That Zany Zandi

Lori Montgomery at WaPo:

A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday.

The report, by Moody’s Analytics chief economist Mark Zandi, offers fresh ammunition to Democrats seeking block the Republican plan, which would terminate dozens of programs and slash federal appropriations by $61 billion over the next seven months.

Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year.

Brad DeLong:

One question: in what sense was Mark Zandi an “architect of the 2009 stimulus plan”? I don’t get that at all.

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UPDATE: Queried, Lori Montgomery emails:

he was on the team of economists who were advising pelosi during that period, and his research helped shape the package. don’t you remember all those photo ops?

Hmmm… By that standard, the Recovery Act had at least 200 “architects,” including me…

Atrios:

It doesn’t matter how many “reports” from “economists” get released making the obvious point that cutting spending=cutting jobs, the Real Americans in the Tea Party and those who understand them and speak for them, the Villagers, know that cutting spending is the right thing to do. Because arglebargle!

Jonathan Cohn at TNR:

I can’t vouch for these numbers and Zandi, who used to advise John McCain, is now the Democrats’ favorite economist to cite. But that’s largely because Democrats are making an argument that mainstream economists like Zandi happen to support: In the midst of such a weak economic recovery, less government spending is almost certainly going to mean fewer jobs.

Patricia Murphy at Politics Daily:

On Monday, House Majority Leader Eric Cantor dismissed the Moody’s report entirely: “I would note that Mr. Zandi was a chief proponent of the Obama/Reid/Pelosi stimulus bill that we know has failed to deliver on the promise of making sure unemployment did not rise above 8 percent.”

But speaking with senators on Capitol Hill Tuesday, Bernanke took issue with the reports and their predictions of dire consequences if the Republican proposal were to pass the Senate.

“A $60 billion cut obviously would be contractionary to some extent, but our analysis does not get a number quite that high,” Bernanke said of the job losses predicted by Moody’s and the economic damage predicted by Goldman Sachs. “I have to say we get smaller impact than that.” Instead, Bernanke said that the cuts would likely slow economic growth by “several tenths” of a percent and that the lost jobs would be “much less than 700,000.”

Although Republicans may feel vindicated by Bernanke’s remarks, he did add that the proposed GOP cuts would not grow the economy in the short term.

“It would of course have the effect of reducing growth on the margins certainly,” he said. “It would have a negative impact, but 2 percent? I’d like to see their analysis. It seems like a somewhat big number relative to the size of the cut.”

John B. Taylor at Economics One:

As I have written before, the old-style Keynesian approach used by Zandi has many of the same flaws that are found in the Goldman Sachs approach: excessively large multipliers, inaccurate predictions of the effect of the 2009 stimulus, failure to recognize that reducing uncertainty about the debt can have positive effects, especially if it is done in a credible way by reducing spending growth now, not postponing it to a date uncertain in the future. After stating that “too much cutting too soon would be counterproductive,” Zandi claims that this is what the “House Republicans want” and what their budget does. But it’s simply not credible to say that a budget that has government spending increasing at 6.7 percent per year cuts spending too much too soon.

In sum, there is no convincing evidence that H.R. 1 will reduce economic growth or total employment. To the contrary, there is more reason to expect that it will increase economic growth and employment as the federal government begins to put its fiscal house in order and encourage job-producing private sector investment.

David Weigel at Slate:

Zandi, Phillips, and other economists who think the government has been creating or saving jobs with supply-side spending are not taken seriously on the right. They have economic models that rate how much “bang for the buck” (they prefer this cliché) is delivered from various types of spending—unemployment checks, food stamps, tax cuts. They have the CBO’s numbers, which posit that 1.4 million to 3.5 million people have jobs that wouldn’t have existed without the stimulus package that became law two years ago this month. Republicans just don’t buy them.

“These analyses by the Keynesians are missing a key part of the story,” Rep. John Campbell, R-Calif., explained Monday. “One hundred percent of the money they’re talking about is borrowed. Republicans, right now, are talking about cutting spending on the margins, and 100 percent of what we don’t cut will be borrowed. The capital that they’re putting to work is capital that’s not improving something in the private sector, and all of these studies fail to take into account the interest we’re paying on the deficit.”

Campbell, an Ayn Rand disciple, has been saying this for a while. Republicans have started aping him only recently. Two years ago, as they opposed the stimulus bill, House Republicans reverse-engineered the White House’s economic models—models bearing a kissing-cousin resemblance to Zandi’s—and promised 6.2 million jobs for half the price of the Democrats’ proposal. The number was based on calculating how many jobs would be killed by tax hikes and inverting it.

This didn’t make much sense, and Republicans didn’t really believe it, but they were out of power. Their bill didn’t pass, so no one noticed. The Democrats’ stimulus did pass, and because unemployment went up, voters don’t think it worked. This gives Republicans a free hand to say anything they like about doomsaying predictions of cuts in government spending leading to cuts in employment. (Rep. Paul Ryan, R-Wis., who helped develop the GOP’s Potemkin stimulus, noted that the Democrats planned on spending $275,000 per job if their models worked; the current cost estimate per job is $228,055, as reported derisively by the conservative CNSNews.com.)

They may be dismissive, but Republicans aren’t Pollyannas about this stuff. Boehner’s comment to a Pacifica Radio reporter—if the spending cuts killed government jobs, he said, “so be it” —was not the party’s message. It’s not actually how they’ve been approaching their cuts.

A GOP aide with knowledge of the process that led to $61 billion in proposed cuts described it like this. The ideas for cuts came from plenty of places—a lot of them came from freshmen—but they were vetted by veteran staff on the Appropriations Committee. Those people tried to direct the cuts away from the salary side of the agencies they were attacking. They tried to target discretionary spending that was not part of salaries. For example, Republicans cut $1.3 billion of discretionary funding to community health centers; the Affordable Care Act, which is still there, stubbornly unrepealed, included mandatory funding for those health centers that the GOP didn’t touch.

The goal, even if GOP leaders won’t sing about it, was to shrink spending but leave employment as unmolested as possible. The agencies have discretion over how they use their shrunken budgets; they don’t have to cut back jobs.

The Republicans who’ll open up about possible job losses might have the more convincing case. Campbell talks about the losses as Joseph Schumpeter talked about creative destruction—temporary losses offset by sustainable gains.

“If we do not get the deficit down, if we don’t change trajectory, will lose more jobs than we lose from cuts,” Campbell said. “When a debt crisis hits, if we’ve still got 47 percent of our debt held by foreigners, we’ll have much greater job loss than that. Our first objective to is try and prevent a fiscal collapse, a la Greece. And it will take a longer time for the private sector to replace public-sector jobs that are cut, but when they do, they’ll last longer.”

Republicans have been talking like this for months, and they haven’t been hurt by it. The choice between stimulus spending and creative destruction is a choice between something voters don’t think worked and something voters don’t think we’ve tried. As long as voters don’t pay attention to how the U.K.’s austerity program is working, the GOP will be just fine.

All Your Best Blog Posts On That Economic Policy Institute’s Study

Ezra Klein:

“Republicans say that public-sector employees have become a privileged class that overburdened taxpayers,” write Karen Tumulty and Brady Dennis. The question, of course, is whether it’s true. Consider this analysis the Economic Policy Institute conducted comparing total compensation — that is to say, wages and health-care benefits and pensions — among public and private workers in Wisconsin. To get an apples-to-apples comparison, the study’s author controlled for experience, organizational size, gender, race, ethnicity, citizenship and disability, and then sorted the results by education

[…]

If you prefer it in non-graph form: “Wisconsin public-sector workers face an annual compensation penalty of 11%. Adjusting for the slightly fewer hours worked per week on average, these public workers still face a compensation penalty of 5% for choosing to work in the public sector.”

Jim Manzi at The American Scene:

Klein links to an executive summary to support his claim, but reading the actual paper by Jeffrey H. Keefe is instructive. Keefe took a representative sample of Wisconsin workers, and built a regression model that relates “fundamental personal characteristics and labor market skills” to compensation, and then compared public to private sector employees, after “controlling” for these factors. As far as I can see, the factors adjusted for were: years of education; years of experience; gender; race; ethnicity; disability; size of organization where the employee works; and, hours worked per year. Stripped of jargon, what Keefe asserts is that, on average, any two individuals with identical scores on each of these listed characteristics “should” be paid the same amount.

But consider Bob and Joe, two hypothetical non-disabled white males, each of whom went to work at Kohl’s Wisconsin headquarters in the summer of 2000, immediately after graduating from the University of Wisconsin. They have both remained there ever since, and each works about 50 hours per week. Bob makes $65,000 per year, and Joe makes $62,000 per year. Could you conclude that Joe is undercompensated versus Bob? Do you have enough information to know the “fundamental personal characteristics and labor market skills” of each to that degree of precision? Suppose I told you that Bob is an accountant, and Joe is a merchandise buyer.

Even if Bob and Joe are illustrative stand-ins for large groups of employees for whom idiosyncratic differences should average out, if there are systematic differences in the market realities of the skills, talents, work orientation and the like demanded by accountants as compared to buyers, then I can’t assert that either group is underpaid or overpaid because the average salary is 5% different between these two groups.

And this hypothetical example considers people with a degree from the same school working in the same industry at the same company in the same town, just in different job classifications. Keefe is considering almost any full-time employee in Wisconsin with the identical years of education, race, gender, etc. as providing labor of equivalent market value, whether they are theoretical physicists, police officers, retail store managers, accountants, salespeople, or anything else. Whether they work in Milwaukee, Madison, or a small town with a much lower cost of living. Whether their job is high-stress or low-stress. Whether they face a constant, realistic risk of being laid off any given year, or close to lifetime employment. Whether their years of education for the job are in molecular biology, or the sociology of dance. Whether they do unpredictable shift work in a factory, or 9 – 5 desk work in an office with the option to telecommute one day per week.

Keefe claims – without adjusting for an all-but infinite number of such relevant potential differences between the weight-average public sector worker and the weight-average private sector worker – that his analysis is precise enough to ascribe a 5% difference in compensation to a public sector compensation “penalty.”

And his use of the statistical tests that he claims show that the total public-private compensation gap is “statistically significant” are worse than useless; they are misleading. The whole question – as is obvious even to untrained observers – is whether or not there are material systematic differences between the public and private employee that are not captured by the list of coefficients in his regression model. His statistical tests simply assume that there are not.

I don’t know if Wisconsin’s public employees are underpaid, overpaid, or paid just right. But this study sure doesn’t answer the question.

Jason Richwine at Heritage:

Manzi is referring to “the human capital model,” which holds that workers are paid according to their skills and personal characteristics, like education and experience. Most scholars—including Andrew, myself, and Heritage’s James Sherk—use it to compare the wages of the public and private sectors. If the public sector still earns more than the private after controlling for a variety of factors, then it is said to be “overpaid” in wages. But because we cannot control for everything, Manzi is saying, the technique is not very useful.

His critique is reasonable enough, but overwrought. The human capital model has been around for three decades, and it is unlikely that economists have failed to uncover important variables that would drastically change its results. Nevertheless, there are other techniques that address most of Manzi’s concerns. An upcoming Heritage Foundation report uses a “fixed effects” approach, which follows the same people over time as they switch between the private and federal sectors. By looking at how the same person’s wage changes when he moves between sectors, a lot of unobservable traits—intelligence, extroversion, etc.—are accounted for.

In order to capture fringe benefits as well as wages, economists have also used quit rates and job queues. If public workers quit less often than private workers, we can infer (with some qualifications, of course) that there are not better options available to them. Similarly, if many more applicants apply for government jobs than there are positions—creating a “queue”—then we know that government jobs are highly desirable. Of course no methodology is perfect, but the scholarly literature can tell us a lot about pay comparisons. Andrew and I discussed this work in detail in a recent Weekly Standard article.

John Sides:

From one perspective, sure, I agree that a statistical analysis of the sort described above based on observational data can never be a true direct comparison. (Not to mention the difficulty of classifying people like me who work in the quasi-public sector.) But if you take things from the other direction, this sort of study can be valuable.

What do I mean by “the other direction,” you might ask? I mean, suppose you start, as people do, with raw numbers: Salary plus benefits = X% of the state budget. The state has Y number of employees. Average income of all Wisconsinites is Z. Then you start adjusting for hours worked, ages of the employees, etc etc, and . . . you end up with Keefe’s analysis.

My point is, people are going to make some comparisons. Comparisons aren’t so dumb as long as you realize their limitations. And once you start to compare, it makes sense to try to compare comparable cases. Taking Manzi’s criticism too strongly would leave us in the position of allowing raw numbers, and allowing pure unblemished randomized experiments, but nothing in between.

In summary:

1. Manzi’s right to emphasize that a simplistic interpretation of regression results can be misleading.

2. Regressions of observational data can be a good way of going beyond raw comparisons and averages.

Some of this discussion reminds me of the literature on the wage premium for risk, where people run regressions on salaries for comparable jobs in order to estimate how much people need to be paid to risk death or injury.. Based on my reading is that these studies can’t be trusted: if you’re not careful, you can easily estimate the value of life to be negative–after all, the riskiest jobs (lumberjack, etc.) tend to pay poorly, while the best-paying jobs (being Bill Gates, etc.) are pretty safe gigs. With care, you can get those regressions to give reasonable coefficients in the range of $1 million per life, but I don’t really see these numbers as meaning anything at all; they’re just the results of fiddling with the models until something reasonable comes out. I’m not saying that the people who do these analyses are cheating, just that they want reasonable results but the models seem too open-ended to be a good measure of risk premiums.

Jonathan Cohn at TNR:

Am I certain Keefe is right? No. Having spent some time reporting on public and private sector compensation before, I can tell you that there is a lot of disagreement over the proper way to adjust the raw compensation figures to account for variables like age, education, and so on. (The debate is as much philosophical as methodological: Some conservatives argue that public employers put an artificial premium on graduate education, effectively paying more for degrees that don’t make workers better qualified.) I haven’t seen a specific refutation of Keefe’s report on Wisconsin, but if you want to read an analysis that suggests public workers, in general, are over-compensated, Andrew Biggs of the American Enterprise Institute has done work along those lines–and has a new article in the Weekly Standard summarizing his views.

But I wonder if this whole debate misses the point. Suppose public workers really do make more than private sector workers. Who’s to say that the problem is public workers making too much, rather than private sector workers making too little?

Andrew Biggs at AEI:

While we’ll have a longer piece out on Wisconsin pay soon, I figured that in response to Cohn’s post I’d raise a couple issues regarding EPI’s report.

First, we’ve found a lower salary penalty for Wisconsin public employees than EPI did (around -5 percent versus -11 percent in EPI’s study). It’s not clear what’s driving the difference, since we’re using the same data, but that’s something to track down. It’s also worth noting that both our calculations and EPI’s control for firm size; this means that essentially we’re comparing Wisconsin public employees not to all private workers, but to employees at the very largest Wisconsin firms, who tend to pay more generous salaries and benefits. Whether to control for firm size is an open question, since if a given public employee didn’t work for the government there’s a good chance he wouldn’t work at a large private firm. But readers at least should be aware of the issue.

Second, the benefits shown in the EPI report aren’t actually for Wisconsin alone. They’re an average for the “East North Central Census Division,” which comprises Illinois, Indiana, Michigan, Ohio, and Wisconsin. Because the Bureau of Labor Statistics doesn’t publish compensation data at the state level (due to small sample sizes) regional figures are the best we’ve got. The problem is, if Wisconsin government workers get relatively better benefits than public employees in other states—which seems to be part of the argument that Governor Walker is making—then these figures will understate true compensation. For instance, in practice Wisconsin public employees make essentially no contribution toward their pensions (formally they must contribute around 5 percent of pay, but their employers almost always cover it). Nationally, public employees contribute an average of around 5.7 percent of pay to their pensions.

Third, the benefit measures in the EPI study are based on what employers pay, not what employees actually receive. This matters for public-sector defined-benefit pensions, which use much more optimistic investment return assumptions than private pensions (a 7.8 percent assumed return in the Wisconsin Retirement System, versus around a 4 percent riskless return in U.S. Treasury securities) and fund their benefits accordingly. Most economists think public pensions are wrong to make these assumptions, but what matters is that employees effectively receive those higher returns whether the investments pan out or not. Adjusting for the differences in implicit returns to pensions would increase total Wisconsin compensation by around 4 percent.

Fourth, and related, is that the EPI study omits the value of retiree health benefits, which most public workers receive but most private employees don’t. (Some very large firms still offer retiree health benefits, but they’re increasingly rare and increasingly stingy.) The value of retiree healthcare can vary significantly. For instance, most run-of-the-mill Wisconsin state retirees are offered the right to buy into the employee plan. This provides an implicit subsidy, since they’re buying at rates calculated for the working-age population rather than their own health risk. The value of this is equal to a percent or so of extra pay every year. Other employees, such as Milwaukee teachers, have almost all their premiums paid for them. Actuarial reports list these protections as costing over 17 percent of salaries, meaning that for these workers EPI’s approach would miss a lot of benefit income. In addition, even these actuarial studies value retiree health coverage at employer cost, not the benefit to the employee. A retired 60-year-old purchasing coverage in the individual market would pay significantly more than the reported cost of his public-sector retiree health plan, because individual coverage costs more than group coverage. Some studies place the cost differential at around 25 percent; the Congressional Budget Office’s health insurance model appears to assume something larger: they say that “once differences in the characteristics of nongroup versus ESI [employer sponsored insurance] policyholders are considered and different loading costs are considered, a typical nongroup policy has roughly 60 percent of the relative plan value of an average ESI policy. That finding is supported by a recent survey of nongroup and ESI premiums and relative plan values in California.” So we know something is being missed and we have good reason to believe that even when we find actuarial reports calculating the cost of retiree health coverage, it’s still an underestimate. Unfortunately, there’s no central data source for retiree health benefits, meaning there’s a lot of digging to get a correct answer.

Fifth, the EPI report doesn’t calculate the value of public-sector job security. In a given year, a state/local worker has less than one-third the chance of being fired or laid off as a private worker. There’s a long history in economics (back to Adam Smith, actually) of thinking in terms of “compensating wage differentials,” although it’s only in the last 20 years or so that there’s been much progress in measuring them. We took a somewhat different approach, of using financial tools to calculate the price of an insurance policy that would protect against job loss and counting the value of that insurance toward public-sector pay. In theory each should produce the same answer, but as always things are messy. There may be a way of using CPS data to get on top of this, though.

At the end of the day, I just don’t think we can make any final conclusions on state/local pay because so much of the data, particularly on the benefits end, is still too loosey-goosey. There’s just more work to be done. (At the federal level, though, the measured overpayment is so large that I’m willing to say I’m convinced.)

Ezra Klein, responding to Manzi:

Jim Manzi has posted a critique of the Economic Policy Institute’s study (PDF) suggesting that Wisconsin’s public-sector workers are underpaid relative to their private-sector counterparts. It basically boils down to the argument that this sort of thing is hard to measure. The study controls for most every observable worker characteristic that we can imagine controlling for. But there are, Manzi says, an “all-but-infinite” number of differences beyond that. Perhaps going into the public sector says something about a person’s level of ambition, or ability to take risks and tolerate stress, or tendency to innovate — something that, in turn, makes the private-sector worker worth more or less to the economy.

And fair enough. Maybe there is some systemic difference between Hispanic women with bachelor’s degrees and 20 years of work experience who put in 52-hour weeks in the public sector and Hispanic women with bachelor’s degrees and 20 years of work experience who put in 52-hour weeks in the private sector. If anyone has some evidence for that, I’m open to hearing it. But the EPI study is aimed at a very specific and very influential claim: that Wisconsin’s state and local employees are clearly overpaid. It blows that claim up. Even in Manzi’s critique, there’s nothing left of it. So at this point, the burden of proof is on those who say Wisconsin’s public employees make too much money.

Reihan Salam on Klein’s response:

I was struck by this sentence: “Even in Manzi’s critique, there’s nothing left of it.” I’ve known Jim for many years and I’ve read just about everything he’s written, including a few things that haven’t been published. I have never seen Jim write that Wisconsin’s state and local employees are clearly overpaid, or indeed that any employees are clearly overpaid. There are many right-wingers who’ve said that, but it’s not the way Jim has ever thought about the issue as far as I know.

I don’t want to put words in Jim’s mouth, here’s what I consider a slightly more Manzian take: the problem with public sector compensation is that there is often very little clarity in terms of whether or not taxpayers are getting a good deal. One of the big reasons right-wingers are so hot for merit pay, based on my limited experience, is that they’re generally pretty comfortable with the idea of at least some public workers making much more than they are making now, provided other workers who’d be willing to work for less because they’re not likely to attract better offers are either paid less or fired.

Let me underline this point: Some public workers, like really great federal procurement officers, might very well be “underpaid,” in that they’re always on the verge of jumping ship to better opportunities, they’re stressed about money all the time when they could be using their awesome Jedi procurement skills to save taxpayers money, and we could attract other awesome people to do this job if only we weren’t such tightwads. Others might be “overpaid,” in that there are people who really like the stability of working for a “firm” that will, short of invasion and military conquest, probably exist for at least another ten years and would be open to working for a bit less money if they had no choice in the matter. Do you think we have more of the former than the latter? That’s where analyses like Keefe’s come in, to offer a rough guide to the conversation.

I would love for conservatives to do a better job of talking about public sector compensation. The basic conflict is whether we think of creating more jobs, work effort, etc., as our goal, or if our goal is to deliver a service. If the latter is our goal, we presumably want to do it in the most cost-effective way, so that we can devote our time, money, and energy to other things we like doing more. By extension, this suggests that we really do want to pay people as little as we can to get the things that we want. Or:

Reihan Salam says:

We really do want to pay people as little as we can to get the things that we want.

What a bozo!

This relentless process of delivering services and goods for less money really does destroy jobs, but, in theory at least, it allows us to create new ones. We happen to be living in a historical moment when there’s not a lot of faith in that idea, partly because we’ve seen a steady decline in labor force participation rates due to tangle of implicit marginal tax rates, an incarceration crisis, interrelated social pathologies, and much else. I’m biased in favor of believing that we will create new job opportunities because almost everyone I’m close to works in jobs that they could not have done in the way they do them now even ten years ago. The goal is to use good public policy to bridge over transitional periods, and, by the way, a dynamic market economy is always in a transitional period.

Manzi responds to Klein:

Klein is correct to say that my post “basically boils down to the argument that this sort of thing is hard to measure.” But he then argues that the purpose of the original study was not to demonstrate that public sector workers are underpaid, but rather to rebut the claim that they are overpaid:

[T]he EPI study is aimed at a very specific and very influential claim: that Wisconsin’s state and local employees are clearly overpaid. It blows that claim up.

That may have been the author’s motivation, but here is the final conclusion of the executive summary of the report:

[P]ublic sector workers in Wisconsin earn less in annual or hourly compensation than they would earn in the private sector.

The report makes a positive claim that it has determined a compensation “penalty” for working in the public sector, and repeats it many times. My argument was that this report does not establish whether or not this claim is true.

By the same logic, it also fails to “blow up” the claim that Wisconsin’s public workers are overpaid. The methodology is inadequate to the task of establishing whether these workers are overpaid, underpaid, or paid perfectly. As the last paragraph of my post put it:

I don’t know if Wisconsin’s public employees are underpaid, overpaid, or paid just right. But this study sure doesn’t answer the question.

Statistician and political scientist Andrew Gelman has a very interesting response to my post, in which he agrees that this conclusion “sounds about right,” but cautions that the study is not “completely useless either” because this kind of adjusted comparison is better than simply comparing raw averages between public and private sector workers. I agree with that entirely. But that is, of course, a very different thing than saying that these adjustments create sufficient precision to support the bald statement, made in the report, that the author has analytically established that there is a “penalty” for working in the public sector.

Megan McArdle:

It’s obvious that this study doesn’t control for everything we can imagine, because it doesn’t even control for the matters that are of central dispute in Wisconsin: protection from being fired.  This is, as people on both sides keep noting, so extraordinarily valuable that workers are willing to give up quite a lot to get it.  And of course, a job that offers this sort of protection is likely to attract workers who especially value it.  All government jobs offer this perk, which is valuable to the workers and costly to the employers; ceteris paribus, I’d expect that other compensation would be lower to compensate.

Obviously, it also doesn’t control in any way for other job or worker characteristics that effect compensation; jobs working for state and local government are systematically different from other sorts of jobs, because so much of what the government does isn’t done by anyone else.  Though, oddly, for the teachers at the heart of this dispute, we do have a good comparison: private school teachers. And as I understand it, public school teachers have higher wages, and much better benefits, than private school teachers.

To which I expect the union’s boosters will say, “But jobs in private school are much more enjoyable–they don’t have to teach the difficult kids!”  Indeed, they’re right.  Which is exactly the point: there’s huge unobserved variable bias here.

There’s also the fact that the EPI study seems to be looking at means, which are going to be dragged upwards by a small number of highly compensated workers, particularly in the educated group.  But state and local wages are capped.  Meanwhile, some of the highest paid jobs in the private sector are in areas like commission sales, which have no counterpart in government. That means that the median worker is probably making much more than the median worker in the private sector.  This may not be true in some lucrative fields such as law and medicine–but even there, we tend to compare government lawyers to the highly paid people at white shoe firms or corporations, not the legions of struggling will-drafters and ambulance-chasers.

You can argue, of course, that this is an ideologically much more attractive income distribution.  Which highlights, I think, the core difference between the way people like Manzi and I look at this, and the way that progressives do.  I don’t think of state employment as a way to create, in miniature, my ideal labor utopia.  I think of it as a way to procure services.  I define people as being “overpaid” not if they are paid more than someone with a similar level of education, but if they are paid more than I need to entice to pay to attract adequate workers.  To analyze that, looking at medians is probably somewhat more instructive than looking at means.

Of course I agree with Manzi that this still doesn’t really tell us whether state workers are overpaid, underpaid, or just-right-paid.  I suspect that the answer is probably “both”–adjusting for worker quality, the median government worker is probably overpaid, while in skilled specialties, salaries are probably not attracting as much of the top-flight talent as we’d ideally like.  (This is why I have been advocating, futilely, that we make it possible to pay SEC employees multiples of what the President of the United States makes.)  But as Manzi, who does this stuff for a living, will undoubtedly tell you, setting compensation is a really hard problem that no one’s got a very good handle on.  So that’s just a suspicion, based on my experience of state bureaucracies, and my best guess at the incentive effects of the current structure.  I don’t have enough data to back me up.  And neither does EPI.

More Manzi:

Have I then set up a nihilistic position that we can never know anything tolerably well because I can just keep raising these points that might matter, but are not included in the model? In effect, have I put any analyst in the impossible position of proving a negative? Not really. Here’s how you measure the accuracy of a model like this without accepting its internal assumptions: use it to make predictions for future real world experiments, and then see if its predictions are right or not. The formal name for this is falsification testing. This is what’s lacking in all of the referenced arguments in support of these models.

Human capital models, fixed effects models, and other various pattern-finding analyses are useful to help build theories, but a metaphysical debate about the “worth” of various public versus private sector jobs based upon them is fundamentally unproductive. For one thing, it won’t ever end. And as Megan McArdle correctly put it, the practical question in front of us is whether we the taxpayers can procure the public work that we want at a lower cost (or more generally, though less euphoniously, whether we are at the practical optimum on the cost-quality trade-off). If you want an analytical answer to this question, here is what I would do: randomly select some jurisdictions, job classifications or other subsets of public workers, cut their compensation, and then see if we can observe a material reduction in net value of output in these areas versus the control areas. If not, cut deeper. And keep cutting deeper, until we find our indifference point.

There would be obvious limitations to this approach. First, generalizing the results of initial experiments is not straightforward. Second evaluating output is not straightforward for many areas of government. But at a minimum, and unlike the world of endlessly dueling regressions, this would at least let us see the real-world effects of various public compensation levels first-hand, and allow the public to make an informed decision about whether they prefer the net effect of a change to public sector compensation or not.

Who Is Happy With This Budget? No One? Bueller? Bueller?

David Rodgers at Politico:

Long on tough choices, short on final answers, President Barack Obama’s new 2012 budget goes to Congress on Monday in what many hope is only an opening bid before he and Republicans come to the table on a bipartisan deficit reduction plan.

For the current year, the White House projects a more-than-$1.6-trillion deficit — even higher than the Congressional Budget Office forecast. But outlays would actually drop in 2012 and stabilize in the $3.7 trillion range, as deficits fall to $1.1 trillion in 2012 and $768 billion in 2013.

After November’s election results, no one assumes this is sufficient, but more than any of Obama’s prior efforts, the new budget makes choices that help define the man himself.

He bets big on education spending — an 11 percent increase next year — while altering the Pell Grant program to try to save the aid levels now allowed for college students from the poorest families. The National Institutes of Health would grow by about $1 billion, even as old anti-poverty programs and heating assistance would be reduced. And $62 billion in Medicare savings would be plowed back into paying physicians who care for the elderly.

Foreign wars, particularly the one in Afghanistan, would cost $118 billion, but for the first time in many years, total expenditures for the Pentagon and military would begin to fall. And while Republicans ridicule Obamat’s five-year cap on domestic spending, it has bred new restraint in the president.

Jonathan Cohn at TNR, before the budget came out:

Between the administration’s recent statements and a series of calculated leaks, we have a pretty good idea of what Obama is trying to do. He’s going to call for spending more money on education and other public investments, but he’ll also endorse enough cuts to keep overall non-defense discretionary spending at last year’s levels. Elementary and secondary school education, for example, should get a boost. But Pell Grants, for low-income college students, are going to take a hit, albeit a carefully crafted one.* There will be more money for building high-speed rail but less for helping low-income families pay their heating bills.

Is this a good thing? In absolute terms, clearly, the answer is no. The demand for Pell Grants is unusually high right now; among other things, cash-strapped states are raising tuitions at state schools just as cash-strapped students and families have fewer resources to pay them. Energy costs for next winter, when the cut in heating assistance would take effect, are likely to be higher than at any time since 2008. Unless the economic recovery quickens very suddenly, plenty of people will struggle to pay those heating bills. And those are just two examples of program reductions that will leave needy Americans even more needy.

But everything is relative, and that means judging these cuts alongside both the modest increases you’ll find elsewhere in this budget and the much larger increases you saw in previous ones. Robert Greenstein, director of the Center on Budget and Policy Priorities, will spend the next few days dissecting the Obama spending request and, as he does, he will likely find plenty not to like. But, during an interview, he also put disappointments in context:

I think [Obama’s] record is very strong — major expansions in refundable tax credits for the working poor, major expansion of student financial aid for low-income students so that more of them can go to and complete college, and of course, major health reform that will extend coverage to 32 million uninsured people. This is the most impressive record of any president since LBJ.

Obama’s spending request looks even better when you consider what the Republicans would do if left to their own devices. They haven’t committed themselves to a 2012 budget just yet. But they’ve said they want a far deeper freeze than Obama’s, reducing non-defense discretionary spending to what it was in 2008. On Friday, they offered a preview of that vision when they announced their proposal for how to finance government for the remainder of the current fiscal year.

They want far more severe cuts to Pell Grants and home heating assistance, plus reductions to such essential services as food inspections and the elimination of programs like Americorps. They also want to reduce spending on the Special Supplemental Nutrition Program for Women, Infant, and Children. That initiative, known as WIC, provides nutritional assistance to expectant mothers and newborns. As Paul Krugman notes, that cut will hurt today and tomorrow, since kids who grow up malnourished are more likely to have problems later in life.

Ezra Klein:

Happy Valentine’s Day, Wonkbook readers: I know you said not to get you anything this year, but I saw the president’s 2012 budget coming out and, well, I couldn’t resist. Head here at 10:30AM EST to download it. You’re welcome.

The budget — which proposes to spend $3.73-trillion in 2012 — includes $1.1 trillion in deficit reduction over the next 10 years. Two-thirds of that comes from spending cuts, with the largest chunk the administration’s proposed five-year freeze of non-security discretionary spending. The final third comes in tax increases. If all goes well, that’ll take the deficit down from the 10.9 percent of GDP we’re projecting for 2011 to 3% of GDP in 2017 — a much more manageable level. Entitlements, tax expenditures, and other traditionally toxic parts of the federal budget are not being addressed. The final document bears very little resemblance to the report produced by the president’s fiscal commission.

One thing to note: The document assumes that the high-income tax cuts expire in 2012, as they’re currently projected to do. The administration isn’t counting that in their $1.1 trillion of deficit reduction, but if the prediction is wrong and the Bush cuts do get another extension, they’ll wipe out most of this budget’s savings in one fell swoop. Conversely, if we decided to get serious about the deficit and let all of the Bush tax cuts expire in 2012 — yes, including the cuts for the not-so-rich — the reduction in the deficit would be vastly larger than anything envisioned in this budget. It’s an odd turn of events, but for all that this budget, and the various Republican proposals, attempt to actually do for the deficit, the biggest single thing we could do would be to do, well, nothing: Let the Bush tax cuts expire and let the health-reform law and the associated Medicare cuts and excise tax get implemented as planned. Doing by not doing: That’s the zen of deficit reduction. Somehow, I doubt Washington will find it very calming.

Peter Suderman at Reason:

Echoing the administration’s line that “the easy cuts are behind us,” Politico’s David Rogers says Obama’s 2012 budget is “long on tough choices.”  That depends on how you define “tough.” Jake Tapper of ABC News gives those alleged hard choices some context: “At no point in the president’s 10-year projection would the U.S. government spend less than it’s taking in.” By the president’s own definition, then, today’s budget plan isn’t sustainable.

Instead, the president outlines a plan that would keep the yearly deficit above $1.6 trillion this year and around $1.1 trillion the year after. The 10-year plan is to shave off about $1.1 trillion from the next decade’s total expected deficit. But in the context of a $7 trillion-plus projected deficit, this is hardly a breakthrough, or a serious fix. Last December, the president’s own fiscal commission proposed about $4 trillion in cuts, including an overhaul of Social Security. The president’s budget, by contrast, barely touches our unsustainable entitlements—and certainly doesn’t offer anything in the way of major reform.

In other words, despite the president’s recognition of the basic math underlying our country’s ongoing fiscal distress, his budget still doesn’t fix the problem that we spend more than we make. So much for confronting the facts.

Brian Darling at Redstate:

The fact of the matter is that the President is using fuzzy math to create an inflated budgetary baseline (in other words he has inflated projected spending over a 10 year period) so that he can claim cuts that don’t exist.  Today is the President’s day to pitch his plan, but the Obama Administration has to answer why his baseline is so inflated and why he is planning to raise taxes at a time of economic pain.

The President’s budget has something called the “Bridge From Budget Enforcement Act Baseline to Adjusted Baseline.”  This is the math theory used to create the fiction of cuts to the deficit.  This document has a “Budget Enforcement Act Baseline” deficit of $5.5 trillion over the 2012-2021 period and adds in some calculations to inflate that deficit baseline.

The President is actually cutting the projected deficit using projections created by his own administration.  This is a great way to make it look like he is going to balance the budget in 2021, a date where he will be far away from the Oval Office and in no way can he be blamed if his numbers do not pan out.

The Obama Administration adds in a factor, the “indexing to inflation the 2011 parameters of the Alternative Minimum Tax” which adds $1.5 trillion to the Obama baseline.  Then the Obama numbers crunchers add a continuation of the tax cuts for middle income taxpayers to the tune of $1.3 trillion.  Please note that this projection does not calculate in an extension of tax cuts for job creators — this is an projected increase in taxes starting in the first year of President Obama’s replacement.

More Obama math.  Add in a $3.3 trillion in program adjustments and $642 billion in debt services on adjustments.  Add in all of these projections to the baseline and you have adjusted the baseline from $5.5 trillion to $9.39 trillion in debt from 2012-2021.  That is how you adjust debt upward to make it look like the President’s budget is cutting spending.  You inflate projected spending over the next 10 years then increase spending at a lower rate than the baseline, you can create a “cut.”

On taxes, the President has hidden a massive increase in the gas tax.  There is a line item in the President’s budget summary tables titled “Bipartisan financing for Transportation Trust Fund” that adds up to $328 billion from 2012-2021.  In the President’s Bipartisan Debt Commission Report, they recommended a 15 cent increase in the gas tax.  The President’s budget seems to assume that his commission’s report is implemented by Congress and send to his desk.  This is an implicit endorsement of a massive increase in the price of gas at the pump in the form of increasing the federal gas tax from $18.4 cents.  If this idea does not pass, then you have a $328 billion shortfall in the projected transportation budget.

Jonathan Chait at TNR:

Andrew Sullivan is back from his absence and in incredibly high dudgeon over the Obama administration’s failure to propose a more austere budget. Andrew concedes that any such proposal would fail and exact huge political damage upon Obama but somehow thinks it’s unconscionable Obama didn’t do it anyway:

The cynical political calculation is obvious and it is well put by Yglesias and Sprung. If Obama backs Bowles-Simpson, the GOP will savage him for the tax hikes, while also scaring the wits out of the elderly on Medicare. The Democratic left – just look at HuffPo today – will have a cow. Indeed, if Obama backs anything, the GOP will automatically oppose him. He has to wait for a bipartisan agreement which he can then gently push ahead. But that’s exactly why we are in this situation today. Because no president has had the balls to deal with it, and George W. Bush made it all insanely worse.

So… why would proposing something that gets shot down not be not only useful but an absolute moral obligation? I don’t really get it. It seems like the smart play is to first win the budget showdown and try to beat some sanity into the Republicans, who can’t possibly compromise right now, and then either cut a deal or (preferably) just let the GOP kill the entire Bush tax cuts for you, which would more or less take care of the medium-term deficit problem.

Anyway, that’s not even my main point. My main point is that Andrew seems to endorse the endlessly discredited doc fix myth:

But in a mere nine years, entitlements will account for 64 percent of all federal spending. And Obama just punted on his promise to cut Medicare payments to doctors, as pledged under Obamacare as a core part of the case that health insurance reform would cut the deficit. So congrats, Megan. We can chalk that up as a cynical diversion (even though Obama pledges to find savings elsewhere in the Medicare budget to make up for this lie – a promise we now have no reason to trust or believe).

Once again, the physician reimbursement is not part of the Affordable Care Act. It’s part of a poorly-drafted 1997 law. Promising to carry out the never-intended 1997 physician reimbursement cuts was not part of the Affordable Care Act. Nor is it anybody’s idea of good policy. I’ve seen this myth circulating among conservatives and hard-core libertarians but it’s the first time I’ve seen it leap over the ideological divide. One of my many attempts to dispel the myth can be found here.

Andrew Sullivan:

Chait says there is no point in Obama proposing a real solution to the country’s medium-term fiscal collapse … because of the nature of the current Republicans. That’s Jon Cohn’s and Josh Marshall’s position too. I have not exactly been easy on the GOP either and their fiscal fraudulence when it comes to the long-term debt. And yet Tom Coburn boldly came out in favor of Bowles-Simpson, and Saxby Chambliss and Kent Conrad are on board for serious long-term entitlement and tax reform. It seems a little strange to believe that a GOP just elected on a platform of ending the debt would oppose Bowles-Simpson’s outline for eventual fiscal sanity. And if they did, Obama could call them out for their fiscal recklessness.

Instead, Obama’s transformation into a “what debt crisis?” liberal means that the GOP for the first time can legitimately call Obama out on his fiscal recklessness. Like Megan, I can see the point of spending in a recession. But when you have a new opportunity to set a new fiscal compass in a slowly recovering economy, outflank the GOP on the long-term debt, and help prevent a looming fiscal collapse, and you give the lame-ass SOTU Obama gave and unveil the risibly unserious budget we got yesterday, you reveal yourself as, well, not exactly change and certainly not hope.

I am not turning on the president given the alternatives, but I am not going to use the alternatives as excuses for the president to shirk his core responsibility to the next generation. I didn’t send eight years excoriating George “Deficits Don’t Matter” Bush to provide excuses for Barack “Default Doesn’t Matter” Obama. Like other fiscal conservatives, I’m just deeply disappointed by Obama’s reprise of politics as usual – even as the fiscal crisis has worsened beyond measure in the last three years. My point is that actually being honest about the budget and what it will take to resolve its long-term crisis is not political suicide, as Chait says. It’s statesmanship. It’s what a president is for.

One reason many of us supported this president was because he pledged not to return to the cynical politics of the Washington game in which partisan maneuvring always, always outweighs the national interest. But what he is telling us now is that he is indeed a classic pol, aiming for re-election, even if the US risks becoming a fiscal banana republic in the next decade.And if you really wanted to help the economy, wouldn’t reassuring domestic industry and international markets that the US is not on an auto-pilot for default be a lot more effective than planning more broadband access (however admirable that may be)? Does the president really believe that leaving Medicare and defense and Medicaid as they are is sustainable?

Leadership is not a bullshit SOTU that dredges up that ancient cliche about a “Sputnik moment” (really, Favreau? That’s all you got?), as if Obama were Harold Wilson extolling the “white heat” of the technological revolution as some sort of cure-all. It is not new slogans like “cut and invest”, which involve trivial amounts of money in the grand scheme of the things and may do actual harm to good government programs, instead of tackling where the real money is. It isn’t trimming a pathetically small amount from defense, while still adhering to Cold War troop deployments across the entire globe.

The Roof, The Roof, The Roof Is On Fire

Jonathan Cohn at TNR:

The U.S. appears to be the only country in the developed world that forbids its government from accumulating debt without authorizing legislation. And that’s led to some scary moments, including one that the economist Henry Aaron shared with me recently.

During the early years of the Kennedy Administration, Congress passed an increase in the debt ceiling at the last minute. But when JFK went to sign the bill, according to Aaron, nobody could find the document. Treasury Secretary Douglas Dillon wanted to know what would happen if the government reached its debt ceiling and an administration lawyer, after some brief research, reported that “it seems, Mr. Secretary, that you are personally liable for interest on the debt.” Dillon, who was an investment banker, pressed the lawyer: How much would that be? “About $150 million a day,” the lawyer reportedly said, prompting Dillon to deadpan “I can’t last more than three days.”

It’s a funny story because it had a happy ending: Kennedy’s advisors eventually found the bill. And if they hadn’t, they would have gotten together with Congress and found some other way to raise the debt ceiling. That’s because, relatively speaking, they were grown-ups who took governing seriously.

Fifty years later, can we say the same thing? Sometime in the next few months, the U.S. will reach its debt limit and Congress will, once again, have a choice: Raise the limit or let the U.S. default on its obligations. For a while now, Tea Party Republicans like Senator Mike Lee, who unseated the insufficiently conservative Robert Bennett in Utah, have been threatening to vote against the debt ceiling increase unless they win substantial reductions in government spending. Idle threats about refusing to raise the debt ceiling are nothing new, but the Tea Party crowd seems quite serious about it–in part because they’ve promised their base they’re going to do it.

And now it looks like they have company. On Sunday’s “Meet the Press,” Republican Senator Lindsey Graham announced that he, too, was willing to engage in serious brinkmanship over the debt:

I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long-term debt obligations, starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means tests for benefits. On the spending side, I’m not going to vote for debt ceiling increase unless we go back to 2008 spending levels, cutting discretionary spending.

As many others have noted, the demand of going back to 2008 spending levels is radical and, not coincidentally, highly unrealistic: According to the Center on Budget and Policy Priorities, it’d amount to a one-fifth cut in discretionary spending–forcing cuts that could damage the fragile recovery and starve programs like Pell Grants that most Americans value.

Daniel Foster at The Corner:

Unlikely as it may seem at the moment, I’m becoming more and more convinced that congressional Republicans can get a lot — in terms of spending cuts, entitlement reforms, and the like — in exchange for agreeing to raise the federal debt ceiling at some point in the next few months.

My argument is dead simple.

P1) The debt ceiling won’t be raised without a ‘yea’ vote from Sen. Lindsey Graham (R., S.C.)

P2) Senator Graham said on Meet the Press that

“I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long-term debt obligations, starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means tests for benefits. On the spending side, I’m not going to vote for debt ceiling increase unless we go back to 2008 spending levels, cutting discretionary spending.”

P3) The debt ceiling must be raised.

C: Graham will get what he wants, or something approximating it. That is, there will be significant revenue-side concessions from Democrats in exchange for support from the likes of Graham and Senate Republicans in his ideological neighborhood.

Don’t buy it? Okay, so which premise is false? P1? Does anyone think 53 Democrats can overcome a filibuster, in a tea-infused Senate, on anything significant, without Lindsey Graham? P3? Does anyone think either party’s leadership will allow a federal debt default?

That leaves P2, which, admittedly, is the shakiest. It rests on us taking a politician at his word. But Graham has been — for good and ill — remarkably transparent about his strategic calculus when it comes to votes. Remember when he publicly, and baldly, abandoned the energy bill he helped write because Harry Reid was going to make his life in South Carolina exceedingly difficult by doing immigration reform first? Graham is a known bipartisan deal-maker, and one of the few Senate Republicans with an open line to the White House. So not only does Graham almost certainly want to make a deal, but he is in a better position than most to know what kind of deal is possible. Indeed, knowing Graham’s style, the hidden premise in his Meet the Press comments is that he has reason to believe Democrats in the White House and in the Senate are willing to negotiate.

Bruce Bartlett:

This morning, CEA chairman Austan Goolsbee warned Republicans against playing games with the nation’s credit rating by refusing to raise the debt limit and creating a technical default. I have been warning people about this problem for more than a year because I know there is a widespread belief among the nuttier right-wingers that a debt default is just what the country needs to force massive spending cuts into effect. Many stupidly believe that the budget would be balanced overnight because the government couldn’t spend any more than the available cash flow from taxes would permit.

Since I first started writing about this danger, some of these nutty right-wingers have been elected to Congress under the Tea Party banner. Since many have never served in elected office before and know virtually nothing about economics or finance, I don’t think they realize that they are playing with fire when they even hint at the possibility of a debt default. They are like children playing with matches.

What I haven’t figured out how to properly convey is that a default triggered by a failure to raise the debt ceiling is of a completely different nature than the sort of default that Ken Rogoff and Carmen Reinhart wrote about in their book. All of those cases were market-driven, where investors refused to buy or refinance a nation’s debt because of fiscal profligacy, irresponsible monetary policies etc. A U.S. default, by contrast, would be 100% self-inflicted based on loss of the Treasury’s legal authority to issue bonds, not because of a lack of market demand for those bonds. The historically low level of real and nominal interest rates on Treasury securities is proof that there is still strong demand for Treasury securities.

I have spent considerable time trying to figure out what exactly would happen in the event that, at some point, the Treasury literally had no cash to pay interest on the debt, redeem maturing securities, pay Social Security benefits and so on. Some people believe that the Treasury has an almost unlimited ability to fudge the problem indefinitely. But I know that there are analysts at the GAO who are very concerned about hitting a hard limit on the Treasury’s legal authority not long after the debt ceiling is breached. The law is very unclear and has never been tested in court.

As far as I am aware, no other country on Earth has the idiotic policy that the United States has of having a legal limit on the amount of bonds the central government can issue. They correctly recognize that the deficit and the debt are simply residuals resulting from the government’s tax and spending policies. It makes no sense to treat the debt as if it is an independent variable.

Tom Maguire:

That whistle you hear on down the tracks heralds an impending train wreck, as Tea Partiers brace for a vote on raising the debt limit sometime in the next few months.

Let’s get a sense of their attitude – some thoughts:

…raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion.That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers…

…

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.

Put him down as “Undecided”.  Ooops, my bad!  That was Barack Obama himself, speaking in 2006.  Put him down as “Present”.  And now, as “President”.  The shoe is on the other foot, sauce for the goose, and away we go.

Republicans will be having a lot of fun with that speech (as they did a year ago) but I hope they eventually suck it up and do the right thing.  Bruce Bartlett worries that they won’t.

Jonathan Bernstein:

First of all, it’s worth mentioning that way back in 2006, long, long, ago, we still didn’t have a 60 vote Senate: the debt ceiling increase passed by a 52-48 vote, with no cloture vote at all because the Democrats didn’t filibuster it.  As far as I can tell from a quick search of the reporting back then, the Democrats did threaten to attach amendments (and wound up forcing at least one recorded vote), but they didn’t use it as leverage (by filibustering or threatening to filibuster) to, say, force a withdrawal from Iraq.

Now, in fact, I don’t know that using the threat of default to win policy victories is irresponsible.  Even bluffing that you’re going to destroy the country if you don’t get what you want…I don’t know that I’d say that would necessarily be irresponsible.  Actually going through with it, though: yeah, that would be about as bad as it gets.  So I’d make a distinction not just between pure posturing and terrible behavior, but between pure posturing, responsible negotiations, and irresponsible negotiations.  And I’ll note that we probably can’t guess which one is going on until the end of the game.

John Cole:

I suppose it is too much to ask that the Democrats run a competent political operation and point out that the Republicans have no actual plan for governance, but intend to simply play chicken with the debt ceiling and hold investigations of the travel office and other crap like that.

If Lindsey Graham wants to go after social security, the Democrats should not do or say a thing until the Republican proposal is in bill form and the details are included. Let them be the party that wants to go after grandma’s income. Let’s see DeMint’s plan for the default of the United States.

Having watched Obama the last two years, I’m reasonably sure the brain trust in charge of the political operation will instead pretend the Republicans are serious and offer more than the Republicans as an opening bid, and then watch themselves get undercut but the douchebag Blue Dogs and flayed alive by the professional left. That’s just how they roll. Morans.

There’s Something About Mittens

David Frum at Frum Forum:

There is an old joke that Wagner’s music is not as bad as it sounds. Something similar can be said of Romney’s campaign economics. Concealed within the triangulation are some very smart ideas. I remain convinced: this man could be a very good conservative president – if conservatives will permit it.

Mickey Kaus at Newsweek

Ross Douthat:

I hear similar things from Romney supporters (or people trying to convince themselves to be Romney supporters) with remarkable frequency. Yes, the argument runs, Romney seems serially insincere, and nearly every position he stakes out comes across as a blatant (and often inconsistent-looking) pander to a conservative electorate that regards him with suspicion. But there are good ideas concealed within the pandering — you just have to know where to look! And in your heart, you know he’s a smart guy who’d make a solid center-right president — wonkish, detail-oriented, sensible on policy, all the rest of it. He’s just a prisoner of the process! And heck, maybe his transparent insincerity is even a virtue: It shows that try as he might, he can’t give himself over completely to the carnival of a primary campaign, because he’s fundamentally too sober and serious to be a carnival barker. (He’s no Palin, is the implication …) Even when he’s mid-pander, you always know that he knows that it’s all just a freak show, and you can always sense that he’d rather be at a policy seminar somewhere, instead of just forking red meat. There’s a highly competent chief executive trapped inside his campaign persona, in other words, and the only way to liberate him is to put him in the White House!

This is an … unusual argument. That doesn’t mean it’s wrong: There were probably people who said the same thing about George H.W. Bush during his lackluster 1988 race — and he did turn out to be a reasonably good president, all things considered. But there’s still an element of absurdity about it. I believe that Mitt Romney is a more serious person, and would probably be a better president, than his campaign style suggests. But issue by issue, policy by policy, that same campaign style makes it awfully hard to figure out where he would actually stand when the pandering stops and the governing begins. In the last couple years, Romney has taken high-profile positions that I agree with (opposing the G.M. bailout), high-profile positions that I disagree with (opposing the START Treaty), and high-profile positions on issues I’m uncertain about (the current tax deal). But because everything he does feels like a pander, I don’t know where he really stands on any of them. And freak show or no freak show, base or no base, that’s no way to run for president.

Frum responds to Douthat:

I sometimes imagine that Romney approaches politics in the same spirit that the CEO of Darden Restaurants approaches cuisine. Darden owns Olive Garden, Longhorn steakhouses, and Red Lobster among other chains. Now suppose that Darden’s data show a decline in demand for mid-priced steak restaurants and a rising response to Italian family dining. Suppose they convert some of their Longhorn outlets to Olive Gardens. Is that “flip-flopping”? Or is that giving people what they want for their money?

Likewise, the “pro-choice” concept met public demand so long as Romney Inc. was a Boston-based senatorship and governorship-seeking enterprise. But now Romney Inc. is expanding to a national brand, with important new growth opportunities in Iowa and South Carolina. A new concept is accordingly required to serve these new markets. Again: this is not flip-flopping. It is customer service.

You may say: But what does Romney think on the inside? Which of his positions is the “real” Romney? I’d answer that question with another question. Suppose an Olive Garden customer returns to the kitchen a plate of fettuccine alfredo, complaining the pasta is overcooked. What should the manager do? Say “I disagree”? Explain that it’s a core conviction to cook pasta to a certain specified number of minutes and seconds, and if the customer doesn’t like it, she’s welcome to take her patronage elsewhere? No! It doesn’t matter what the manager “really” thinks. What matters is satisfying each and every customer who walks through the door to the very best of the manager’s ability.

Ross Douthat fails to understand that meeting customer expectations is itself a principle!

Ezra Klein:

I enjoyed this analogy, but it doesn’t work. The presidency carries a four-year lock-in, while the Olive Garden doesn’t. Put it this way: If going to the Olive Garden meant only eating at the Olive Garden for the next four years, it’d be a real problem if they lured you in with pasta and breadsticks and then, three months later, turned the place into a hookah bar that served only salmon burgers. Some people might find that to be an improvement, and some people might not, but that’s not the point: A fishy hookah bar isn’t what you signed up for.

Frum is right that customer service can be a principle in and of itself. And I’d be really interested to see a presidential candidate promise to better represent the people by explicitly using polls to steer his or her presidency. But that’s not what Romney is promising. He’s promising to do certain things, and uphold certain values, when in office. If he’s lying about that, it’s not customer service. It’s betrayal yoked to a four-year contract.

Matthew Yglesias:

Ezra Klein points out some problems with this line of thought. But I think the real issue here has to do with character. The executives of Darden Restaurants are basically trying to make money. And so are the owners of the firm. And that’s fine. Most of us aren’t so distressed by the idea that the firm is, on some level, a soulless money-making machine. But on this view, Romney is . . . what? A soulless power-seeking machine?

To a large extent our political system is already biased toward promoting power-crazed sociopaths into positions of authority. The public’s aversion to people who appear to have this quality to a greater extent than other high-profile politicians seems very understandable to me. Meanwhile, at the end of the day Ross Douthat is right to say that this still leaves you necessarily puzzled by the question of what a Romney Administration would actually do. Is it so crazy for political activists and pundits to be curious about this?

Daniel Larison:

Something that helps make sense of Romney’s positioning is its largely reactive quality. Despite his past claims that he understands leadership, he never leads on any issue. During the presidential campaign, Romney endorsed granting Detroit a huge subsidy when he thought it might help him in the Michigan primary. Later the same year, he fiercely opposed bailing out Detroit, because he perceived that support for the auto industry was not useful to him. He supported the TARP when that was the default Republican leadership position to take, and has since become a fierce critic of the management of the TARP once he realized that being identified as pro-TARP was politically toxic. The candidate who famously said that he “liked mandates” and has endorsed a mandate as the “conservative position” when he wanted to brag about his achievements cannot abide the individual mandate when it positions him against the health care bill. In other words, he has the ability to position himself for short-term political advantage rather well, but seems to have no notion of how to take one position–whether he “really” believes it or not–and stand by it for more than a year or so if there is some brief advantage to be had in changing positions in the meantime. This is what creates the impression that he has no enduring goal or vision other than the acquisition of political office and influence. All the while, he has the insufferable habit of embracing each and every new position with the zeal of a convert, convinced that he now has the moral authority to denounce anyone who disagrees, and then casually abandoning or neglecting the issue when something else shiny catches his attention.

My guess is that Romney doesn’t “really” have a stand on any of these issues, but what is annoying is not simply Romney’s lack of principle. Many and possibly most politicians are not that deeply committed to principles, and that’s to be expected, but Romney attaches a degree of smugness and sanctimony to the exercise that is genuinely obnoxious. What should be bothersome to his supporters is that his pandering is so impermanent and fleeting that he inspires no confidence that he will be in the same place a year or two from now. Very simply, he can’t be counted on and can’t be trusted.

Andrew Sullivan

Jonathan Cohn at TNR:

You may not believe this, but I know how Douthat and Frum feel.

Notwithstanding my liberal beliefs and general affinity for Democratic politicians, I once had very high hopes for Romney as a presidential candidate. He had raw intelligence and management acumen, as his tenure at Bain Consulting demonstrated. In Massachusetts politics, he’d staked out moderate positions, pledging not to interfere with a woman’s right to abortion (in part because a family friend had died after an illegal procedure) and criticizing conservatives like Jesse Helms and Pat Robertson in interviews with gay community newspapers.

Most important of all, Romney had accomplished something meaningful in office, signing the Massachusetts health care reforms. In a profile for TNR, here’s how I described that episode:

Romney’s subsequent work on the health care bill showcased his best qualities–reminiscent, in many ways, of his days at Bain. For advice, he tapped some of the state’s top minds on health–even those, like MIT’s Jonathan Gruber, who had traditionally advised Democrats. For political support, he reached out to traditional champions of expanded coverage, such as former House member John McDonough, turning these would-be adversaries into allies. And, above all, he went into negotiations with an open mind. The result was a bill that had enough support to get all the way through the legislative process. Romney ended up signing the bill in a grand public ceremony on the steps of Fanueil Hall. Standing at his sidewas his old nemesis, Ted Kennedy–who, it turns out, had worked closely with Romney on sealing the deal. “I’m a partisan Democrat, and, in a lot of ways, I think he was a terrible governor,” says one high-ranking legislative staffer who worked on the measure.”But I do give him credit for participating in the health care debate and helping to advance that agenda.”

All of this made me think that Romney was the heir to the tradition of moderate Republicanism that his father, former Michigan Governor George Romney, had once championed. During the 1960s, the elder Romney had fought the good fight against the Republicans’ Goldwater wing, urging the party to distance itself from John Birchers and other conservative extremists. The elder Romney never made it as a presidential candidate but maybe the younger Romney would.

Mitt wouldn’t be getting my vote, obviously: He was still pretty conservative, particularly on economic issues. But I thought his problem-solving instincts and apparently sincere interest in public service would serve him well and that, when it was all over, he might end up doing good things in office.

But by early 2007, when I began the reporting of my profile, Romney was in full pander mode–saying whatever it took to win over the Republican base, even if that meant campaigning as precisely the sort of conservative ideologue his father had once disdained:

…if any one moment epitomized the new Mitt Romney, it was his speech before the Conservative Political Action Committee (CPAC) in February. There, gathered in one place, were the intellectual and ideological heirs to the conservative movement that first captured control of the Republican Party in the 1960s. But Mitt Romney had not come to carry on his father’s fight against the right wing. He had come, instead, to do what every other aspiring Republican presidential nominee was doing: beg for the group’s approval. After being introduced by Grover Norquist, the conservative activist perhaps most responsible for the radical makeover of government economic policy in the last decade, Romney began his speech by suggesting it was a “good thing” the crowd would soon hear from Ann Coulter, who was next on the speaking agenda. From there, he fed the crowd red meat–attacking Ted Kennedy, Nancy Pelosi, and the press; promising to fight the liberal social agenda, to close U.S.borders, and to never, ever raise taxes. “This is not the time for us to shrink from conservative principles,” Romney thundered. “It is time for us to stand in strength.”

Romney’s latest panders make me wonder not if those of us who believed in Romney were wrong about him from the beginning. After all, it was Ted Kennedy, back in 1996, who first zeroed in on Romney inconsistencies on abortion with the devastating line: “He’s not pro-choice, he’s not anti-choice. He’s multiple choice.”

Ezra Klein

Mori Dinauer at Tapped:

I think Ross Douthat is essentially correct when he says that Mitt Romney‘s policy dexterity is so extreme that it renders judgment on his hypothetical presidential administration all but futile. I used to think that because Romney will bend in any direction he could be reasoned with, and thus could be a reasonable president. Not any more. The fact that we have no idea what he would do strongly suggests that he is no longer qualified for the office in the first place.

Cynthia Tucker:

Mitt, you old chameleon, you

Virginia Is Not For Lovers Of A Mandate

Kevin Sack at NYT:

A federal district judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first court in the country to invalidate any part of the sprawling act and ensuring that appellate courts will receive contradictory opinions from below.

Judge Henry E. Hudson, who was appointed to the bench by President George W. Bush, declined the plaintiff’s request to freeze implementation of the law pending appeal, meaning that there should be no immediate effect on the ongoing rollout of the law. But the ruling is likely to create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.

In a 42-page opinion issued in Richmond, Va., Judge Hudson wrote that the law’s central requirement that most Americans obtain health insurance exceeds the regulatory authority granted to Congress under the Commerce Clause of the Constitution. The insurance mandate is central to the law’s mission of covering more than 30 million uninsured because insurers argue that only by requiring healthy people to have policies can they afford to treat those with expensive chronic conditions.

The judge wrote that his survey of case law “yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, not withstanding its effect on interstate commerce or role in a global regulatory scheme.

Daniel Foster at The Corner:

Suit was brought by Virginia attorney general Ken Cuccinelli.

“I am gratified we prevailed. This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution,” said Cuccinelli in a statement.

Cuccinelli has made the extraordinary request that the case bypass the regular appellate order and proceed directly to the highest court, arguing that the Obama administration, too, would benefit from a speedy resolution.

Josh Marshall at Talking Points Memo:

A year ago, no one took seriously the idea that a federal health care mandate was unconstitutional. And the idea that buying health care coverage does not amount to “economic activity” seems preposterous on its face. But the decision that just came down from the federal judgment in Virginia — that the federal health care mandate is unconstitutional — is an example that decades of Republicans packing the federal judiciary with activist judges has finally paid off.

Tom Maguire

Jonathan Cohn at TNR:

Hudson’s ruling is not unexpected. He is a Republican appointee with a history of conservative rulings. Nor is it definitive. Two other federal district judges, Democratic appointees both, have already ruled that the entire law passes constitutional muster. A fourth decision, by a judge in Florida, is expected by year’s end.

Most legal experts expect that, eventually, the case will come before the U.S. Supreme Court. Hudson himself acknowledged as much, writing “The final word will undoubtedly reside with a higher court.”

And how might the five Republican appointees and four Democratic appointees on the Surpeme Court rule? Most court observers I know believe that at least one of the Republican appointees, most likely Anthony Kennedy, would agree with the government that the Affordable Care Act falls well within traditional boundaries of the taxing and interstate commerce powers. (For an example of such logic, see the Michigan ruling from a few weeks ago.)

I tend to think those experts are right, for reasons I’ll get around to explaining one of these days. Then again, I recall hearing similar confidence about another highly anticipated court ruling–one about, oh, ten years ago.

For more on the mandate and some varied opinions on how an adverse ruling by the Supreme Court might affect the Affordable Care Act overall, see Aaron Caroll, Jonathan Gruber, Ezra Klein, and Igor Volsky.

Meantime, if you’re looking for a more generic primer on the individual mandate, I highly recommend this video from the Kaiser Family Foundation.

Orin Kerr:

I’ve had a chance to read Judge Hudson’s opinion, and it seems to me it has a fairly obvious and quite significant error. Judge Hudson assumes that the power granted to Congress by the Necessary and Proper Clause — “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers” — does not expand Congress’s power beyond the Commerce Clause itself. The key line is on page 18:

If a person’s decision not to purchase health insurance at a particular point in time does not constitute the type of economic activity subject to regulation under the Commerce Clause, then logically an attempt to enforce such provision under the Necessary and Proper Clause is equally offensive to the Constitution.

Judge Hudson does not cite any authority for this conclusion: He seems to believe it is required by logic. But it is incorrect. The point of the Necessary and Proper clause is that it grants Congress the power to use means outside the enumerated list of of Article I powers to achieve the ends listed in Article I. If you say, as a matter of “logic” or otherwise, that the Necessary and Proper Clause only permits Congress to regulate using means that are themselves covered by the Commerce Clause, then the Necessary and Proper Clause is rendered a nullity. But that’s not how the Supreme Court has interpreted the Clause, from Chief Justice Marshall onwards. Indeed, as far as I know, not even the most vociferous critics of the mandate have suggested that the Necessary and Proper Clause can be read this way.

Ezra Klein:

he real danger to health-care reform is not that the individual mandate will be struck down by the courts. That’d be a problem, but there are a variety of ways to restructure the individual mandate such that it doesn’t penalize anyone for deciding not to do something (which is the core of the conservative’s legal argument against the provision). Here’s one suggestion from Paul Starr, for instance. The danger is that, in striking down the individual mandate, the court would also strike down the rest of the bill. In fact, that’s exactly what the plaintiff has asked Hudson to do.

Hudson pointedly refused. “The Court will sever only Section 1501 [the individual mandate] and directly-dependent provisions which make specific reference to 1501.” That last clause has made a lot of pro-reform legal analysts very happy. Go to the text of the health-care law and run a search for “1501.” It appears exactly twice in the bill: In the table of contents, and in the title of the section. There do not appear to be other sections that make “specific reference” to the provision, even if you could argue that they are “directly dependent” on the provision. The attachment of the “specific reference” language appears to sharply limit the scope of the court’s action.

Doug Mataconis:

In this particular case, the next step on the appellate ladder would be the Court of Appeals for the Fourth Circuit, which has generally had a reputation of being among the more conservative Courts of Appeal.  However, Virginia’s Attorney General has reportedly been mulling the idea of  applying to the Supreme Court to leave to bypass the  Court of Appeals and proceed directly to the final state of the appellate process. Even if such an application were made, there’s no guarantee it would be granted so the the case may end up in the 4th Circuit anyway, but this strikes me as mistake. It seems to me that a final hearing before the Supreme Court might have a better shot, for Virginia, if it had other rulings against the law from other Courts behind it.

In any event, it’s clear that the Federal Government was unable to overcome much of the initial skepticism that Judge Hudson expressed about the arguments in favor of the mandate in his ruling on the government’s Motion to Dismiss. On the Commerce Clause, Hudson ruled that the requirement that American citizens purchase health insurance or face a penalty to exceed even the relatively liberal bounds of Congressional authority as set forth in case likes Wickard v. Filburn and Gonzalez v. Raich and that failure to act cannot itself be considered an act occurring within interstate commerce. On the government’s backup argument that the mandate and it’s penalty are justified under Congress’s far broader authority to tax for the “general welfare,” Hudson essentially ruled that the taxing power cannot be used to accomplish a purpose not authorized under the specific grants of power given to Congress under Article I, Section 8, and that the Attorney General’s argument is undercut by the fact that both Congress and the President specifically denied during the build up to passage of the Affordable Care Act that the mandate was a tax (a relevant fact because it goes to the question of Congressional intent).

Finally, rather than declaring the entire ACA unconstitutional, Hudson’s decision merely enjoins enforcement of the individual mandate. However, given the fact that mandate is the centerpiece of the entire regulatory scheme, it is hard to see how the rest of the law could survive without it.

This case is obviously going to be appealed, but it’s nonetheless a victory for Virginia, and it’s noteworthy as one of the few times in recent memory that a Court has said to Congress — no, you can’t do that. For that reason alone, it’s a good thing.

Elizabeth Edwards: 1949-2010

The Week

Michael Tomasky at The Guardian:

How bizarre that it was just two days ago that word came that Elizabeth Edwards’ doctors recommended against further treatment, a step that suggests the person’s time is short, but still measured in weeks, usually; and then boom, it was just yesterday that she passed away at 61 from breast cancer.

I always feel a poignancy about people like this who didn’t ask for the spotlight but were thrust into it. The one false step I felt she made was that time she stood there with her husband in March 2007 to announce that though her cancer had returned, John’s campaign would continue. That was mostly on him of course, and it was one of many signs that made me really suspicious of the guy: your wife’s cancer starts attacking her again and you’re not suspending your campaign? It’s quite possible that she was complicit in this against her will, in that way political wives often have to be.

But far overwhelming that, she handled many difficult public stresses with grace in the last few years. Can you imagine being humiliated by a jackass spouse in front of the world and having to fight cancer; having to leave him while knowing that it meant that your life partner wouldn’t be there with you for the end of the battle? And then still working in the public arena for the things she believed in. And on top of all that, she had to bury a child, which is clearly the worst thing that can happen to a person in this life (I know; my parents had to).

Meghan O’Rourke at Slate:

In 2006, after my mother was diagnosed with stage IV colorectal cancer at the age of 52, I felt a weird connection to Elizabeth Edwards. In some ways she reminded of my mom. They looked a little alike, they seemed to share a kind of pragmatic idealism and the gift of natural authority, and they both had advanced cancer in their 50s. So I felt warmly toward Edwards, and I rooted for her in her struggle, and I defended her when friends thought she was foolish to go on the campaign trail while ill. She should be at home with the kids, they said. Why? I wondered. The strange truth of cancer is that it both doesn’t transform you and does; it lifts you up, but it cannot make every moment holy, or perfected, or ideal. My mother chose to keep running a school, though it arguably might have been “better” for her health if she hadn’t. So who were any of us to say that Edwards shouldn’t devote her time to helping her husband become president? What did we know of the strange internal transactions that the ticking timer might produce?

Of course, I was hardly alone in my attachment to Edwards. One of the most distinctive things about her wasn’t just how much she suffered and survived—in addition to her cancer, she witnessed both the death of her son, Wade, in 1996, and of course her husband’s infidelity with Rielle Hunter—but how much of this suffering took place in public, where every move was analyzed and judged. Despite all this Edwards frequently acquitted herself with an aplomb and equanimity that led Arianna Huffington to speak of Edwards’ having “suffered multiple setbacks with so much grace” on CNN’s Parker Spitzer Tuesday night. Inarguably, Edwards did have what my colleague Hanna Rosin called an “ability to seem, in the same moment, invincible and also vulnerable and exposed” that appealed to many people, especially women.

But defending Edwards’ choice to soldier on in politics got a lot more complicated when it became clear that she’d known of her husband’s affair and yet continued to campaign for him. Women who had lionized her were crestfallen to find that she had believed (or that she’d pretended to believe) the affair was a mere one-night stand. Who was this credulous Elizabeth? Where had the straight-talking pragmatist gone? The revelation, as Rebecca Traister put it when Edwards appeared on Oprah in 2009 and let it be known that her husband had persuaded her he should stay in the race, was “crushing to anyone with an idealized view of Elizabeth Edwards.”

Ezra Klein:

The first time I came to Washington as an adult, I came to visit Elizabeth Edwards. It was May 2005, and a few weeks earlier, I’d gotten an e-mail inviting me to dinner with her and her husband. The invitation came from Elizabeth, but the one I was excited to meet was John. I was, after all, a young political junkie, and John Edwards was — or at least just had been — a real live presidential candidate.

There were a couple of bloggers invited that night, and when I rang the doorbell, it was John Edwards who answered and ushered me in. Behind him was a woman I didn’t recognize. She was heavyset with short gray hair, and she was setting the table. I assumed she was staff or perhaps an older relative. Then, of course, she came and sat down.

Edwards was then being treated for cancer, and she’d decided against wearing a wig that night. There was a sweet moment when John Edwards tried to rally the bloggers to convince Elizabeth she didn’t need to wear a wig at all, not ever, but she didn’t want to talk about that.

I wish I had a clearer memory of exactly what she did want to talk about that night. I remember the dinner. Lasagna and steamed broccoli and baked-meats-in-sauce that Edwards had made herself and that she shuttled back-and-forth from the kitchen while making complicated points about national security. I remember how impressed I was with her mind and how the excitement of meeting her husband was quickly overshadowed by the pleasure of meeting her. But what I really remember is what we talked about on other nights: Health-care reform.

The video atop this post is from a 2008 event I moderated on behalf of Campus Progress. It was Edwards’s first public event after the 2008 campaign and the subsequent revelations of her husband’s infidelity, and this was what brought her back into the public eye. Health-care reform. When she showed up, she was carrying a 50-page journal article that used survey data to connect foreclosures to health-care costs. She was the real deal, as you can see from her blogging on the subject.

Jonathan Cohn at TNR:

Edwards took her advocacy seriously and, fittingly, she was a serious advocate. A lawyer with a degree from the University of North Carolina, Edwards studied the health care system closely. Having interviewed her a few times, I can tell you that she understood the policy debate better than most politicians and, yes, quite a few journalists. But it was her passion for the issue that really stood out. She thought that making the health care system more decent and humane was a moral imperative. And she didn’t shy away from talking about it in those terms.

Following the revelations of her husband’s infidelity, which happened just as her cancer was returning, the media started describing her as a tragic figure. But she had come to know the true meaning of tragedy many years before, when her son, a teenager, died in a car crash. That she rebuilt her life and spent so much of her life advocating for others was truly admirable.

Edwards will not be forgotten. But she will be missed.

Jonathan Alter at Newsweek:

The scandal involving John Edwards’s affair with Rielle Hunter broke only days after my wife and I had dinner with Elizabeth and her brother in New York. I thought much of the coverage was gratuitous; after all, John Edwards wasn’t even in politics anymore and his wife was sick. Couldn’t we give it a rest? But I was appalled enough—and chagrined enough by my own inability to see beneath the surface of things—that I made no effort to contact her. Not long after, she sent me a one-sentence email apologizing for letting me down. It was cryptic and sad.

Elizabeth (not to mention her husband) had reason to apologize, especially to the scores of campaign workers who had uprooted their lives to work for Edwards. She had known of the affair before the cancer recurrence and should have taken that moment to make sure John withdrew from the race. Their decision to move forward anyway—a product of her fierce ambition as much as his own—was selfish and unfair to the millions of people committed to electing a Democratic president.

I later heard that the danger of nominating a candidate who could easily be blown out of the water in the fall campaign was perhaps not as great as it seemed. Had Edwards won Iowa, a few Edwards aides who knew of the affair were prepared to go public, destroying his chances. Or they might have chickened out.

Elizabeth handled the aftermath of the scandal badly. She used interviews for score-settling and wrote a second book, Resilience, that had Too Much Information. It seems she did eventually realize that. “There are certainly times when we aren’t able to muster as much strength and patience as we would like. It’s called being human,” she wrote on her Facebook page on Monday.

Americans love nothing more than to build up their politicians and other celebrities before ripping them to pieces. And so it bears repeating that these people are people, too. The culture kicked Elizabeth Edwards when she was already down. Now everyone is sad and sorry, but it’s too late.

So The Summer Will Be Ending Just The Way The Summer Began

Max Fisher at The Atlantic:

An oil rig off the coast of Louisiana in the Gulf of Mexico has exploded, sending all 13 oil workers into the Gulf, one of whom remains missing. A search and rescue effort by the U.S. Coast Guard is already underway. The explosion comes shortly after oil finally stopped flowing into the Gulf (for the moment) from another rig that had been severely damaged by a large explosion. Fortunately, early reports say this explosion occurred at an oil rig that is not currently producing, drastically reducing the potential for further environmental damage.

Despite strong encouragement from many liberals and environmental activists, that crisis did not secure sweeping energy reform legislation or the full Democratic backing of long-sought cap and trade proposals. Even President Obama’s offshore drilling moratorium was initially knocked down by a state court. In the wake of that long and difficult episode, many are greeting this most recent event with deep, almost macabre cynicism about our ability to learn from disaster.

Michelle Malkin:

Pray for the workers. Brace for the political aftermath.

Allah Pundit:

DHS claims that the rig wasn’t producing oil and gas when the explosion hit. Time to breathe easy? Maybe not: CNN’s Ed Henry is hearing from the Coast Guard that the platform was in production and that it … wasn’t equipped with a standard blowout preventer. (The crew did, however, allegedly start emergency shutdown before bailing out.) As of an hour ago, the rig was still on fire but I’m not sure what the status is now. Jindal is set to speak within an hour or so. Stand by for updates galore.

Update: WDSU says that because it’s a platform, not a rig, it’s not actively engaged in drilling.

Update: A tip from a reader who, unlike me, knows what he’s talking about:

If the platform is not a drilling platform then it doesn’t need a traditional blowout preventer. The difference being is that with drilling the oil is being forced out at a high rate, therefor need a blowout preventer that can hold back all that pressure. If this platform is a production platform, all it needs is something to stop the flow in the pipes which is flowing with much lower pressure.

Update: How much oil and gas was the platform churning out? CNN:

“Mariner has notified and is working with regulatory authorities in response to this incident,” the statement said. “The cause is not known, and an investigation will be undertaken. During the last week of August 2010, production from this facility averaged approximately 9.2 million cubic feet of natural gas per day and 1,400 barrels of oil and condensate.”

Update: Oh boy. Here we go:

The Coast Guard is saying that a mile-long oil sheen is spreading from the site off an offshore petroleum platform that exploded in the Gulf of Mexico off Louisiana.

The site of the explosion is west of where BP’s massive spill occurred.

Update: Ah, a comforting explanation for the sheen. It’s not oil bubbling up from the seabed; it’s oil that had already been captured and stored on the rig.

Also, Mariner indicated that the fire — which was first reported to the Coast Guard by workers on a nearby rig around 9:20 a.m. (10:20 a.m. ET) — was not sparked by an explosion. It started at one of the platform’s seven active wells, the company said, though its cause is under investigation…

Jindal said that Mariner has told him that all seven wells have been closed off and that what is burning now is from fuel in storage, and not from an active leak.

Jonathan Cohn at TNR:

The Coast Guard says it has rescued all 13 workers and, so far, it looks like we’re not in for a repeat of the Deepwater Horizon disaster, according to New Orleans Times-Picayune. This rig, which is owned by Mariner Energy, was in much shallower waters–340 feet deep rather than a mile.

And while the well was producing oil, Mariner officials say that workers shut down the operation before evacuating. The officials also said they observed no leaking oil during a flyover, conducted while the rig was still burning.

The Times-Picayune reports that the drilling “had nothing to do with the drilling operations that fell under the government’s controversial moratorium after the BP spill.” But oil and gas industry officials remain worried this incident will set back efforts to end the moratorium:

…oil and gas industry insiders, who have fought for months to get the moratorium lifted, are concerned that the accident will be perceived as something that a moratorium would prevent.

“It’s certainly disheartening, and it is going to be yet another challenge for the industry,” said Chris John, president of the Louisiana Mid-Continent Oil & Gas Association.”We were making some progress on the moratorium. This certainly will complicate matters.”

Yes it will. And I can’t say it upsets me. While this incident may not strengthen the case for the existing moratorium, it should certainly remind people that there are hazards inherent in offshore oil operations–and that we should be working harder to reduce our reliance on fossil fuels.

Update: Coast Guard officials are now saying they did not see an oil slick on the water, following reports suggesting they had.

Mary Katherine Ham at The Weekly Standard

James Joyner:

Aside from snark about the irony that this didn’t happen when oil men Bush and Cheney were at the helm, I’m not sure what to make of this.  Clearly, federal regulation of Gulf oil drilling has been spotty — and that certainly extends to the Bush-Cheney tenure, when this well was drilled.  And some companies seem to have markedly more violations than others, with no meaningful penalty.

Choire Sicha at The Awl:

Why should we care? We all know that oil apparently just goes away. Just like Gulf War I prepared us for Gulf War II, so has Gulf Spill I inured me to this latest.

Also I don’t really need to think about the fact that Mariner Energy, which owns the blown-up oil rig, has at least two top executives who worked at Enron, right?

Richard Lawson at Gawker:

Luckily, it was non-producing and there are no reported deaths. But man, oil companies really shouldn’t have listened to that sinister Explode-O-Rig 5000™ salesman.

The Saucer Remains Cool

Alexander Bolton at The Hill:

Senate Democrats do not have the votes to lower the 60-vote threshold to cut off filibusters.

The lack of support among a handful of Senate Democratic incumbents is a major blow to the effort to change the upper chamber’s rules.

Democratic leaders in both the House and Senate are pushing for filibuster reform at the start of the new Congress next year.
Five Senate Democrats have said they will not support a lowering of the 60-vote bar necessary to pass legislation.
Another four lawmakers say they are wary about such a change and would be hesitant to support it.

Doug Mataconis:

The filibuster as it exists has been in place for decades and has served very well it’s primary function of ensuring that the minority has the voice it was intended to, and to ensure that the Senate serves it’s intended function of putting a brake on the populism of the House of Representatives.This is a concept that James Madison communicated quite well when spoke of the reason why the Senate provided equal representation to the states regardless of size in Federalist No. 62:

[T]he equal vote allowed to each State is at once a constitutional recognition of the portion of sovereignty remaining in the individual States, and an instrument for preserving that residuary sovereignty. So far the equality ought to be no less acceptable to the large than to the small States; since they are not less solicitous to guard, by every possible expedient, against an improper consolidation of the States into one simple republic.

Another advantage accruing from this ingredient in the constitution of the Senate is, the additional impediment it must prove against improper acts of legislation. No law or resolution can now be passed without the concurrence, first, of a majority of the people, and then, of a majority of the States. It must be acknowledged that this complicated check on legislation may in some instances be injurious as well as beneficial; and that the peculiar defense which it involves in favor of the smaller States, would be more rational, if any interests common to them, and distinct from those of the other States, would otherwise be exposed to peculiar danger. But as the larger States will always be able, by their power over the supplies, to defeat unreasonable exertions of this prerogative of the lesser States, and as the faculty and excess of law-making seem to be the diseases to which our governments are most liable, it is not impossible that this part of the Constitution may be more convenient in practice than it appears to many in contemplation.

Thanks to the passage of the Seventeenth Amendment and other changes in American politics over the past two centuries, the “protection of the states’ purpose of the Senate has been muted somewhat, but the Senate still plays the role that Jefferson and Washington anticipated it would:

The “Senatorial saucer” conversation between George Washington and Thomas Jefferson is part of U.S. Senate legend. Jefferson had returned from France and was breakfasting with Washington. Jefferson asked Washington why he agreed to have a Senate.

“Why,” said Washington, “did you just now pour that coffee into your saucer before drinking it?”

“To cool it,” said Jefferson; “my throat is not made of brass.”

“Even so,” said Washington, “we pour our legislation into the Senatorial saucer to cool it.”

It’s unclear if this conversation ever actually took place, and it’s probable it didn’t, but it nonetheless describes quite aptly the role the Senate, and the filibuster, plays in our system. There’s no reason to change it.

Jonathan Cohn at TNR:

The nine senators wary of or opposed to abolishing the filibuster include some of the caucus’ most conservative members, including Max Baucus, Ben Nelson, and Mark Pryor. And that’s hardly surprising.

When it takes 60 senators to pass all legislation, the Democratic leadership has to rely on these people not only for their votes but also for their cache among Republicans. In other words, Democrats aren’t going to get Charles Grassley to vote for a bill if Max Baucus doesn’t vote for it, too. That’s going to matter even more next year, after the elections, if/when the Democrats lose seats and need Grassley (plus a few others) to move legislation.

Of course, the filibuster empowers individual Democrats at the expense of the party as a whole. If it’s sixty-votes-or-bust for the next few years, Democrats may be done passing major initiatives.

Jonathan Bernstein on Cohn:

One of the problems with thinking about these things is that our eyes are often fixed on the present.  With the Democrats at 59 Senators, it’s easy to focus on the threshhold of 60 votes for getting cloture, especially with Republicans using a rejectionist strategy pegged to requiring cloture to be achieved on every bill and nomination.  It’s worth stepping back and remembering that Senate majorities are usually smaller, and often much smaller.  Needing 60 has certainly made a difference in this Congress, but the filibuster may be a whole lot less important in other Congresses (as in cases of divided government).  That doesn’t mean that reform is a bad idea, but only to realize that for Democrats, this is more likely to be a 2013 problem than a 2011 problem.

That said, what I’d advise reformers to do is to concentrate their efforts on urging candidates to take strong stands on the issue.  When the time comes for action, which Democrats hope will be at the beginning of the 113th Congress in January 2013, they want as many Senators as possible to be committed to change.  The second thing I’d recommend is for reformers to prepare a package of relatively minor changes for January 2011, in order to demonstrate the point that each Senate can effect rules changes by majority vote.  Again, unless there’s a surprise Democratic sweep this November, I wouldn’t worry so much about pressing senior and marginal Democratic Senators on lowering the 60 vote needed for cloture.  Instead, I would try to find smaller streamlining procedural reforms that are relatively noncontroversial on their own (such as, perhaps, eliminating the filibuster on the motion to proceed, or changing for needing 60 for cloture to needing 41 to stop cloture) — whatever procedures, no matter how insignificant they may be substantively, that marginal and senior Dems are willing to support — and press to have a majority-rules vote on implementing them.

Megan McArdle:

I’m broadly pro-filibuster, but then I have an aversion to legislative activity, so that’s hardly surprising.  But whether or not you support it, I see little hope of changing it unless we get a long period–ten or so years–of single-party dominance.  At this point, Democrats would be crazy to do this.  They’d get a few months before they lose so many seats in the House that–even if they don’t lose entirely–they won’t have enough votes to do much.

And in exchange, they risk empowering a Republican Senate majority–if not in 2010 (which I think is very unlikely) then in 2012.  It’s absolutely true that Reagan and others had less popularity at this point in their presidency than Obama.  Unfortunately for Obama, financial crises take a long time to recover from.  The recession that ate away the popularity of Reagan was a classic monetary contraction that led to a boom as soon as Fed Chair Paul Volcker loosened his iron grip.  There’s a very good chance that in two years, Obama is still going to be trying to explain why unemployment is above 8% and GDP is kind of anemic.  If that’s the case, the Republicans will hold the house and the senate at the end of 2012.

Mind you, I’m not saying that this chance is above 50%.  But a 35% chance is a pretty big risk.  Democrats are strategically correct to focus on consolidating and defending the gains they’ve gotten, rather than risk having all of it undone in order to make a few lesser gains.  I understand that it’s hard for progressives to say that the major progressive achievements under this administration are pretty much all in the past.  But the leadership is saving them from themselves.

Matthew Yglesias on McArdle:

Megan McArdle thinks the likes of me should think twice about filibuster reform: “[Democrats] risk empowering a Republican Senate majority — if not in 2010 (which I think is very unlikely) then in 2012.”

I really wish people would stop treating this kind of consideration as a knock-down refutation of the case for reform. I really and truly think it would be better to let the Senate vote by majority rules. That’s what I thought in 2005, it’s what I think in 2010, and it’s what I’ll think in 2015.

But anyone who is holding out on reform out of fear of empowering future Republican majorities should consider that for all the reasons Democrats will have the chance to change the rules in January 2011, Republicans will be able to change the rules in 2013 or 2015 or whenever else. The only reason filibustering has been allowed for as long as it has has been because of strong norms against its over-use. But those norms have been eroding for decades. The idea that Senate majorities are going to allow this trend to continue indefinitely is silly. The way this movie goes is that the downward spiral of obstruction continues until some majority gets sick of it and changes the rules. The question is when will the rules change not will they be changed.

Ezra Klein:

If you can’t manage the 60 votes to overcome a filibuster, you can’t manage the 67 votes to change the rules and end the filibuster. At least in theory.

But in practice, there’s another path open to the Senate’s growing ranks of reformers: The so-called “constitutional option,” which is being pushed particularly hard by Sen. Tom Udall, but is increasingly being seen as a viable path forward by his colleagues.

The constitutional option gets its name from Article I, Section V of the Constitution, which states that “Each House may determine the Rules of its Proceedings.” In order to fulfill this constitutional order, the Senate must be able to, well, determine its rules. A filibuster, technically, is a way to stop the Senate from determining something by refusing to allow it to move to a vote. Because stopping the Senate from considering its own rules would be unconstitutional, the chair can rule against the filibuster, and the Senate could then move to change its rules on a majority vote.

One caveat: Many people, including Udall himself, believe this has to happen at the beginning of a new Congress. If it doesn’t happen at the beginning of a new Congress, then Congress is considered to have acquiesced to the previous Congress’s rules, and a filibuster against further rule changes wouldn’t interrupt the constitutional right to determine the rules.

This is not a radical theory, or a partisan one: Both Richard Nixon, then the vice president and thus the president of the Senate, and Robert Byrd, then majority leader and considered the greatest parliamentarian to ever walk the chamber, have argued in favor of the constitutional option.

Martin Gold recounted Nixon’s argument in a 2004 article for the Harvard Law Review: “Nixon reasoned that because no Senate could deny a future Senate the ability to exercise a constitutional right, and because Rule XXII, paragraph three [the filibuster] “in practice” prevented a majority of Senators from adopting new rules, Rule XXII, paragraph three, was unconstitutional,” at least when it came to blocking consideration of new rules. Byrd was even pithier: “This Congress is not obliged to be bound by the dead hand of the past,” he said.

But for all the theory, the constitutional option has never quite been used in practice. Instead, it’s been repeatedly, and effectively, almost used. In 1917, Senate reformers were ready to use against the filibuster. A compromise was brokered, and that’s how cloture — the ability to shut off a filibuster — was created. In 1975, reformers again were ready to wield it against the filibuster, and this time, a motion to uphold the constitutional option passed and a motion to table it failed. And again, a compromise was brokered, this time bringing the number of votes necessary to breach the filibuster down from two-thirds of the Senate to three-fifths. The option was also considered for various reasons in 1953, 1957, 1961, 1963, 1967, 1969, 1971, and 1979.

And that gets to the real role that the constitutional option could play: If Democrats lay out a clear path to changing the rules through a majority vote, and if they show enough unity to convince Republicans that they’ll really try it, you might see a hasty decision to reach some sort of bipartisan compromise on the rules. But if Democrats push this strategy only to find themselves unable to follow through on it, they may find that they’ve lost their ability to protest rules changes if Republicans decide to pursue the same strategy when they eventually retake the Senate.

Ed Morrissey:

The trick, of course, is getting the necessary 51 votes in January.   Democrats may find themselves short, if the midterms turn into a tsunami.  Even if they have 52 or 53 votes, enough Democrats have to stand for re-election in 2012 that the remaining Democrats may wish to consider whether they want to hand a filibuster-buster to a majority Republican chamber in 2013.  The 2006 election was particularly good to Democrats in the Senate, and they’ll be defending a lot more seats than the GOP — likely with an unpopular President at the top of the ticket.

Under Ezra’s scenario (which is well researched, by the way, so read it all), the incoming majority of the 113th Congress could simply adopt the filibuster-buster rule from the 112th Congress by not making any changes to it.  It’s a default at that point, and Republicans would have to act to allow Democrats to have filibuster power.  If the GOP defeats Obama in that same election, it means no more judicial filibusters, no way to stop legislation, and the elimination of the need to consult across the aisle at all.

So will they want an unfettered President Palin or President Jindal, for example, to appoint judges to the Supreme Court and lower benches?  Leave themselves with no way to stop a Republican agenda led by a President Daniels or a President Herman Cain?  If they find that palatable, then expect the much-smaller Democratic majority to sign up for that notion in January, if it exists at all.  I suspect that most Democrats have been in the Senate long enough to know how it works to be in the minority — and that the same folks on the Left who want to eliminate the filibuster will bemoan its absence shortly thereafter.

The Screaming Of The Charts

Daniel Indiviglio at The Atlantic:

A Chart That Screams, ‘Extend Unemployment Benefits!’

[…]

This chart shows a serious problem. That giant gap consists of Americans who are unemployed, and couldn’t get a job even if they wanted to. This emphasizes the need for Congress to extend unemployment benefits. It’s pretty clear that millions of Americans remain unemployed because the jobs aren’t there — not becuase they aren’t trying hard enough to find them. In fact, it’s not even close.

Ezra Klein:

‘A Chart That Screams, “Extend Unemployment Benefits!” ‘

You’ll have to excuse me for simply stealing Daniel Indiviglio’s headline for this chart, but it’s really the right way to introduce it:

James Joyner:

I’m sympathetic to the notion that we need to constrain government spending.  But this seems a particularly cruel bill on which to make that stand.  And, aside from the “but Republicans support tax cuts for the rich while railing against deficits” canard, there are all manner of more expensive, wasteful programs to cut.

I’m also sympathetic to the philosophical objections.  There’s simply no question, as Daniel Hamermesh points out that we have “huge amounts of research showing that extending the potential duration of unemployment benefits creates an incentive for the unemployed to search less and remain unemployed longer.”  How could it not?

But, as he points out, “most of the research describes behavior in average economic times, not when the unemployment rate is 9.5%.  What little research is available suggests smaller effects when there are fewer job vacancies.”  And, needless to say, there are fewer job vacancies right now.  The world economy has been in the toilet for two years now and there are strong signs things will get worse before they get better.

Jonathan Cohn at TNR:

You know that really annoying contrarian? Maybe he was in your grad school seminar. Or, perhaps, he was part of a listserv on public policy. Whatever. He was the guy who was always telling everybody they were wrong and–this is the annoying part–he often turned out to be right. You wished he weren’t around, but you were also glad that he was.

Scott Winship is that guy. He’s smart and, yes, he can be a real pain in the ass. The talk of an unemployment crisis got his attention. Maybe, he figured, this was another case of people misreading the data or, perhaps, misusing the data…

Scott Winship:

When it comes to economic conditions, I’m generally a glass-three-quarters-full kind of guy.  Take unemployment.  Quick—what was the risk in 2008 that an American worker would experience at least one bout of unemployment?  Chances are you thought that that risk was higher than one in eight.*  But figures from government surveys indeed suggest that thirteen out of fifteen workers (or would-be workers) had not a single day unemployed during the first year of the “Great Recession”.** (Incidentally, the recessions of the mid-1970s and the early 1980s were also called the “Great Recession” by some commentators.)

The 2009 data won’t be out until later in the year, but if last year ends up comparable to the depths of the early 1980s recession, then the average worker will “only” have had a seven in nine chance of avoiding unemployment.***  But these figures overstate economic risk because some unemployment is voluntary and much of it is brief.  According to the Congressional Budget Office, the chance that a worker experienced an unemployment spell lasting more than two weeks during the three years from 2001 to 2003 was just one in thirteen—a period covering the last recession.

So as I’ve been following the debate about unemployment insurance and whether it actually worsens the unemployment rate, I’ve actually been open to the idea that being able to receive benefits for up to two years might create perverse incentives.  The research is not as uniformly dismissive of the idea as some liberal assessments have implied (go to NBER’s website and search the working papers for “unemployment” if you want to check this out yourself).

In particular, the idea that there were 5 people looking for work for every job opening struck me as sounding overly alarmist.  So I started looking into the numbers to determine whether I thought they were reliable.  The figures folks are  using rely on a survey from the Bureau of Labor Statistics called the Job Openings and Labor Turnover Survey, which unfortunately only goes back to December of 2000.  But the Conference Board has put out estimates of the number of help wanted ads since the 1950s.  Through mid-2005, the estimates were based on print ads, as far as I can tell, but the Conference Board then switched to monitoring online ads.  You can find the monthly figures for print ads here and the ones for online ads here.  The JOLT and unemployment figures are relatively easy to find at BLS’s website.

I’ll just say I was shocked and that I am much more sympathetic to extension of unemployment insurance than I was yesterday.

Matthew Yglesias:

Winship writes “I’ll just say I was shocked and that I am much more sympathetic to extension of unemployment insurance than I was yesterday.”

I don’t think people should be dismissive of the idea that unemployment insurance has a disemploying impact on incentives. And that’s why in normal times you don’t want to offer an unlimited amount of unemployment insurance. But faced with a massive gap between the number of people looking for work and the number of job openings, this just doesn’t matter as much as it otherwise would and the humanitarian and aggregate demand impacts are way more important.

Ryan Avent at Free Exchange at The Economist:

At the same time, it’s important to remember that the best thing one can do for the unemployed is to get them employed. In a piece today providing an economic argument for extended unemployment benefits, Larry Summers quotes President Obama as saying:

Lasting unemployment takes a toll on families, takes a toll on marriages, takes a toll on children.  It saps the vitality of communities, especially in places that have seen factories and other anchoring businesses shut their doors.  And being unable to find work – being able to provide for your family – that doesn’t just affect your economic security, that affects your heart and your soul.  It beats you up.  It’s hard.

And he’s right. As Brad DeLong noted in his latest By invivation piece:

Workers who are out of work—especially workers who are out of work for a long time—lose a good deal of their market-relevant human capital. Their networks of contacts that allow them to easily get and change jobs, their habits of punctuality, their workplace skills, and their self-esteem all erode. The long-term unemployed, especially, drop out of the effective labor force—and it is damnably hard to reattach them all to employment absent a full-scale World War II-style inflationary boom.

In their recent contribution to the Brookings Papers on Economic Activity, Michael Elsby, Bart Hobijn, and Ayşegül Şahin explain that the longer workers spend in unemployment, the slower is their subsequent rate of exit from unemployment. Mr Summers answer to this is that unemployment benefits are stimulative:

[U]nemployment insurance puts money in the pockets of the families most likely to spend the money – which in turn expands the economy and creates jobs. The nonpartisan Congressional Budget Office has identified increased aid to the unemployed as one of the two most cost-effective policy options for increasing economic production and employment.

Missed unemployment insurance payments since May total over $10 billion – enough to have created 100,000 jobs.

That’s a fair point, but the 100,000 jobs created by those payments are clearly insufficient to employ the 2.5 million unemployed affected by the lapse in benefits.

What should be clear is that America’s current unemployment policies are woefully unprepared to handle a labour market like the present one. As important as it is to keep families out of destitution, it’s also necessary to focus on ways to keep unemployed workers in those families attached to the labour force and prepared to get and succeed in a job when one is finally available. Otherwise, the long-term unemployed will linger on growing ever less employable, joblessness will become structural, and America can get ready to face its own bout with European-style hysteresis.

Reihan Salam:

Scott Winship has a powerful post on the ratio of job openings to unemployed workers. The numbers are sobering, and speak to Smith’s broader point. Yet if we do make it out of this cyclical downturn, as I believe we will, what will the economy look like on the other end? I think that’s an important question, and it’s the question that I tend to dwell on, though I can see why some might find that frustrating given the urgency of the immediate unemployment crisis.