Ezra Klein

WHY RECONCILIATION MIGHT BE BESIDE THE POINT.

Igor Volsky : So what does all of this mean for health care reform and the recent debate over reconciliation? Democrats now have 60 votes (assuming that Al Franken is seated) to pass health care reform and some pundits may argue that reconciliation is no longer necessary. But this view overestimates the unity of the Democratic party. Blue-dog moderates like Sens. Evan Bayh (D-IN) and Ben Nelson (D-NE) are unlikely to support the price tag of comprehensive health care reform ($1.3 trillion over 10 years) or legislation that undermines the monopoly of private insurers. For this reason, reconciliation forces Republicans and Blue Dog Democrats to compromise with the liberal majority, not the other way around. I'm glad that Democrats have preserve the threat of reconciliation as a way to pressure Republicans into a bill. "Nice role you have in the legislative process here. Shame if something should happen to it." But my guess is that it would be easier, now that Specter has flipped, to...

MY READERS IS SMARTER THAN I: GLOOMY BANKS EDITION.

An informed reader writes in. Ezra, A few quick notes on your housing market post. I’m in the affordable housing realm—mostly rental, occasionally ownership-- so I’d like to think I know something. 1.) This isn’t as crazy as it sounds. A lot of developers of large projects will offer their own financing or partner with a specific lender for the first units in the building. A solid developer should’ve included this in their budget. If they’re creditworthy enough to have access to construction financing, they should be creditworthy enough to afford origination costs and servicing of the mortgages in the short term. Once the building fills up, they’ll probably sell the mortgages off to a secondary market buyer. 2.) This is a way of keeping the developer honest. If I were on the banking side of the equation, and my odds of being paid back are affected by the ability of 70 other unit owners to pay their mortgage and condo fees, I would want the developer to have some concern about the...

THE GOOD AND THE BAD OF THE BIG TENT.

In general, when a politician leaves a party, you ask "why?" With Specter, the more rewarding question is "who?" In this case, there's an answer: Pat Toomey and the Club for Growth. Toomey is the conservative ex-congressmen mounting a primary challenge against Specter. The Club for Growth is the monomaniacally anti-tax organization that's funding it. And Specter's defection is the direct result of that effort. He said as much at his press conference. That is to say that Specter's defection is the direct result of the Republican tendency to challenge unreliable politicians. It's a strategy that Democrats have, at times, envied: As the argument goes, Republicans have more party unity because they have less tolerance for betrayal. And that's probably true. There were a lot more Democrats who voted for Bush's tax cuts than there were Republicans who voted for Obama's stimulus bill. But in recent years, no Senate Democrats have switched parties, while at least two Republicans have done so...

A FILIBUSTER-PROOF MAJORITY?

Over at Swampland , Karen Tumulty distinguishes a "filibuster-proof majority," which is what FDR had, from a Senate where one party or another controlled a theoretically filibuster-proof number of seats, which is what Carter had. Specter's defection, she suggests, is akin to FDR's situation rather than Carter's. But I'm not sure that's right. FDR, after all, couldn't pass health care reform, and so didn't even try. The presence of the Dixiecrats led him to almost totally exempt African Americans from Social Security. His court-packing scheme was a flop. There is, in other words, no such thing as a majority that renders the president's agenda safe from congressional opposition. The simple fact that a majority could be filibuster-proof in general doesn't mean it is filibuster-proof on discrete pieces of legislation. The question, rather, is simply how much gets passed. FDR got a lot more passed than Carter. But it's a continuum. Arlen Specter's sudden admiration for progressive...

MORE PROBLEMS IN THE HOUSING MARKET.

The Financial Times has a good story today on a new twist in the mortgage market. Namely, banks have stopped offering mortgages in buildings that haven't already sold a sufficient quantity of units. In one case, a buyer with "stellar credit" and a 25 percent downpayment couldn't get a mortgage because the luxury development she wanted had only sold three of 46 units. This is not, on the bank's part, a crazy argument: Developments that don't sell sufficient units have massive problems. The water stops working because the pipes freeze. The heating bill is unpayably high. The units fall into disrepair. The developer defaults and can no longer pay maintenance costs. Eventually, the residents who have bought homes walk away from their mortgages. For a pretty good look at this dark cycle, check out this "This American Life" episode . But it becomes a chicken-and-egg problem. If you can't get mortgage financing to sell the first homes in a development, you can't sell the rest of the homes in...

SO YOU SAY YOU WANT A CONFIRMATION?

Kathleen Sebelius is expected to win a fairly easy confirmation today. Some Senators have spoken of delay, but few suggest there's any hope of marshaling a consequential number of "no" votes. And so we will have our Secretary of Health and Human Services. Max Baucus's glowing statement follows the jump:

BREAKING: ARLEN SPECTER SWITCHING PARTIES.

The Washington Post confirms : Pennsylvania Sen. Arlen Specter will switch his party affiliation from Republican to Democrat, according to sources informed on the decision. Specter's decision would give Democrats a 60-seat, filibuster-proof majority in the Senate assuming Democrat Al Franken is eventually sworn in as the next Senator from Minnesota. (Former Sen. Norm Coleman is appealing Franken's victory in the state Supreme Court.) Specter as a Democrat would also fundamentally alter the 2010 calculus in Pennsylvania as he was expected to face a difficult primary challenge next year from former Rep. Pat Toomey. The only announced Democrat in the race is former National Constitution Center head Joe Torsella although several other candidates are looking at the race. The number 60 doesn't assure 60 votes on any particular priority, but it's a tremendous psychological advantage. It means that there are 60 votes with a baseline incentive to see a successful Democratic Party rather than...

BANAL THOUGHTS ON PORTFOLIO MAGAZINE CLOSING.

Thought the first: They blew through $100 million ? Buh-buh-buh-buh-how? The magazine wasn't printed on gold leaf. It wasn't staffed by robots from the future. It didn't have a Mars bureau. My working assumption has been that the budget meetings went something like this: But presumably that's not right. Or is it? Thought the second: Someone should hire the extremely talented economics writer Ryan Avent . Quickly. before someone else hires the extremely talented economics writer Ryan Avent. That guy is an obvious growth stock.

MEXICO AND SWINE FLU.

Swine flu is obviously a bad thing. But it's a bad thing with outrageously bad timing. Mexico, in particular, was in economic trouble before. The situation is dire now. The sort of policies you implement to quarantine a disease are the reverse of the sort of policies you implement to grow an economy. One requires an acceleration of transactions. The other requires a cessation of them. According to The Financial Times , Mexico is thinking of "shutting down" the country's capital. The immediate next step, according to the mayor, will be to close the transportation network. Restaurants that can hold more than 50 people have been barred from opening for business. Factory shifts are going to stagger and slow so fewer people are crowded into one place at one time. You can imagine what's happened to tourism. The recession had already slowed Mexico's economy. Now swine flu is going to bring it to a stop. And if Mexico goes down, that of course has major ripple effects on other countries and...

GLOBAL WARMING IS SAD.

Fareed Zakaria interviews Energy Secretary Steven Chu, who turns out to be a total downer : Can we really prevent global warming? Or should we be thinking more about adaptation? Building coastal fortifications may be cheaper than halting the release of CO2. Right now, the climate scientists feel that if all humans shut off carbon emissions today, it will still glide up by about 1 degree centigrade. In the business-as-usual scenarios, Nicholas Stern says there's a 50 percent chance we may go to 5 degrees centigrade. We know what the Earth was like 5 or 6 degrees centigrade colder. That was called the Ice Ages. Imagine a world 5 degrees warmer. The desert lines would be dramatically changed. The West is projected to be in drought conditions. And certain tipping points might be triggered. We can adapt to 1 or 2 degrees. More than that, there is no adaptation strategy.

CONSERVATIVES, ANALOGIES, AND APPOINTMENTS.

This is all getting a little silly. From Dave Weigel's article on the efforts of pro-life Kansans to derail Kathleen Sebelius's nomination: According to [David Gittrich, the long-serving state development director of Kansans for Life.], when Brownback turns his sights on the governor’s race he’ll gave to “reestablish his credentials as a pro-lifer” and explain his vote. “All the pro-life votes in the world don’t make up for supporting Kathleen Sebelius,” said Gittrich. “This is like saying, ‘I’m against the Holocaust and Nazi Germany but I’d like Hitler to be in charge of the health care center.’” Charming. And this Washington Times editorial arguing against appointing Rosa Brooks as an adviser to the Undersecretary of Defense takes much the same tack: President Obama is surrendering national security with a radical appointment at the Defense Department. Rosa Brooks, this month made adviser to Undersecretary of Defense for Policy Michelle Flournoy, will be in a position to do...

THE OBAMA ADMINISTRATION IS NOT ABOUT BEHAVIORAL ECONOMICS.

I don't mean to be churlish about this, because the intellectual history in Frank Foer and Noam Scheiber's " Nudge-ocracy " is really quite good. But enough with the attempts to tie Obama to behavioral economics. The apparent influence of the nascent field on the actual policy proposals emerging from the administration is minimal. The stimulus was not behavioral in nature. It was straight Keynesian spending. The health care policies we've seen so far are rote recitations of consensus proposals of the sort that non-behavioral think tanks have been peddling for years. Cap and trade is a policy architecture we applied to sulfur dioxide 15 years before Cass Sunstein published Nudge. Eliminating student loan middlemen and converting Pell Grants to mandatory money are not the sort of behavioralist advances that appear in Dan Ariely's Predictably Irrational . It's true, of course, that various Obama-associated economists are interested in behavioral economics. Peter Orszag is famous for...

TAB DUMP.

• The First 100 Days...Of the McCain Administration? • Was Tim Geithner a radical nationalizer? • Shortage of doctors proves obstacle to Obama's goal. • Republican spending cuts: An eerily prescient indicator of natural disaster? • Reid to McConnell: "This is a seat for you at the table; we hope you take it."

DEPARTMENT OF DEPRESSING SYMMETRIES.

Ben Smith has a nice catch today. Conservatives for Patient Rights -- the folks founded and funded by this guy -- released an ad quoting Canadian physician Brian Day on the horrors of socialized medicine. But an alert tipster sends the rest of the interview with Day. At about the four-minute mark, Days protests that he's not, under any circumstances, suggesting some "two-tiered, American-style medical care." He goes on to note that Germany, France, Switzerland, Austria and England "don't have queues in health care." “I think this is what people tend to forget," he continues. "They equate alternatives to the Canadian health care system with ‘Americanization,’ which is not what we’re talking about. We’re talking about countries like Belgium, and Switzerland, and France, and Austria.” It's telling that the American health care system plays much the same role in the Canadian discussion that the Canadian health care system plays in the American discussion.

SUMMERS TALKS ECON.

I'm loathe to describe Larry Summers' in terms that suggest a shy and retiring personality, but it is the case that we've heard a lot less from him than from folks like, say, Tim Geithner. Last Friday, however, he gave a talk to the InterAmerican Development Bank outlining his take on the financial crisis (and he did it, as he said, in "the language of economics"). Simon Johnson summarizes .

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