Derek Thompson

The New York Times has a funny piece today on the shape-shifting social mores of smart phone use. Can you check email at office meetings? Answer email at office meetings? Keep your Justin Timberlake ring tone on Loud? These are tough questions, and if the article is any indication, there's no clear guide to cell phone use at work. Until now, that is:

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The prevailing concern among liberals is that health care reform in 2008 will follow in the footsteps of the 1993 debacle. This is a legitimate concern, and health care reformists would be wise to draw lessons from the Clintons' failure, but we don't need to reach back the 1990s for allusions to failed entitlement reform. Beleaguered Republicans could always sink health reform the way beleaguered 2005 Democrats torpedoed Social Security privatization: Paint the other side as radical conspirators against America.

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Is cap and trade going to screw the poor? Turns out there is some debate about this. You have the Tax Foundation going on about how the costs of cap and trade will be "disproportionately borne by low-income households," and Warren Buffett saying that cap and trade is "probably going to be pretty regressive." And then you have the CBO's weekend estimate of what cap and trade will cost the individual families, which both Kevin Drum and Matt Yglesias use to make the point that poor families will actually do pretty well.

The estimate says that the average family will face additional costs of about $165. Families in the lowest quintile will actually see a benefit of $40, largely because some portion of the revenue will be used to fund a rebate and tax credit for low income families. Families in the top quintile will pay an extra $245 dollars a year. That looks pretty progressive. But families in the second highest quintile will end up with an additional burden of $340 a year -- more than the wealthiest Americans. How to make sense of this?

With state budgets feeling the pinch and the federal government refusing to bailout even California, the national mascot of state deficits, 23 states have raised taxes in 2009, with 13 more states considering increases. There's every reason to think that eventually almost all states will raise income, sales or business taxes, considering that in the far milder recession of the early 1990s, 44 states raised taxes by more than one percent. Where are taxes rising this time?

Check out the map below to find out. Some takeaways: Every state west of Colorado has passed or proposed a tax increase. State governments are often passing the tax increases over painful spending cuts. California is raising income taxes by .25 percent on top of almost $15 billion in service cuts. Sales taxes are also getting creative, from raising the price of beer and wine (New York) to eliminating exemptions for hybrid vehicles (Washington) to extending the sales tax to music downloads and periodical subscriptions (Wisconsin). For more from the Center for Budget and Policy Priorities report, go here.

With state budgets feeling the pinch and the federal government refusing to bailout even California, the national mascot of state deficits, 23 states have raised taxes in 2009, with 13 more states considering increases. There's every reason to think that eventually almost all states will raise income, sales or business taxes, considering that in the far milder recession of the early 1990s, 44 states raised taxes by more than one percent. Where are taxes rising this time?

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Unemployment numbers are out for 48 states, and for some states they are record-setting in all the wrong ways. Congratulations are in order for Nebraska and Vermont, the only two states to not report increases. But why is it that whenever these awful reports come out, the same four or five state always grab the headlines?

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This week I visited a particularly charged part of the health care reform debate: Doctors' pay. The reason to focus on doctor pay is simple: to change the way we pay for health care, we'll have to change the way we pay the people providing us the care. Even Obama has criticized the "warped incentives" that reward doctors' for over-treating patients. But let's set aside the question of how to make doctors poorer. How do we make doctors better?

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Americans are getting increasingly nervous about the strain of Obama's projected trillion-dollar deficits. Yesterday's poll numbers from the New York Times and Wall Street Journal are crystal clear: With unemployment still climbing, 58 percent of the public wants Obama to focus on deficit-reduction even if it means a longer recession. We are all Herbert Hoover now?

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Tired of overdraft fees? Sick of ATM charges? Of course you are. So here's Probity, a Texas-based bank that promises to treat you better. But there's a catch. You're going to have to pay for that checking account. And you're going to have to pay every month.

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Secretary Timothy F. Geithner urged skeptical lawmakers on Thursday to act quickly on President Obama's plan to overhaul the regulatory structure for the financial system.

"Every financial crisis of the last generation has sparked some effort at reform," Mr. Geithner said as he went before the Senate Banking Committee on Thursday. "But past efforts have begun too late, after the will to act has subsided."

HAVING spent much of the past year putting out fires, America's leaders are now turning their attention to preventing future blazes. Barack Obama unveiled proposals on Wednesday June 17th that would refashion the federal rules governing almost every corner of finance, pushing government much more deeply into private markets and partially rolling back a quarter-century of liberalisation. Eye-catching though the 85-page "white paper" is, it might have been bolder. It merely sounds the opening salvo in a battle that could stretch into next year, because much of the plan requires approval in Congress, where jurisdictional and ideological clashes beckon.

In a speech at the White House yesterday, President Barack Obama outlined what he envisions for future regulation of the financial system. He called his plan "a new foundation for sustained economic growth . . . a transformation on a scale not seen since the reforms that followed the Great Depression." Indeed it is.

His plan, if adopted, will fundamentally change the nature of our financial system and economy. The underlying concerns and assumptions are clear, and they are made clearer by considering other ways that his administration has dealt with the consequences of competition -- particularly the faux bankruptcies of General Motors and Chrysler and the impending change in antitrust policy. Although the president said in his speech that he supports free markets, these initiatives confirm that the administration fears the "creative destruction" that free markets produce, preferring stability over innovation, competition and change.

Three quarters of a century ago, President Franklin Roosevelt earned the undying enmity of Wall Street when he used his enormous popularity to push through a series of radical regulatory reforms that completely changed the norms of the financial industry.

Well that was fast. Two big polls came out last night and this morning -- here's the CBS/NYT poll and here's the NBC/WSJ poll -- to find that the administration's agenda is starting its trip down the tubes. "Obama Poll Sees Doubt on Budget and Health Care," headlines the Times. "Public Wary of Deficit, Economic Intervention," headlines the Journal.

Right, so there is a lot of interesting stuff in the polls. (The Journal poll, in particular, finds that the auto crisis has made American more likely to purchase American cars. Or so they say.) But I find the results on the deficit genuinely confusing.

The Journal poll has a solid majority (58%) agreeing that "The President and the Congress should worry more about keeping the budget deficit down, even though it may mean it will take longer for the economy to recover." The Times poll has a majority (52%) siding with the view that the "federal government should NOT spend money to stimulate the national economy and should instead focus on reducing the budget deficit."

I find this odd because Americans overwhelming supported the recent effort to ... spent a humongous pile of money stimulating the economy. You can find a rundown of 11 polls on this here. In every poll -- every single poll -- a big plurality of Americans supports the stimulus, and in nine of the polls a majority of the public supports it. Sometimes as much as 70% of the public supports it.

I know public opinion is complicated and preferences can work on many levels and so forth, but I would have thought it would take at least six months to do a complete somersault on this.

Attention America: If you find yourself without underwear, covered in mosquitoes, running from a charging pack of alligators while trying to read a romance novel through your goopy eye lashes ... you still might be living in a recession.

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Christopher Beam at Slate makes the excellent observation that President Obama excels at selling his policy reforms as the solution to a complex web of issues extending far beyond the core policy. Health care reform, for example, is always about more than health care. It's about corporate competitiveness, a nimble job market that isn't tethered to precious employer benefits, more disposable income for families, freed up state funds for education and infrastructure, diminished deficits, diminished reliance on foreign owners of the deficit, and so on. Beam quips, "the only thing left for Obama to cite is some statistic showing most terrorist attacks are the result of high premiums."

Beam hits on most of the advantages of Obama's karmic approach to selling policy, but I wanted to highlight two distinct drawbacks. First, it forces him to promise too much from his reforms. Second, as anybody who's played Jenga knows, interconnectedness has its risks.

To be sure, promising too much from your policies is a prerogative of governing. But in Obama's case, where no stone should be left unturned by reform, I think it threatens to raise public expectations to a level where reality will prove to be a consistent disappointment. Take his cap-and-trade policies. Obama sees it creating five million jobs, reducing emissions by 80 percent by 2050, and saving Americans $130 billion on energy bills.

Now wait. The point of cap-and-trade (or carbon taxing) is to price the negative externality of carbon pollution to discourage profligate production by firms and over-use by consumers. That means creating a little bit of hitherto unfelt pain to teach both sides the true cost of carbon. How do you raise the market price of carbon nearer to its environmental "cost" and save Americans money on their energy bills in the short term? It's not possible, really. Whether you auction the carbon allowances and kick back to consumers or don't auction the allowances and foot consumers with a larger bill, the price of energy has to rise. In the long term, perhaps, "everybody wins." In the short term, everybody pays.

There are other risks that follow inevitably from the everything-is-connected school of speaking. If every reform is balancing on another policy, what happens when that Jenga piece comes loose? Beam quotes Obama tying the GM bailout to health care reform. On the one hand, he's right to do so. GM pays $65 per hour to its employees when you factor in its bloated health care costs to current and retired workers, which contributed to its money woes. But it's ominous that today the New York Times released a poll finding that the public is falling behind the Obama administration on two key issues: GM and health care reform. While the president's overall approval rating is still a healthy 63 percent, views of the president's job with the auto industry and health care hover in the mid-to-low 40s, and this before what will be a sweltering summer of negotiations in DC.

Obama's ability to explain himself through narratives rather than sound bites is, on the whole, a distinct advantage, and Beam is right to focus his piece on the positive aspects of Obama's karmic worldview, in which we are all connected in the great circle of policy reform. But, as we head into a health care process where Obama clearly has more convincing to do, I wonder whether he'll continue to sample from a buffet of interconnected benefits of reform, or pick one theme and run with it.

Jenga! Flickr image from 416style.

The United States has lost $63 billion of personal income in the last quarter, and about the fifth of the loss comes from California. But when you line up the states back to back in order of percent change in income, America's late acquisitions are the bookends: Hawaii is getting richer, faster, while Alaska's income plummet is more than six-times worse than the national average.

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I guess I'm a little surprised by Karl Rove's op-ed today in the Wall Street Journal. The MO of House and Senate Republicans has been to block, block, block. Now the strategy seems to be: Engage in the details of health care reform to expose the flaws in "ObamaCare." That sounds like hard work! Maybe a united front against president hasn't paid off in public opinion, but it did have a kind of simple logic to it.

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Christopher Beam at Slate makes the excellent observation that President Obama excels at selling his policy reforms as the solution to a complex web of issues extending far beyond the core policy. Health care reform, for example, is always about more than health care. It's about corporate competitiveness, a nimble job market that isn't tethered to precious employer benefits, more disposable income for families, freed up state funds for education and infrastructure, diminished deficits, diminished reliance on foreign owners of the deficit, and so on. Beam quips, "the only thing left for Obama to cite is some statistic showing most terrorist attacks are the result of high premiums."

Beam hits on most of the advantages of Obama's karmic approach to selling policy, but I wanted to highlight two distinct drawbacks. First, it forces him to promise too much from his reforms. Second, as anybody who's played Jenga knows, interconnectedness has its risks.

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Two Japanese travelers trying to enter Switzerland were caught carrying $134 billion -- yes, billion -- in fake US Treasury bonds in a briefcase. The forgeries contained 249 securities with a face value of $500 million, several "worth" more than $1 billion, and several "Kennedy" bonds, which, um, are just totally made up to begin with. What exactly is the endgame here, one wonders? As my colleague Charles Davi, who discovered the article, quipped: "Uh excuse me. I'd like to cash my 130 billion dollar check!"

And here's one of the most delightfully absurd paragraphs I've ever read in a news story:

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