Derek Thompson
Derek Thompson is a staff editor at Atlantic Business, where he writes about economics, business and technology. Derek has also written for BusinessWeek and Slate.
About Thompson
Derek Thompson is a blogger at TheAtlantic.com and staff editor for the Business Channel, where he writes about economic policy, technology, and the media industry. His writing may include trace amounts of romantic comedy allusions. Derek graduated from the Medill School of Journalism at Northwestern University with a triple major in journalism, political science, and legal studies, but he doesn't plan on doing anything with that last bit. He has also written for
Slate,
BusinessWeek and
The Daily Beast. He has appeared as a guest on radio and television networks, including CBS News Radio, the BBC, and CNBC. If you, too, understand the world primarily through sports metaphors, you might want to
follow him on Twitter.
When the economy collapses, the federal government runs a deficit. This is basic economic stuff. Americans have less money so tax revenue goes down. The government sends more money out to Americans to keep demand alive, and deficits go up. On the other hand, our 50 states do not have the opportunity to run deficits during recessions, because they are constitutionally required to balance their budgets. So states are slashing spending and raising taxes during a…
"Rise in Washington unemployment rate seen as a good sign." No, that's not an article in The Onion. It's not from a memo circulating among Republican strategists, or from bankers trying to securitize unemployment benefits. That's a real headline today in the Washington Post.To explain why they might not be crazy, let's remember what the unemployment rate is. It's the number of people out of work divided by the labor force, which is everybody who counts as either…
Health care reform has hit a new snag. It's not the excise tax, or the individual mandate. It's student loan reform.Huh? What does student loan reform have to do with extending health care coverage or bending the cost curve? Nothing at all! But Democrats are hoping to pass a measure that would eliminate private student lenders in the same reconciliation "side car" where health care reform could pass through the House and Senate. Seven Senate Democrats -- Sens.…
Today was not a good day for Rep. Paul Ryan. The conservative wonk's fiscal roadmap would dramatically change US tax policy and revamp our entitlement system in the name of deficit reduction. But as two tax policy centers announced today, Ryan's deficit reduction plan doesn't actually reduce the deficit. Whoops.What does it do exactly? Well, a lot of things. On the tax side, it turns the income tax into a two-rate system, eliminates most deductions and the…
Greg Mankiw, the Harvard professor whose textbooks are hallmarks of introductory economics, has a story he'd like to share. He asks us to imagine we have a friend who constantly spends more than he earns (friend = America). This friend tells you he's going Bermuda. This is another metaphor for health care spending. Here's the conversation:
The 3-D TV market sounds like it's about to explode. I don't completely understand why.Don't get me wrong: I love television, I love all three dimensions, and together I'm sure they could make something just splendid. But why would I buy a 3-D television today, when prices are high (as they always are for first-time technologies without widespread competition) and precious few networks are offering 3-D content? We are essentially talking about an expensive normal…
One of my favorite myths is that information is free. We think information is free because we're used to paying for access -- cable bills, smart phone data packages, Internet -- but not for content -- like ABC, or Google's mobile search, or a magazine website. But we're still paying. In that vein, Eduardo Porter wonders whether TV should move away from cable buffets to an a la carte model where we pay for individual shows.This is an interesting idea with…
The Senate is close to passing a new $150 billion stimulus package that would extend jobless aid for up to a year. Over the past few days I've written quite a bit about why I think extending unemployment benefits is a no-brainer. For Cato Institute employment expert Alan Reynolds, it's also a no-brainer -- that we should stop extending them.Before we get to the chat (and it's a long chat!) let's look at the raw numbers of the worst jobs crisis in 60 years. We've…
Everybody knows that "figuring out" online advertising is an enormous challenge. Newspaper publishers miss the days when big ad images on dead trees in readers' hands could fund a real news staff with enough money left over to keep the coffee flowing and the donuts fresh. That's not the world we live in, alas. But why exactly are ad revenues so much lower online? Not surprisingly, Google has an answer.The Google Public Policy Blog has an excellent take on the…
Nutrition pyramids exist to give us a sense of how much we're supposed to eat from each food group. The federal government's food subsidy policy exists to manage supply and protect prices for farmers with excellent lobbying groups. These two things share as much in common as the fast food industry and PETA. So when turn them into pictures and put them side-by-side, we get this::
I'm sympathetic to the argument that taxing "bad" food is too blunt an instrument to…
The strange thing about deficit reduction is that even as politicians duck the question of entitlement reform or tax increases, there is broad agreement in the economic community that deficit reduction would involve some combination of spending cuts -- probably within entitlements -- and tax increases -- probably along the lines of tax expenditures or a broad-based low-rate value-added tax. Of course, that's exactly the problem for the Obama administration.…
President Obama's health care reform plan does two basic things on the spending side: it extends subsidies to help lower-income Americans purchase health care (paid for with taxes and Medicare spending cuts) and it establishes a foundation for cost reduction in the future. That first part gets almost all of the attention (especially those eight words I put in parentheses), but the second part is glossed over with surprising regularity. That's a shame because for…
Breaking up is hard to do, but your friend the Internet is here to help! Here's a company that will deliver the bad news to your significant other for nothing more than a small fee, and the price of your dignity. The company is descriptively called iDUMP4U, and that's pretty much exactly what it does. Catherine Rampell from the Economix blog at The New York Times has their billing information:$10 Basic Breakup -- "We will call your other and make them your ex…
Here's what I knew about our jobs crisis: Unemployment is at 9.7%, and almost fifty percent of the unemployed have been without a job for half a year. What I didn't know was how different the jobless ranks are today compared to the last great recession of the early 1980s. Ryan Avent of the Economist points me to a chart from Calculated Risk and explains some scary things::
"The golden age of the Web is coming to an end. Prepare for the Splinternet."Thus announces Josh Bernoff in an interesting post about how new gadgets designed for surfing the Web -- our smartphones, e-readers, tablets and even TVs -- are fighting with each other to redefine how we access information online. But what is the "Splinternet" and why should the answer even matter to you?*Let's take a step back and think about some of the new gadgets on the market.…
We all know the Great Recession set fire to the housing market. But because the US government plays a extraordinarily intimate role in the housing market, it's fair to say that the Great Recession also set a fire under our housing policy. Rep. Barney Frank, the influential chairman of the House Financial Services Committee, is worrying loudly about the safety of government-chartered mortgage loan companies Fannie Mae and Freddie Mac, and Treasury Sec. Tim Geithner…
President
Obama hopes to sign both additional economic stimulus plans and a
comprehensive health care bill within the next two months. To get some
perspective on these two critical issues, I spoke with Robert
Reischauer, the director of the Congressional Budget Office between
1989 and 1995. He is currently the president of the Urban Institute and
a nationally respected expert on the budget and our entitlement system.
In this, the second half of our conversation…
As the Senate plugs away at a $15 billion jobs bill -- sorry, business tax cut! -- it's worth taking a step back and acknowledging its limitations. The bill would exempt all new hires from payroll taxes in 2010. How much money back is that? For a $60,000 worker hired on May 1, it would save about $2,500 in 2010 according to Sens. Chuck Schumer and Orrin Hatch. That's not chump change, but it leaves the vast majority of compensation up to the employer. So put…
President Obama hopes to sign both additional economic stimulus plans and a comprehensive health care bill within the next two months. To get some perspective on these two critical issues, I spoke with Robert Reischauer, the director of the Congressional Budget Office between 1989 and 1995. He is currently the president of the Urban Institute and a nationally respected expert on the budget and our entitlement system. This is the first part of our wide-ranging…
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