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Ezra Klein

WHEN CAREER AND PARENTHOOD ARE NOT A CHOICE.

Ezra KleinApr 27, 2009
One other point worth making on the marriage debate. In general, this conversation is conducted at a fairly elite level. When we talk about young couples choosing between furthering their education and careers and getting married and having children, we're generally talking about the minority of Americans who go to college or even travel beyond. But the tension between career and children is similarly sharp for lower-income folks. And it's often not a choice. According to data collected by the National Survey on Family Growth , 30 percent of women have had an unplanned or mistimed birth. That number jumps to 51 percent for women beneath the poverty line. And among women with no high school diploma or GED, it's 61 percent. Once these women have a child, it's no longer a choice between the path that focuses on career and educational advancement and the path that focuses on family. Insofar as those roads branch off from each other, the choice is made. And long-term earning prospects...

YES, BUT WHY DO THEY GET MARRIED LATER?

Ezra KleinApr 27, 2009
To say a bit more on Mark Regnerus's brief for young marriage, these arguments have a tendency to sound like a debate Ward Cleaver thinks he's having with Paris Hilton. That's not as dismissive as it may sound: Cleaver and Hilton both have points. But they're not terribly useful points. Regnerus gets at, but doesn't correctly articulate, a genuine problem: A person's 20s are a crowded decade with long-term implications. They're simultaneously the best period to start a career and to start a family. Regnerus isn't entirely wrong to bemoan the fact that marriage has been decisively shifted to the late-20s and early-30s, but he doesn't do a good job integrating his own evidence. It's accurate to say that there's a substitution effect as people prioritize education and career. Plenty of promising college relationships crash on the shoals of law school acceptance letters. But he doesn't get into why they do that, and he doesn't consider the counterfactual of what would happen if they...

THE ORSZAG-FURMAN AXIS.

Ezra KleinApr 27, 2009
Ryan Lizza's profile of Peter Orszag begins with a long Jon Stewart anecdote and ends by making some health care news. Thus, it is, in the eyes of this blog, virtually a perfect work. Here's the news: Orszag’s job is to defend Obama’s budget on all fronts, but he will be most deeply engaged in health care. I asked him how he could be so sure that his ideas about how to reduce health-care costs would work, mentioning that I had been surprised to learn that Paul Ryan and other Republicans had seized on health-care cost controls as the issue they believed would bring down Obama’s health-care plan and, with it, they surely hoped, his Presidency. Specifically, they believed that Orszag’s obsession with “comparative effectiveness,” research about which treatment options work best for a given ailment, will lead to vast government intrusion into the doctor-patient relationship. The research, which received major funding in the stimulus legislation and which was also included in Obama’s budget...

READY, SET, CITE!

Ezra KleinApr 27, 2009
The video above pits Henry Waxman against Newt Gingrich is straight-up, no-holds-barred, citation warfare. (There are moments when I wish this blog had music, or at least exciting sound effects). The primary point of contention is a number you're hearing a lot these days: $3,128. That's the supposed yearly cost that cap and trade will impose on every American. The number's pedigree is pretty good, too. It's from MIT. The problem is that it isn't true. The author of that study, MIT scientist John Reilly, has now sent multiple letters to John Boehner begging him to ask his troops to stop distorting Reilly's science. The $3,128 estimate, he says, is "nearly 10 times the correct estimate, which is approximately $340." But as Brian Beutler neatly documents , Reilly isn't the only one seeing his estimates butchered. Studies from the Wharton School of Economics and the Center on Budget and Policy Priorities are also getting ground up and twisted out. As the old line goes, good arguments don'...

TIM GEITHNER'S WALL STREET DAYS.

Ezra KleinApr 27, 2009
The New York Times has a front-pager on Tim Geithner's schedule back when he was heading the New York Federal Reserve. What we learn is that Geithner spent a lot of time hanging out with bank presidents. He was even a candidate to helm Citibank (Geithner apparently had no interest in the job). As always, it's a bit hard to know what to think of all this. It raises the specter of capture, but on the other hand, Nouriel Roubini is a fan of Geithner's more recent announcements, and so it's not obvious that less compromised candidates would actually be doing anything different. I have trouble imagining that Rahm Emmanuel is ready to nationalize the banks. In some ways, this seems more like a commentary on what's wrong with the Federal Reserve than on what's wrong with the Treasury Department. At Treasury, Geithner is subject to all manner of forces outside his control and all manner of actors with differing incentive structures and constituent demands. But the Fed is politically insulated...

YOUR WORLD IN POLLS: EVERYONE LOVES THEIR DOCTOR EDITION.

Ezra KleinApr 27, 2009
If you look at the health care policies favored by liberals and the health care policies favored by conservatives, here's the general difference: Conservatives believe the decision-maker in health care is the consumer. Liberals believe it's the doctor. And so conservative policies try to change consumer behavior. Liberal policies try to change doctor behavior. That's why conservative policies tend to focus on how individuals pay for care: High deductible health care plans, for instance, make consumers spend more out of pocket, and so they're more price sensitive, and in theory, more careful. Single payer health care and other versions of the "global budget" theory change the way providers are compensated (overprescription means underpayments), and so, in theory, change the behavior of doctors. And a new Kaiser/NPR poll shows why this might be important: You could argue that that question is flawed: Most people haven't been prescribed anything of any seriousness in the last two years...

INNOVATION FAIL.

Ezra KleinApr 27, 2009
Matt is right to say that a lot of what passed for "financial innovation" was in fact innovative efforts at regulatory arbitrage. One of the pieces of the crisis that I hadn't understood until recently, for instance, was the role that Basel II banking regulations played in the growth of the structured securities market. In essence, Basel II, which went into effect a couple years ago, held that a bank only had to keep half as much capital on hand for AAA-rated securities as for other types of assets. That created a huge incentive for banks to get more things rated AAA, as it meant that they didn't need to have as much money sitting around. They could spend it buying more products that offered higher returns. They could, in other words, further leverage themselves. Cue "financial innovation." Structured finance -- where you separate assets into different parts (tranches), and make the "senior" tranche pretty safe by making the other tranches pay out losses first -- was essentially a way...

GO WEST, YOUNG BLOGGER.

Ezra KleinApr 27, 2009
Last week, I headed out to Missoula to give a talk on behest of Matt Singer's Forward Montana . Perks to giving talks in Missoula: 1) They happen in bars. 2) Wearing jeans makes you seem dressed up . There's literally a pitcher of scotch ale on the chair next to me in case I get thirsty during the talk. Take note, DC: This makes panel discussions more interesting. As you might expect, the talk is on health care, and the basic argument is, first, that health care is a political problem more than it is a policy problem, and second, that the big question is not the public plan but how you pay for the damn thing. Also, I use a lot of car analogies.

THE MARK OF A BLOGGY BLOGGER.

Ezra KleinApr 27, 2009
Nate Silver on blogging: For the most part we’re just trying to be interesting to people. I think we differ from a lot of blogs. We very rarely just say, okay, here is this that’s going on and here’s what Ezra Klein said and Ezra’s great, so you should read…. Instead, we actually - everything we do we try to actually have some original kind of substance there. We don’t just do a lot of linking around. In some ways, it’s not a very bloggy kind of blog. Nate, obviously, runs a great blog. But as he says: Not very bloggy. Every blog can't be FiveThirtyEight.com. Bloggy bloggers should do a lot more linking to me. Even Nate Silver thinks so. And you don't want to argue with him. He is science.

AN ILL TIDE SINKS ALL BOATS.

Ezra KleinApr 27, 2009
This post lacks a nifty news peg, but I've been thinking a lot about Joshua Coval, Jakub Kurek, and Erik Stafford's paper " The Economics of Structure Finance ." In particular, people talk about the "systemic risk" of big firms and massive banks. The banks, in other words, that are too big to fail, and whose very existence thus poses a threat to the system. That's where you get the talk about capping bank size. But the argument of the paper is that the turn from bonds and loans to structured finance was itself a contributor to systemic risk. And I've not heard as much discussion about that. Coval, Kurek, and Stafford is clunky to write, so henceforth, I'll just call them CKS. Either way, they argue that risk needs to be understood not only in terms of how often an asset fails but when it fails. Namely, is it likely to fail amidst a chain of other defaults and a broad economic collapse? Or is failure basically uncorrelated to other aspects of the economy? That matters for an individual...

"HEY YA"

Ezra KleinApr 27, 2009
Not to cop to a Sunday night spent catching up on DVR'd sitcoms, but Scrubs featured a pretty brilliant acoustic cover of Outkasts "Hey Ya," which is, in turn, ripped from this even more brilliant "Hey Ya" cover by Mat Wettle of Obadiah Parker. All of which is to say, Happy Monday.

I TAKE THIS WOMAN, AND HER PRIUS, IN SICKNESS AND IN HEALTH....

Ezra KleinApr 27, 2009
Mark Regnerus's op-ed on the virtues of marrying young makes some interesting arguments that I'm loathe to offer half-baked commentary on. I prefer easy topics, like the financial crisis. I would, however, like to offer my congratulations to the environmental movement: We have literally reached a place where even articles on the optimal age for matrimony include an analysis of carbon emissions: Marriage may be bourgeois, but it's also the greenest of all social structures. Michigan State ecologists estimate that the extra households created by divorce cost the nation 73 billion kilowatt hours of electricity and more than 600 billion gallons of water in a year. That's a mighty big carbon footprint created in the name of solitude. Take a bow, Al Gore. And remember, kids, that your wedding day "is your day to show the ones you love your passion for the environment!" So go to GreatGreenWedding.com and get started.

AND THEN THEY CAME FOR THE YUPPIES.

Ezra KleinApr 25, 2009
You know the economic downturn has gotten bad when it's slowing the expansion of the new organic supermarket that was supposed to move into my neighborhood. Can't Congress do something!?

TAB DUMP.

Ezra KleinApr 24, 2009
• Samantha Power and Cass Sunstein have a child. Intelligence-based superpowers not yet divulged. • What is Obama's grand economic theory? • Banks on the block. • Health care polling data!

THE IMPORTANCE OF MEANINGLESS AMENDMENTS.

Ezra KleinApr 24, 2009
In response to the Great Amendment Hunt of Ought-Nine , commenter Badger asked, "These are pretty silly, but isn't the House going to make mincemeat out of these things once it goes to conference/reconciliation/de-crazifying committee?" Probably. Most of these amendments were meant to "instruct" the budget conferees. They will be duly ignored. They exist more to put the Senate on record than to actually change federal law. Indeed, many of them were effectively meaningless: In one case, the Senate voted to instruct conferees to bring a point of order against any legislation that would let tax rates rise to their pre-2001 levels. That, of course, is the very point of the budget. But that amendment will be ignored. Tax rates will rise. The budget will pass. So why get exercised? In short, the Senate is now on record against a lot of policies it means to pass. It is on record against all the particulars, for instance, of cap and trade legislation. You can imagine the ads now. "In April,...

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