Ezra Klein

THE KNIVES COME OUT -- QUICKLY -- FOR SONIA SOTOMAYOR.

You'll have to forgive me: I think I partially missed the point -- or at least one of the important implications -- of Richard Cohen's column citing opposition to affirmative action as described in Ricci vs. DeStefano as the crucial litmus test for the next Supreme Court nominee. Ricci vs. DeStefano turns out to have passed through the court of Sonia Sotomayor, the 2nd Circuit Judge who many consider a frontrunner for the nomination. Cohen doesn't mention her by name, but as Jeffrey Rosen notes , in a piece that quotes a number of former clerks and associates arguing against her nomination, this was the most "explosive" case she's been involved with. Different players here are obviously doing different things. I don't doubt that Cohen's angry opposition to affirmative action is genuine. Nor do I doubt that Jeffrey Rosen really amassed a bunch of negative quotes from former clerks. But even so, it's remarkable how quickly we've seen what amounts to an oppo dump on Sotomayor.

THE LIE OF THE "LEVEL PLAYING FIELD."

Earlier today, Ron Pollack, the director of Families USA, made a nice point before the Senate Finance Committee. "We keep on talking about a level playing field," he said, "but in Medicare, we don't have a level playing field. The payments to private plans in Medicare Advantage are considerably larger than they would be for someone in traditional Medicare." To just take a second to explain this, Medicare offers private insurance options called Medicare Advantage plans. The basic idea was the government would pay them the same amount of money it pays the Medicare program to cover seniors. If the private market could outcompete Medicare, then it could prosper. But it didn't. Instead, it lobbied for more and more reimbursement, until the government was paying private plans 119 percent what they were paying Medicare. That's almost 20 percent more per beneficiary. Which is all to say that the private insurance industry is not interested in level playing fields as a matter of principle. It'...

PREFERENCES ON THE COURT.

My, err, soon-to-be-colleague Richard Cohen has an op-ed today arguing that Obama's next Supreme Court justice should face a "litmus test." But not on abortion. Rather, the next nominee to a Supreme Court that's 88 percent male and 77 percent white male should have to agree that "there is no need to cling to such a remedy" as affirmative action anymore. "Maybe once it was possible to argue that some innocent people had to suffer in the name of progress," Cohen allows, "but a glance at the White House strongly suggests that things have changed. For most Americans, race has become supremely irrelevant. Everyone knows this. Every poll shows this." Well, if "everyone knows this," then it seems that the Supreme Court would, by definition, agree, right? In any case, this is as good a time as any to plug my column from yesterday arguing that the Supreme Court needs some straight-up gender preferences. I argue : Few would publicly argue that the Court has a duty to be liberal or conservative...

THOSE SCARY UNION ORGANIZERS.

I should probably feign surprise that yet another study , this time from the University of Illinois, has emerged showing that union intimidation not only isn't a problem, but doesn't appear to exist in any measurable quantities. This bit of research -- which was, in part, funded by the AFl-CIO, but uses public records in ways that can be easily reproduced -- examined majority sign-up in the Illinois public sector. In the past six years, 22,000 workers joined unions, and thousands more worked for agencies that managed to repel an organizing campaign. The researchers used Freedom if Information requests to survey the public records from all of those efforts. There was no evidence of union coercion. Ever. The one complaint filed was dismissed for lack of merit. It consisted of "hearsay statements that [UNION X] representatives came to employees’ homes in an effort to obtain signatures on authorization cards." Even if it had been true, it would have been the intimidation tactics favored...

SCHUMER DEFENDS THE PUBLIC PLAN.

Chuck Schumer just forced the Senate Finance Committee's Health Care Coverage Roundtable to address the public plan. And give Schumer some credit. He didn't hedge. "Just as bad as a public plan with an unfair advantage," he said, "is no public plan at all. My colleague from Kansas said the American people don't want the government involved. Well, let me tell you, the American people have some problems with the government. But they have a lot more problems with private insurers." Schumer went on to argue that opposition to the public plan is predicated on a high-functioning insurance market that doesn't now, and hasn't ever, existed. Private insurers, Schumer exclaimed, can't even tell you what a given treatment costs . They won't release their data on either quality or prices. This is not an elegant market that should be protected from further competitive pressures. This is a mess in desperate need of new players with new incentives. "To not have a public plan and let it compete the...

THE LESSONS OF SWINE FLU.

It's looking like swine flu doesn't have the genetic capability to mutate into anything especially lethal. The high death toll in Mexico may simply be evidence that the disease was much more widespread than was initially understood. All of which is very good news. But it's also a teachable moment of sorts. The influenza might prove relatively harmless. But it could have been a reaper bug. And in that case, if Mexico's aggressive public health response had been a little less effective, the consequences could have been catastrophic. Indeed, in the past couple of years, we've had at least a couple close calls. SARS was incredibly deadly but never became terribly infectious. Swine flu was quite infectious but didn't become particularly deadly. Both originated in relatively poor areas. All of which is to say, there are a lot of issues in foreign aid that are matters of compassion rather than direct national interest. A lack of secondary education doesn't jump borders or kill Americans. But...

WILL WE GET TAX REFORM?

For a bit more on the administration's changes to the corporate tax code, check out this post from real life tax lawyer Daniel Shaviro. In particular, he offers a depressingly realistic take on the difficulties facing any effort to force corporations to pay higher taxes on investment abroad: The efficiency gains from equalizing domestic and foreign tax rates faced by U.S. taxpayers might verge on being a slam dunk argument for the Administration's general position if not for one further problem. When we impose business taxes on legal entities such as corporations, rather than directly on individuals, we can only impose the U.S. tax rate, for investment abroad, on companies that are classified as U.S. residents. Unfortunately, corporate residence is an extremely weak reed for the imposition of U.S.-level rather than tax haven-level taxes. For new investments (as distinct from those already out there, which are hard to shift without paying a tax price), it is quite easy for investors to...

WHY IS OBAMA LOOKING TO END $190 BILLION IN CORPORATE TAX BREAKS?

Generally speaking, I'm a big Robert Reich fan. But his explanation for why the president is going after a variety of tax breaks that help corporations hide international income makes very little sense. The president needs the cooperation of many big corporations if he's going to get universal health insurance enacted this year. Many of these companies would benefit from lower health costs but they're reluctant to take on Big Pharma, big health insurance companies, and major health providers, all of whom are dead set against a provision in the emerging health insurance proposal that would allow the public to opt for a government health plan. How does it help for him to take on corporate tax havens? Because the president needs as many bargaining chips with the rest of corporate America as possible. The proposed crackdown on foreign tax avoidance is one such chip. He might be willing to take it off the table if big corporations lend him active support on health insurance. The...

CAN CHUCK SCHUMER SAVE THE PUBLIC PLAN?

Don't underestimate the importance of Chuck Schumer's proposed compromise on the public plan. The Senior Senator from New York is not freelancing on this. Max Baucus asked him to work out the details of the public insurance option. And so he did. The public plan he has proposed will not be subsidized by the government or partnered with Medicare. It will not be supported by tax revenue or guaranteed access to hospitals and doctors. It will compete on a "level playing field" with the private insurance industry. Which has put the private insurance industry in a tricky space. They had based the whole of their argument against the public plan on the idea that it would not compete on a "level playing field." Like brass knuckles in a boxing match, it would not be fair . But what if it is fair? What if you check its gloves? In that case, you have Karen Ignani, the head of the insurance industry, countering with two arguments. The first is that there is no need for a public plan “if you have...

DON'T HATE JAMES INHOFE FOR HIS HONESTY.

There's a tendency to treat Senator James Inhofe as the Republican Party's crazy uncle. You invite him to dinner. You listen to him rant about global warming. You wait out his stories about asking Michael Crichton to testify before his committee as a climate expert. You try not to look away from your peas. But there's a case for taking Inhofe much more seriously than that. He's not the party's crazy uncle. He's it's unrestrained id. What makes him different from other Republicans is that there's little distance between rhetoric and action. But it's his rhetoric, and not theirs, that's actually a useful guide to Republican Party behavior. Take his curious response to Arlen Specter's defection: There is no evidence more visible that the American people are already rebelling against the far-left agenda than Senator Arlen Specter switching parties to become a Democrat. He did this for one reason, and that is his advisers told him he couldn’t retain his Senate seat as a Republican. In...

THE PROBLEM WITH STRESS TESTS.

Its a bit of a dead if you do, dead if you don't, problem. James Kwak explains : From a regulatory perspective, the goal is to determine which banks will fail a worst-case scenario and force them to take preventive action. But at the same time, the Treasury Department is trying to restore confidence in the financial system. This objective breaks both ways. Confidence is low today in part because markets suspect that the banks are under-capitalized, but are not sure. So in the long term, rigorous stress tests that the public has confidence in should boost confidence by making clear that at least some banks are healthy, even if they reveal that some banks are sick. But in the short term, labeling specific banks as sick would effectively cause runs on those banks, putting them into immediate danger and possibly triggering ripple effects on other financial institutions. (Although deposit insurance should rule out the possibility of people lining up to withdraw their deposits, runs can...

TAB DUMP.

• Supreme Court tenure is stupid. Change it. • In case you forgot that Libertarianism does, in fact, carry quite radical implications. • Nasty credit card tricks, and the politicians that protect them. • "When you have a lot of people in finance taking home billions, then something has gone badly wrong." • Why white is a more environmentally friendly than green. • Worrying about "Too Big to Fail" before it was cool.

FEDERAL RESERVE PRESIDENT WANTS US TO GO ALL SWEDEN.

Thoma Hoenig, President of the Kansas City Federal Reserve, is a pretty credentialed guy. He's been with the Federal Reserve since 1973, specializing in banking supervision. He knows, presumably, both how banks work and also how effective regulators can be when they choose to interfere with their workings. So it seems meaningful that he's giving aggressive speeches arguing for a plan that "is similar to what was done in Sweden." An excerpt: While you may be familiar with some of my more recent remarks on the “too big to fail” issue, I have been concerned with this problem for some time. Previously, I said, “In a world dominated by mega financial institutions, governments could be reluctant to close those that become troubled for fear of systemic effects on the financial system. To the extent these institutions become too big to fail, and where uninsured depositors and other creditors are protected by implicit government guarantees, the consequences can be quite serious. Indeed, the...

WHY WE SHOULD GET RID OF MEDICARE.

Representative Tom Price has an op-ed in Politico today where he argues: Because of Washington’s inability to deliver high-quality care, the American people remain wholly opposed to turning control of medical decisions over to the government. To overcome this, Democrats in Congress have begun promoting an innocent-sounding “public option.” They claim the public option would simply “compete” with private plans. Proponents of such a plan assert that the inadequacies of our current health care system are the product of a failed free market. Yet the irrefutable truth is there is no free market in American health care. Market mechanisms have been trampled by governmental involvement in care, primarily through Medicare — the government’s public option for seniors. It would seem that the obvious solution would be to get rid of Medicare. Yet Price doesn't advocate that. Which is strange. If that the American people are so set against government-run care and Medicare has proven such a...

DOES EUROPE REALLY HAVE LESS UPWARD MOBILITY THAN AMERICA?

Tax quibbles aside , Russell Shorto's explanation of how he stopped worrying and learned to love the European welfare state is nicely done. The answer is pretty simple: He started to like the welfare state when he began to receive its services. This, incidentally, is the sort of thing that conservatives worry about quite publicly in the United States. When Ben Nelson says he'll oppose the public plan because "at the end of the day, the public plan wins the game," he's gesturing towards this point. People, in general, like the welfare state. Conservatives have an array of complicated arguments about why they don't really like the welfare state, and are just fooled by the sense that they're getting Medicare for free, but that doesn't change the fact that Medicare is wildly popular. Indeed, it's what makes the fights over new entitlements so terribly bitter: There's a (largely correct) sense that expansions of the welfare state do not go away. Shorto also offers some criticisms of the...

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