Ezra Klein

FROM THE ED SCHULTZ SHOW.

Lawrence O'Donnell was co-hosting, and O'Donnell wanted to talk about the problems with using budget reconciliation. And so we did. I think he's probably right about the problems of using reconciliation for health care policy, but he's underplaying its importance as a threat. It makes a bipartisan bill more, not less, likely. I make this point a bit fuzzily on the program, but think of it like this: A legislative process has two basic outcomes. Bill or no bill. The majority wants bill. The minority wants no bill. And the Senate, as an institution, is built to favor the no bill position.

THE FEDERAL RESERVE AND THE IMF AGREE.

I'd been hearing that the Federal Reserve's estimates for how much capital the banking system would need were quite a bit lower than the IMF's. More evidence that the stress tests are optimistic and that Geithner is a Wall Street stooge! But James Surowiecki digs deeper into the numbers and finds that they're actually quite close. "Unless you think the I.M.F.’s estimates are unrealistic or softballed," he concludes, "it’s simply wrong to call these results a whitewash."

WHAT SORT OF BANKERS DOES WASHINGTON NEED?

In response to yesterday's post suggesting that Washington do more to attract out-of-work finance types, a smart financy type who recently came to Washington e-mails:

I totally agree with you that the progressive community needs to be pushing ahead much more aggressively on reg reform. One thing you didn't mention is that the fin. services community has basically largely been dusting off their old "competitiveness"/deregulation proposals from 2004-7 and recasting them as "regulatory reform" proposals now. Paulson's original blueprint was totally cut from this cloth, and contained a number of wishlist items.

MEDIA ME.

I'll be on Ed Schultz's MSNBC show tonight around 6:30 Eastern. It will be a milestone in television history, and you don't want to miss it.

CAN TWITTER SATISFY OUR DEEPEST NEEDS?

Maybe some of them. I rather like Ruth Reichl's take on Twitter:

Twitter is a sort of public diary; figurative scraps of paper. Are you enjoying it?

Enormously. As I wrote in my first book, privacy is overrated. My mother’s scraps of paper were shouts into the void, and I think she would have been much happier if she could have sent them into the world instead of sticking them in a box. We all want, very much, to be seen and understood.

THE NEW YORK FED THINKS THE BANKS REPRESENT THE PEOPLE.

Eliot Spitzer expounds on one of my favorite topics: The astonishing composition of the New York Federal Reserve:

STEALTH SUBSIDIES CONTINUE.

Tim Geithner's announcement that banks who wanted to repay their money early would have to also leave the FDIC's low-interest lending program received a pretty favorable response the other day. Banks shouldn't be able to leave only those government programs that impose regulatory constraints. No banks with benefits! But as Binyamin Appelbaum and Neil Irwin explain, they'll still be getting government help:

YOU CAN'T FIGHT CITY HALL.

I never understand the fuss over Supreme Court nominations. The president holds all the power. That's even more true if his party controls the Senate. So when conservative groups "concede that they have little chance of derailing Obama's choice, barring a scandal," what does it mean? If they derail Obama's choice, he'll just make another choice. It's not like defeating his first nominee would make him lose a turn, or let Mitch McConnell choose the next candidate. Bush, for instance, got beat on Harriett Miers, and then nominated a more conservative justice in her stead. The hubbub is baffling. The opposition can't win. They can only delay losing.

YOUR STRESS TESTS IN GRAPHS: HOW STRESSFUL ARE THEY?

The administration's argument for the stress tests' stringency is made on page seven of the results. There's even a helpful graph:

depressionloans.png

ARLEN SPECTER AND HIS ZOMBIE HORDES FIGHT FOR THE CURE.

specterbald.jpgOf late, Arlen Specter has been engaged in something of a crass-off against, well, himself. His argument for switching parties was that he'd lose the Republican primary. His argument for consistency was that he would still oppose the interests of the very voters he was now courting. But www.SpecterfortheCure.com is something of a new low.

NOT-AS-BAD JOBS NUMBERS.

I wouldn't call the new jobs numbers good economic news, per se. They're more like not-as-bad economic news. Recently, we've average 650,000 jobs losses a month. April saw a "mere" 539,000 lost jobs. And a lot of the jobs created were on the federal-side of the ledge. The private sector lost 611,000 jobs in April. So we lost a lot of jobs. But not as many jobs as we've been losing. Which is to say that the news is bad but the trend is good.

JOHN MAYNARD KEYNES ON THE PROBLEM WITH "SKILLED" INVESTORS.

0415_20innova.jpgI should probably make up some tenuous connection to the stress tests so it seems that I have some reason for quoting this bit of Keynes' General Theory, but really I just think it a brilliant point:

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