Ezra Klein

THE BUDGET VOTE.

Ed Kilgore crunches the numbers and finds that Pelosi and Reid managed to hold the caucus together pretty well: 47 House Democrats represent districts carried by John McCain in a bad Republican year. They voted 34-13 for the Obama-backed budget. 13 Democratic senators represent states carried by McCain; they voted for the budget 10-3. Of the four House Democrats voting against the budget who represent districts carried by Obama, three (Barrow of GA, Foster of IL, and Nye of VA) are from seats recently won by Republicans, and the fourth is Dennis Kucinich. Only two Senate Democrats from states won by Obama voted against the budget: Arlen Specter, who switched parties the day of the vote, and Evan Bayh, from a state that narrowly went Democratic for the first time in 44 years (true also, of course, for Virginia senators Warner and Webb, who voted for the budget). Looking at the Democratic groupings often suspected of disloyalty is interesting, too. The Blue Dog Coalition in the House...

WHY DOES THE SUPREME COURT HATE WHITE MEN?

"Let's put all this in perspective," writes Adam Serwer. "There have been 110 Justices on the Supreme Court. Of those, two have been women, and two have been black. The other 106 have been white men. That means that around 96% of Supreme Court Justices have been white men." The "this" that Serwer is perspectivizin' is Mark Halperin's unfortunate decision to respond to Souter's retirement by pasting a giant 'WHITE MEN NEED NOT APPLY" headline across his blog. Classy work, Mark. As the stats show, the history of the United States Supreme Court -- an institution that is, as we speak, 88 percent male and 77 percent white male --is not exactly a history of raging anti-white dude sentiment. And I've always found it notable that the instant the conservative bloc lost its sole female member, it set about dismantling the compromise she had worked out to protect abortion. It's almost as if being a woman gives you a slightly different perspective on issues relating to female reproductive rights...

BIG NUMBERS.

The Econ4u folks are dedicated to education Americans about all matters financial. To dramatize the importance of their mission, they put a poll into the field asking people how many millions are in a trillion. The results: Q: How many times larger is a trillion than a million? Would you say… One Thousand Times- 18% Ten Thousand Times- 12% One Hundred Thousand Times- 21% One Million Times- 21% Ten Million Times- 17% Don’t Know- 12% The correct answer is a million millions are in a trillion. But 79 percent of Americans got that wrong. And almost everyone got it wrong downward. To be sure, I'm not sure that the meaning of this is precisely clear. The obvious implication is that Americans aren't able to accurately assess what their government is doing, but I'm not sure the sense that "the government is spending dump trucks of money" is actually different for people who think a trillion is 100,000 millions or 1,000,000 millions. And that's probably how most people understand what the...

YOUR WORLD IN CHARTS: WHO IS SPECTER TRYING TO PLEASE?

Some expected, but still dispiriting, news out of the Senate last night, where Dick Durbin's "cramdown" legislation went down to defeat . The policy was simple enough: It would allow bankruptcy judges, at their discretion, to reduce the principal and interest-payments on primary mortgages. That would make it likelier that people could keep their homes. Unsurprisingly, the banking industry wasn't hugely enamored of the bill, and protested that they'd have to raise mortgage prices to deal with the resulting uncertainty in their revenues. That's probably an accurate objection, so far as it goes. But the change in aggregate mortgage prices would be so small as to be virtually unnoticeable for homeowners. The reduction in principal, conversely, could save the homes of the directly impacted, and by keeping them in their homes, boost home prices in the area. Many observers -- including the administration -- supported the provision. The financial industry, predictably, reacted less favorably...

PRIMARY SOURCES: CHRISTINA ROMER GOES TESTIFYIN'.

Yesterday, Christina Romer appeared before the Joint Economic Committee to give the assembled congressfolk an update on the administration's economic thinking. So far as these documents go, it's a pretty clear outline of the White House's approach, and it includes an interesting bit on the interaction of Romer's research on the Great Depression and her take on the current crisis. She begins with a jaw-dropping fact: "By one measure, she says, "household wealth has fallen by $13 trillion, or 20%, since its peak." But she argues that economic loss hasn't been the driver of the ensuing pain. Rather, economic volatility has done the most damage: In a paper I wrote many years ago, I argued that the main effect of the crash of the stock market in 1929 on spending operated not through the direct loss of wealth, but through the enormous uncertainty it created. The initial crash in October was followed by wild fluctuations of stock prices. This volatility led consumers and firms to be highly...

WHY OBAMA IS PISSED AT THE HEDGE FUNDS.

One of the interesting threads in the Chrysler bankruptcy was Obama's evident fury at the hedge funds and investment banks that refused the deals the government offered. The reason for their reluctance was simple enough: Bondholders don't want to lose money. But the strategy behind their intransigence proved poor: They didn't think the government would send Chrysler into bankruptcy. And that gave them leverage. Out-of-court debt restructurings generally require consensus. But they were wrong. Not only did the administration let Chrysler fall to the bankruptcy courts, but Obama called the investors out by name: While many stakeholders made sacrifices and worked constructively, I have to tell you some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none. Some demanded twice the return that other...

WORTH QUOTING: I MISS TOM DASCHLE EDITION.

Came across this somewhat randomly yesterday. It's Tom Daschle giving a speech in Colorado. He was a bit more courageous on the framing of this issue than are most of the current participants. But before we define the solution, I think it’s important that we define the problem. It’s important that we’re all on the same page, that we agree what the problem really is. Before we define the problem we have to destroy the myth. And the myth in our country has long been that we have the best healthcare system in the world. Why else would kings and leaders all around the world, people of prominence come to the United States? Well to a certain extent that is true. But for every king who may come to the United States, there are thousands of people who leave the US to get medical care elsewhere. They call it now medical tourism. Thousands of people leave the United States because the quality and the cost is better in other countries. So how do we explain, well we explain by simply stating that...

DAVID SOUTER'S WELL-DESERVED RETIREMENT, AND WHAT IT SAYS ABOUT THE SUPREME COURT.

You have to pity David Souter. By all accounts, he'd grown to hate his job. The Court was a grind. "An intellectual lobotomy," he called it. He was exhausted by the ideological jockeying. Dispirited by the institution's rightward turn. Shattered by the decision in Bush v. Gore . He loathed DC. "The world's worst city," he said. He thought often of quitting. As soon as each term closed, he'd fly home to New Hampshire and hike. But he held fast. Because we've built our system such that a Justice who isn't unexpectedly incapacitated has to be strategic in timing their resignation. Souter did not want to be replaced by a hardline conservative. He couldn't bear to see his work undone. And so he continued to hold a job he'd long since grown to dislike. A fixed term limit would end these perverse incentives. Give Justices 12 years of service and not a day longer. Let the political system prepare for vacancies rather than be caught by surprised. But in the absence of such a change, long-...

QUESTIONING THE FLU.

I'll be interviewing a pandemic flu expert in a couple of hours. I have my own questions, of course ("what investment opportunities does this open up for me and mine?"), but if there's anything you'd like me to ask, leave it in comments.

LUCK AND THE FOX BUSINESS CHANNEL.

"Contrary to what many parents tell their children," wrote Robert Frank, "talent and hard work are neither necessary nor sufficient for economic success. It helps to be talented and hard-working, of course, yet some people enjoy spectacular success despite having neither attribute." It's not a particularly bold claim. Nor is Frank's conclusion the sort of thing that ordinarily makes headlines. Saying that "the link between success and luck is stronger than many people think" borders on the trite. Unless, of course, you're on Fox's new business channel. There, self-made anchor Stuart Varney was shocked, shocked , that Frank would suggest such a thing. The result is some extremely entertaining television. It seems more like a skit than a segment. If I were writing a parody of Fox's new business channel, I think I'd have turned in something a little less heavy-handed. "Go back to your Socialist newsroom!" for instance, wouldn't have struck me as believable. But this isn't a skit. It's an...

TAB DUMP.

• A Who's Who of financial blogs. • The myth of the 100 days. • A family-friendly White House? • Have you read some Keynes today? • An economist vs. economics.

THE FIRST 100 DAYS MADE FUNNY, THE FIRST 100 DAYS MADE INSPIRING.

Give it up to Slate: Their parody Facebook feed of Obama's first 100 days is very funny. Meanwhile, in other First 100 Days commentary, Mark Schmitt is skeptical of the whole construct, but I love his conclusion: But we should take a moment to respect the miracle that these 100 days happened at all. Consider what we have come through in the last 12 years or so of conservative dominance: a politicized impeachment, an election in which the actual winner did not become president, a staggering usurpation of executive power, a long war premised on lies, a partly successful effort at one-party control, the most systematic violation of civil liberties since the Red Scare, a disgraceful and systematic embrace of barbaric behavior at the highest levels of government. Step back any distance, and you'd say we've gone through an electoral crisis, several iterations of constitutional crisis, and a crisis of legitimacy. And yet here we are, with the constitution and our electoral democracy intact,...

THE CHRYSLER BANKRUPTCY.

I haven't written much about the Chrysler bankruptcy because I've not been sure I understand it well enough t have an opinion. But this is about the clearest explanation I've found: What the federal government is hoping for — in it's happiest-of-happy-thoughts scenarios — is a quick "surgical" bankruptcy of only 30-60 days with Fiat swooping in to pick up the pieces of a tarnished and broken Chrysler, helping them to right the company with an injection of $3.5 billion in DIP (Debtor-In-Possession) financing — a special form of financing provided for companies in financial distress or under Chapter 11 bankruptcy process that allows the company to operate as it sheds contracts. Then the Feds will give $4 billion in "exit financing." First to go will be legions of dealer contracts that will be shed like so much dead skin off a snake. The UAW has already agreed to certain cuts in their 1997 contract that should take care of their needs. That relatively rosy scenario can be broken up at...

DO CEOS ONLY MATTER SOME OF THE TIME?

Steve Pearlstein spent some time last week with Mayo Shattuck, the grinning fellow pictured above. Shattuck was a high-flying financial whiz kid who looked like a genius amidst the boom but who's been tagged as a fool since the crash. Shattuck, of course, has all manner of perfectly reasonable explanations for his company's poor fortunes. But the conclusion, then, isn't just that Shattuck is being unfairly pilloried now. It's also that he was disproportionately lauded then . Quoth Pearlstein: Like many executives and directors on Wall Street, Mayo Shattuck ultimately defends his performance by noting that in business, as in life, bad things sometimes happen to good people. By the same logic, of course, good things sometimes happen to good people -- which those good people ought to remember the next time they confuse luck with skill and begin to believe they are worth $14 million a year. It serves the interests of various people to suggest that the weakness of firms operating in today'...

BURPS, NOT FARTS.

Tom Laskawy is attending Princeton's "Feeding a Hot and Hungry Planet" conference. Fun stuff. But he must not be that engaged because he had time to send a couple IMs that suggested a truly disturbing ability to anticipate my interests: Tom: i'm at an ag conf. at princeton listening to an official from the UN FAO. he had a tidbit i need to share with you. 90% of "enteric fermentation" GHG emissions are from BURPING. cow farting is basically off the hook. i knew you'd want to be advised of this development That basically means that the potent methane emissions from cows -- emissions that contribute quite a lot to climate change -- are the product of burps, not farts. Which makes them slightly less funny, and hopefully makes the political system slightly more capable of taking them seriously. And he's right. I am glad to be advised of this development. By the way: You don't know how hard it was to resist attaching a puerile picture to this post.

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