Ezra Klein

WOULD THE OBAMA PLAN HAVE HELPED?

Reading Kate Michelman's story , Bob McManus asks a good question: "Please help me understand how Obama's cost-cutting and efficiency proposals would help in this specific case?" Well, his cost-cutting and efficiency proposals wouldn't. The question is whether his access proposals would. What we basically know of Michelman's story is this: Her daughter worked with horses. Her daughter was uninsured. Her daughter suffered a terrible spinal cord injury. Her mother had to pay for treatment, and it's nearly bankrupted the family. The question, then, becomes why her daughter was uninsured. That's the hinge point. One answer is that she couldn't afford insurance. Either her income was insufficient or she had preexisting conditions that complicated her application. Obama's proposal would help here: His combination of subsidies and insurance market reforms would make health insurance more accessible to those who want to buy it but can't quite fit it in the budget. Another answer is that she...

BAUCUS AND KENNEDY SET THE PACE.

In a letter to Obama today, Max Baucus, chair of the Senate Finance Committee, and Ted Kennedy, chair of the health, Education, Labor, and Pensions Committee, not only outlined a timeframe for health reform but also put forward a strategy for overcoming the turf warfare of years past. The key bit: Since our committees share jurisdiction over health care reform legislation in the Senate, we have jointly laid out an aggressive schedule to accomplish our goal. Both committees plan to mark-up legislation in early June. Our intention is for that legislation to be very similar, and to reflect a shared approach to reform, so that the measures that our two committees report can be quickly merged into a single bill for consideration on the Senate floor. That's a far cry from 1994, when different committees -- including Kennedy's HELP Committee -- reported wildly different bills to the floor. The variance in legislative product made it all the harder for Democrats to unite behind a single piece...

ARE PLASTICS MAKING US FAT?

Kevin Drum writes that, "Childhood obesity is far higher than it used to be, but it's not brand new: there have always been kids who were sedentary and ate lots of crappy food. But 30 years ago, these kids just got flabby, they didn't get diabetes." The implication is that the rise in childhood obesity and diabetes might be the product of phthalates -- a compound used in plastic packaging that is also proving a potent disruptor of normal endocrine function. I'm all for more study of phthalates , but I really wouldn't dismiss the change in eating habits over the past 30 years. Thirty years ago, kids might have been sedentary and eating lots of crappy food, but they were eating less of it than they are now. Same for adults. According to CDC data , between 1971 and 2000, obesity in the United States shot from 14.9% to 30.1%. The main reason is simple enough: Average calorie consumption increased. Men went from 2,450 calories to 2,618 calories. Over the course of a year, that's an...

THE VIRTUES OF COMPLEXITY.

Ryan Avent notes that Ben Bernanke's rousing defense of financial innovation seems peculiarly retro. Bernanke concludes by saying that "I don't think anyone wants to go back to the 1970s," but as Avent notes, his examples of worthwhile innovation mostly date back to bell bottoms and the Electric Light Orchestra. "Credit cards, for one, which date from the 1950s. Policies facilitating the flow of credit to lower income borrowers was another, for which he credited the Community Reinvestment Act of 1977. And, of course, securitization and the secondary mortgage markets developed by Fannie Mae and Freddie Mac in...the 1970s." To be fair, Bernanke does point to one more modern innovation: The subprime market. But for understandable reasons, he doesn't spend much time on it. Much of Bernanke's focus is on the spiraling complexity of innovations. Credit cards, for instance, originally "allowed the user to make purchases or obtain cash advances, with a single, unchanging annual percentage...

MAKING CAP AND TRADE NORMAL.

Was at the gym this morning and caught this advocacy ad from "Repower America," Al Gore's climate change advocacy coalition. The framing caught my eye: "Close the carbon pollution loophole. The stuff from oil and coal that's destroying the planet? Cap it. And spur new investments in green jobs and clean energy." There are two interesting implications to that sentence. The first is that carbon is just like any other type of pollution. Polluters should have to pay. Nothing to see here. And there's a case for that attitude: Cap-and-trade was used successfully beat back the sulfur dioxide emissions that were causing acid rain. The policy worked more quickly than expected at a lower cost than predicted. The Economist called the program "probably the greatest green success story of the past decade." Here's a sort of ugly graph from the Environmental Defense Fund making the point: As for "loophole," the word generally refers to a "weakness or exception that allows a system, such as a law or...

KATE MICHELMAN AND THE NEED FOR INSURANCE.

"We have literally fallen from the middle-class to potentially having nothing," says Kate Michelman. But she's lying. Michelman, the former president of NARAL, was not middle class. You don't run one of the largest advocacy organizations in the country and make $42,000 a year. Similarly, her husband was a retired college professor. Between the two of them, they were almost certainly wealthy. Which makes her story all the worse. In 2001, Michelman's daughter was horseback riding. The horse spooked and fell backward, crushing her spine and paralyzing her. She had no health insurance. The bills neared a million dollars. Michelman cashed out her 401(k) and her IRA. The next year, her husband was diagnosed with Parkinson's disease. In theory, this should have been less of a problem. Her husband was covered by Medicare and backed by supplementary long-term care insurance. And that worked. For awhile. But walking to a doctors appointment one day, his balance gave and he cracked his femur and...

MONDAY MORNING DISTRACTION.

The New Scientist has a list of 13 things that do not make sense . And they're right! Those things do not make much sense. But they're probably more interesting than whatever else you're doing at 10:30am on a Monday. So reading about them makes a certain amount of sense.

THE ECONOMICS OF BOOKS ON ECONOMICS.

Like many folks in Washington, I've been making my way through Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism . The authors are both eminent economists -- George Akerlof won the Nobel in 2001 and Robert Shiller has been the among the best and most prescient analysts of bubbles -- and word is that their book has gained a number of adherents inside the administration. But that's not the fault of Akerlof and Shiller's publisher. It is perhaps not surprising that a book about the economics of irrationality is somewhat irrationally presented. But it's still puzzling. Take the blurbs on the back cover. The first comes from Robert Solow. That's all for the good. Getting a Nobel laureate on your book jacket does wonders for credibility. The second, however, comes from Dennis Snower, an economist at the University of Kiel, in Germany. The third comes from Diane Coyle, author of The Soulful Science: What Economists Really Do and Why It Matters...

SHOULD ELIOT SPITZER GET A SECOND CHANCE?

Reading Newsweek 's profile of Eliot Spitzer's efforts to edge back into public life is a sort of dizzying experience: It is the thing it's about. On the one hand, Newsweek is talking to Spitzer about whether he can ever reenter the political conversation. On the other hand, by talking to Newsweek and getting a cover story, Spitzer is reentering the political conversation. It's all a bit weird. But Spitzer deserves to be heard. In 2004, he wrote a cover story for The New Republic entitled Bull Run. Like a lot of article from that era, it was an entry in the "How Can Democrats Win?" genre. Spitzer's answer was to rediscover regulation as a pro-market value. To make his point he gave three examples: The conflicts of interests that riddled investment banks amidst the tech boom, the costs of pollution, and the scourge of, yes, subprime loans. The article doesn't appear to be online, but here's a quote from Nexis: Unfortunately, our belief in the importance of equal opportunity and...

TAB DUMP.

• Health reform without a public plan: The German model. • Israel -- a loud and promised land. • An extremely negative book review. • I can't tell if Nouriel Roubini is being gloomy here or not. • That is so DC.

CAN THE ENVIRONMENTAL PROTECTION AGENCY SAVE THE PLANET?

This was largely expected, but it's big news that the Environmental Protection Agency is readying to issue finally issue its finding that greenhouse-gas emissions endanger public health. Under the provisions of the Clean Air Act, this means that the EPA will be able to begin regulation carbon as a pollutant. In essence, this now gives the energy industry an easy way and a hard way to deal with carbon emissions. The easy way is the congressional process. There, they'll have local representatives and friendly senators willing to protect their interests. If that process breaks down, however, they'll face the hard way: Tight regulation by the capricious and unsympathetic bureaucrats who staff the EPA. Ed Markey put it bluntly : "Do you want the EPA to make the decision or would you like your congressman or senator to be in the room and drafting legislation? ... Industries across the country will just have to gauge for themselves how lucky they feel if they kill legislation." It's the "do...

STANDING OVATIONS.

The Freakonomics blog wonders why standing ovations are so common amongst opera audiences. Are "classical music and theater are being diminished by a...scarcity of negative feedback?" They ask. "What if theater and orchestra audiences behaved more like blog commenters?" An awful thought (just kidding! Love you guys!). Tyler Cowen thinks the answer is rich people who prize a studied aloofness. "The opera-going demographic wishes to signal 'magnanimity,'" writes Tyler. "When these high-status people are slighted, as they might be by a bad performance, their privately optimal response is to ignore the slight. Reacting to the slight suggests that they have let it bother them; it is a sign of low status to be bothered by what are ultimately low status entities." I favor a different hypothesis: People fear being wrong. The standing ovation isn't necessarily a sign of enjoyment. You might stand and clap for an utterly unpleasant play about the Holocaust. It's a sign of critical appreciation...

TARP PROVING MORE EXPENSIVE THAN WE FIRST THOUGHT.

That's the takeaway from the CBO's new report on the Troubled Asset Relief Fund. You might wonder how a $700 billion program can return multiple cost estimates. The answer, basically, is that the TARP program's costs are not simply how much the government spends. They are how much the government spends minus how much they make when they sell the troubled assets. And CBO's new estimates suggest the troubled assets will be worth less than we thought: CBO currently estimates that the net cost of using the TARP’s full $700 billion in purchase authority will total $356 billion—$336 billion to be recorded in 2009 and $20 billion to be recorded in 2010. That estimate amounts to a roughly 50 percent net subsidy—that is, roughly one-half of the gross purchase authority. CBO’s most recent estimate of the TARP’s cost is higher than what we presented in January: by $152 billion for this year and $15 billion for next year (at that time, our estimated net subsidy was approximately 27 percent of the...

BEST FRIENDS.

I don't normally post videos of elephants on this site. Nor videos of dogs. But I do post videos of elephants who are best friends with dogs. Happy Friday.

YOUR WORLD IN CHARTS -- WELL, TABLES -- CONT'D.

Mere moments ago, I was complaining that the CBPP's chart showing percentile income gains for different income quintiles actually understated the situation, as 10 percent of a small salary and 10 percent of a huge salary are not the same amount of money. Turns out that the CBPP also tabulated the data in dollars. They've even got a fancy table: To normalize the numbers a bit, the increase for the top percentile was 256 percent, or $863,200. But if the incomes of the lowest quintile had increased by $863,200, that would've been income grown on the order of 5,700 percent.

Pages