Archive for ‘Economics’

The Things that Matter

By , 11 December, 2009, No Comment

Third video of the week: my interview with Gallup’s pollster Ijaz Gilani, Part 2, on the economy, terrorism and civil strife.

Read my analysis at Untold Stories.

Can You Wish Yourself Bon Voyage?

By , 15 November, 2009, 1 Comment

When I started this blog, I had high ambitions of posting once a day, which soon became every other day, which soon became once in 4 days, and sometimes even once a week. But this is the first time I have gone two weeks without an update. Apologies.

I do have an excuse. I’m embarking on a four-month quest across South Asia, reporting on the intersection of economics and security; on the role that development, infrastructure, natural resources and trade currently play in the region’s instability and the role that they could play in stabilization.

I’m traveling courtesy of the folks at the Pulitzer Center, and relying on the kindness of family and friends for places to sleep and eat. I’ll be blogging for the Center’s site (and cross-posting here), and publishing the fruits of my more detailed reporting to Forbes and Newsweek. This combination—nonprofit grant, out-of-pocket expenses, handouts from friends, and freelancers’ fees—is a telling window into the economics of the new journalism. My budget says I’ll JUST break even, so it’s unclear whether there’s a business model in international reporting done this way, or whether this method can ever replace what we’ve lost with the collapse of the bureau system. Still, for the moment, reporting great stories without LOSING money suits me just fine—it’s sure to be an incredible ride.

Though I’ll be cross-posting my future items to both this page and my Pulitzer Center page, my first post is already up on the Center’s website, and I urge you to check it out.

Turning the Corner

By , 30 October, 2009, 1 Comment

The wise minds at the BEA say the economy has turned a corner, posting GDP growth at a relatively robust rate (3.5%) in the third quarter, just like Ben Bernanke promised it would.

Still, the fact that we’re rising from rock bottom doesn’t tell us how long it will take to get back to where we were, or what the recovered economy will look like. For that, we need to dig deeper into the numbers, and, simply put, the picture isn’t pretty.

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Health Care: A Reader Request

By , 27 October, 2009, 1 Comment

A reader emailed yesterday asking what I made of Harry Reid’s decision to bring the public option back from the dead, and whether I could explain the politics and policy in lay terms. Here’s what I wrote [some day-after edits in parens]:

Basically, the various committees in the Senate and the House have each developed their own bills, which have passed the committee’s own votes. Harry Reid, as Senate leader, gets to take those bills and combine them into a NEW bill, which the whole Senate then votes on. It has to get 60 votes to pass a [procedural] barrier called cloture. Basically, 60 Sens vote for it, and after that, the Senate has 30 hours before it has to pass the bill or not. During those 30 hours, they can consider amendments relevant to the bill but cannot consider any other policy matters. And on those amendments, only 51 votes are needed.


Once the full Senate passes the bill, that version goes back to the House, where they can either pass it as is, OR if they tweak it too, the full Senate has to re-vote on it. That can be dangerous, because the House is further left than the Senate and is likely to add things the Senate won’t pass. So Reid is likely to try and manage the negotiations such that the Senate votes on the bill in a form the House can quickly pass and send straight to the Prez. It seems that the Schumer opt-out version of the pub-op is the one that can potentially get through both House and Senate.

How can it get through the Senate? Two ways–either Reid knows of a few senators who will vote for it but haven’t said so yet, in which case, he writes it INTO the bill he brings to the floor and it gets 60 votes at cloture, after which they tweak/amend some and its over. OR he can only get the 50+ votes for it we know about right now in which case he DOESN’T put it in. They get 60 votes cloture on a bill sans public option, and then introduce the pub-op AS an amendment, at which point they only need to get 51.

On the policy of this [opt-out] version of the pub-option: I’m not a fan but it’s better than the Snowe trigger compromise.

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The Future of Europe

By , 21 October, 2009, 1 Comment

As some readers of this blog may know, I have a large soft spot for the Watery Isle. I have visited friends and family there roughly once a year for as long as I can remember, and I lived there as a student, twice, in 2003 and 2006-7. So when I comment on events there, I do so with something more than an outsider’s concern. But today, I comment as an American.

Let me explain. Despite all the hoopla about ‘David Cameron the conservative reformer.’ his policies are identical to the Thatcherite Tories of three decades ago. That is, shrinking the size of government through upper-income tax cuts and slashing spending, and focusing what’s left of government on supporting ‘traditional values.’ [Especially egregious is his subtly concealed scheme to cut welfare payments to poor single moms–a group that correlates with immigrants– while increasing the tax breaks to married couples, essentially paying middle-class white women to stay home and have babies. ‘Lie back and think of England,’ much?]

Together, as one journalist has already noted, these add up to a government that helps southern England at the expense of the North: the South is London financiers, Oxbridge academics, doctrinaire Anglicans and well-kept lawns. The North used to be factories, mines, sheep farms, and Protestant dissent, but Thatcherite labor reforms took the Northern economy and culture apart (as globalization necessitated, I admit). The result is that Britain is overly reliant on its financial sector and took a harder hit than most developed nations when the finance world collapsed last year. Granted, New Labour has done a whole lotta nothing to give the de-industrialized North something else to live on, but given that the North remains Labour’s consituency, the chances of Britain’s lack of economic diversity being addressed are much higher with Labour than with the Tories. Especially now that the financial crisis has made it possible for Labour to make a market-based argument for why Britain needs to start doing something besides banking again instead of the old socialist arguments that they rightly left behind 10 years ago.

All of this matters when it comes to understanding the two parties’ attitudes to foreign policy.

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Obama Plays Institutionalist?

By , 9 October, 2009, No Comment

Two weeks ago, I mentioned that I was frustrated with Obama’s approach to big international issues like climate change, because it followed his preference for decentralized consensus governance over the institutions and realpolitik of great power diplomacy. (Worse still is the extent to which others seem to buy into his vision.)

On the environment, the opportunity to throw some real institutionalist punches and ram climate legislation through the Senate passed us by in June, when the House passed the bill and the health care debate hadn’t taken over everyone’s attention spans. Being individualists, the Obama-ites failed to think about the institutional structure of the Senate and the fact that it doesn’t take on more than one big bill at a time, as well as about the institutions of other governments who would not, despite their general admiration for Obama, be duped into taking a handshake from him in December instead of real policy commitments to reduce emissions.

That said, there are occasional fleeting moments where it seems that Obama has grown savvy to these problems with his radical individualism. That’s why, as I reported in Fortune today, he’s using the institutions he still has power over (the executive agencies) to regulate individual industries in lieu of getting a comprehensive bill. In some ways, discretionary regulation beats Congressional oversight–career bureaucrats tend to be less beholden to lobbyists. On the other hand, discretionary regulation tends to be less economically efficient in the policies it produces, because industries are considered piecemeal and without proper attention to the way they interact in the macroeconomy. Furthermore, discretionary regulation is, well, discretionary, and doesn’t have any value once power changes hands. Congressional policies, on the other hand, are very hard to undo once they’re in place. Still, is this better than nothing? Hell, yeah.

Must See TV

By , 8 October, 2009, No Comment

I have mixed feelings about cable opinion anchors. I find their shouting and character gimmicks infuriating, on left and right, but I think at least in the world of American TV news, they do longer segments that let them spend more time on issues they care about than their ‘straight’ news counterparts and I value that in a soundbyte era. [I also agree with Dan Drezner that talking head shows were actually better when left and right yelled at each other than they are now, yelling at themselves]

That said, I don’t watch Olbermann or O’Reilly, Matthews, Dobbs or Kudlow unless I’m at the gym and need distraction. However, I heard on the grapevine that Olbermann would be devoting a whole hour to an opinion talk—a ‘special comment’—on health care last night. Since I’m rather obsessed with the issue at the moment, I set my DVR and just watched the results. Summary: he’s wrong about a LOT, but this is powerful and eloquent stuff. Worth watching.

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

I Stand Corrected

By , 1 October, 2009, No Comment

Three weeks ago, I thought we were moving towards a coherent piece of health care legislation. I was wrong. Let me review this one more time:

A. If your primary goal is achieving universal insurance coverage, you can: 1. Have a single payer system where the government provides insurance; 2. Have an employer mandate with a super-strong public option where the government might as well provide insurance; or 3. Have a universal individual mandate with aggressive regulatory reform and generous subsidies.

Of these three, the first, single-payer, hasn’t ever been on the table. The third—otherwise known as the Wyden-Bennett bill—would be the easiest on the public fist, as well as the most conducive to medical innovation. On those grounds, it’s my favorite.

B. If your primary goal is reducing the cost of medical treatments, you can: 1. Have a single-payer system where the government centralizes and rations care; 2. Have a super-strong public option where the government might as well provide it; 3. Have aggressive reform of our medical profession and training, with incentives for people who set up small community clinics, say, or better tuition grants for folks who go to med and nursing schools.

Of these two, the first has never been on the table. The second would undermine medical innovation (see point a, above). The third, which I support, isn’t something that can be legislated, but has to be pursued long term.

If this is still confusing, watch the awesome animation below.

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International Week

By , 26 September, 2009, 4 Comments

The madness of Qaddafi aside, there was some value to this weeks UN and G20 meetings: they introduced the world to Barack Obama’s foreign policy.

Readers of this blog will know that I am skeptical of 44, because I see him as representing the rise of the liberal-tarian left at the expense of liberal institutionalists like myself. In foreign policy, however, Obama has endorsed the institutionalist path, memorably promising during the campaign that he would negotiate with any and all world leaders instead of taking unilateral action and would engage international institutions to combat international problems like climate change.

I had struggled to reconcile this with his professed love of diffuse power. Now I understand: Obama thinks of governance as consensus building amongst individuals. As a result, his vision of international institutions is much the same as his vision of Congress, as a place we go to engage in banter until we arrive at broad and general consensus, rather than as a place for realpolitik dealmaking around concrete specifics.

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It’s Getting Better All the Time

By , 15 September, 2009, 1 Comment

Before turning in for the night, I feel I ought to join the voices toasting the anniversary of Lehman’s collapse. I’ll leave serious analysis of where we are, and how much remains to be solved, to other bloggers and other days. My thoughts are more mundane.

Yesterday, when the President delivered Wall Street hotshots a lunchtime lecture about the need for regulatory and compensation reform, I noticed one thing: I was watching CNBC, and the market didn’t blink once during his address. In fact, it seemed to perk up during that half-hour (noon to 12:30), and stay up throughout the afternoon.

This morning, Ben Bernanke had a similar result when he addressed econo-wonks during the first half hour of trading.

Why does this matter? This time last year, every time any government official–Bush, Paulson, Bernanke–got on camera with the intention to restore calm, investors panicked. On days when there was no other economic news, regulators opening their mouths were singlehandedly making the situation worse.
That is not to say that Bernanke and Obama going on the conference circuit now has any real economic value, but simply to point out that the non-effects of their speeches show that we are all a lot less jittery, and that’s a good thing.