Kill Health Reform
Last week, I weighed in on the health-care-for-illegals debate by saying we can bar illegals from health care for now, and then by enacting immigration reform later, create incentives and
statutory avenues for illegal immigrants to become full-fledged citizens, pay
their taxes, and get their proper GP check-up. I don't think Mickey Kaus agrees with me about the latter half of that sentence, but we're jiving on Part One:
Aug 21 2009, 3:41PM
Email Debate about Cash for Clunkers and Keynes
I've having a civil intra-Atlantic conversation with Conor Clarke at the Daily Dish about the merits of the Cash for Clunkers program. Basically it started like this. Conor: The point of stimulus is to spend money quickly -- success! Me: But what if we've spent $3 billion to cram thousands of inevitable late-2009 car purchases into two weeks -- fail.
Conor's publishing a rejoinder to my rejoinder later this afternoon on the Dish, but in the meantime he sent me a draft of it, and we had a little email chat about Cash for Clunkers, Keynes, stimuli and time travel. I thought about summing up, but it's just so much easier to produce the original emails, after capitalizing the letters and deleting all of Conor's smiley face emoticons. (JK!) Here it is, with Conor's emails indented:
Conor's publishing a rejoinder to my rejoinder later this afternoon on the Dish, but in the meantime he sent me a draft of it, and we had a little email chat about Cash for Clunkers, Keynes, stimuli and time travel. I thought about summing up, but it's just so much easier to produce the original emails, after capitalizing the letters and deleting all of Conor's smiley face emoticons. (JK!) Here it is, with Conor's emails indented:
Aug 21 2009, 2:54PM
Should Universal Health Care Cover Illegal Immigrants?
In an interview with right-wing radio host Michael Smerconish, President Obama said the health care bills weren't designed to cover illegal immigrants, except perhaps for children and in cases of emergency. Ryan Avent said he was "ashamed" of Obama's answer. James Surowieki of the New Yorker pointed out that most of the European countries whose health care systems we envy don't cover illegal immigrants either.
Aug 21 2009, 11:57AM
Maps That Shouldn't Surprise Me
Correction time! Yesterday I wrote a rather dumb post about how a ProPublica map seemed to suggest, bizarrely, that New York state had received a whopping one-third of our committed stimulus cash. That would have been truly remarkable and insidious indeed, but as it turns out, it was a map of TARP funds for banks. And as you may have heard, New York has some of those. Let's all take a look at this map again.
Aug 21 2009, 11:00AM
Was Cash for Clunkers a Success?
Cash for Clunkers is set to end on Monday after burning through $3 billion in less than a month. The government's auto-revitalization program, which gave buyers up to $4500 after trading in their old cars, has moved more than 450,000 cars in the last few weeks. My colleague Conor Clarke, writing at the Daily Dish, says this is a testament to its success. He's right that "good stimulus is timely stimulus," but I think it's wrong to call C4C a success at this point, for a couple reasons.
Aug 20 2009, 4:00PM
Why Florida is Obama's Worst State
My colleague Chris Good reports today on Atlantic Politics that Obama polls lower in Florida than any other state in Quinnipiac surveys. Obama's rating has dropped from 58 percent approval in June to 47 percent today. Is this surprising? Nope. Not at all.
Aug 20 2009, 1:05PM
Cash for Clunkers Clunks as Dealers Leave in Droves
All good things come to an end. So too do things of dubious goodness. And whether you place Cash for Clunkers in the first or second category, it's time to bow our heads and say goodbye to what was, at the very least, one of the most popular government stimulus programs in recent memory. Cash for Clunkers is ending, as auto dealers are bowing out of the program in fear that they have extended too many $4500 rebates for the government to reimburse.
Aug 20 2009, 12:50PM
Where is the Stimulus Money Going? New York ...
New York state is set to receive more than a third of the $476 billion of committed stimulus cash -- about $9,000 per NY resident. Where is the rest of the money going, and who stands to get rake in the most government dollars? Richard Florida has the graphs on his Atlantic blog here.
Aug 20 2009, 11:58AM
How the Media is Killing Health Care Reform
Last week I said Obama should stop trying to fight factual errors with factual corrections because Americans don't care about facts or statistics. I should have been more specific. Americans care about statistics that garnish their worldview. They do not care about other people's facts or statistics that do not prettify their values. Farhad Manjoo has an excellent piece about why that's true. He's Slate's technology columnist, but unfortunately in this story, technology is not the hero. Quite the opposite, modern communications technology has made it easier to insulate ourselves in a cocoon of misinformation.
Aug 19 2009, 4:12PM
No, Fox News Should Not Fire Glenn Beck
I don't watch Glenn Beck. I'm at work during his 5PM Fox News show, I don't own a TiVo and I don't really watch political television anyway. So most of what I know about the guy comes from YouTube clips, which means I've noted his particularly alarmist segments, his talent for voices and his use of the word socialism so often it's like he's trying to trademark it. But now, Henry Blodget writes for Huffington Post that News Corp should fire Glenn Beck. That's absurd.
Aug 19 2009, 3:13PM
Should We Do Cash for Clunkers for Computers?
Here we go again ... again. Cash for Clunkers, the car edition, burned through a billion dollars in a week. Cash for Clunkers, the refrigerator edition, is going strong in New England. Can we get the government to pay us to ditch other things: Televisions? Dining room furniture? Snuggies?
Yes, we can! Computers. Dude, you're getting a Dell... rebate from the government!
Yes, we can! Computers. Dude, you're getting a Dell... rebate from the government!
Aug 19 2009, 2:18PM
Yes, the Internet Can Make You (and Your Kids) Smarter
Maybe Google isn't making us stoopid, after all. Students taking online courses beat those with face-to-face instruction, according to a new study for the Department of Education. The report, by SRI International, reviewed studies from 1996 to 2008 involving K-12 schools in addition to colleges and adult education programs. It concluded that students following online courses ranked in the 59th
percentile in tests compared with the average classroom
students scoring in the 50th percentile. Great news! What do we do with it?
Aug 19 2009, 12:33PM
Rumor: Not One, But Two Apple Tablets?
Last month, rumor had it that Apple is developing a Tablet -- a big iPod Touch -- to roll out in September. Yesterday rumor had it that the first rumor was wrong, and Apple won't unveil anything until 2010. Today's rumor has it that the second rumor is wrong and the first rumor was only half-right: There will be two Apple Tablets unveiled!
Aug 19 2009, 10:31AM
Is the Public Option for Health Care Overrated?
In the last week, the biggest health care furor to take place outside the sweaty, screamy town halls was the Obama administration's tacit, and possibly unintentional, admission that it was backtracking on a government-run insurance program -- a "public option." The debate over the public option is often a battle of two caricatures: Republicans call public insurance "socialism" while Democrats call it a necessary litmus test of their party's cajones.
So it's both surprising and and refreshing to read Steven Pearlstein, the business columnist for the Washington Post who's received a lot of link-love from liberal bloggers, begin today's column: "Enough already with the public option!"
So it's both surprising and and refreshing to read Steven Pearlstein, the business columnist for the Washington Post who's received a lot of link-love from liberal bloggers, begin today's column: "Enough already with the public option!"
Aug 18 2009, 4:19PM
iPhones: Saving Your Deleted Emails ... and Exploding?
Not a good day for iPhone news. It's been reported that an iPhone software bug locates emails on your phone, even after you've deleted them. That's not much of a problem if you're the kind of person who often accidentally deletes important emails on your smart phone, as I do every week or so. But it is a frustrating security problem if you're nervous about somebody searching your phone and uncovering emails you thought were erased. Also, iPhones are exploding.
Aug 18 2009, 12:17PM
No Apple Tablet Until Early 2010?
I've been buzzing about the arrival of the Apple Tablet, the 10-inch diagonal iPod Touch-like device rumored to be something between a small netbook computer and an e-Reader. But some of those buzzes have been killed by the revelation that no Apple Tablet was announced as part of the company's September event. Instead, insiders say we should expect previews of more iPods (yawn) and iTunes updates. But I want my Apple Tablet and I want it now! How long must the world wait to be reborn under the glossy twinkle of the Tablet screen?
Aug 18 2009, 11:42AM
An Idiot's Guide to Health Care Reform
As the September showdown over health care reform approaches, it's easy to get lost in the summer haze of town hall scream fests and liberal freak-outs and hand-wringing about euthanizing grandmas and Sarah Palin's impressionist position on facts. Let's get back to basics and answer three big questions.
1) What will the health care bill do?
2) Why do we need reform?
3) How would the law affect you?
1) What will the health care bill do?
2) Why do we need reform?
3) How would the law affect you?
Aug 18 2009, 10:25AM
How Do You Steal 130 Million Credit Card Numbers?
A Miami man and two Russian accomplices are being indicted for allegedly stealing 130 million credit card numbers, the largest identity theft in history. That's a lot of credit card numbers -- like, one for every housing unit in the United States. How did they do it?
Aug 18 2009, 9:50AM
Recession Roundup: Producer Prices, Housing Starts Decline
Even as most economists predict that the US economy is turning the corner, there appears to be some skidding along the bend. Wholesale prices fell again, making their 12-month decline the worst on record. Construction on new homes also fell. What does this tell us about the economy?
Aug 17 2009, 4:48PM
Cash for Clunkers: It's Still a Clunker
Regular readers of this site will know that I am no leaping cheerleader of Cash for Clunkers, the government's auto revitalization program that gives away up to $4500 for new cars. We shouldn't be paying people do destroy working capital, it's rotten for used-car dealerships (who actually do something with the old cars besides junk their engine) and its apparent popularity is, I think, the product of historic pent-up demand for cars, which means we're paying people thousands of dollars for cars they might have bought later this year anyway.
Today I've stumbled upon two pieces of information that make me proud of trying to sound the alarm of C4C -- but also a bit sad for those billions of taxpayer dollars.
Today I've stumbled upon two pieces of information that make me proud of trying to sound the alarm of C4C -- but also a bit sad for those billions of taxpayer dollars.
Aug 17 2009, 3:45PM
Does Today's Stock Sell-Off Signal a Broader Downturn?
Barring an obscene rise or fall in the market, I think the most important overall conclusion to draw from any one day of stock trading is that it's very difficult to draw important overall conclusions from any one day of stock trading. But with that said, today's sell global sell-off is inauspicious. It's not only today's markets -- at 3:15PM the Dow is down about 200 -- but also the consumer woes, the foreclosures, the prospect of more bank failures. Let's review some of the bad news that could signal a stalled recovery, or something worse:
Aug 17 2009, 2:25PM
Only 18 Percent See Stimulus Helping Them Personally
Bad news for Obama as his health care bill continues to falter: 60 percent of Americans don't think that the $787 billion 2009 stimulus passed in January is doing anything to help the economy. Only 18 percent say it's helped them personally. Are Americans responding rationally, or is this just crazy-talk?
Aug 17 2009, 12:15PM
Would GM's New $4,000 Car Sell in the US?
For years, General Motors made its mark selling domesticated tanks that required a surgeon's exacting touch and focus to keep the axles between the road hash marks. OK, so the Hummer wasn't that bad, but it close. Now, however, GM has announced it's unveiling its cheapest car ever. The inspiration, or competition, comes from India, where the Tata Nano -- an adorable slab of car with a base price of under $3000 -- is putting auto makers on the notice that the race to the bottom in car prices is on.
Aug 17 2009, 11:00AM
Why is Asia Dominating in the World Recovery?
As the United States and Western Europe beam about our glacial recoveries ("Look everybody, 0.1 percent annualized negative growth last quarter!"), Asia must be pointing and laughing a good, boastful laugh. Six months after the nadir of this global near-depression, Asia is dominating, again. As the old G7 risks contracting 3 percent this year, Asia could grow by 5 percent. China, Indonesia, South Korea and Singapore grew by an average annualized rate of 10 percent last quarter. Even Japan, where first-quarter GDP fell at a worlds-worst annualized rate of 11.7 percent, recently recorded positive growth in the second quarter.
Why?
Why?
Aug 17 2009, 10:15AM
Facebook's Evil, Genius Plan to Own Your Life
When I heard the news last week that Facebook bought FriendFeed, a niche social network, my first reaction was that it was one of those logical tech mergers that made sense, but not much difference. But this weekend, I read not two articles alleging that the purchase potentially sets the stage for Facebook to become the Internet's defining social media portal, with tentacles stretching so far and wide throughout the web that it would take on the current king of the net: Google. How?
Aug 14 2009, 11:20AM
Why Bike-Sharing Programs Are Really Good Ideas
So now, in addition to my friends who will not shut up about how amazing D.C.'s bicycle-sharing SmartBike program is, there's word out of Montreal that its Bixi bike-sharing program will now be exported to Boston and London. The concept of bike sharing strikes me as perfectly sound. Bikes are very convenient except for two things: They're expensive and they can be a pain to lock up and not have stolen. Bike-sharing solves these two problems in a flash by letting you rent from a fleet of bikes and store them in docks across the city.
Aug 14 2009, 9:58AM
How to Read 10 Pages a Minute
File this under dubious and interesting claims: the PX Project has developed a technique to increase the average person's reading speed by 386 percent. That would bring the average reader from about 200 words a minute to 772 words per minute. The project claims some of its trainees can read up to 4000 words a minute -- or about 10 pages. How does that work, exactly?
Aug 13 2009, 3:38PM
Is Europe Beating the US Out of the Recession?
After a historically awful beginning to 2009, the European Union had a surprisingly strong second quarter with Germany and France even recording positive growth. Now wait -- I thought the recession in Europe was supposed to be worse than the United States. Earlier this year, EU economies were contracting 50 percent more than the US and last quarter was the worst quarter for jobs in EU history. Is this recovery for real?
Aug 13 2009, 12:49PM
Standard Format Keeps E-Readers on the Same Page
Good news for e-readers! Sony has decided it will embrace a standard ebook format, meaning that if you buy a Kindle or another electronic reader, but then choose to move your collection to another device, your books will transfer easily, like a mp3 of a song. This is, as many observers have noted, a crucial step toward mainstreaming electronic books.
Aug 13 2009, 11:55AM
Despite Cash Stimulus, July Retail Sales Are a Clunker
Retail sales inched down by 0.1 percent in July, far below economists' predictions of a 0.7 percent rise, indicating that consumer demand -- which accounts for about 70 percent of the US economy -- is still sluggish. What's the account for poor consumer demand? Wages and joblessness.
Aug 13 2009, 10:45AM
Actually, America Isn't a Small Business Country at All
Via Economix and Economist's View, I see the Center for Economic Policy and Research released a study (PDF) comparing small business sectors around the world. You might think that America -- distinguish, as politicians say, by our entrepreneurial spirit and our small businesses -- would rank extremely high. But it turns out that, by percentage, the US has one of the world's smallest small business sectors. How is that possible?
Aug 13 2009, 9:45AM
Initial Jobless Claims Unexpectedly Inch Higher to 558,000
First-time jobless claims rose unexpectedly, but the number of Americans receiving unemployment benefits overall fell by 100,000 to 6.2 million, its lowest mark since April, in a mixed sign that layoffs are slowing. Big picture: Unemployment will probably still hit 10 percent, but we're very clearly at that point on the unemployment mountain where the terrain is less like a vertical cliff and more like a walkable hill.
Aug 12 2009, 1:48PM
Arizona and Florida Lead Home Sales Surge
With prices way down, home sales are showing sustained gains across the country. Year-over-year home prices fell a record 15.6 percent in the second quarter of 2009, but compared with the first three months, home prices actually increased, with a burst of house sales led by -- of all places -- foreclosure capitols Arizona, Florida and Michigan.
Aug 12 2009, 9:49AM
Replacing NYC Subway Would Take 200 Fifth Avenues
Ever wonder how much road space NYC would need to replace its subway system? Or how much of Manhattan we would need to block off to provide parking to all those commuters? Here's some awesome and interesting math from the blog Frumination. My favorite statistic:
Aug 12 2009, 9:25AM
Television: The Next Victim of the Advertising Famine
For viewers, the beauty of modern cable is this: You have hundreds of diverse channels to choose from. For advertisers, the problem with modern cable is this: You have hundreds of diverse channels to choose from! So how do you target the same number of consumers?
Aug 11 2009, 3:14PM
Hey Obama, Americans Don't Care About Facts!
As Obama speaks at a town hall in New Hampshire today, I have some unsolicited advice for him. No more facts. Let me explain:
Aug 11 2009, 2:11PM
Worker Productivity Surges, But It Isn't All Good News
Worker productivity soared in the second quarter at a 6.4 percent annual rate, its fastest pace in six years. That is good news for overall GDP growth, but bad news for unemployment as it indicates that employers are not hiring, but instead forcing more work on downsized staffs. It's going to be a very slow recovery for jobs -- as if we needed any more evidence.
Aug 11 2009, 12:35PM
Mancession! An Illustrated Analysis
The Great Recession has been rotten for millions of Americans, but it's been particularly rotten for one pretty significant demographic: Men. What is the mancession, how serious is it and what caused it? Here are your answers: In pictures!
Aug 11 2009, 11:30AM
Does Google Search Need a Hit of Caffeine?
Google is at work upgrading its leading search engine program, and the company announced that it is opening up an online preview to let web developers give feedback on the nascent program. Not content to let Microsoft dominate search engine news with Bing's impressive consumer-focused additions and the big Yahoo search partnership, Google has unveiled a new search engine development program it is calling "Caffeine," which it hopes will make Google search even faster and more relevant and useful for users.
Aug 11 2009, 10:10AM
Yes, We Should Use Commenters to Shill Products!
The first rule of online journalism is that nobody knows how to make good money from it. The second rule, therefore, is that any and all suggestions are very much welcome! So here's one: If you can't make money off of your writers, bloggers and editors, maybe we should be trying to make money off of our free and spirited commenters.
Seriously, it's happening at New York magazine.
Seriously, it's happening at New York magazine.
Aug 10 2009, 3:20PM
Did Big Government Republicans Save This Economy?
Benjamin Carlson has an interesting piece on the Atlantic Wire about the emerging trend -- at least, on the New York Times payroll -- to thank the government for saving us from a depression. Paul Krugman has a column today that praises "Big Government" for averting the crisis, with sideswipes at Republicans for doubting government's ability to be a force for good.
Wait a tick. Check out the arrows in the government's anti-recession quiver -- $700 billion of TARP, another $100 billion AIG bailout, trillion-dollar emergency action under Fed Chair Ben Bernanke. Weren't those all initiated under a Republican administration?
Wait a tick. Check out the arrows in the government's anti-recession quiver -- $700 billion of TARP, another $100 billion AIG bailout, trillion-dollar emergency action under Fed Chair Ben Bernanke. Weren't those all initiated under a Republican administration?
Aug 10 2009, 1:04PM
Americans Pay $38 Billion of Bank Overdraft Fees a Year!?
From the Financial Times:
US banks stand to collect a record $38.5bn in fees for customer overdrafts this year, with the bulk of the revenue coming from the most financially stretched consumers...I'm sorry. How is that mathematically possible?
Aug 10 2009, 11:55AM
Why Selling GM Cars on eBay is Good for the Auto Industry
General Motors announced it is teaming with eBay to sell cars on the online auction site. The joint venture marks the first time that eBay Motors, with 12 million monthly visitors, will sell new cars. This is a somewhat crazy idea, but mostly it's a really good one. It's high time that car companies allowed consumers to bypass dealers and buy cars online.
Aug 10 2009, 11:35AM
Is It Immoral to Pay for Unpaid Internships?
Unpaid interns: They're destroying America. This seething horde of wage-depressing, union-killing collegiates and ex-collegiates are, some argue, worse than illegal immigrants, because instead of
doing the jobs nobody wants to do, college interns do the jobs that everybody their age wants to do, but that only the wealthier can afford.
So goes the argument. I, former unpaid intern, don't buy it.
So goes the argument. I, former unpaid intern, don't buy it.
Aug 8 2009, 1:10PM
Fox News Profit Soars As GOP Implodes
The birther movement and town hall protests against health care reform have dominated news coverage in the early days of August. But as the GOP is increasingly seen as a fringe party with falling national support, viewership and profit for the right-leaning Fox News has exploded. The channel reported a 50 percent increase in profit last quarter, and as Gawker discovers, the relationship between GOP support and Fox News is something like a see-saw. The lower the GOP dips, the higher the FNC rises.
Aug 7 2009, 3:45PM
Apple Tablet: Super E-Reader or Super Mini-Computer?
It's still about a month before most people expect Apple to unveil its new Tablet -- a 10-inch diagonal screen that'll work just like an iPod Touch. Or will it? Nobody knows for sure, but that doesn't mean it isn't fun to round up all the rumors and spend our Friday afternoon imagining how much better life would be if all knowledge were receivable through a shimmering touch-sensitive slate.
Aug 7 2009, 12:35PM
AIG (Finally) Posts Profit, Still Owes $87.6 Billion
AIG, the insurance giant at the heart of the financial meltdown, and the recipient of $180 billion of government investment, posted its first profitable quarter since 2007. The company lost nearly $100 billion in 2008 and another $4.4 billion in the first three months of 2009, so it's nice to see an AIG quarterly earnings report that doesn't make your average tax payer apoplectic. It's still going to be a long time before we see the money our government has sunk into this molten lava pool of toxic assets.
Aug 7 2009, 12:00PM
Cash for Clunkers ... for Refrigerators?
One way I suppose that we could engineer a world humming on eco-friendly machines is to bribe Americans to trade in all their clunky possessions for a rebate to buy something more eco-friendly. We've tried it with cars and it "worked" -- in that the program successfully handed out $1 billion faster than we anticipated. So why not try it with other expensive products?
Don't like your clunky computer monitor? Here's some money for a greener screen. Got a problem with your water heater, thin windows and black-tile roof? Here's a fat check for an eco-home makeover! Refrigerator making lots of white noise and emissions? Here's some state cash for a new one! Yes, Cash for Clunkers for refrigerators is alive and kicking in New England.
Don't like your clunky computer monitor? Here's some money for a greener screen. Got a problem with your water heater, thin windows and black-tile roof? Here's a fat check for an eco-home makeover! Refrigerator making lots of white noise and emissions? Here's some state cash for a new one! Yes, Cash for Clunkers for refrigerators is alive and kicking in New England.
Aug 7 2009, 11:29AM
Why Did CNBC's Ratings Fall Off a Cliff?
CNBC's ratings are down almost 30 percent year-over-year and almost 50 percent on some shows. Theories abound. Perhaps they've taken a PR hit by riding 2007's bull market headfirst into the blazing inferno of 2008. Perhaps America's protector laureate of populist range Rick Santelli actually makes viewers lurch for the volume control button. Or perhaps Jon Stewart's celebrated undressing of manic stock maven Jim Cramer left a bad taste in people's mouth. Whatever.
Aug 7 2009, 9:39AM
Why Did the Unemployment Rate Go Down?
The unemployment rate decreased to 9.4 percent, falling for the first time since April 2008 and providing yet more evidence that the economy seems to be rounding a corner. Employers cut about 250,000 jobs in July -- the fewest since last August, and far below most analysts expectations, which clustered around the 300,000 mark.
Aug 6 2009, 3:41PM
Have You Seen Microsoft Bing's Award-Winning Jingle?
It's August. It's Thursday afternoon. Your work is winding down, and Twitter isn't working. So, hey check out Microsoft's award-winning jingle video for their new search engine Bing. It's, um...well it's discussion-worthy. And people, let's keep the criticism constructive!
Aug 6 2009, 1:41PM
Is the End Near for BofA CEO Ken Lewis?
Two pieces of bad news for Bank of America today in the Wall Street Journal. BofA recently agreed to a $33 million settlement with the Securities and Exchange Commission after being accused of misleading shareholders about bonuses paid after BofA's merger with Merrill Lynch. But Jess Bravin reports that a judge has blocked the secret deal saying the public deserves to know what BofA CEO Ken Lewis and other top brass knew about Merrill's bonuses and its losses before shareholders voted to approve the $50 billion merger.
Aug 6 2009, 12:37PM
CYBER-THUGS: @Twitter we're clogging up ur tubes!
Twitter is under attack! The popular social media outlet that allows users to exchange 140-character messages is reportedly the victim of a denial-of-service attack. What the heck is that? (Three updates added.)
Aug 6 2009, 11:33AM
Jobless Claims Continue to Fall, Signaling Distant Recovery
Initial jobless claims fell for the fourth straight week, yet another important indicator that the economy is emerging from a recession in the third quarter of 2009. Remember, this isn't unemployment peaking (unemployment figures come tomorrow and we probably won't have good news in that category for months). Instead, this is the number of people filing for first-time unemployment benefits, and some economists think it is the leading indicator for economic growth.
Aug 6 2009, 10:09AM
Is Murdoch's Plan to Charge for Online News Doomed?
Rupert Murdoch announced plans to charge for all online content of his newspaper and TV empire, in what is possibly the boldest move of any media mogul to boost revenue from online news. Since Murdoch's News Corp empire spans the globe, including the Wall Street Journal, the New York Post, Fox News and basically anything ever published in Australia ever, this would send shock waves through a barren online media landscape that is gasping for revenue streams. But will it work?
Aug 5 2009, 5:20PM
Sony Hunting Amazon (and Apple?) With E-Reader
Sony announced it will be rolling out two new e-readers, with the smaller 5-inch screen version selling for only $199. That's $100 less than the Amazon Kindle, which has grabbed most of the buzz and bucks in this, the dawn of the e-reader industry. Sony also slashed the price of their e-book books to $9.99 to compete directly with Amazon, but early sales are lagging. Did Sony do enough to improve on this Amazon-dominated market?
Aug 5 2009, 3:15PM
Remember, 95 Percent of Voters Already Have Health Care
Sometimes facts can be really illuminating. I'm watching the grassroots campaign against health care reform, and the truly manic debate about whether or not it is authentic (see: Marc Ambinder's blog).I think Marc is right, and it's worth remembering that the fight to reform health care is about two things:
Aug 5 2009, 1:14PM
The End of the iPhone?
Conventional wisdom says the iPhone is the indisputable champion of cell phones. But what if that's wrong? What if the one thing that can best it is ... an iPod?
A few months ago, I wrote an article explaining how the Verizon MiFi, a wireless wifi card, combined with a mobile web device with speaker and audio like the iPod Touch could replace the cell phone. Living inside MiFi's permanent wifi cloud, you could make all your calls through Skype, or another voice-over-Internet program, on that iPod. Goodbye, cell phones?
A few months ago, I wrote an article explaining how the Verizon MiFi, a wireless wifi card, combined with a mobile web device with speaker and audio like the iPod Touch could replace the cell phone. Living inside MiFi's permanent wifi cloud, you could make all your calls through Skype, or another voice-over-Internet program, on that iPod. Goodbye, cell phones?
Aug 5 2009, 11:30AM
Three Problems with Congress Extending Cash for Clunkers
All indications out of Washington are that the Senate will extend the Cash for Clunkers, bringing the grand total of the auto revitalization program to $3 billion. I've written quite a bit about C4C in the last week, and readers seem pretty evenly divided into two camps. The first camp thinks we're wasting billions on a make-believe stimulus that won't help the environment. The second camp thinks I'm crazy to question the effectiveness of a stimulus program that was so effective it was spent in a week.
I think I've made it pretty clear where I stand on Cash for Clunkers.
I think I've made it pretty clear where I stand on Cash for Clunkers.
Aug 5 2009, 10:00AM
Is the Recession Making Waitresses Hotter?
What's the weirdest economic indicator you've heard of? The Dirty Underwear Index? The Bad Eye Make-Up Index? For me, it's got to be the More Mosquitos Index. When homeowners foreclose and vacate their pools and ponds, the standing water attracts mosquitoes to breed. But I admit I was intrigued by the seemingly fantastical claim that recessions make restaurant waitresses hotter. Huh?
Aug 4 2009, 5:28PM
The CBO Might Be Wrong, But Orszag Isn't 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.
Aug 4 2009, 3:39PM
Do Democrats Live in States With Higher Unemployment?
Yesterday the blogosphere made a bonfire party out the suggestions that Republican states had better unemployment rates. Today, I present two pictures: 1) a graph of unemployment by state from the Bureau of Labor Statistics (via Krugman); and 2) a graph of political party affiliation by state from Gallup (via Sullivan).
You decide how they match up:
You decide how they match up:
Aug 4 2009, 12:00PM
Geithner's Meltdown Over Financial Reform
Treasury Secretary Tim Geithner unleashed an "expletive-laced" barrage on regulators over financial reform frustrations, and it's making some people worried that Obama's regulation plans are already falling apart. Tim Fernholz has some great analysis. To highlight his best point: Geithner is fighting a war on two fronts. The first front is against Wall Street, which doesn't want to cede any power to the administration now that they're cutting the strings and re-learning to put up huge profits. The second front, just a few hundred miles down I-95, is against Washington regulators who don't want to cede any power to the administration because ... well, because they're Washington agencies and that's how they do.
Aug 4 2009, 11:16AM
How Great Will Our 3rd-Quarter Recovery Be?
In the second quarter of 2009, between April and June, our GDP contracted one percent. That was better than most analysts expected (and much better than our first quarter implosion of negative-six percent), which is why early estimates of of GDP growth in the third quarter are surprisingly positive. What will economic growth be like in July through September? Let's take a look at the guesses:
Aug 4 2009, 10:02AM
Could the Apple Tablet Kill the Kindle?
Everybody expects Apple to announce the launch of a 10-inch touch-sensitive tablet next month. The device will likely look and act like a big iPod Touch, but the larger screen is obviously drawing comparisons to the Kindle, Amazon's e-book carrier. Given Apple's ability to revolutionize the music buying/listening business with iTunes and iPods, it's only reasonable for techies to wonder whether the tablet has a chance to similarly crush the online book business. Is the Kindle toast, already?
Aug 3 2009, 4:59PM
Bank of America's $33 Million Fine Won't Be Its Last
Bank of America has agreed to pay $33 million after the Securities and Exchange Commission accused the nation's leading lender of making false statements to investors about Merrill Lynch bonuses. My hunch is that this won't be the last penny that BofA pays out for concealing information about the Merrill Merger.
Aug 3 2009, 3:09PM
Do We Want the US to Be More Like Texas?
Imagine that you are granted the power to decide the future of the American state, and you are standing at a crossroads before two signs pointing in opposite directions. The first sign says: This way for low taxes, low regulations, low unemployment, and no budget deficit. The second sign says: This way for higher taxes, higher regulations, higher unemployment, and a crippling budget deficit. Which path do you choose?
Aug 3 2009, 12:30PM
Why Google's CEO Schmidt Left Apple's Board
It always struck me as kinda bizarre that the CEO of Google sat on the board of Apple. Especially now that both companies appear to be doing battle with Microsoft, it seemed like something between a non-aggression pact and formalized alliance against the beleaguered software giant. But today Google CEO Eric Schmidt announced he will be leaving the board, and news is that just like that other famous non-aggression pact, this relationship has soured quickly.
But why?
Aug 3 2009, 11:41AM
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.
Aug 3 2009, 10:31AM
Three Ways to Fix Facebook
Farhad Manjoo of Slate pens a great open letter to the Facebook crew about how to fix a site that seems to me to get less intuitive and useful with every redesign. His suggestions for a re-redesign are excellent: Make it easier to find your own stuff, ditch the worthless Highlights section, and fix Facebook messaging. And I have three more!
Aug 3 2009, 9:30AM
Hey David Gregory, This is Why the Stimulus Is Not Working
Via Noam Scheiber, I see that Larry Summers had some difficulty explaining the stimulus on Meet the Press this Sunday. The exchange went like this: David Gregory would say "Where are the jobs you promised?" and Summers would respond "Not here yet, because we inherited a recession worse than expected." Then Gregory would respond, "But where are the jobs you promised?" and Summers would repeat himself, slowly.
I'm sure it was frustrating for Dr. Summers -- who wasn't exactly forthright about stimulus numbers himself (more on that later) -- but it would have been easier for him to make his point if he came to MTP with graphs. Like this one:
I'm sure it was frustrating for Dr. Summers -- who wasn't exactly forthright about stimulus numbers himself (more on that later) -- but it would have been easier for him to make his point if he came to MTP with graphs. Like this one:
Aug 2 2009, 12:44PM
Is Health Care Talk Toxic for Cable TV?
Since Obama's health care press conference notched the lowest ratings of his presidency, the word is growing that talking about health care is sure-fire way to kill your ratings. Health care, after all, is really complicated, and reforming it is even more complicated. What's more, cable's preferred method of discussing policy is to bring in two sides and have them "debate" for two minutes, which is a bad way to cover anything simple and a tortured way to explain anything complicated.
Jul 31 2009, 4:41PM
Cash for Clunkers Shifts Into Second Gear
The House of Representatives has voted to allocate an additional $2 billion toward the Cash for Clunkers plan to revitalize the auto industry, after pent-up demand for new cars exhausted the first billion in a matter of days. This is good news for the hobbled car companies, which need a lift after auto demand fell to its lowest level in a half-century. But is Cash for Clunkers really a good deal for Americans?
Jul 31 2009, 2:22PM
Can We Please Ban Voicemail Instructions Forever?
You know what makes me bleeping mad? When I call somebody who doesn't answer the phone, and that robot woman (you know her) goes through her 15-second voicemail instructions before the tone. Could there be a more obvious money-grab from the phone companies? Yes, I know I can leave a voice message. And yes, I know it requires me to ... not do anything. It's not like if my friend doesn't answer, I'm going to put down the phone, pull out my stationary, quills and stamps and try to mail a letter. So let's ban this already!
Jul 31 2009, 12:30PM
With 2,000 News Writers, What is AOL Up To?
Dial up might be dying, but American Online sees a bright future in ... journalism? AOL now has about 2,000 writers and former journalists making content for its blogs and news sites, as the former tech giant is trying to remake itself as an online media conglomerate. The company, which is about to spin off from Time Warner, has poached thousands of journalists from print publications and television, like Bloomberg and ESPN. Hey AOL, what are you trying to do here?
Jul 31 2009, 11:10AM
The Good and Bad of the US Economy's Light GDP Dip
The Atlantic's Marc Ambinder wrote earlier this month that the most important number in politics would be released today, July 31, 2009. It is the first estimate at economic growth from April through June of 2009. If the numbers were good -- ie, "positive or only very slightly negative" -- he thought it would put wind in the sails of health care reform.
Well, today is July 31. The GDP numbers are out. And they are...
Well, today is July 31. The GDP numbers are out. And they are...
Jul 31 2009, 9:30AM
Why Did Cash for Clunkers Run Out of Cash?
Jul 30 2009, 4:00PM
Cash for Clunkers FAQ
Cash for Clunkers, the $1 billion government program that pays thousands of dollars for your old car if you switch to a newer more eco-friendly vehicle, kicked off this week. Does your car or truck qualify? Should you sell it to the government? Does this policy make any sense? Let's get to the answers:
Jul 30 2009, 1:40PM
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.
Jul 30 2009, 12:10PM
Does Obama Understand How to Make Jobs?
Unemployment is scratching 10 percent and the Obama administration is fending off accusations that the president's policies are anti-business. So BusinessWeek sat down with Obama to talk to him about how exactly he planned to find jobs for six million Americans in the next few years. What can we learn from the interview? It's clear that Obama knows where the job market is heading.
Jul 30 2009, 10:40AM
Today's Unemployment Numbers Made Simple
There is no good news in unemployment statistics these days, only bad news that is slowly getting less bad. And so it is today. The number of Americans filing for unemployment benefits fell for the third straight week. The four-week average for new claims is now at its lowest point since January. But still, 25,000 people filed for jobless benefits for the first time last week. The big lesson is simple: The unemployment tsunami has crashed and receded, but thousands of jobs are still getting pulled out by the tide.
Jul 30 2009, 10:00AM
And Then the Government Came for Your Nose Job
Call it the Botax. Congress is considering a tax on cosmetic surgeries, a $12 billion industry, to help pay for health reform. That's a significant mountain of money to grab deficit-fighting bucks, and as Catherine Rampell notes, the Botax could also be seen by parents as a so-called "sin tax" to reduce needless cosmetic surgeries for their daughters. But really: Taxing breast augmentation? Instapundit counters: Why not tax abortion?
Jul 29 2009, 11:50AM
What the Federal Reserve's Unpopularity Means for Health Care
Poor Federal Reserve. As a Gallup poll showed last week, it would lose a popularity contest to the IRS. That's too bad, especially considering that many economists I read credit the Federal Reserve's historically easy money for saving the economy, or at least keeping New York's Financial District from committing mass hari kari. But, of course, the economy still stinks, and when Americans are asked to rate the institution behind the stinky economy, they're going to focus on that stinkiness. So no surprise there. But I do think this poll offers an important lesson -- for health care.
Huh? Hear me out.
Huh? Hear me out.
Jul 29 2009, 10:25AM
Hey Obama, You're Letting a Crisis Go to Waste
If the first six months of the Obama administration had a slogan, it would probably be Rahm Emanuel's oft-quoted axiom: "Never let a crisis go to waste." The government has space to do extraordinary things when Americans feel like their country is standing on a cliff edge (see: $787 billion stimulus package). But if you support re-regulation of Wall Street, our gangbusters stock and bond markets are going to leave a bittersweet taste in your mouth. Recoveries are good, but, as Felix Salmon writes, "we've wasted our crisis."
Jul 29 2009, 9:10AM
This Tax Might Save Health Reform
Last week President Obama opened the door to taxing insurance companies. This week Democrats are preparing to walk through it. Could this be the sword that cuts the Gordian Knot of health care reform?
Jul 28 2009, 5:10PM
Politicians: No More Erectile Dysfuntion Ads!
In the midst of an all-consuming debate over health care reform, some lawmakers are using the opportunity to fight TV ads for prescription drugs. You know the type: The Lunesta butterfly fanning an sleepless face; the FloMax man chuckling while male golfers scamper to porta-potties; the Viva Viagra singers pausing to warn about certain four-hour abnormalities.
But now a group of congressmen are pushing bills to ban or tax prescription drug ads. Do they have a shot?
But now a group of congressmen are pushing bills to ban or tax prescription drug ads. Do they have a shot?
Jul 28 2009, 2:44PM
Pandora's Bucks and the Future of Music
If you haven't heard of Pandora, a personalized radio site based around your favorite bands, then it's time to start paying attention. It's not simply because the record industry just struck a deal with webcasters that paves the way for personalized radio to flourish, or simply because Pandora, the Internet's radio leader, just secured $35 million in funding. No, you should start paying attention because streaming music really could be the future of the music industry.
Jul 28 2009, 1:39PM
Home Prices Rise for First Time in Three Years
Home prices are up for the first time since July 2006, according to the Case-Schiller Index. This comes one day after we reported that home sales increased, by 11 percent, for the third consecutive month. What a week for the American home!
But wait, say my trusted bloggy advisers on housing issues, Calculated Risk and Felix Salmon. We're not out of the woods yet...
But wait, say my trusted bloggy advisers on housing issues, Calculated Risk and Felix Salmon. We're not out of the woods yet...
Jul 28 2009, 12:39PM
Was the Bank Bailout Just a "Big Fat Lie"?
John Carney, writing for Business Insider, is mad as hell that banks are using billions of dollars in TARP funds to cushion their capital rather than spur lending. He's right: Banks do appear to be using TARP funds to recapitalize rather than lend money, and I wish that wasn't the case. But is he right that slower lending makes the TARP funds -- and the entire bank bailout -- one "big, fat lie"? No.
Jul 28 2009, 10:10AM
In Praise of the Four-Day Workweek
Forget everybody working for the weekend. In Utah all government employees have shifted to a four-day workweek, and the state is calling it a win-win-win for its budget, workers and clean air. Utah has saved $1.8 million in electrical bills in the last year, the air has been spared an estimated 6,000 metric tons of carbon dioxide, and workers are thrilled. Eighty-two percent of them say they prefer the new arrangement, which still enforces the 40-hour week by requiring 10 or more hours a day Monday - Friday. Is it time to ask your boss if you can take off Friday .... forever?
Jul 27 2009, 3:17PM
Dark Days for Obama's Health Care "Game-Changer"
President Obama told the Washington Post last week that he considered a powerful independent board advising on Medicare a key component of the health care plan he expects to sign this fall. Elsewhere, the administration has called a strong independent Medicare council a "gamechanger" with the potential to significantly lower the long term costs of health care. But according to the Congressional Budget Office (CBO), the proposal would save little money over the next ten years. Politico called the report "a serious blow." Is that right?
Jul 27 2009, 1:07PM
Home Sales Up 11%: Three Reasons to Cheer
Home sales soared 11 percent in June, the third consecutive month of recovery for the housing industry, signaling that we likely hit the bottom of the housing market in the first quarter of this year. To be sure, the market remains depressed and distressed: Sales are still 21% below the 2008 levels, and more than three times below their 2005 highs. But today's housing news is almost all positive. Let's count down three happy things to take away from this:
Jul 27 2009, 10:45AM
My Internet Browser Crashed While I Was Writing This Article About Whether or Not Robots Were Evil, Which Makes the Answer to That Question Pretty Self-Evident!
We are used to advances in medical technology, such as cloning and stem cell research, colliding with issues of morality. But could robot technology pose the same sticky moral questions? I was in the middle of blogging a New York Times report about an association of computer scientists discussing the dangers of artificial intelligence and ... my Internet browser just crashed, erasing half of this article! I kid you not!
So ... hey, you know what I think about robots? I think they're wonderful. Every last one. Bless our robots! Especially Mozilla Firefox. And as I return to the story about robots' morality, I proceed with caution and promiscuous use of the Save button.
So ... hey, you know what I think about robots? I think they're wonderful. Every last one. Bless our robots! Especially Mozilla Firefox. And as I return to the story about robots' morality, I proceed with caution and promiscuous use of the Save button.
Jul 24 2009, 4:40PM
Obama's $4 Billion Education Prize: Incentive or Bribe?
President Obama announced a new education initiative today that sets aside a pool of $4 billion to reward states for improving their school systems. The theme of his speech was twofold: We need better teachers, and we need better standards. We need to find better teachers by using data from student achievement to highlight effective teachers. And we need better standards to keep some states (ahem, Mississippi) from setting their education bar so low that they gut the word "standard" of all meaning.
Jul 24 2009, 11:45AM
Dow 10,000?
The Dow pushed past 9000 yesterday to close at an eight-month high. This was just two days after notching a seventh consecutive winning session for only the fourth time in the last 20 years. What does it all mean? Truly, I haven't the slightest clue. If I did, I'd find a way to market that kind of clairvoyance for a seven-figure salary on Wall Street and pool half my earnings into daily sports betting. Instead, as a mere blogger, all I have is analysis. So let's ask: Should investors prepare themselves for a 5-digit Dow?
Jul 24 2009, 11:02AM
Hey Obama, There is Consensus on Health Care Reform!
If you haven't been following the debate over health care reform closely, you might have missed something interesting. There is a consensus building over how to pay for health care reform. It doesn't appear in the Democrats' Senate health care reform plan. It doesn't appear in the Democrats' House health care reform plan. But you can find it almost everywhere else: from the editorial page of the Wall Street Journal to the front runners of the liberal blogosphere. What is it?
Jul 23 2009, 3:50PM
Why Apple is Dominating the Premium Computer Market
Among computer shoppers looking to spend at least $1000, 91 percent choose Macs. That's according to research from the NPD Group, in a CNET report. How different is the Apple market from its competitors? The average price for a Windows PC is $515. For Macs, it's $1,400. Is that good news or bad news for Apple?
Jul 23 2009, 3:11PM
Fannie and Freddie: The Mother of All Bailouts
Move over, AIG. Fannie Mae and Freddie Mac, the government-sponsored mortgage giants, could shortly become the most expensive bailout of the Great Recession.
Jul 23 2009, 11:55AM
Americans: 3X More Miserable Than Previously Calculated
Economists like to call their profession "The Dismal Science," so you'd think they would have a monopoly on, or at least competence in, measuring dreariness. But it turns out they're not even measuring our misery properly. So claims the Huffington Post, which recently debuted its own Misery Index -- the sum of unemployment and inflation -- to account for the millions of Americans who've been pushed to part-time, or simply given up looking for jobs altogether, but don't appear in the official unemployment rate.
Jul 23 2009, 10:55AM
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?
Jul 22 2009, 5:45PM
Would You Stand on Planes for Cheaper Tickets?
According to a study conducted by Irish airline Ryanair, 42 percent of passengers said they would be willing to stand on short flights for half-priced tickets. Buck up, Ireland! What kind of country turns down hundred-dollar rebates for fear of one-hour foot soreness? There are already plenty of Americans who regularly stand for an hour to travel cheaply. They're called New Yorkers!
Jul 22 2009, 3:55PM
The Lessons of the Californiapocalypse
California lawmakers and the governor have agreed on a budget that would close the state's $26 billion deficit. Voters recently rejected a budget plan that required tax increases, and so the budget in Sacramento's hands heavily focuses on the other end of tax/spend spectrum. Spending will be slashed across the state, and the cuts will be most painful for social services affecting children and the poor, and statewide education. Are there other places California could have cut some fat? Well, Conor Friedersdorf might say, that's a bit like asking Jabba the Hutt if there there are places besides his chin where he might benefit from losing some weight.
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.
Jul 22 2009, 10:59AM
Should Google Make YouTube More Like Apple iTunes?
Google appears to have ballistic missiles aimed at software giant Microsoft, but its Apple rivalry is considerably more placid. That could have something to do with the fact that Google CEO Eric Schmidt sits on Apple's board of directors (sketchy?). But before we go conspiracy hunting, let's think about how Google could actually compete with Apple's core products, like, say, its music dominance via the iTunes store and playlists. But that would be impossible, you might say, unless Google were the proprietary carrier of millions of songs ... Oh wait. So what about YouTube?
Jul 21 2009, 5:55PM
Which College's Graduates Make the Most Money?
Is it Harvard? Stanford? MIT? Via Economix, a website called PayScale has collected data from college grads on their jobs and salaries and put together a fascinating chart ranking the highest median graduate salaries by school. How tantalizing! And the college whose graduates earn the most money is...
Jul 21 2009, 2:55PM
Is Obama Shunning Liberal Economists?
Joseph Stiglitz, the renowned economist, globalization scholar and former chair of President Clinton's Council of Economic Advisers, is a lonely man, writes Michael Hirsch for Newsweek. Like the Cassandra of lore, he predicted the seeds of our financial destruction, and the impotence of the stimulus package, but his prescience has yet to win him the ear of the president. Can we chalk it up to a decade-long feud with Larry Summers, or does Obama have a deeper reluctance to govern as a true economic liberal?
Jul 21 2009, 11:45AM
$23,000,000,000,000!?
It was widely reported this week that the recession bailout would put the US government on the hook for more than $23 trillion dollars. I smelled fertilizer when I read that figure and the wise Barry Ritholtz did too. So how inaccurate is it? Let's count the ways with Ritholtz:
Jul 21 2009, 9:55AM
The Problem with Flying to the Moon and F-22s
Last week, a starstruck Charles Krauthammer delivered a plaintive eulogy to American's outer-space program, trumpeting the many reasons why America must will itself back to the moon in the next ten years. Krauthammer's summons our eyes to the heavens:
That is the moon. On it are exactly 12 sets of human footprints -- untouched, unchanged, abandoned. For the first time in history, the moon is not just a mystery and a muse, but a nightly rebuke.I'm sorry to ruin the moment for anybody, but am I the only person who feels terribly unmoved by this eloquent cosmic paean?
Jul 21 2009, 7:40AM
California Budget Offers Path Out of Fiscal Apocalypse
California lawmakers have agreed on a budget to close the state's $26 billion deficit, ending a long, embarrassing road marked by failed initiatives, downgraded credit ratings and government IOUs. What does the budget solution look like? At a glance:
Jul 20 2009, 4:08PM
This is Why You're Fat
Elizabeth Kolbert, writing in the New Yorker, asks a simple question: Why are we so fat? The short answer -- We eat too damn much -- is unbefitting a proper New Yorker essay, and so we're served a long, fascinating look at the literature of "weight-gain" books that aim to explain how Americans gained more than a billion pounds in the last ten years. The most convincing answer I found is: Price and elasticity of appetite.
Jul 20 2009, 12:30PM
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:
Jul 20 2009, 10:55AM
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?
Jul 20 2009, 9:49AM
Amazon to World: We are Not Evil Totalitarians
A mini-scandal broke last week when it was reported that Amazon deleted copies of certain novels from its e-reader, the Kindle, including George Orwell's Animal Farm and 1984, the dystopian tome where "Big Brother" controls information flow. Creepy! Information-controlling companies want to avoid the label Orwellian, but it certainly doesn't help when the thing you're being Orwellian about is the work of George Orwell. Amazon explained the weird move this way:
Jul 17 2009, 2:41PM
Looking for a Job? Go to D.C.
We're in the toughest, most competitive market for jobs in the last 20 years. So if you're looking for a job and feeling mobile, where should you head? Sunny, humid, socialist Washington, D.C., of course!
Jul 17 2009, 1:53PM
California, Nevada Match All-Time Unemployment Highs
State unemployment figures are out and Michigan is still leading the country with 15.2 percent unemployment. That's still a full percentage point below its all-time high from 1982 of 16.9 percent, but the four states filling out the top five -- Rhode Island (12.4), Oregon (12.2), South Carolina (12.1), and Nevada (12) -- all match their their all-time highs.
And how about the national axis of gloom that is MichiCaliFliArivada (that is, MI, CA, FL, AZ and NV)? They claim three of the top six worst unemployment rates.
And how about the national axis of gloom that is MichiCaliFliArivada (that is, MI, CA, FL, AZ and NV)? They claim three of the top six worst unemployment rates.
Jul 17 2009, 1:05PM
What Bank of America and Citi's Profits Mean for Wall St
Citigroup shocked Wall Street today by announcing a $4.3 billion profit in the second quarter, the same day that the beleaguered giant Bank of America also beat expectations with a $3.2 billion quarter. This caps a banner week for banks, with Goldman Sachs and JP MorganChase also announcing walloping second-quarter profits. Is this bad news for America, or good news for Obama's bank strategy? Or is it somehow both?
Jul 17 2009, 10:59AM
What Does "Too Big to Fail" Mean Anymore?
Simon Johnson, a former IMF economist, has a piece on his Baseline Scenario blog today about former Treasury Secretary Hank Paulson's testimony to Congress yesterday, which he ties into the larger story of how we let a handful of banks control such a formidable swath of our financial system. Even as we collectively intoned the lesson Too Big to Fail is Bad, Too Big to Fail is Bad, we're seen Countrywide Financial, the mortgage lending giant, and Merrill Lynch swallowed by Bank of America, while JP MorganChase absorbed Bear Sterns and Washington Mutual. And we didn't just allow this to happen. At times, we forced it to happen.
As a result, we've avoided government nationalization at the expense of basically allowing JP Morgan and Bank of America to nationalize the banks for us.
As a result, we've avoided government nationalization at the expense of basically allowing JP Morgan and Bank of America to nationalize the banks for us.
Jul 16 2009, 4:35PM
Lies, Intimidation and Bank of America
Former Treasury Secretary Hank Paulson testified today about his controversial role in the mammoth Bank of America-Merrill Lynch merger, and he took quite a licking from Congress. Amid the web of barbs and accusations, three things became clear: 1) That Paulson basically threatened to replace BofA CEO Ken Lewis if he backed of the deal; 2) That Paulson did not necessarily act on behalf of Federal Reserve Chairman Ben Bernanke; and 3) That Congress is mad, mad, mad about the whole thing. Does this all add up?
Jul 16 2009, 2:43PM
Clinton Economist: Recovery Will Be Slow
Laura Tyson, former Chair of the Council of Economic Advisers during the Clinton administration, spoke with our own James Fallows at the Aspen Ideas Festival. She predicts a period of "relatively slow growth" as we emerge from the recession, and she predicts growth coming from the emerging markets. That sounds rather familiar, doesn't it?
Jul 16 2009, 1:27PM
The Miserable State of MichiCaliFlArivada
Here's a gallows humor game. A state-by-state report of economic pain (unemployment, credit card debt, foreclosure rate, etc) comes out, and you're looking to make some lunch money. Turn to your colleague, and say: "Before even looking at what this report measures, I will guess at least three of the top five worst states in the category." Impossible right? Out of 50? Without even knowing the statistic? Wrong. Just say: California, Florida, Michigan, Nevada, Arizona. It's that easy.
For example: Today's foreclosure rate survey is out, and - surprise!- the top four states are all in that Unfab Five.
For example: Today's foreclosure rate survey is out, and - surprise!- the top four states are all in that Unfab Five.
Jul 16 2009, 12:30PM
California's Strategy: Be More Like Texas
When we last looked at California's $26 billion deficit, I entertained the idea that the future of the America's states would look less like California's lush canopy of government spending, and more like Texas' harsher flatland of lean government services. Today, the New York Times reports that Gov. Arnold Schwarzenegger is very close to budget deal. What does the future of California look like? It certainly looks a lot more like Texas.
Jul 16 2009, 11:00AM
This Recovery Will Be Very, Very Painful
David Leonhardt, writing in the New York Times, paints a picture of US employment in dark, morbid colors, and makes the argument that even if the recession is over, we're a long way from a recovery that feels like a recovery. We might be moving into the epilogue of recession otherwise known as the slog, but this is why you shouldn't expect
Jul 15 2009, 5:40PM
America's Newest Social Security Crisis
Jul 15 2009, 3:06PM
Taxes for the Rich, Health Care for the Rest
The health care bill that emerged from the House this week probably represents the liberal end against which Congress will try to wrangle, amend and compromise its way to a passable health care plan in the next few months. The bill -- which provides coverage for about 97 percent of Americans at the cost of more than $1 trillion -- will be judged in Washington primarily on the basis of how we will pay for it. Our health care crisis, after all, is not just a health crisis, but a fiscal crisis, as health spending is projected to devour increasing government and personal spending. When DC bigwigs call for the plan to be "deficit-neutral" in ten years, it means they're looking for a way to set health care spending on a fiscally sustainable course and pay for the upfront changes within the next decade without further burdening the deficit.
How does this bill do that? It promises Medicare/Medicaid savings and forces almost all employers to cover their workers. But most importantly, it taxes the rich.
How does this bill do that? It promises Medicare/Medicaid savings and forces almost all employers to cover their workers. But most importantly, it taxes the rich.
Jul 15 2009, 1:37PM
In Recession, Hawaii to Build a "Spaceport"
Paradise is getting poorer. Visits to Hawaii are down and tourist spending is slumping 15 percent. But rather than offer, say, another honeymooners deal, the state is thinking outside the box -- er, the biosphere. It wants to build a galactic etherport to fly tourists through space. Aloha, Earth!
Jul 15 2009, 1:00PM
This Recession is Over
Jul 15 2009, 10:30AM
Should We Kill the Stimulus?
Writing in the Economix blog, Casey Mulligan, an economist from the University of Chicago, makes the case that the debate about another stimulus is besides the point because Obama's first stimulus is not working at all! The costs, says Mulligan, are not commensurate even to the "the most optimistic estimate of the benefits," since $787 billion to save or create 3.5 million jobs means that each job essentially costs a quarter of a million to save or create, without the guarantee that the job will exist after the stimulus coffers are empty.
Jul 14 2009, 3:15PM
Take That Google Apps: Free Microsoft Office Online
And so the Google-Microsoft war continues. Let's review the latest battles:
In May, Microsoft struck at Google's search empire with Bing, a good-looking and smart-acting new search engine that the Times' David Pogue (and I) called better than Google, barely. Google struck back this week with Google Chrome, a planned operating system built for the growing netbook world of internet-based computing. And now Microsoft's counterstrike: the software giant will offer a free online version of its Office product (ie Word, Excel, PowerPoint) in 2010. Free Microsoft Office! And this guy said the Microsoft-Google wars were bad for customers...
In May, Microsoft struck at Google's search empire with Bing, a good-looking and smart-acting new search engine that the Times' David Pogue (and I) called better than Google, barely. Google struck back this week with Google Chrome, a planned operating system built for the growing netbook world of internet-based computing. And now Microsoft's counterstrike: the software giant will offer a free online version of its Office product (ie Word, Excel, PowerPoint) in 2010. Free Microsoft Office! And this guy said the Microsoft-Google wars were bad for customers...
Jul 14 2009, 1:30PM
Where to Get a Job in Tomorrow's Economy
I've got one two words for you: Heath care. That seems to be the conclusion of this report (PDF) from the Council of Economic Advisers, which comes complete with graphs detailing how tomorrow economy will look very much like today's, and how health care will continue to dominate job growth over the next decade.
Jul 14 2009, 11:10AM
Sarah Palin's Cap-and-Trade Takedown
I usually don't resort to pile-ons, but erstwhile Atlantic Business blogger Conor Clarke, who's serving up his thoughts at the Daily Dish, has a fun, smart and necessary take down of Sarah Palin's splendidly strange cap-and-trade oped in the Washington Post today. Clarke does a smashing job with the heavy fact-lifting, but in the interests of summing up a cascade of wrongness in a single fact, consider this: Palin wrote a 700-word takedown of cap-and-trade that did not include the words pollution, emissions, carbon, or global warming.
Let's think about this for a second.
Let's think about this for a second.
Jul 14 2009, 10:11AM
June's Retail Rise: Good News or Bad News?
Good news: June's retail numbers are out, and they've beat economists' predictions, rising 0.6 percent. On the other hand, if you discount auto and gas sales, retail actually fell by a thin 0.2 percent margin. But a bump in auto sales is good news because it reflects positively on consumer confidence. And yet, firms that depend on more discretionary spending like restaurants and department stores continue to suffer. How can we make sense of these figures? As always, let's look at some graphs:
Jul 13 2009, 4:55PM
And You Thought Detroit Had Issues
Le populist rage from the Financial Times: "Workers at a failed French car parts supplier are threatening to
blow up their factory unless the company's two biggest clients - Renault and PSA Peugeot Citroen - stump up extra compensation." And just in time for Bastille Day!
This comes after a wave of "bossnappings" across the country, where frustrated workers would take their bosses hostage "sometimes for several days."
Jul 13 2009, 3:03PM
Why Aren't Kids These Days Downloading Music?
For years the greatest fear of music titans was the pimply masses of teens downloading their artists' music and sharing it with friends, so that the musicians' product was proliferating even as the profit margins were shrinking. (Does that kind of thing sound familiar?)
But a new report suggests that illegal music downloading has fallen off more than 60 percent in the last two years, as teens are increasingly turning to streaming sites, such as YouTube, Pandora, Grooveshark and others. As they leave file-sharing behind, is this good news for the music industry?
But a new report suggests that illegal music downloading has fallen off more than 60 percent in the last two years, as teens are increasingly turning to streaming sites, such as YouTube, Pandora, Grooveshark and others. As they leave file-sharing behind, is this good news for the music industry?
Jul 13 2009, 2:20PM
BusinessWeek's Sale and the Future of the Newsweekly
BusinessWeek magazine is now up for sale, with ad sales down 30 percent. This is rotten news for BW, because we're in bad market for weekly magazine buyers, and a low price could require harsh cuts into the editorial and business ranks of the magazine. But bad times for magazines is a good time to mention Michael Hirschorn's article in the current Atlantic, The Newsweekly's Last Stand, which looks at the depressing state of newsweekies in America and finds salvation in our friends across the pond.
Jul 13 2009, 11:00AM
Are Kindles and iPods the End of Culture Snobbery?
This weekend I was riding the DC metro reading Vanity Fair. VF is an awkward social indicator because it's a mostly serious volume of excellent writing and reporting about politics and culture hiding under an air-brushed image of, say, Jessica Simpson, next to a lipstick red headline asking whether we may call her fat (we may not). When fetching glances from other subway riders, I'll admit I sometimes feel a tinge of defensiveness, as if I have to explain to the anonymous gawkers, "Don't judge me, I promise I'm only reading Michael Lewis!"
This is what you call culture snobbery, and as James Wolcott explains -- in Vanity Fair, no less -- it is dying a slow, digitized death. Because when all culture can be reduced to a file living in our e-reader and iPod, will we ever be able to judge strangers by the covers of their reading material again?
This is what you call culture snobbery, and as James Wolcott explains -- in Vanity Fair, no less -- it is dying a slow, digitized death. Because when all culture can be reduced to a file living in our e-reader and iPod, will we ever be able to judge strangers by the covers of their reading material again?
Jul 10 2009, 3:00PM
California vs. Texas for the Future of America
The 20th century was all about California. The 21st will be all about Texas. While Hollywood rots and the UC system shrivels under a fiscal mess summed up by the number 26 (as in billion dollar deficit), the Lone Star state is poised to become the star of the country. Its unemployment is 2 percentage points below the national average, and it's business record is sterling: Chief Executive magazine named it the best place to do business in America, and it houses the most Fortune 500 companies of any state.
So aruges The Economist. So let's ask: Is Texas ready to be the future of America?
So aruges The Economist. So let's ask: Is Texas ready to be the future of America?
Jul 10 2009, 12:15PM
Are the Obese Weighing Down Health Care?
The idea that fat people are driving up health care costs is one of those arguments that's so easy to make and so thinly intuitive that I almost resist believing it, out of reflexive skepticism. But I was interested to read, via The Curious Capitalist, that the U.S. Department of Health and Human Services has data showing that recently health care costs for heavier people people are rising much faster than for the rest of us.
Jul 10 2009, 10:50AM
Did the WSJ Just Admit Global Warming Is Real?
Witness the power of words: This week, the world's economic leaders declared at the G8 summit in Italy that global temperatures "ought not to" rise 2 degrees above pre-industrial levels. How exactly they would do so, nobody said. Today the conservative WSJ editorial page compares their toothless declaration to King Canute, the ancient royal kook who walked to the beach and commanded the tides to roll back. I agree, that's a really good analogy!
But the analogy only works when the thing we're asking to "roll back" is, in fact, real and damn near inevitable. Did the Wall Street Journal editorial page just admit that climate change is real?
But the analogy only works when the thing we're asking to "roll back" is, in fact, real and damn near inevitable. Did the Wall Street Journal editorial page just admit that climate change is real?
Jul 9 2009, 4:30PM
It's Not Just a Recession. It's a Mancession!
What is a mancession, you ask? It's not this. It's a recession that hurts men much more than women, and we are allegedly in the worst mancession in recent history. Eighty percent of job losses in the last two years were among men, said AEI scholar Christina Hoff Summers, and it could get worse.
Jul 9 2009, 2:08PM
What's the Matter with Economic Journalism?
Economics, somebody once said, is the painful explanation of the obvious, and for some it seems, economic journalism isn't any less painful. Why is so much economic journalism -- in magazines, newspapers and, yes, blogs -- often so hard to read? Are financial writers failing at their (my) job?
Jul 9 2009, 11:33AM
Is Microsoft Bing Really Better Than Google?
David Pogue seems to be making some waves with a frank and surprising review of Microsoft's new search engine Bing. Pogue, reviewing for the New York Times, finds that not only does Bing compete with Google, but in some ways it's actually much better. For example, scrolling over results reveals a pop-up balloon in which you can glance at the contents before clicking. Cool! In a panel to the left of the search results it suggests more specific searches, so if you're a girl Googling Binging Johnny Depp, Bing will offer News, Movies, Quotes, Biography and Images. Useful!
So for the first time since I first wrote about Bing's launch, I gave it a whirl. And you know what? It really might be better than Google.
So for the first time since I first wrote about Bing's launch, I gave it a whirl. And you know what? It really might be better than Google.
Jul 9 2009, 9:42AM
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 he right?
Jul 8 2009, 2:00PM
Yes, Google Chrome Could Beat Microsoft Windows
Google has announced that it is launching an operating system (OS) called Chrome to compete with the dominance of Microsoft Windows. This comes just weeks after Microsoft launched Bing, a search engine it hopes will eat into the market share of Google. And back and forth we go. How seriously should we take Google's foray in the Windows domain? Very seriously, if the technology blogs are any indication.
Jul 8 2009, 11:58AM
What World Leaders Should Discuss at Italy's G8 Summit
When the world's most powerful economies meet Wednesday in the earthquake-ravished town of L'Aquila, Italy, the leaders of the eight pillars of the world economy would be wise to compare and contrast their performances, to date. Here's a look at how four of the top European economies are faring:
Jul 8 2009, 10:20AM
Why It's So Hard to Find a Job Right Now
Via Catherine Rampell, we have this handy breakdown of the job market that paints a picture somewhere between distressing and ulcer-inducing. Layoffs are obviously a huge problem, but as Catherine explains, they're not the problem. For unemployed folks looking for a culprit, it's not the firings, it's the hirings.
Jul 7 2009, 5:17PM
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:
Jul 7 2009, 2:29PM
Yes, Obama Will Have to Raise Your Taxes
The problem with trying to pass a $1.3 trillion universal health care plan, on top of raising the price of carbon emissions, on top of spending over a trillion dollars to stimulate the economy is that, as they say, a trillion here and a trillion there, and pretty soon you're talking about real money. So let's talk about real money. Where're we gonna get some? Your paycheck. How're we gonna do it? Raise your taxes.
Jul 7 2009, 11:59AM
Why So Many Jobless Recoveries, Recently?
Employment is a lagging indicator in economic downturns, which means you don't often see a recovery in the jobs market until months after other factors -- like consumer confidence and the stock market -- have long recovered from their recession lows. But in the last two recessions, employment has lagged for a much longer time, by historical standards. What accounts for this, and can we expect a similar "jobless recovery" in 2010?
Jul 7 2009, 10:50AM
Could California's Crisis Kill Health Reform?
In Bloomberg, Kevin Hassett argues that when Americans get wind of how California is dealing with its $24 billion state deficit -- that is, paying with IOUs -- they will rebel against Obama's health care plan and bury the number one policy initiative of his first term. Does this make any sense?
Jul 7 2009, 9:22AM
Will Michael Jackson Break the Internet?
"Today's memorial service for Michael Jackson is expected to be the biggest
event in the history of the internet," the London Times exclaims. And others agree. The memorial service for the King of Pop, who died of cardiac arrest at the age of 50, will be live-streamed on CBS, Fox/Hulu, Facebook/CNN, and Myspace, and it's expected to shatter both online viewership records and servers in the process. Could it really be that much bigger than Obama's inauguration?
Jul 6 2009, 4:01PM
The Federal Reserve's Magical Balance Sheet
I've said before that when the Great Recession becomes old and quaint
enough to be put into a children's book, authors are going to have to
find words that rhyme with Bernanke.
That's for Ben Bernanke, the chairman of the Federal Reserve, whose
herculean efforts to flood the banking system with capital has been key
to keeping our banks afloat and our economy undead. And the good news
is that the Fed now sees it fit to draw back its historic rescue
efforts. Here's a graph from the Wall Street Journal Real Time
Economics blog that shows just that:
Jul 6 2009, 1:40PM
What Changed Between 1981 and 2007?
A lot has changed in the quarter century-plus since Ronald Reagan became president. As Billy Joel reminisced on the early 1980s: "Begin, Reagan, Palestine; Terror on the airlines; Ayatollahs in Iran, Russia's in Afghanistan," all the way up to the 2000s with, say: "Tax cuts, oil gluts, terror by religious nuts; Enron, Hadron and Katrina, Iraq, Iran, Brangelina..." But how do we explain this?
Jul 6 2009, 12:35PM
This Graph is Why the Recession is Over
The jobs market is terrible. At 9.5 percent, unemployment is already a full percentage point higher than the administration's worst-case scenario, and we're still bleeding jobs. "But wait!" say a handful of optimistic economists (they exist). "When we look at the jobs data, we don't see bleeding. We see an end." This graph, they say, is why the recession is over:
Jul 6 2009, 11:40AM
California, Florida Still Dragging Us Down
What do California, Arizona, Nevada, Florida and Michigan have in common? In just about every indicator of economic pain, those states not only top the list but take up much of the top ten. California and Florida have the worst foreclosure rates and credit card debt, Nevada has the worst drop in home prices, Arizona has the worst drop in unemployment and Michigan is the overall jobless leader with a 14 percent unemployment rate. June's home price numbers are out (from Case-Schiller) and guess who leads the pack, again?
Jul 6 2009, 10:30AM
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:
Jul 6 2009, 9:35AM
Transformers II is Big, But It's No Mary Poppins
With the summer blockbuster movie Transformers II racking up some dizzying revenue to match its dizzying camera-work, we're hearing quite a bit about how it could challenge the box office "records" of past summer behemoths like The Dark Knight. But it's worth remembering that the records it is breaking aren't really records, because they're not adjusted for inflation. Via Slate, I've come across this inflation-adjusted list of the highest grossing movies of all time. Fans of Mary Poppins, rejoice! Just a spoon full of inflation-adjusting makes the Dark Knight go down.
Video
Jul 2 2009, 3:50PM
Is Obama Anti-Business?
Austan Goolsbee defends the president's policies at the Aspen Ideas Festival.
Jul 2 2009, 3:39PM
Jack Welch Launches Online Biz School
BusinessWeek reports that Jack Welch, the esteemed former CEO of General Electric, has announced that he will open his own online MBA program. For $20,000 the Jack Welch Management Institute, which officially opens in the fall, will offer $600 per credit hour tuition, which means you can get your MBA from Jack for about $20,000. Is this a great idea?
Jul 2 2009, 12:45PM
Should Journalists Be Entertainers?
Jul 2 2009, 11:50AM
California's Deficit Plan Now Includes IOUs
California lawmakers failed to agree on deficit measures to close the state's $24 billion budget shortfall on the eve of July 4 weekend. As a result, the state controller said he will start paying some of the state's bills with IOUs. At this point, the state has 45 days to solve the deficit. After that deadline, lawmakers are constitutionally unable to actually make law or adjourn until budget provisions are passed to close the shortfall. This is absolutely dreadful, not to mention embarrassing, news for the state, but apparently the treasury is getting creative. Its solution? Split the state in half.
Jul 2 2009, 10:50AM
Can Republicans Be the Party of Growth?
Via Michael Mandel, here's an interesting piece about fixing the GOP from Amity Shlaes. She's the conservative whose tome about FDR, "The Forgotten Man," argued that the New Deal was bad for the economy, and Capitol Hill Republicans bought the book in bulk. Now she's speaking directly to her most avid readers with a pretty simple message: Stop blowing up your marriages, and start blowing up your party.
Jun 26 2009, 4:03PM
Consumer Spending Up, As Stimulus Takes Effect
There have been plenty of critics of Obama's $800 billion stimulus plan who argue that it hasn't made enough of a difference. I've been one of them. But the news today is that consumer spending is up, for the first time since February, at 0.3 percent clip, and that much of the credit must go to the stimulus bill. One-time payments in the form of Social Security and unemployment benefits and reductions in payroll taxes have helped after-tax income to climb by 1.6 percent in May. Is that a green shoot we see, or is it just another green praying mantis settling on dead cold ground?
Jun 26 2009, 1:20PM
Transformers II: Most Expensive GM Ad Ever
Transformers II, the mega-blockbuster movie opening this week, is already smashing revenue records. Somewhat unlike the company that made most of the transforming cars: General Motors. But think happy thoughts for GM. Sweeping, sexy shots of their muscle cars doing sweeping, sexy muscle car things is apparently the only part of the movie getting decent reviews. (Ahem, that's what strategic advertising looks like!) Even the name of the film -- Transformers: Revenge of the Fallen -- sounds
like a bold prophecy for the bankrupt auto maker. With a $200 million price tag, could this film be the most expensive, most effective, most auspicious car advertisement in American history?
Jun 26 2009, 11:20AM
Merrill Lynch Camp: Ben Bernanke Is Telling the Truth
Within the financial crisis, an acute controversy is building over the Federal Reserve and the Treasury Department's role in the 2008 merger of two giant banks -- Bank of America, led by CEO Ken Lewis, and Merrill Lynch, then led by John Thain. In September 2008 Bank of America paid $50 billion deal to acquire Merrill Lynch, which was facing huge losses. In December, BofA CEO Lewis, sensing that the losses were too much for his company to stand, went to Washington, DC, to meet with Fed Chairman Ben Bernanke and former Treasury Secretary Hank Paulson to explain he wanted to back out of the deal.
Here's where the story gets murky, and interesting.
Here's where the story gets murky, and interesting.
Jun 26 2009, 10:15AM
How Much Would You Pay for Cap-and-Trade?
About $19 a month? Then you're an average American. That's according to this fancy graph (after the jump) drawn up by Nate Silver based on a Washington Post poll. Silver took two pieces of data -- that when the monthly cost of the cap-and-trade bill is $10, 56 percent support it, and when it's $25, 44 percent support it -- drew lines, crossed the streams and came up with this:
Jun 25 2009, 5:10PM
What's Up with These Dumb, Pornographic Fast Food Ads?
In marketing, I suppose it's something of a syllogism that if you make an advertisement that combines food with sexual innuendo -- like this new thing from Burger King -- you've got a winner on your hands. There's only one problem: It's not true. There's this study that shows that overtly sexy ads don't work on women. And these studies showing sexy ads drown out the product, diminish brand recall, and often don't reap dividends even when the product is directed only at men. So why do marketers do it? (Also, let's look at some ads and talk about how stupid they are!
Jun 25 2009, 1:50PM
Finally! A Financial Crisis Poster for Your Room.
If we do not learn from our mistakes, we are bound to repeat them. And the best way to learn from our mistakes is to teach them faithfully to our children by turning them into colorful posters. With that, Catherine Rampell offers this printable timeline (pdf) of the financial crisis from the New York Fed, which I guess is like the Rand McNally the Federal Reserve system. One thing I learned was this:
Jun 25 2009, 12:05PM
The United States of America vs. Karl Rove
This is the world that Karl Rove lives in: Obama's approval rating is in deep trouble, the public wants to kill government-run health care, and the Republicans have a shot at riding health reform like a gust of wind out of their smoldering ashes. The rest of us live in a world that looks, well, the utter and exact opposite. This is what Karl Rove being wrong looks like:
Jun 25 2009, 10:40AM
How to Fix Too Big to Fail
Simon Johnson, the IMF economist turned Atlantic contributor turned prolific blog/wonk identity, has an interesting piece in the Times' Economix blog counting down three ways to fix "Too Big To Fail," the idea that major banks can grow so big that their collapse poses a mortal threat to the financial health of the economy. I'm going to count down with him, narrating my impressions as I go.
1. Do Nothing.
1. Do Nothing.
Jun 24 2009, 5:15PM
What if the President Smoked Pot?
I'm reading William Saletan unpack the latest antismoking bill, and although I don't have a great framework for evaluating drug regulation, it seems to make a lot of sense. Rather than take steps to outlaw cigarettes, the law is a practical response to the question: How can we make this safer? It allows the FDA to alter the harmful chemistry of cigarettes and expands approval of nicotine gum and patches, among other things. And it makes me wonder: Why can't other drug policies be practical responses the same question?
Jun 24 2009, 3:30PM
Weaponized Keynesianism and the Republicans
I tend to think I'm a decently fair observer of politics. But one thing I've never had patience for is Republicans who don the cloak of fiscal conservatism and then threaten to light themselves on fire when military spending increases by too little -- much less go down. Maybe that's why I really appreciate this rhetorical MOAB from the voluble Rep. Barney Frank on paying for the F-22:
Jun 24 2009, 12:00PM
The Craziest Plan To Save Newspapers Ever
The Daily News of Rhode Island is hurting, like every newspaper, but at least this is thinking outside of the box:
So if you only want the website, the Daily News will pay you $100 to take the newspaper. You don't have to read it. You don't have to look at it. You can toss it, use it for fish wrap, or just blanket yourself in the local business section like a paper Snuggie. Could this possibly work?The Daily News will now charge $145 annually to a newspaper subscriber, $245 if a subscriber wants the paper and access to the paper's web site--and, here's the key figure, $345 if the subscriber only wants the web site.
Jun 24 2009, 10:55AM
America's Lost Decade for Jobs
Just how bad were the last ten years for jobs? Horrific. Michael Mandel, the BusinessWeek economist last seen diagnosing America's failure of innovation, has crunched the numbers, and these pictures aren't pretty. The last ten years have been the worst decade for job creation since 1949.
Jun 23 2009, 3:05PM
Today's Home Sales Report Made Simple
Home sales rose in May, by 2.4 percent, for the second straight month. Good news? Not so fast. Year-over-year sales are still lagging, and home prices are 35 percent down from their 2005 high. And this mediocre news is coming on top of much lower home prices and an $8,000 federal tax credit for first-time buyers. As Ian Shepherdson put it shortly: "Direction good. Pace slow." Here are four points to take away from the housing figures.
1. Maybe This Improvement is Just Seasonal.
1. Maybe This Improvement is Just Seasonal.
Jun 23 2009, 11:50AM
Do Moon Cycles Affect the Stock Market?
Monday was a new moon. You might not have noticed, but the stock market is apparently paying rapt attention. A study published in the Harvard Business Review reviewed 25 worldwide stock exchanges, and the authors found that annualized mean daily returns
in G7 countries were higher around new moons than full moons. And not just slightly higher. Returns were two to three times higher during new moons in every single G7 country. Are full
moons bad for both sleeping and stocks? Out: Bear Markets. In...Werewolf Markets?
Jun 23 2009, 10:30AM
Are Goldman Sachs' New Record Bonuses Good?
The Guardian newspaper reports that Goldman Sachs, the investment bank which has only just paid back the $10 billion it loaned from the US government's Troubled Asset Relief Program, is set to hand out gigantic bonuses this year, possibly its biggest ever. Where is this money coming from? In the less crowded field of investment banks, Goldman can act as a crucial intermediary in the bond markets to help governments and companies raise money, and it can charge higher premiums for doing business. So much for reforming Wall Street while we nursed it back to health. Has Goldman Sachs won the recession?
Jun 23 2009, 9:36AM
Ron Paul: I'm Not Bailing Out California
The sorry state of California faces a $20+ billion deficit, and all the talk is whether the state falls into the category of too big to fail, and Washington should throw it a bone, or two billion. I think we know whose vote the state is not getting: Writing in the New York Times' Room for Debate, former presidential hopeful Ron Paul comes down firmly (and unsurprisingly) in the tough love category. As he puts it: "If you live beyond your means, you'll one day have to live beneath your means." Sage words, Mr. Paul. So what do we do, instead?
Jun 22 2009, 4:25PM
What if Health Care Reform Never Happens?
Let's say health care reform fails this year. Maybe Obama tries again, and he fails again. And future presidents try and fail to reform the system, but every year we just play out the same 1993 scenario, and the government is unable to pass health care reform forever. What would that future look like?
Jun 22 2009, 2:30PM
Burger King's Horrible, Creepy Ad Campaign Isn't Working
To the surprise of nobody, Burger King's horrible, creepy advertisement campaign is not working, and the company finds itself falling further behind McDonald's according to just-released figures. This strikes a huge blow to the idea that what Americans want from their fast food joint is a Bobblehead King doll who sneaks into your bed, raps about square butts, and terrorizes you from outside your bedroom window. Yes, those were advertisements for hamburgers.
In other words, thank you America, for compelling our elites to put the strategic back into strategic advertising.
In other words, thank you America, for compelling our elites to put the strategic back into strategic advertising.
Jun 22 2009, 12:47PM
Is It Dumb to Bring Up U.S. Life Expectancy?
One of common arguments for the inefficiency of the US health care system is that we pay more for care than many countries whose citizens live longer. Economist Greg Mankiw jumps all over this argument, calling it "schlocky" and quoting Nobelist Gary Becker, who notes that there are a lot more variables to a country's average lifespan than access to health care, such as obesity. Let's take a look at this assertion...
Jun 22 2009, 12:15PM
How to Use Smartphones at Work: A Visual Guide
The New York Times has a funny piece today on the shape-shifting social mores of smart phone use. Can you check email at office meetings? Answer email at office meetings? Keep your Justin Timberlake ring tone on Loud? These are tough questions, and if the article is any indication, there's no clear guide to cell phone use at work. Until now, that is:
Jun 22 2009, 10:40AM
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.
Jun 19 2009, 2:41PM
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?
Jun 19 2009, 12:53PM
What's Wrong with California, Nevada, Arizona and Florida?
Unemployment numbers are out for 48 states, and for some states they are record-setting in all the wrong ways. Congratulations are in order for Nebraska and Vermont, the only two states to not report increases. But why is it that whenever these awful reports come out, the same four or five state always grab the headlines?
Jun 19 2009, 11:30AM
How Do We Make Doctors Better?
This week I visited a particularly charged part of the health care reform debate: Doctors' pay. The reason to focus on doctor pay is simple: to change the way we pay for health care,
we'll have to change the way we pay the people
providing us the care. Even Obama has criticized the "warped
incentives" that reward doctors' for over-treating patients. But let's set aside the question of how to make doctors poorer. How do we make doctors better?
Jun 19 2009, 8:37AM
Are Americans Asking Obama to Repeat FDR's Mistakes?
Americans are getting increasingly nervous about the strain of Obama's projected trillion-dollar deficits. Yesterday's poll numbers from the New York Times and Wall Street Journal are crystal clear: With unemployment still climbing, 58 percent of the public wants Obama to focus on deficit-reduction even if it means a longer recession. We are all Herbert Hoover now?
Jun 18 2009, 4:30PM
Why You Could Pay for Your Next Checking Account
Jun 18 2009, 2:45PM
The 5 Strangest Economic Indicators
Attention America: If you find yourself without underwear, covered in mosquitoes, running from a charging pack of alligators while trying to read a romance novel through your goopy eye lashes ... you still might be living in a recession.
Jun 18 2009, 12:30PM
Alaska Getting Poorer, Faster
The United States has lost $63 billion of personal income in the last quarter, and about the fifth of the loss comes from California. But when you line up the states back to back in order of percent change in income, America's late acquisitions are the bookends: Hawaii is getting richer, faster, while Alaska's income plummet is more than six-times worse than the national average.
Jun 18 2009, 11:26AM
Karl Rove's Bizarre Plan to Kill Obama's Health Reform
I guess I'm a little surprised by Karl Rove's op-ed today in the Wall Street Journal. The MO of House and Senate Republicans has been to block, block, block. Now the strategy seems to be: Engage in the details of health care reform to expose the flaws in "ObamaCare." That sounds like hard work! Maybe a united front against president hasn't paid off in public opinion, but it did have a kind of simple logic to it.
Jun 18 2009, 10:20AM
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.
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.
Jun 17 2009, 7:18PM
The World's Dumbest Financial Criminals Ever?
Two Japanese travelers trying to enter Switzerland were caught carrying $134 billion -- yes, billion -- in fake US Treasury bonds in a briefcase. The forgeries contained 249 securities with a face value of $500 million, several "worth" more than $1 billion, and several "Kennedy" bonds, which, um, are just totally made up to begin with. What exactly is the endgame here, one wonders? As my colleague Charles Davi, who discovered the article, quipped: "Uh excuse me. I'd like to cash my 130 billion dollar check!"
And here's one of the most delightfully absurd paragraphs I've ever read in a news story:
And here's one of the most delightfully absurd paragraphs I've ever read in a news story:
Jun 17 2009, 4:30PM
The Problem with Fareed Zakaria
In the pantheon of political and economic commentators, there is perhaps no one who writes so lucidly with such utter calm and reasonableness as Fareed Zakaria. His columns aren't Cracker Jack boxes bursting with goshwow revelations. They're mugs of warm milk that go down nice and smooth, filling you with a kind of zen peace and a dozy satisfaction that everything is going to be alright. He can be Obama with a pen and history PhD. He can be Thomas Friedman without the metaphors. And when undozy times call for undozy measures, he can be wrong.
Jun 17 2009, 10:27AM
What the World's Great Recession Looks Like
Yesterday I posted four graphs showing that although the collapse in US home prices and our federal deficit is without precedent, the country is still tracking better than the Great Depression in just about everything else. We're not experiencing (yet) either Depression-era deflation or even average-recession inflation. US trade is beginning to rebound slightly. Our industrial production falloff isn't even close to the early '30s, and our unemployment, while historically terrible, isn't Depression-vintage.
But today I got my hands on alarming graphs from the folks at VoxEU (via a column by Martin Wolf) which convincingly demonstrates that, for the much of the world, 2009 looks, without question, just as bad, if not worse, than the first years of the Great Depression.
But today I got my hands on alarming graphs from the folks at VoxEU (via a column by Martin Wolf) which convincingly demonstrates that, for the much of the world, 2009 looks, without question, just as bad, if not worse, than the first years of the Great Depression.
Jun 16 2009, 5:59PM
Do Doctors Deserve to Be Paid Less?
I'm listening to the New Yorker's political podcast, with Ryan Lizza and James Surowiecki discussing health care reform and one of them (Lizza?) makes the perfectly obvious point that if we're going to dramatically change the way we pay for health care, we'll likely have to dramatically change the way we pay the people providing us the care: that is, doctors. Obama has said as much, calling on law makers to "change the warped
incentives" that reward doctors for the number of operations they do. But how exactly do we create incentives for doctors to earn less?
Jun 16 2009, 4:00PM
This is What the Great Recession Looks Like
How bad is the Great Recession? Housing prices have slid more sharply than the Great Depression, and the federal deficit free fall is without precedent. That's bad. But in just about every other category, the Great Depression was must worse. That's good! What else? Paul Swartz, an International Economics analyst at the Council on Foreign Relations, presents the recession, in context, in graphs (in a PDF).
Jun 16 2009, 12:30PM
California Screamin'
On such a summer's day in 2009, when too big to fail has practically become a national slogan, you would think that the Obama administration would find it in their hearts and their pockets to lend some bailout money to the state of California, which now faces a $24 billion deficit. But no. The early word from DC is that the administration has refused to bail out California and that Arnold Schwarzenegger will be forced to take whatever lessons he learned when playing Mr. Freeze and apply them to government spending.
Jun 16 2009, 10:30AM
Is Banking Reform Effectively Dead?
Bloomberg reports that the Obama administration's emphasis on health care reform and climate control will likely push bank reform and re-regulation to late 2010, just in time for election-year grandstanding. One year doesn't seem like a long time, but politics is about momentum and we Americans have a habit of jumping from one national fixation to another. (Remember, 12 months ago, we were worrying about whether algae blooms and toxic smog would totally ruin the Olympics.) As we speak, popular resentment toward the banks on Capitol Hill and Main Street is ripe and ready for plucking. A year from now, it will be moldy, smelly and stashed away in the refridgerator compartment where you hide lumpy fruit that didn't make last week's fruit salad. In other words, this won't kill the will for financial reform, but it could turn the will into mush.
Jun 15 2009, 5:39PM
Are Unpaid Internships Destroying America?
In the future, writes WIRED editor Chris Anderson, everything will be free. And in the case of jobs, the future is now, because unpaid internships abound, especially in the summer months, with college students flocking to DC and New York like the salmon of Capistrano. Even former masters of the universe are prepared to trade the expectation of comp'ed lunches for the expectation of hot office coffee. Are unpaid internships one-part education/one-part natural expression of the labor market? Or are they spoiling rich young Millennials and transforming the country for the worse?
Jun 15 2009, 2:35PM
Is Europe Reading Paul Krugman, or History?
Jun 15 2009, 10:49AM
In Health Care, Do We All Lose to Singapore?
As the health care debate boils over this summer, one meme sure to be be stirred into the stew is the frequently recited fact that Americans lead the world in health spending but have no similar world-leading claim to life expectancy. In fact, we rate 50th out of more than 220 countries with an average age of 78. But as the graph after the jump shows, the disconnect between health spending and life expectancy isn't unique to America.
Jun 15 2009, 10:40AM
What's the Matter With Rich Liberals?
Nancy Folbre hits on one of my favorite rejoinders to the annoying, if fading, liberal yawner that Democrats lost so many elections because millions of heartland Americans voted Republican against their self-interest. This argument, which received its most public treatment in Thomas Franks' "What's the Matter with Kansas?" posits that Republicans learned to make the class war about values instead of economics and tricked millions of poor, poor Americans into voting against their economic self-interest.
But as Folbre rightly notes, this is a very silly argument because "the most visible support for raising taxes on the rich comes from ... the rich," like the chief executive of Netflix begging the president to raise the highest income tax bracket to 50 percent. Raise my taxes! is another pretty bizarre strain of economic self-interest. Maybe we should ask: What's the matter with America?
But as Folbre rightly notes, this is a very silly argument because "the most visible support for raising taxes on the rich comes from ... the rich," like the chief executive of Netflix begging the president to raise the highest income tax bracket to 50 percent. Raise my taxes! is another pretty bizarre strain of economic self-interest. Maybe we should ask: What's the matter with America?
Jun 12 2009, 5:30PM
The Bizarre Brouhaha Over Facebook Usernames
Tonight Facebook is doing something not-so-crazy that you probably shouldn't care about, but I'll tell you anyway. They're allowing users to replace the messy sequence of letters and numbers after the facebook.com with a username, just like Myspace does. No biggie, right? Wrong. Because this is a story that involves 1) The Internet, 2) A change 3) Room for speculation, it follows that somebody had to write a story saying that this not-so-crazy update will make Facebook obsolete and change the face of the Internet as we know it. Thank you, Daily Beast!
Jun 12 2009, 2:47PM
How Bad Would America Be Without the Stimulus?
"History is one big laboratory experiment that only gets run once," Niall Ferguson muses to the New York Times today. Actually that's not quite true, responds Tim Fernholz. In the worldwide science project called Recessionomics, we're seeing many countries' labs experiment with a bevy of downturn-busting strategies. Let's see who's winning:
In Lab USA, which has experimented with a Keynesian stimulus plan and massive federal involvement in the bank system, we expect to see a bottom of the recession in the fall. Lab European Union, which has limited both its monetary and fiscal response, expects a recovery in the middle of 2010, and its GDP has contracted 50 percent more than the States, where the shock began. Keynes wins again?
In Lab USA, which has experimented with a Keynesian stimulus plan and massive federal involvement in the bank system, we expect to see a bottom of the recession in the fall. Lab European Union, which has limited both its monetary and fiscal response, expects a recovery in the middle of 2010, and its GDP has contracted 50 percent more than the States, where the shock began. Keynes wins again?
Jun 12 2009, 12:45PM
Should California Legalize and Tax Marijuana?
California is a mess. Barring major intervention from the governor or legislature, it's about seven weeks away from a financial meltdown and crumbling under a budget deficit of $24 billion. Dark days call for drastic measures. If there was ever a time for a liberal-leaning state to start experimenting with illicit drugs or the taxable revenues thereof, this would be it. (With Update!)
Jun 12 2009, 11:05AM
Will Health Reform Fail Like Social Security Reform?
These days it is fashionable to compare Obama's health care reform to Bill Clinton's failed attempts to reform health in 1993, as Matt Bai did most recently, and most extensively, in his New York Times story. But maybe the best allusion isn't to Clinton, but to George Bush and Social Security reform -- the most recent blockbuster, partisan battle to change a major entitlement program.
At Time, reporter Jay Newton-Small compares the current debate over the public option for health care to the debate over privatizing Social Security, which reared its head after the 2004 election and promptly crashed and burned. Could the same thing happen to health care? I wouldn't be so sure. In many ways, the Social Security debate is not the right template for the health care reform debate.
At Time, reporter Jay Newton-Small compares the current debate over the public option for health care to the debate over privatizing Social Security, which reared its head after the 2004 election and promptly crashed and burned. Could the same thing happen to health care? I wouldn't be so sure. In many ways, the Social Security debate is not the right template for the health care reform debate.
Jun 11 2009, 1:02PM
How Bad is the Bank of America/Merrill Lynch Scandal?
Bank of America CEO Ken Lewis has testified that former Treasury Secretary Hank Paulson and current Fed Chairman Ben Bernanke essentially forced him to acquire Merrill Lynch despite evidence of its growing losses. Even though this was certainly done with "America's best interests" in mind, it's still a bit troubling. It's especially troubling because early this year, Merill CEO John Thain was forced out for hiding Merrill's red ink. But doesn't Lewis' testimony reveal that explanation as completely, 100 percent bogus? For me this raises three big questions about one of the biggest financial mergers of our time:
Jun 11 2009, 11:53AM
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?
Jun 11 2009, 10:11AM
Stimulus Money Bought Many More Fords Than GMs
When the US government passed the stimulus bill, it allocated about $287 million to buy cars for the General Services Administration. In doing so, the government demonstrated its own preferences among Detroit's automakers by spending almost half the money on Ford automobiles, as opposed to the now-government-owned General Motors and now-pawned-off Chrysler. See Uncle Sam? Now you see how Americans consumers feel.
Jun 10 2009, 3:42PM
What Shall We Cheers To? Alcohol Taxes!
Here's an interesting study from the Center for Budget and Policy Priorities that takes an interesting look at an issue I've been grappling with: the sin tax. For a while, I wasn't for the sin tax so much as I was against arguments against the sin tax, but after reading this, I'm tempted to sin tax my most regular sin more than ever.
Jun 10 2009, 1:00PM
Is Telecommuting Bad for Business?
Blogging is just about the most portable job in the world. All you need is a computer with internet to read and write and a phone to make occasional calls. But really, that makes it like a lot of jobs. With email, instant messaging, document sharing and cell phones, connectivity isn't an office perk, it's a cinch at home too. As a result, telecommuting is on the rise, and one report estimates that by the next presidential election, "nearly 75 percent of the U.S. workforce will be mobile." So why is this guy writing in The Big Money saying that's a bad thing?
Jun 10 2009, 11:50AM
What the Heck Can We Do About the Deficit?
I'm going to level with you: I don't have the first idea what to do with the deficit. On the one hand I hear the serious-sounding argument that we are flying into a fiscal disaster if we don't fix the deficit right away. On the other hand is another serious-sounding argument that, not only is the deficit not urgent, but deficit hawks could plunge us back into recession a la 1937. And on top of all this is the likelihood that nobody is going to take deficit reduction seriously, either now when the economy needs a boost or later when Democrats will be nervous to inflict fiscal "pain" before the 2010/'12 elections.
Jun 10 2009, 10:31AM
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?
Jun 9 2009, 4:14PM
Your Dirty Old Underwear Is Prolonging the Recession
You learn the strangest things from reading economic blogs. Did you know that higher beer taxes will make you lazier at the gym? It's true! Or that Zach Galifianakis is the comedic genius of my generation? He certainly is weird! Or that "Alan Greenspan is a fan of men's underwear sales as an important economic indicator?" Now that just might be the fact of the day.
Jun 9 2009, 3:49PM
How Obama Saved the Banks Without a Bank Plan
The country's largest banks appear stable even as Obama's largest bank plan is dead. Treasury Sec. Tim Geithner's Public-Private Investment Plan to price and buy toxic assets from the banks has withered on the vine, and it's enough to make some writers wonder whether the Obama bank plan has failed. But wait, how can you say the big bank plan failed if the biggest banks aren't failing?
Jun 9 2009, 12:45PM
America, the Part-Time Nation
"No one I know has a job anymore," Daily Beast editor Tina Brown observed early this year. "They've got Gigs." You know, gigs. Part-time jobs, here and there, that provide a decent trickle of checks without the umbrella of benefits. I remember reading that and wondering whether Tina was getting a representative cross-sample or hanging out with too many New York journalists and bankers. Both things could be true of course, but it looks like Tina was onto something:
Jun 9 2009, 11:42AM
Will the New iPhone Save Journalism?
Let's follow the logic. Apple iPhones can now buy movies and TV shows just like a computer. What about magazines? Maybe them too: an application called Scrollmotion says it hopes to offer on the iPhone "50 major magazines, 170 daily newspapers and 1 million books," possibly including Esquire and Bon Appetit. Is the stage set for iPhone to cash in on that grand-daddy of journalism life preservers: The iTunes of Journalism?
Jun 9 2009, 10:45AM
10 Crazy Ideas for Fixing Our Education System
School is out for almost all students in Kindergarten through college. So now that the teachers and students are out relaxing, let's talk about them behind their backs: Our education system stinks. It's a paragon of wasteful spending and mediocre results. Lucky for us, Obama and his whip-smart Secretary of Education Arne Duncan know that better results require bold changes. So let's get bold! From killing tenure and the SAT to requiring Spanish classes for everybody (er, para todos!), nutty ideas abound. Here are 10 crazy ideas for remaking our schools from K through College:
1) Eliminate summer vacation.
1) Eliminate summer vacation.
Jun 8 2009, 3:40PM
Could McDonald's Really Beat Starbucks?
Did you ever think that America was silently lusting for a quarter-pounder with cheese, fries and a mocha latte? I sure didn't. But maybe that's why I'm stuck at a desk blogging about coffee marketing while the guys at McDonald's roll in their big piles of money. With sales are up more than 5 percent (more than Burger King or Wendy's), McDonald's is boasting about its McCafe campaign's stronger-than-expected debut. Is the time nigh when, thirsting for a cup of joe, you trade the faux-Francaise atmosphere of Starbucks for the bright plastic counters of McDonald's?
Jun 8 2009, 12:13PM
And Then the Recession Came for Hipsters...
Here at the Atlantic, we have considered the impact of the recession on Americans responsible for making investments, and making cars, and making students. But how about the impact on Americans responsible for making, well, nothing at all? Now the recession has hit New York hipsterdom and Williamsburg wallets are feeling skinner than a pair of Levi's 511s.
Jun 8 2009, 11:59AM
Should We Save the Jobs of Bad Teachers?
This Jonathan Alter piece from Newsweek about Obama's education strategy calls for the White House to get tough with teacher unions. No more "peanut-buttering" money nice and even across the multigrain face of America's school systems. It's time to get tough with teachers, find the ones that are working and axe the ones that are failing. How do we do it? We use the education stimulus spending.
But wait, I thought the point of stimulus spending was to save jobs. Can that really be true of every industry except education? In a recesion, is it worth it to save the job of a bad teacher?
But wait, I thought the point of stimulus spending was to save jobs. Can that really be true of every industry except education? In a recesion, is it worth it to save the job of a bad teacher?
Jun 8 2009, 10:59AM
Go To College
Everybody knows that college is too expensive, too old-fashioned, too liberal, too humanities focused, and so on. But the recession has demonstrated that it's also too important to dismiss for all those reasons.
Jun 8 2009, 10:23AM
Do We Really Need Another Stimulus Already?
The economy is getting better, but still terrible, and job losses are slowing, but still terrible, and so mixed into the commentary about how the economy might turn the corner this autumn is a growing movement to push Obama to pass his second stimulus bill. The Center for Economic and Policy Research has even started their own coed fraternity to honor the economists and pundits behind the movement, including Paul Krugman, Mark Thoma and Katrina Vanden Heuvel of The Nation. It looks like a perfectly fine group, and I hope everybody receives complimentary CEPR Honor Roll bumper stickers, but consider some reasons not to join (yet):
Jun 5 2009, 5:50PM
Extreme Makeover: Federal Reserve Edition
Talk about your public beautification projects. The Fed's getting a makeover and image-softening advice from an Enron lobbyist. Huh.
The Fed has probably done more than any other institution to avoid a financial disaster on par with the Great Depression. Although the stimulus spending is slow, TARP is sort of a political mess, Geithner's public-private plan is kaput, (and let's not even bring up Detroit), somehow, we're nearing a softer-than-expected landing to the recession. So why does the Fed need a facelift? And why hand the scalpel to an Enron lobbyist?
The Fed has probably done more than any other institution to avoid a financial disaster on par with the Great Depression. Although the stimulus spending is slow, TARP is sort of a political mess, Geithner's public-private plan is kaput, (and let's not even bring up Detroit), somehow, we're nearing a softer-than-expected landing to the recession. So why does the Fed need a facelift? And why hand the scalpel to an Enron lobbyist?
Jun 5 2009, 1:58PM
Today's Unemployment Numbers Made Simple
Just the facts: The US economy lost 345,000 jobs in May. That's bad. But economists thought we'd lose almost 200,000 more. That's good. At 9.5%, unemployment is higher than its been in a quarter century. That's bad. But we're losing jobs slower than any time since September. That's good. Economists predict we could hit double digit unemployment later this year. Bad. "Before the end of the year and maybe even by late summer we could be at flat employment," says economist Alan D. Levenson. Good.
Got it? Maybe this would be easier with pictures:
Got it? Maybe this would be easier with pictures:
Jun 5 2009, 11:55AM
How to Make the United States Innovative Again
Yesterday I suggested that maybe the United States isn't as innovative as we like to think. (It wasn't my idea. It was Michael Mandel's.) But Mandel's piece didn't seem to answer the big question: What are innovators
doing wrong? And how do you design a
macroeconomic policy to unleash ideas? Today, I have answers, and they range from rescuing engineers from the clutches of the military, to hosting a big national innovation contest, to changing the way we tax companies.
Jun 5 2009, 9:30AM
Juicy Learnings from the Harvard Crimson's Graduation Report
The Harvard Crimson published its annual graduation survey with job stats for the Class of 2009, which is a cool barometer for the migration of America's well-to-do whippersnappers. What do their jobs tell us about the state of the economy? Let's grade the industries. Finance flunks. Media gets a D. Health and education receive gold stars. And grad school graduates cum laude.
The survey also includes more, um, intimate details.
The survey also includes more, um, intimate details.
Jun 4 2009, 4:20PM
GOP Proposes Spending Cuts. Are They Serious?
At nearly $2 trillion, the deficit is a monster. So the GOP has proposed $375 billion of budget cuts to pare it down. That's the good news. The bad news is that when you peak under the hood of the engine, you see two big wrenches. 1) $317 billion of the estimated cuts is just a cap on discretionary
spending, which is a make-believe item that will never pass Congress. 2) The new, actionable ideas amount to only $5 billion a year, which is a hardy 0.3% of the estimated deficit.
Jun 4 2009, 2:39PM
Maybe the US Isn't So Innovative, After All
BusinessWeek economist Michael Mandel has a bummer of a piece arguing that as much as the United States likes to think of itself as the world's eureka machine, maybe we're not as clever as we thought. "Innovation has stumbled" in the past decade, he says, and our innovation shortfall explains our trade deficit. It also explains why consumers took on so much debt. Heck, our national lack of imagination has all sorts of far reaching effects:
Jun 4 2009, 11:15AM
How to Keep the US From Turning Into the Soviet Union
Gorbachev helped destroy the Soviet Union by borrowing abroad and printing money to paper over the need for fundamental reform. How familiar does that sound? Simon Johnson has an interesting piece today about how to make it sound less familiar. His three-point plan is: Raise interest rates, begin to wean ourselves off Saudi oil, and bring the deficit down to about 5% GDP by next year. Hold it, five percent by 2010? You've got to be joking.
Jun 4 2009, 10:20AM
Hulu Might Start Charging for Content
Hulu is seriously considering charging users to watch its movies and television, according to Jeff Bercovici from Daily Finance. But Hulu, are we really going to enjoy your evil plot to destroy the world of television if we have to pay for it?
Jun 3 2009, 5:35PM
Does Microsoft's Bing Ad Blame Google for the Financial Crisis?
The new ad for Microsoft's new search engine decision engine Bing is out, and it is frenetic. "While everyone was searching, there was bailing," intones a bemused young voice over images of foreclosure signs and Wall Street freak outs. He continues: "While everyone was lost in the links, there was collapsing." Photos of financial distress and destruction blink in and out like a Michael Bay action sequence, or a Ken Burns feature on fast-forward.
Why is Microsoft comparing online searches with the recession? And is it the weirdest indictment of Google you've ever heard?
Why is Microsoft comparing online searches with the recession? And is it the weirdest indictment of Google you've ever heard?
Jun 3 2009, 3:50PM
Even Tim Geithner Can't Sell His House
Selling your bank bailout plan to Wall Street is one thing. Selling your house in this market is quite another. And via CNN Money we find something that will make Republicans chortle and regular Americans nod with jaded familiarity. Treasury Secretary Timothy Geithner has been reduced to renting his tony suburban New York home, because nobody in the world will buy it from him.
Jun 3 2009, 3:15PM
In Recession, Television Beats Clothes, Food and Cars
In a recession, people make cuts. But what would you give up first, your pants or your light bulbs? Your car or your cellphone? Those are important questions and an Ipsos/Reuters poll has the answer. We will eat dogfood before canceling HBO, Gawker concludes.
Jun 3 2009, 12:50PM
Austan Goolsbee is Brilliant, But is He Right?
In response to Jack Welch calling the Obama budget "from the moon," Austan Goolsbee, Obama's silver-tongued economic spokesman, shot back:
"Look, we enter the government essentially in a hotel that is on fire. We're throwing people from the windows into the pool to save their lives and this is the evaluation of the Olympic diving committee."Zing! But Goolsbee isn't really answering the question:
Jun 3 2009, 11:10AM
Why 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.
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.
Jun 3 2009, 10:35AM
How Health Care Stole Your Pay Raise
This amazing graph bouncing around the web is the most striking example of why health care reform isn't just about reforming care. It's about reforming the economy. New bumper sticker: "Reform Health Care; Get a Raise!"
Jun 2 2009, 5:23PM
Which State Was Least Great in 2008?
A really cool data table -- with an even cooler graph after the jump -- shows how GDP, jobs and home prices moved in each state last year. How did your state do? If you live in North Dakota, congratulations to both of you for nationwide highs in both home price increase (1.9%) and a GDP boost of 7.3% (...whoa, look out China!). As for the shame of the nation, hang your head Alaska (worst GDP), Arizona (worst job losses by percent), and Nevada (worst home price collapse). But which state did the worst overall? You can probably guess...
Jun 2 2009, 3:00PM
Do Poor Fat Americans Deserve More Taxes?
Is the recession making us fatter? In the last year, America's obesity rate is up almost 2 percent, according to a Newsweek/Gallup poll. That means 5.5 million more Americans have graduated into obesity in the last 12 months. And really it's so surprise: junk food is so terribly cheap and often delicious.
Jun 2 2009, 1:56PM
The Chinese Are Buying Hummer. Are You Outraged?
Hummers used to be a symbol of American greatness, or gratuity -- if there's a difference. Now a Chinese manufacturer is buying the company. How the mighty have fallen? Or, how the almost-as-mighty have been suckered into buying a worthless car company?
Jun 2 2009, 12:10PM
What's Wrong With Florida and California?
Here are the cities with the worst credit card debt in the country. Conclusion: Orlando is inundated like a family at the bottom of Splash Mountain. What stands out to me is that eight of the top ten cities are in Florida and California, which, as the map after the jump demonstrates, is also pretty much exactly where we've seen the glut of home foreclosures. I've been thinking recently about America's foreclosure/consumption crisis. But is real F/C problem really a Florida/California problem?
Jun 2 2009, 9:35AM
How GM Could Fail Sooner Than You Think
Yesterday, I tried to explain how GM could rebound sooner than you think, but for the sake of balance (and, as the case may sadly be, accuracy) we should also consider whether GM is in fact doomed.
This month's Atlantic piece Do CEOs Matter? argues that very often they do not. The ethos and worldview of companies are often so homogenous and insular that the chief executive could often be replaced by any number of minions under him. If that is indeed the case, it is not good for GM.
This month's Atlantic piece Do CEOs Matter? argues that very often they do not. The ethos and worldview of companies are often so homogenous and insular that the chief executive could often be replaced by any number of minions under him. If that is indeed the case, it is not good for GM.
Jun 1 2009, 6:40PM
How Should Obama Run GM?
Commenters in my last piece on the government's GM intervention argued that the Obama administration was certainly going to micromanage the company, despite its promises not to, because it's morbidly interested in a future of fuel-efficient cars. There are plenty of smart reasons to be nervous about lawyers and economists running a manufacturing plant, but what is the argument for Obama to have no influence over GM?
Jun 1 2009, 2:05PM
How Hearst is Crushing Conde Nast -- For Once
In the magazine world, Hearst has long been the able and underrated sibling living under the shadow of his showy prom king brother Conde Nast, but recessions have a way upturning social order. And today in the New York Times, Hearst can finally puff out its chest and brag that, even if it doesn't have the most shimmering skyscraper in Times Square, it does have something even more important: a viable business model. What's its secret?
Jun 1 2009, 1:59PM
How GM Could Rebound Sooner Than You Think
General Motors is completely hosed. Its cars are ugly, they run on too much gas, Americans don't like them any more, and today the reckoning comes on top of extraordinary pensions and health care commitments to their workers that will drown the company for the foreseeable future.
That's the tone of most things I'm reading from smart people I trust. But can we imagine a scenario in which GM could come out of this thing looking OK?
That's the tone of most things I'm reading from smart people I trust. But can we imagine a scenario in which GM could come out of this thing looking OK?
Jun 1 2009, 11:15AM
Why Socialists Don't Build Good Cars
Today in the Wall Street Journal, a former Socialist Car Czar explains how the Romanian government failed repeatedly to build a drivable car. "I knew nothing about manufacturing cars, but neither did anyone else
among Ceausescu's top men," Ion Mihai Pacepa admits. But certainly, in the country that mastered the art of the assembly line, we must have somebody extraordinarily experienced running this auto bailout, right? Introducing Brian Deese:
Brian Deese [is] a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.Oh dear.
May 29 2009, 3:40PM
Why in the World is the G20 Meeting in Pittsburgh?
The G20 apparently has a sense of humor, or irony at least. The leaders of the world's most important economies will be meeting this fall in Pittsburgh. Uh huh, Pittsburgh. A lot of people are asking something along the lines of "What, was downtown Baltimore booked?" But I'm wondering: Why is an organization dedicated to international development meeting in America's national mascot for steel subsidies? Isn't that a bit like a group of Mormon organizations gathering in Las Vegas?
May 29 2009, 12:30PM
Levi's Mannequins for Gay Marriage
How's this for millennial marketing: Levi's is joining the White Knot movement to show solidarity for gay marriage by tying white ribbons to mannequins in its stores. So now we can make this bumper sticker: "Plastic mannequins: Now progressive than the Republican Party."
May 29 2009, 10:15AM
How the New Google Wave Will Change Emailing, Blogging, Your Life
Just as Microsoft is unveiling a search engine to take on Google Search, Google is unveiling a software program to take on Microsoft Office. It's called Google Wave, an online "collaboration" tool that brings document sharing, emailing and instant messaging under one program that works a bit like a live chatroom. Google says it developed Wave to answer the question, "What would email look like if we set out to invent it today?" It would look like this:
May 28 2009, 6:59PM
How Harvard University Almost Destroyed Itself
Boston Magazine has a long, shocking piece about how the people running the world's greatest university almost bankrupted the school through a series of very dumb financial decisions after a decade of unbelievable growth in the endowment. Reading the litany of horror -- making bad decisions in the stock market, paying for buildings they couldn't afford, learning to hate Goldman Sachs -- it occurred to me that Harvard has never seemed more like average Americans.
May 28 2009, 3:38PM
The Graph That Will Solve the Financial Crisis
It now sounds like Treasury Secretary Tim Geithner's big bold plan to buy toxic assets from the banks might not even get off the ground. According to the WSJ, investors are feeling too skittish to marry their money to government backing. Two months ago, this would have sent the economy into a tizzy. Today, it doesn't make the WSJ.com homepage (unlike Bing.) Ultimately, the Geithner plan was never as important to solving the financial crisis as the actions taken by the Federal Reserve. This graph explains why:
May 28 2009, 1:54PM
Will Microsoft Bing Be a Google-Killer Search Engine?
Microsoft has had a rough few years. There are more self-identifying Republicans in America than Microsoft Live Search users, the Zune would be joke except nobody talks about it, and their public face is pudgy little John Hodgman looking stupid in those Apple commercials. But now they're about to role out a new search engine called Bing, and you know what? It looks pretty good!
May 28 2009, 12:50PM
The Stimulus Is Lagging. Why is Obama Bragging?
One hundred days after the passage of Obama's $787 billion stimulus bill, the administration is on a bragging tour, saying they've saved or created nearly 150,000 jobs in a hundred days. It's true that 150,000 more employed Americans is a great thing and a cause for some celebration. But shouldn't we be celebrating a number three times higher?
May 28 2009, 10:10AM
The Case for Taxing Emails
Everybody's talking about making people pay for what they use online, and the New York Times has a short piece about making you pay for what you use the most: taxing all your emails.
Why would governments do such a thing? To kill spam, save bandwidth, and make a ton of money.
Why would governments do such a thing? To kill spam, save bandwidth, and make a ton of money.
May 27 2009, 3:37PM
Stress Test "Adverse Scenario" Looks a Lot Like Reality, Part II
A few weeks back, Conor Clarke pointed out that the stress tests' more adverse projection for the US economy looked frighteningly like the front page of that day's newspaper. The pessimistic hypothetical for the economy projected 8.9% unemployment, a 22% decline in housing prices, and a 3.3% decline in GDP in 2009. The unemployment numbers came out that day and, well, they were 8.9% exactly.
Today there's another graph that makes it look like we've living through the adverse scenario of our recession:
Today there's another graph that makes it look like we've living through the adverse scenario of our recession:
May 27 2009, 2:30PM
Sonia Sotomayor and the Economics of Gender
President Obama's Supreme Court pick Sonia Sotomayor has stirred the controversy pot with some of her statements about race and gender. In 2001 she said: "I would hope that a wise Latina woman with the richness of her
experiences would more often than not reach a better conclusion [as a
judge] than a white male who hasn't lived that life." This has the powers that be and the punditocracy in quite the wrangle over who's being racist, reverse-racist, sideways-racist and the like.
But more interesting to me is the question Sotomayor's comment raises: How does experience, gender in particular, impact political judgment?
But more interesting to me is the question Sotomayor's comment raises: How does experience, gender in particular, impact political judgment?
May 27 2009, 12:35PM
Why I Drink More Alcohol Than You
May 27 2009, 12:15PM
How the Crash Will Reshape the World's Cities
May 27 2009, 10:45AM
Does Unemployment Guide the Stock Market?
Conventional wisdom holds that stock prices are leading indicators of economic health, while unemployment figures are lagging indicators. This makes sense, because stock prices reflect real-time valuations of company health, whereas employers don't make the decision to downsize (or restaff) until they feel like they've got a sense of long-term recession or growth. But along comes Felix Salmon with a graph to blow up that whole theory:
May 26 2009, 2:40PM
Should We Blame California's Government or Its Citizens for the Deficit?
Deficits are simple things, really. A government spends too much, brings in too little, or both. But in the case of California, there's a not-so-simple debate over whether we should pin the state's extraordinary deficit on California's spend-happy government or tax-sad citizens. The People of California vs. Sacramento (with a verdict!) after the jump:
May 26 2009, 11:50AM
Two Ways to Talk About Health Care Reform
The debate over health care reform is only in its larvae stages, but even among its advocates, it seems to me that there are two distinct methods to debating its impact on the budget. The first relentlessly seeks realistic, but politically unpopular, ways to pay for universal care. The second looks to pass health reform first and pay for it later. Who's winning?
May 26 2009, 10:30AM
NYT: Texting on Cell Phones Causes Anxiety, Insomnia, Dumbness
Do you have a cellphone? Do you use it to text people? If you answered yes, the New York Times has news for you: You're losing sleep, rotting your brain and getting stress fractures on your thumbs.
May 25 2009, 12:18PM
The Case Against Pennies, Coins and Paper Money
I don't like carrying cash. I leave most of my change in tip jars. And on the nuisance scale, pennies for me fall somewhere between mosquitoes and DC parking laws. But reading Time to Cash Out by Wired writer David Wolman, I was pleased to discover the argument to do away with cash and coins makes even more sense than I imagined.
May 25 2009, 9:05AM
Hank Paulson Admits He Doesn't Understand Mortgage Securities
This quote, from Newsweek's piece on former Treasury Secretary Hank Paulson, strikes me as a bombshell:
Paulson--by his own admission--was not paying much attention to the way banks were slicing and dicing mortgages and selling them as complex securities. "I didn't understand the retail market; I just wasn't close to it," he told NEWSWEEK.If Newsweek won't play prosecutor, I will: "Hank Paulson, you were Goldman's chief executive as mortgage securities boomed in 2004-5. Your earned an incredible severance, partly because of it. And you say you didn't understand mortgage securities? How is that remotely possible?"
May 22 2009, 2:55PM
Does Twitter Make Blogging Obsolete?
Andy Serwer is the managing editor of Fortune magazine and he is so busy with Twitter and Facebook status updates that he has announced the end of blogging -- for himself and, it would seem, the world. As newspapers and magazines drown, are blogs really just the next inland city to be submerged in the wave of communications technology?
May 22 2009, 11:59AM
The End of Television As You Know It
As everybody knows, or is supposed to say in public company: Television is stupid. But nowhere is that truism clearer than this week's Upfronts, where the networks tell advertisers about the shows they're going to debut in September (and cancel in October), and advertisers pay for awkward jokes made at their expense because, like a house cat or Richard Gere in that movie, they got nowhere else to go.
It's a sorry spectacle -- only the latest sign that television no longer makes sense and we're nearing the end of TV shows as we know them.
It's a sorry spectacle -- only the latest sign that television no longer makes sense and we're nearing the end of TV shows as we know them.
May 22 2009, 10:45AM
Gawker's Nick Denton on the Financial Crisis
Felix Salmon sat down with Gawker's mad genius Nick Denton to discuss how Gawker continues to make so much money while the country continues to pour so much into this bailout. After all, if anybody's pulling a golden rabbit out of their hat these days, it's the guy with a 27% year-over-year rise in revenue in the journalism industry. Denton, spill your secrets!
May 21 2009, 5:21PM
Cheney's Right About Obama
I read Dick Cheney's speech and some commentary today, and this passage stuck out for me:
"The administration seems to pride itself on searching for some kind of middle ground... They may take comfort in hearing disagreement from opposite ends of the spectrum. If liberals are unhappy about some decisions, and conservatives are unhappy about other decisions, then it may seem to them that the President is on the path of sensible compromise."Hey Cheney, that's an excellent analysis of Obama's bailout plan! Huh? Let me explain:
May 21 2009, 3:10PM
Why the Banks Are So Eager to Pay Back TARP
Here's the New York Times on the banks' somewhat extraordinary plans to pay back the TARP money in seven months -- maybe years before the Treasury expected:
Having regained a financial footing as well as a bit of their old swagger, major banks are racing to pay back billions of taxpayer dollars ... Now that big banks seem to have stabilized, regulators are trying to determine how and when these institutions should be allowed to return their bailout money.That's great thing, right? Not exactly, says Ezra Klein:
May 21 2009, 1:01PM
Is the Recession Ending? A Guide to Today's Economic Indicators
So are we on our way out of this thing or not? The world's economies are plunging, commercial real estate is on a cliff and California would register a 10.0 on the Richter scale if it could detect fiscal fissures. But now April's leading indicators are up and economists are once again optimistic. What the heck is going on?
May 21 2009, 10:56AM
Should We Blame Congress or the White House for Deficits?
Barry Ritholtz asks an interesting question: since Congress controls the budget and presidents set the agenda, can we say that one is more responsible for our deficits? He doesn't answer the question so much as tease readers with these two really interesting graphs that plot our deficits next to each party's control of the White House or Congress. So who can we blame?
May 21 2009, 9:24AM
In Praise of Sin Taxes for Cigarettes, Soda, Marijuana...
Federal and state governments are badly in need of revenue. And since their citizens have no money and hardly remember what a capital gain looks like, people are getting desperate for taxable goods. And by desperate, I mean creative. Is it time to tax prostitution yet? Yes it is, apparently.
May 20 2009, 2:45PM
Do Journalists Deserve To Be Paid?
Not much! That's the conclusion from Robert G. Picard, an Oxford professor whom I'm not liking very much right now. Here's his argument for why journalists deserve low pay:
Ouch, Picard. Since I've already Twittered about this article (literally) and asked for micropayments from my comment section (still waiting, guys...), I guess the only thing left to do with this piece is blog it. To value creation and beyond!Wages are compensation for value creation. And journalists simply aren't creating much value these days. Until they come to grips with that issue, no amount of blogging, twittering, or micropayments is going to solve their failing business models.
May 20 2009, 11:47AM
Governments Aren't As Bad at Running Companies as You Think
In the Wall Street Journal's oped pages today, John Steele Gordon explains why headline-driven politicians simply can't run businesses. He writes:
The Obama administration is bent on becoming a major player in -- if not taking over entirely -- America's health-care, automobile and banking industries. Before that happens, it might be a good idea to look at the government's track record in running economic enterprises. It is terrible.No, that's not really true:
May 20 2009, 11:00AM
Is America Better Off Without Conservatives?
There really is no making Paul Krugman happy. The Republican establishment is down on its knees and conservative luminaries are despondent, with Richard Posner publicly bemoaning the state of Hayek and Buckley's conservatism. But Krugman would prefer to excommunicate reformed conservatives than listen to them as they flock to his side -- with a couple suggestions. "Why, exactly, should we listen to people who by their own admission completely missed the story?" he writes. Jeez, I thought smart, intellectually honest people were a good thing.
May 19 2009, 3:35PM
Google's New Algorithm Can Read Employees' Minds
It's not enough that Google troll every corner of the Internet, turn itself into a universal library, and read through your email to pepper your Inbox with relevant advertising. No, Google will not stop until it has developed an algorithm to read your mind. Or at least, the minds of all of its employees.
May 19 2009, 2:05PM
Would Obama Make a Good CEO?
Today in the New York Times, David Brooks writes that the qualities that make good CEOs aren't people skills or charm, but doggedness and boring anal-retentiveness. For this reason, he says, "business and politics do not blend well." Brooks warns that when charismatic politicians wrestle the CEO title from the charmless organization-bots, as we're doing now, the the inevitable result is disaster. Does that mean the Obama administration is doomed to fail with the bailouts?
May 19 2009, 12:00PM
Wolfram Alpha, Google and the Future of Search Engines
Wolfram Alpha, the new "search engine" that you should absolutely check out sometime today if you haven't, has been compared to Google and Wikipedia, or to some hybrid of the two. In short, the engine takes a term, like "vampire bat" or "May 19, 2009," and instantly produces a scientific report with details (like the size and weight of the bat, or today's moon cycle) culled from its extensive internal knowledge base. In other words, it's not a search engine, which produces articles as results. It's a knowledge engine that produces answers with explicit information. It's still a work in progress, but the unveiling is enough to make some question whether it will change the way we search the Internet.
May 18 2009, 4:33PM
Study: Millennials Really Love Their Big Government
A study from the Center for American Progress polls the Millennial generation and finds that they aren't afraid of big government, not even a little. This is a bit surprising, because one thing I always heard about today's twentysomethings is that we're libertarian-lite: culturally liberal but too anti-authority to love a big government. Well, nevermind, I guess.
May 18 2009, 12:50PM
In Praise of Calorie-Counting
Here's a story I like to tell. I used to eat Cosi salads for lunch about three days a week. Then I read that a serving of Cosi's salad dressing has about 360 calories. As somebody who likes his salads well-dressed and his pants well-fitting, I was taken aback, and snooped around a bit for other foods I eat regularly that have about 400 calories -- like two big scoops of chocolate ice cream. Today I warn fellow Cosi-addicts that it makes nutritional sense to order this way: "I'm actually on a diet. Could you hold the dressing and just put two big scoops of chocolate ice cream on top of the lettuce, instead? Thanks." Why am I telling this story? Because Sens. Tom Harkin and Rosa DeLauro are re-introducing a menu-labeling law with calorie-counts, and that is awesome.
May 18 2009, 11:05AM
Is the Recession Making You a Nicer Person?
More charitable giving! Fewer designer handbags! Free hugs everywhere! Welcome to the post-recession America. Or so says the cover story from New York magazine, a buoyant ode to the bright side of NYC's financial doom. Green shoots of human compassion abound, it seems, from booming volunteerism, increased enrollments in divinity school, and plunging crime stats (murders are down 21% in New York). So should we all stop worrying and learn to love a world with much less money?
May 8 2009, 10:50AM
Why the Verizon MiFi Could Kill the Cell Phone
Finally, there's a product that puts a wireless hotspot in your pocket: the MiFi, a battery-powered device the size of a thick business card that provides its own password-protected wireless network (NYT's David Pogue reviews here). This is cool for all the obvious reasons -- with MiFi in your pocket, your computer, phone and iPod Touch are connected to the Internet whether you're on a road trip or the beach. But it's especially cool for a reason Pogue doesn't mention: It could signal the end of cell phones.
Apr 27 2009, 11:34AM
Maybe John Thain Wasn't the (Most) Bad Guy After All
Does John Thain -- the former head of Merrill Lynch who is now one of the richest, most reviled unemployed people in the country -- deserve our pity? And is Bank of America CEO Ken Lewis blatantly lying to shareholders? Let's review the case:
Apr 25 2009, 1:30PM
Why Your Next Credit Card Could Be Backed by Obama
Since apparently everything in America is going into the toilet except the public's faith in Barack Obama, it seems that the way to fix everything in America is to entrust it to Barack Obama. The issues on the table for greater government involvement include: student lending, the car companies, car warranties, pensions, health care, banks, etc -- the list goes on. I mean, really, what's the White House going to back next, your credit card? Maybe, says Slate's Chris Beam.
Apr 25 2009, 9:04AM
The Dow Roller Coaster ... As an Actual Roller Coaster
Via Techcrunch: If you could literally ride the ups and downs of the stock ticker as the market crashed in 2008, what would it feel like? A pretty decent ride, right? Right. So some genius has turned the last 12 months of vertiginous stock insanity into an virtual roller coaster iPhone app (video after the jump), and he should be praised for it. In our time of darkness, verily, may God bless the iPhone and keep it.
Apr 24 2009, 12:17PM
Jackie Chan and Patriotic Consumption
Do other countries share our "Buy American" instincts to rally around local products? So asks Catherine Rampell, of the NYT Economix blog, and it seems to me the answer should be 'Yes' for at least two reasons.
Apr 24 2009, 11:25AM
Simon Johnson's Not So Quiet Media Coup
This guy, Simon Johnson. He really is everywhere now, huh? Former IMF economists turned MIT professor-bloggers aren't supposed to competing with Lindsay Lohan for Internet space, but in the world of econoblogging, Simon Johnson apparently is Lindsay Lohan. At this rate, he'll be guest-judging the last episode of American Idol and holding down the cover story in the next Men's Health entitled "The Diet Coup."
Apr 24 2009, 10:26AM
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.
Apr 23 2009, 4:12PM
The Daily Show's Silly Sweden "Report"
The Daily Show clip (after the jump) about life in Sweden behind the velvet curtain of socialism has been making the rounds. It's not all that funny, and it's not all that informative. From it, I learned two things, exactly: That the Swedes make terrible music videos, and that they are really ridiculously good-looking. But what does the video leave out?
Apr 23 2009, 12:09PM
What is Obama's Grand Economic Theory?
That's a question that's buggered 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.
Apr 23 2009, 10:50AM
L.U.V.ing It: What Letter is This Recession?
Nouriel Roubini's dour piece (is there another kind?) in Forbes today reminded me of a question that's bouncing around the blogosphere: How many letters can we use to describe this recession and which one will we finally end up with?
Apr 23 2009, 9:46AM
Our Diamond-Shaped Recession: Lasting, but Not Forever
Via Greg Mankiw, here's a good morning graph to get you going. It's jolting enough to shake the clouds out of your eyes and alarming enough to trigger some adrenaline-fueled focus:
Apr 22 2009, 5:23PM
Should GM Be More Like Amazon.com?
In other words, should it offer "direct-from-the-manufacturer" purchases online to slash car dealer costs? I think this is a cool idea, but I've never bought a car so I'm not sure what inconveniences it would pose to a buyer. But hey, the Washington Post's Steven Pearlstein also thinks it would be a great idea! On the other hand, he also thinks that local dealers will love it too, and unless many car dealers secretly hate being employed, I can't imagine that's right. Let's think this through:
Apr 22 2009, 3:01PM
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.
Apr 22 2009, 11:07AM
The Future of Cell Phones is No More Cell Phones
Here's a fun thing: Portfolio and Wired are sparring over what cell phones will look like in a few years. Portfolio makes the not-so-transformative case that people seem to really downloading iPhone apps, and that in the future, a lot more people are going to be downloading data software and funny noises like iFart, turning what was once a mere communicative apparatus into an increasingly essential (and occasionally really annoying) do-it-all machine. But I'm more interested in Wired's crystal ball, which sees, somewhat blissfully, no more cellphones!
Apr 22 2009, 10:48AM
So Does the IMF Agree With the Geithner Plan, After All?
I'm starting to look through the depressingly informative IMF report, paying particular attention to its broader theory of how to properly recapitalize the banks, and I'm seeing a lot of familiar advice. Considering Simon Johnson's articulate and highly circulated critique of the United States' incestuous relationship with the banking elite, I guess I'm a little relieved that the IMF's bank-rescue plan looks pretty similar to what we are doing/are trying to do/are told that we are doing.
Apr 22 2009, 8:46AM
Why Do Our Economic Models Keep Failing?
Via Ryan Avent, I came across this fascinating interview about why economic models always fail us in crisis. That's a big question, so fortunately the professor has a really great historical analogy to start us off. A group of Swiss soldiers get lost in the Alps and the weather take a bad turn. One soldier realizes he has a map and they follow it until they find a town to take shelter. But when they explain what happened to their commander he realizes that's it's not a map of the Alps: it's of the Pyrenees.
Apr 21 2009, 4:41PM
Can the Oil Shock Alone Explain the Financial Crisis?
Yes. That's the astonishing conclusion of a paper presented at the Brookings Institution that I'm still having trouble wrapping my mind around. The author, economist James Hamilton, can hardly believe the conclusions of his economic model, himself (I've got company), but the findings are remarkable, nonetheless.
Apr 21 2009, 1:51PM
Is It Time to Charge for Content?
Via Matt Yglesias, I found this list of five tips for charging for content, from Alan Murray, the online editor of the Wall Street Journal. It's sort of prescriptive, but it's also essentially a list of "things I do as the online editor of the Wall Street Journal." But I'm most interested in the Yglesias' idea that the key to charging for content is finding information that "nobody cares about."
Apr 21 2009, 11:33AM
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.
Apr 21 2009, 9:41AM
Shut Up, Bankers
Yesterday I wrote that Obama could do a better job explaining the necessity of our banking system so that populists would keep their tea parties inside. That was before I read Gabriel Sherman's remarkable New York piece chronicling the earth-shattering moans of the New York's banking elite. It's almost enough to make you think: Who needs these guys, anyway? In a word, it's jaw-dropping. In a sentence, it reeks of a snobby disconnect from reality and a hyperelitism that makes "The Hills" cast look like the orphans from "Annie." Choice quotes after the jump:
Apr 21 2009, 8:20AM
WSJ Blames Obama for Stock Market Fall -- Again
The Dow had a rough day yesterday, down almost 290 points on fears that the banks' positive earnings reports dissembled sickly balance sheets. Fortunately for readers uninterested in understanding cause and effect, the WSJ op-ed page was there to explain, predictably, why it's all Obama's fault.
Apr 20 2009, 4:59PM
The Wrong Way to Cut the Deficit
I guess I'm pleased that Obama has asked his Cabinet to shave off $100 million from its budget to cut into the deficit. A journey of a thousand miles begins with a single step, after all. Of course, this hardly counts as a step. It's more like foot stretch. Paul Krugman has the right perspective:
Let's say the administration finds $100 million in efficiencies every working day for the rest of the Obama administration's first term. That's still around $80 billion, or around 2% of one year's federal spending.Krugman goes on to say that this is fine political theater and all, but I'm not even sure it's that.
Apr 20 2009, 2:25PM
What Does the Federal Bailout Look Like?
$8,000,000,000,000. Eight trillion dollars. That's the price tag of the federal government's economic rescue, including the stimulus package, company bailouts, new lending and the gargantuan asset purchases by the Fed. (And this was before the pension explosion.) It's hard to visualize $8 trillion unless you can, you know, actually see it. Now, thanks to some long-addition from the Atlantic's Timothy Lavin and flash work from Anup Kaphle, you can.
Apr 20 2009, 12:30PM
Erectile Dysfunction and Yankees Fans
Today Jeffrey Goldberg writes about his son's first brush with the slew of erectile dysfunction ads as they tried to watch a baseball game on TV this weekend. Goldberg's miffed:
The game starts up and I duck the subject for a while, until the next commercial break, which features a commercial for Levitra. Unbelievable. Does Broken-Johnson Syndrome afflict all Yankees' fans, or just most? I'm a pretty diehard Yankees supporter, but if this is the ultimate price, I would even pull for Boston.To be sure, Levitra knows what its doing by advertising to baseball fans, especially those likely to hail from New York. After all, most of these fans are middle aged, New Yorkers are innate stress crucibles, and you can't feel terribly libidinous when you're losing to the lowly Cleveland Indians 22-4 on a half-a-billion-dollar roster. But most Yankees fans? Please.*
Apr 20 2009, 11:15AM
First Thing We Do, Let's Blame All the Economists
BusinessWeek's cover story this week, "What Good Are Economists, Anyway," slams the economic industry for failing to predict and explain the economic crisis, which is weird because that's exactly what any non-economist could say about the business journalism industry. The piece prompted such a feverish online response that economics editor Peter Coy took to the comments section to defend his argument, and his magazine:
"BusinessWeek did write lots of stories warning of trouble to come. We were more bearish than the consensus of economists."Hmm. I was dubious. So I searched the BW archives for cover stories in the few months before the stock market peak in the summer of 2007. To be sure, BW has been all over stories before they mainstreamed (Peter Coy started reporting on the danger of exotic securities in 2002, so hats off to that). But there was also plenty to argue against the claim that BusinessWeek was a standardbearer of bearish scrutiny.
Apr 20 2009, 9:50AM
It's Time for Obama to 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.
Apr 17 2009, 1:37PM
How High Could California Unemployment Go?
The news out of California this afternoon is morbid. Unemployment has accelerated just past the 11 percent mark, the highest mark the Department of Labor Statistics has ever recorded for the state. How bad could it get?
Apr 17 2009, 12:09PM
Citi's Big Quarter in Perspective
Another day, another big first quarter announced by a struggling bank. Citigroup today reported that for the first time in a year, it's turned a profitable quarter with revenue rocketing up 99%, following in the steps of strong earnings from Goldman Sachs and Wells Fargo. The banking industry is indeed showing signs of recovering, but with two enormous caveats. First this is a recovery that is still very much on federal life support. Second, we could be on the verge of another wave of crashing credit.
Apr 16 2009, 1:47PM
Should We Pity Rich People As Much As They Do?
A bizarre piece in the WSJ today gives us a chance to review a couple key questions about taxes and the wealthy, including: Are $250K-earners middle class? Did rich people think Obama was kidding about raising their taxes? And should we pity those burdened with the indignity of renting their beach house?
Apr 16 2009, 10:55AM
Shop Til They Drop
Apr 16 2009, 10:10AM
More Fuel on the Student Loan Fire
Democratic congressmen have both politely and not so politely rejected Obama's proposed student loan reforms, which would replace private lenders with direct government loans and redirect any savings to fund needy students' tuitions. Even some student loan enthusiasts have basically thrown up their hands, tisk-tisked the president for not putting up a fight, and quietly moved on. But today, two news stories suggest the debate could get a second wind.
Mar 23 2009, 5:00PM
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.
Here's the logic: If Geithner's plan fails, it will probably be for one of two reasons. The first is that a stress test reveals that the bank's assets are truly worthless, which makes nationalization appear more palatable to Wall Street. The second is that the bank's assets are valued too high for investors, in which case the private sector backs out, the plan falls apart, and we've crossed out one more idea on a list of ideas that ends with nationalization. As Kevin Drum explains, "far from making nationalization more difficult, its failure would make it both inevitable and broadly acceptable."
There's a pragmatic sneakiness to these forward-looking arguments, but the second scenario would seem to undermine the first. Let's say Geithner's newest plan fails so spectacularly that nationalization seems dandy by comparison. Wouldn't the political cost to Obama be tremendous, deepening the backlash against the administration's competence and hurting his chances to revolutionize heath care and energy?
Second, the plan could expose the fundamental insolvency of the banks. There's always the chance that this public-private partnership peeks under the hood of the car and finds that it's not just a lemon: It's got no engine! If some of these toxic assets are close to worthless, news of the bank's insolvency could trigger another wave of Dow drama and zap whatever is left of Geithner's integrity.
Here's the logic: If Geithner's plan fails, it will probably be for one of two reasons. The first is that a stress test reveals that the bank's assets are truly worthless, which makes nationalization appear more palatable to Wall Street. The second is that the bank's assets are valued too high for investors, in which case the private sector backs out, the plan falls apart, and we've crossed out one more idea on a list of ideas that ends with nationalization. As Kevin Drum explains, "far from making nationalization more difficult, its failure would make it both inevitable and broadly acceptable."
There's a pragmatic sneakiness to these forward-looking arguments, but the second scenario would seem to undermine the first. Let's say Geithner's newest plan fails so spectacularly that nationalization seems dandy by comparison. Wouldn't the political cost to Obama be tremendous, deepening the backlash against the administration's competence and hurting his chances to revolutionize heath care and energy?
Second, the plan could expose the fundamental insolvency of the banks. There's always the chance that this public-private partnership peeks under the hood of the car and finds that it's not just a lemon: It's got no engine! If some of these toxic assets are close to worthless, news of the bank's insolvency could trigger another wave of Dow drama and zap whatever is left of Geithner's integrity.
Mar 23 2009, 11:33AM
Sweden's Saab story, and ours
Finally, some tough talk on
car companies: "When I see that (our nation's car company) has been
running at a loss for so many years it
would be irresponsible for me to stand here and say, sure, we are going
to
use the taxpayers' money in this way. I don't think I was elected to do
that."
Oh wait, that's not a free market rogue in the Obama administration. That's the industry minister of Sweden -- Sweden! -- on allowing auto maker Saab to persue "reorganization," or their version of Chapter 11 bankruptcy, this morning in the New York Times. What's Adam Smith doing in Scandinavia?
Oh wait, that's not a free market rogue in the Obama administration. That's the industry minister of Sweden -- Sweden! -- on allowing auto maker Saab to persue "reorganization," or their version of Chapter 11 bankruptcy, this morning in the New York Times. What's Adam Smith doing in Scandinavia?
Mar 4 2009, 5:45PM
Hey CNN, stop cheerleading the recession
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