Does Thinking of New Luxuries Make Us Unhappy?
Figure of the Day: Tim Geithner Makes Us $8 Billion

Worth Reading, Mostly Economics, for March 29, 2010

  • Pappas: "A Republican National Committee staffer was fired after The Daily Caller reported Monday that the committee paid a bar tab of nearly $2,000 for young GOP donors at the risqué, bondage-themed Voyeur West Hollywood nightclub.... Erik Brown — a California political operative who FEC filings show was reimbursed by the committee for the Voyeur outing and who several Republicans have told The Daily Caller feels like he’s been thrown under the bus by the RNC following the event — was asked by the terminated staff member to charge the bar tab on his credit card..."
  • Drum: "From French President Nicolas Sarkozy, speaking today at Columbia University: 'Welcome to the club of states who don't turn their back on the sick and the poor.... The very fact that there should have been such a violent debate simply on the fact that the poorest of Americans should not be left out in the streets without a cent to look after them... is something astonishing to us.' Sarkozy was something of a darling of the right when he was first elected, thanks to his support of laissez-faire economics and general embrace of American values. But the financial collapse of 2008 turned him into something of a regulatory hawk, and now there's this. I'll bet the American right doesn't think much of him anymore."
  • Chait; There's a certain species of center-right fiscal hawk who views covering the uninsured as a luxury ... they... express this view through metaphor... because it's hard to make this case explicitly without sounding like a moral monster. Robert Samuelson offers another good example.... Self-indulgent" ... The Bush tax cuts, which massively enriched George W. Bush and Dick Cheney, could be described as self-indulgent. Samuelson supported those.... Obama and the Democrats... all have insurance. Even if you consider providing basic medical care to people who lack it an "indulgence," they are not in.... Samuelson calls Obama and the Democrats "shortsighted and self-centered -- though their quest was for political glory, not financial gain."... [H]e literally cannot imagine that it might be spring from an altruistic motive.... And surely the easiest path to this glory is to shift resources from rich or politically-powerful groups to a politically demobilized sector of the electorate.
  • Schmitt: "Frum's ouster is a sad day not only for conservatism but for political discourse generally. I don't say that because Frum and I agree on anything. I don't say it because I think he's a nice guy to have a beer with -- I've never had that pleasure -- or because he seems "reasonable," like David Brooks or some fifth-generation "Rockefeller Republican." I say it specifically because I disagree with him, because he's often unreasonable, because he represents a fierce, principled, engaged conservatism, one that participates in arguments in the real world, and sometimes comes back with those arguments modified, and probably improved. That's been my sense of him ever since reading his first major book, Dead Right in the mid-1990s. It's always risky to pass judgment on any organization's personnel decisions, but from the outside it certainly seems that it was that engagement itself which led to Frum's ousting..."
  • Avent: "hOver the weekend, Steve Waldman tweeted at me: 'iphones & public transit: i’ve found smartphones increase the opportunity cost of driving, tilt toward public trans. just me?' Smart, internet connected devices of all sorts have significantly reduced the pain of what were previously dead times — sitting on the train, waiting in the airport terminal... and so on. But sitting behind the wheel of a car is not a dead time, however much it might feel like one. You’re constantly assessing road conditions, the behavior of the cars around you, and the behavior of your own car, while you use arms and legs to operate the vehicle. This is why it’s so dangerous to do other stuff while driving; you’re actually very busy. And so the relative cost of time in transit across modes is almost certainly shifting, as devices become better and faster, and as online activity becomes richer and more flexible...
  • Gizmodo: "The iPad doesn't run Flash. If your website uses Flash, it won't play well on the iPad. Turns out, a lot of people want their sites to look pretty on the iPad. So the internet's already starting to look different.... YouTube, of course, has been playing with HTML5 for a bit , as has Vimeo, and both have served up iPhone OS-tailored video for a while. Brightcove, another big video service, used a by lot of magazine sites ( Wired , Slate , Time and NYT), is is making its HTML5 powers more widely known , with the "Brightcove Experience for HTML5," specifically in response to the iPad, with the NYT and Time listed as customers using Brightcove HTML5 edition , meaning they'll have iPad-ready video at the get-go. Not to mention sites like TED now offering Flashless renditions for iPhone OS devices.... It's interesting, to say the least, that a device promising to be the best browsing experience--cue Scott Forestall crazy eyes-- is in fact reshaping the internet....
  • Greenwald: "All of that is crucial background for understanding just how pernicious and deceitful is the Op-Ed published this weekend by The Washington Post and authored by McConnell. The overarching theme is all-too-familiar: we face a grave threat from Terrorists and other Very Bad People ("cyber wars"), and our only hope for protection is to vest the Government with massive new powers.... In one sense, this is just typical fear-mongering of the type the National Security State has used for decades to beat frightened Americans into virtually full-scale submission: you are in grave danger and you can be safe only by vesting in us far greater power, which we'll operate in secret: here, allowing us to "reengineer" the Internet so we can control it.... It's not an exaggeration to say that the "cyber-war" policies for which McConnell is shilling is the top priority of the industry he serves.... Readers of The Washington Post, exposed to McConnell's Op-Ed, would know none of this..."
  • Drum: "Rep. Bart Stupak (D–Mich.), who opposed healthcare reform up until the last second because of his doubts about its abortion language, took his cues largely from Richard Doerflinger, associate director of the United States Conference of Catholic Bishops' Secretariat of Pro-Life Activities. Plenty of other Catholic groups eventually agreed that the bill's language was actually pretty restrictive, but the bishops never did.... Stupak's had a change of heart about the bishops.... 'Last week, Stupak attacked the bishops and other anti-abortion groups for "great hypocrisy" in opposing Obama's executive order after having supported former President George W. Bush's executive order banning stem cell research in 2007. He told the Daily Caller he believed the bishops and the groups they were allied with were "just using the life issue to try to bring down health-care reform."...'"
  • Frakt: "Some have asserted that the individual mandate penalties under the Affordable Care Act (ACA) are lower than those imposed in Massachusetts.... This is an empirical question... the ACA penalty will be $674 for an average U.S. resident while the Massachusetts penalty would be $537 on average.... About 40% of the population would have a higher penalty under Massachusetts rules than under ACA rules. However, nearly half of those who would have a higher Massachusetts than ACA penalty are exempt from ACA penalties due to low income. Many such individuals are eligible for premium and cost sharing subsidies under ACA. Thus, the incentive for gaming is lower for this subset. So, I don’t think it is fair to say the ACA penalties are lower than Massachusetts’ penalties. On average they’re higher..."
  • Tumulty: "The Daily Caller examines the Republican National Committee's FEC filings, and discovers a few things that are not likely to go over well with GOP donors. Such as: 'Once on the ground, FEC filings suggest, Steele travels in style. A February RNC trip to California, for example, included a $9,099 stop at the Beverly Hills Hotel, $6,596 dropped at the nearby Four Seasons, and $1,620.71 spent at Voyeur West Hollywood, a bondage-themed nightclub featuring topless women dancers imitating lesbian sex'..."
  • Waldman: "Remember during the 2008 primary campaign how Obama supporters argued that one reason not to elect Hillary Clinton was that she would unite Republicans against her? And that since they hated her so much, they'd wage a scorched-earth campaign against everything she tried to do...>... Good thing we dodged that one. I bring this up not as a criticism of Obama’s ceaseless efforts to reach across the aisle... this outcome shows that some time ago, conservatives stopped believing that any Democratic president could possibly be legitimate.... This idea... is a poison running through our national political bloodstream. And before anyone responds, "But wait – some guy once left a comment on Daily Kos comparing George W. Bush to Hitler!", we have to understand the clear difference between the right and the left... [which] lies in what the leaders do. The venom on the right goes all the way to the top..."
  • At the risk of being branded one of those liberal haters of American exceptionalism, sign me up for the blunt rules approach. It's not that blunt rules are any kind of panacea. Wall Street bankers dedicate their lives to figuring out clever ways to circumvent regulations, and they'll keep doing that.... But that's the whole point of blunt rules... they don't require Congress to anything more than set them in the first place. You still have to trust regulators to act reasonably, but even if they don't you at least have the backstop of statutory limits that are hard to get around.... The big question, of course, is that even if you support this approach, just what should those blunt rules look like?...
  • Krugman: "From 1980 or so onward, however, that system gradually broke down, partly because of bank deregulation, but mainly because of the rise of “shadow banking”... the risks of old-fashioned banking but weren’t covered either by guarantees or by regulation. The result, by 2007, was a financial system as vulnerable to severe crisis as the system of 1930. And the crisis came.... We have already, in effect, recreated New Deal-type guarantees... debts of shadow banks, like deposits at conventional banks, now have a government guarantee. The only question now is whether the financial industry will pay a price for this privilege, whether Wall Street will be obliged to behave responsibly in return for government backing. And who could be against that? Well, how about John Boehner, the House minority leader?
  • Reich: "Banks fear genuine financial reform would cost them a bundle.... So even as Wall Street sheds crocodile tears about the terrible things it's done, it is throwing money at Capitol Hill to thwart reforms that would prevent it from continuing to do terrible things. The political payoffs seem to be working. Proposed legislation from Treasury and the House (at this writing, the Senate Banking Committee hasn't reported out) has loopholes big enough to allow bankers to drive their Ferraris through them. Specifically, they permit secret derivative trading in foreign-exchange swaps (similar to what Goldman used to help Greece hide its debt) and in transactions between big banks and many of their corporate clients (as with AIG). Before you wallow in hopeless cynicism, though, it's worth noting that we already have a law against this. It's called the Sarbanes Oxley Act of 2002. It just needs to be enforced..."
  • Yves Smith: "[T]he report does have one intriguing, and well documented finding: that the plutonomies have low savings rates. Consider an fictional pep rally chant: 'We’re from Greenwich. We’re invincible. Living off our income. Never touch the principal." Think about that. If you are rich, you can afford to spend all your income. You don’t need to save, because your existing wealth provides you with a more than sufficient cushion. The ramifications when you have a high wealth concentration are profound. From the October 2005 report: 'In a plutonomy, the rich drop their savings rate, consume a larger fraction of their bloated, very large share of the economy. This behavior overshadows the decisions of everybody else. The behavior of the exceptionally rich drives the national numbers – the “appallingly low” overall savings rates, the “over-extended consumer”, and the “unsustainable” current accounts that accompany this phenomenon…'"