A number of economists have started proclaiming that the recession is over, or at least that a recovery is just around the corner. Others disagree. Robert Hall, the chairman of the National Bureau of Economic Research’s Business Cycle Dating Committee, reportedly indicated recently that the group is still waiting for “activity to surpass its previous peak.”What are the telltale signs of an economic bottom? Depends whom you ask:
- According to Alan Greenspan, the former chairman of the Federal Reserve, you should watch for an uptick in sales of men’s underwear.
- According to Mark Thoma, a professor at the University of Oregon, seeing private sector funds recapitalize banks (”without the aid of government guarantees or other such programs that encourage capital infusions”) and improvements in private-sector nonresidential investment (like buildings and equipment). A rebound in consumer spending and a stabilization in the housing market would also be important, he says.
- The Calculated Risk blog has distilled historical research from the U.C.L.A. economist Edward E. Leamer, and explains the sequence for signs of a recovery proceeds thusly: first residential investment (housing) and consumer spending pick up; then investment in equipment and software increases, and unemployment falls; and finally investment in nonresidential structures rises.
- The Economic Cycle Research Institute uses a shorthand called “the three P’s.” As explained by Daniel Gross of Newsweek, they are: “a pronounced rise in the leading indicators; one that persists for at least three months; and one that’s pervasive, meaning a majority of indicators are moving in the same direction.”
- The Economic Cycle Research Institute’s managing director, Lakshman Achuthan, describes an indicator known as “doggie downtime,” the lag time between the death of a family’s dog and the purchase or adoption of a new dog. Apparently shorter delays indicate the economy is rebounding.
While I’m not sure about doggie downtime and men’s underwear sales, consumer spending has stopped its free fall but is still pretty dismal, and some of the glimmers of hope in the housing market seem to be flickering out. Like housing, nonresidential construction investment has slowed its decline but is still tenuous. Similarly, the pace of layoffs has eased, but job losses continue.
Thursday, August 20, 2009
How do we know the recession is over?
Brad Delong on Think Tanks
Which makes me think about a great panel on Bloggers and Think Tanks I went to at Netroots...
Which inspired me to make my interview (in the loudest room I could find) with Dean Baker into a podcast. I'm finally going to try that podcast thing.
I'll be interviewing Richard Ray at GA AFL-CIO (hopefully next week)
And my "man on the street" interview will be with a friend of mine who happened to be on the same street as myself because... you know, we were hanging out at the time.
I'm coming up with some "randomness" to throw into the mix.
If people like it I may do another...
What you won't hear from "Free Market"[sic] opponents of health care
We pay $250 billion a year for drugs that would sell in a free market for about $25 billion a year because the government gives drug companies patent monopolies. Patent monopolies are also the reason that expensive diagnostic tests are expensive.In addition, our doctors get paid about twice as much as doctors in West Europe and Canada, even though most of the rest of us get paid less than our counterparts, because the United States has protectionist barriers that limit the number of qualified foreign doctors who can practice medicine in the United States.
In other words, Ms. Parker may have missed it, but the current health care system has about as much to do with a free market as the Soviet Union.
FACT CHECK health care reform
Health overhaul myths taking root:
The judgment is harsh in a new poll that finds Americans worried about the government taking over health insurance, cutting off treatment to the elderly and giving coverage to illegal immigrants. Harsh, but not based on facts.President Barack Obama's lack of a detailed plan for overhauling health care is letting critics fill in the blanks in the public's mind. In reality, Washington is not working on "death panels" or nationalization of health care.
To be sure, presenting Congress and the country with the nuts and bolts of a revamped system of health insurance is no guarantee of success for a president – just ask Bill and Hillary Rodham Clinton. Their famous flop was demonized, too. After all, the devil does lurk in details.
It can also lurk in generalities, it seems.
Obama is promoting his changes in something of a vacuum, laying out principles, goals and broad avenues, some of which he's open to amending. As lawmakers sweat the nitty gritty, he's doing a lot of listening, and he's getting an earful.
A new NBC News poll suggests some of the myths and partial truths about the plans under consideration are taking hold.
Most respondents said the effort is likely to lead to a "government takeover of the health care system" and to public insurance for illegal immigrants. Half said it will probably result in taxpayers paying for abortions and nearly that many expected the government will end up with the power to decide when treatment should stop for old people.
A look at each of those points:
THE POLL: 45 percent said it's likely the government will decide when to stop care for the elderly; 50 percent said it's not likely.
THE FACTS: Nothing being debated in Washington would give the government such authority. Critics have twisted a provision in a House bill that would direct Medicare to pay for counseling sessions about end-of-life care, living wills, hospices and the like if a patient wants such consultations with a doctor. They have said, incorrectly, that the elderly would be required to have these sessions.
House Republican Leader John Boehner of Ohio said such counseling "may start us down a treacherous path toward government-encouraged euthanasia."
The bill would prohibit coverage of counseling that presents suicide or assisted suicide as an option.
Republican Sen. Johnny Isakson of Georgia, who has been a proponent of coverage for end-of-life counseling under Medicare, said such sessions are a voluntary benefit, strictly between doctor and patient, and it was "nuts" to think death panels are looming or euthanasia is part of the equation.
But as fellow conservatives stepped up criticism of the provision, he backed away from his defense of it.
___
THE POLL: 55 percent expect the overhaul will give coverage to illegal immigrants; 34 percent don't.
THE FACTS: The proposals being negotiated do not provide coverage for illegal immigrants.
___
THE POLL: 54 percent said the overhaul will lead to a government takeover of health care; 39 percent disagree.
THE FACTS: Obama is not proposing a single-payer system in which the government covers everyone, like in Canada or some European countries. He says that direction is not right for the U.S. The proposals being negotiated do not go there.
At issue is a proposed "exchange" or "marketplace" in which a new government plan would be one option for people who aren't covered at work or whose job coverage is too expensive. The exchange would offer some private plans as well as the public one, all of them required to offer certain basic benefits.
That's a long way from a government takeover. But when Obama tells people they can just continue with the plans they have now if they are happy with them, that can't be taken at face value, either. Tax provisions could end up making it cheaper for some employers to pay a fee to end their health coverage, nudging some patients into a public plan with different doctors and benefits. Over time, critics fear, the public plan could squeeze private insurers out of business because they would not be able to compete with the federal government.
It's unclear now whether Obama is committed to the public option. He described it recently as "just one sliver" of health reform, suggesting it was expendable if lawmakers could agree on another way to expand affordable coverage. Now the White House is emphasizing his strong support for it.
___
THE POLL: 50 percent expect taxpayer dollars will be used to pay for abortions; 37 percent don't.
THE FACTS: The House version of legislation would allow coverage for abortion in the public plan. But the procedure would be paid for with dollars from beneficiary premiums, not from federal funds. Likewise, private plans in the new insurance exchange could opt to cover abortion, but no federal subsidies would be used to pay for the procedure.
Opponents say the prohibition on federal money for the procedure is merely a bookkeeping trick and what matters is that Washington would allow abortion to be covered under government-subsidized insurance.
Obama has stated that the U.S. should continue its tradition of "not financing abortions as part of government-funded health care." Current laws prohibiting public financing of abortion would stay on the books.
Yet abortion guidelines are not yet clear for the government-supervised insurance exchange. There is strong sentiment in Congress on both sides of the issue.
___
The poll of 805 people was taken Aug. 15-17 and has a margin of sampling error of plus or minus 3.5 percentage points.
Debate Over Public Option: Post Excludes Freedom Loving Americans
That would be the people who hate the idea that the government will use the power of the state to force people to buy insurance from Aetna, United Health, or some either company run by a golden diaper CEO. If there are mandates without a public option, then this is exactly what would happen. Many freedom loving people find this idea quite offensive which is one reason why many progressives feel strongly about the public option. Somehow the Post could not find anyone to represent this view.
On the other hand it did give an extraordinary amount of space to people in the Obama administration who wanted to trash their progressive critics while hiding under a shield of anonymity. That's very bad reporting.
A real newspaper would report this by saying that "several members of the Obama administration made harsh comments about progressive critics, but refused to go on record with their statements."
Dean Baker on Bernanke
First, he misled Congress last fall to help gain quick approval of the TARP. He told Congress that the commercial paper market was shutting down, so that non-financial corporations could not raise the money needed to pay their bills and meet their payrolls. In fact, the Fed had the ability to prevent a shutdown of the commercial paper market by directly buying commercial paper. Bernanke announced plans to establish a special lending facility to buy commercial paper the weekend after Congress approved the TARP.
Bernanke has also chose to keep all of the Fed's lending secret. While anyone can go to the Treasury's website and find out which banks received money from the TARP and under what terms, Bernanke has refused to make information on Fed's lending available even to members of the relevant congressional oversight committees.
Finally, Bernanke has allowed the distinction between commercial and investment banking to be obliterated. After Goldman Sachs became a bank holding company, Bernanke has allowed it to continue to operate as an investment bank. This means that it has effectively gambled with the FDIC's insurance fund money. Even proponents of the repeal of Glass Steagall insisted that they would never allow this sort of mixture of government insured deposits and speculative investment banking.
For these reasons, even some people who don't think that Bernanke's responsibility for the greatest economic disaster in 70 years disqualifies him for reappointment do not want to see him get another term as Fed chair.
Though I want to point out that Baker, at Netroots Nation last week, said he should probably be reappointed as Larry Summers would be the likely choice to take his place--and Baker thinks he is even more to blame for the crisis...
Democratic leadership is joining the real world--where Republicans would vote against pretty much anything...
New Rx for Health Plan: Split Bill
The White House and Senate Democratic leaders, seeing little chance of bipartisan support for their health-care overhaul, are considering a strategy shift that would break the legislation into two parts and pass the most expensive provisions solely with Democratic votes.
The idea is the latest effort by Democrats to escape the morass caused by delays in Congress, as well as voter discontent crystallized in angry town-hall meetings. Polls suggest the overhaul plans are losing public support, giving Republicans less incentive to go along.
Senators on the Finance Committee are pushing ahead with talks on a bipartisan bill. Democratic leaders say they hope those talks succeed but increasingly are preparing for the possibility that they do not.
Most legislation in the Senate requires 60 votes to overcome a filibuster, but certain budget-related measures can pass with 51 votes through a parliamentary maneuver called reconciliation.
In recent days, Democratic leaders have concluded they can pack more of their health overhaul plans under this procedure, congressional aides said. They might even be able to include a public insurance plan to compete with private insurers, a key demand of the party's liberal wing, but that remains uncertain.
Other parts of the Democratic plan would be put to a separate vote in the Senate, including most of the insurance regulations that have been central to Mr. Obama's health-care message.
That bill would likely set new rules for insurers, such as requiring they accept anyone, regardless of pre-existing medical conditions. This portion of the health-care overhaul has already drawn some Republican support and wouldn't involve new spending, leading Democratic leaders to believe they could clear the 60-vote hurdle.
Americans Hate Everyone, Believe Everything
Ezra Klein:
Wednesday's Wall Street Journal/NBC poll (pdf) is disappointing stuff. It's not so much that the American people have turned against Obama's health-care reform effort as they've turned against the legislative process in general. The graph at the right tells the story well: Americans disapprove of the job Obama is doing on health care. But they hate the job Republicans are doing. Which is not to say that the conservative attacks haven't been effective.
The poll tested a variety of assertions that were simply wrong -- Was health-care reform likely to include illegal immigrants? A government takeover of the system? Taxpayer-funded abortions? The government deciding when to end care for the elderly? -- to see whether the false attacks were falling flat or actually worming their way into the public consciousness. The answer? Worming. Definitely worming.
The public option, once supported by 76 percent of the poll's respondents, is now opposed by a plurality. Obama's plan still commands majority support if explained, but even that support has fallen in recent months. The poll is all bad news. The arguable exception is the devastating low numbers for the Republicans. But it's not clear they matter, really. The Republicans don't have to pass anything. They just have to kill something. A kamikaze mission is successful if it destroys the target.
There's a lesson in this for Democrats, though: Republicans have made a judgment that destroying health-care reform is a political winner regardless of its impact on their short-term popularity. Democrats, conversely, have spent a lot of time worrying about their short-term popularity rather than just muscling through a massive win on health care. The result? Their plan and their president are both a lot less popular than they were a few months ago. Caution and delay don't seem to be working out too well.
Poll: Nearly Half Of Americans Believe “Death Panel” Falsehood
Nearly half the country believes that the health care proposal would empower the government to withhold medical care for the elderly. As Steve Benen notes, this “points to a political discourse that’s badly broken.”
Indeed, another finding amplifies this point. Many have argued that those believing the “death panel” fantasy are a small minority that gets its info from Fox. But this poll finds that when it comes to television, only 23% get their news from Fox — far less than believe in death panels — while a total of 57% get their news from broadcast networks or CNN.
I don’t want to make too much of that — people could be getting their “death panel” info from the internets or talk radio other sources — and as a general rule, reporters hate it when you blame this kind of thing on the media. But if we agree that the media’s general role is informing the public, clearly something’s wrong here.
China moves to curb health costs
China has moved to control healthcare costs for its citizens from Beijing, setting plans to purchase and distribute hundreds of essential medicines that are now mostly sold at huge mark-up prices through hospital pharmacies.
The measures are part of an Rmb850bn ($124bn, €88bn, £75bn) overhaul of the country’s ailing health system, aimed at securing basic medical services for every citizen and increasing efficiency and transparency in drug use.
When Beijing began reforming its communist economy 30 years ago it discontinued free healthcare for all and, by 2000, the majority of the population was uninsured. Although the authorities have since tried to build a new healthcare system, large numbers of rural residents and migrant workers still cannot afford healthcare.
“By 2003, 30 per cent of poor households in the government’s National Health Survey were reporting healthcare costs as the main cause of their poverty,” the World Bank said in a report on health reform in China this year.
The World Bank said misaligned incentives encouraged hospitals to make money from selling drugs. China’s share of pharmaceutical expenditure relative to total health expenditure was nearly 45 per cent in 2003, compared to an OECD average of about 15 per cent.
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