Author: Megan McArdle

For the second year in a row, a suit retailer is including a special new feature in its annual sale:  if you lose your job after buying the suit, they’ll refund your money, and you can keep the suit.  

As someone who was known to attend a protest or two herself during college, I have been struggling mightily to find some sensible arguments in the movement of students protesting budget cuts at their campuses.  But while I’m sympathetic to students finding it harder to attend college, I’m not sure what they think is supposed to happen.  There’s no money.  This is not some question of reallocating resources from bad uses to good–everything is being cut because their institutions are under serious financial duress.  When administrators point this out, the students reiterate how hard it all is, as if doing so will spur the administration to shake the money tree harder until extra cash falls from the skies.

The main target of Greece’s austerity plan, before even the European nations being expected to offer bailouts, was the bond market.  Greece needs to at least partially finance its way through the mess it’s created, and with markets worried about a fairly imminent collapse, that was proving difficult.

Zero-percent financing is the last resort of a desperate car company.  Financing has historically been a lucrative sideline for automakers (the last few years notwithstanding); indeed, Ford and GM were frequently described as banks with a sideline in manufacturing.  That was a pretty accurate reflection of where they were making their money–and an explanation of why they stopped, when debt markets when haywire.

I have never seen conservatives and liberals so divided . . . in beliefs, not values.  On the one hand, there are people like the TNR crew, and Jonathan Bernstein, Andrew’s guest-blogger, who seem to think that this it’s the next best thing to a done deal.  Meanwhile, all the conservatives and libertarians I know think that it’s pretty much hopeless, because Pelosi can’t get it through an increasingly rebellious House.  To our jaded eyes it looks as if everyone who can is looking for an excuse not to vote for a bill that is unpopular with their constituents.  

I am not a creature of habit.  Forming even simple habits, like remembering to turn the alarm system on before I go to sleep, is agonizingly difficult.  So remembering to take medicine twice a day, every day, and not, say, leave for work without taking my pills . . . well, frankly, I am the leading cause of antibiotic resistance in this country. 

According to the Washington Post, “The U.S. Postal Service estimates $238 billion in losses in the next 10 years if lawmakers, postal regulators and unions don’t give the mail agency more flexibility in setting delivery schedules, price increases and labor costs.” The author, Ed O’Keefe, can’t quite bring himself to say it, but the post office as we know it is becoming increasingly untenable. What do we do with the wreckage?

Small-government types may be disappointed to hear that the answer is not “privatize it”; virtually no one thinks that there is a viable business model trapped inside the aging behemoth. Every time the relative efficiency of government services comes up, some conservative brings up the damn post office, and then some liberal tiredly points out that priority mail is cheaper than any comparable service from the Post Office. It’s not exactly surprising that the post office can undercut UPS prices with $23 billion a year in government subsidies. The question is, do we get $23 billion in extra value?

Arguably, we used to. Mail, like other forms of communication, has network effects–each node becomes more valuable as you add more nodes to the network. Arguably, it was a natural monopoly with capital costs that were best handled by the government. Futhermore, things like our legal system have become very dependent on the mail system, which allows us to legally serve notice and so forth.

But as has been noted elsewhere, mail is largely becoming an anachronism–I barely even get my bills that way any more. Mostly, I get catalogues, Christmas cards, and the occasional invitation to a wedding or baby shower–not $23 billion worth of service. Probably not even worth my per-capita share of the postal service, which if my math is correct, works out to about $75 a year. And then, of course, babies and small children neither receive much mail, nor pay much in taxes. So call it $100. Would you pay $100 a year for the privilege of getting mail?

Yeah, me neither.

You can’t even downsize the thing to the parts that work–the parts that are most valuable are the really expensive, broadly distributed network of post offices and employees. This is the part that Congress won’t let die, and which will never be able to pay for themselves.

We remain emotionally attached to our post offices, and postal workers remain emotionally attached to their jobs, and congressmen remain emotionally attached to their votes. So the post office will probably hang on for another one or two decades, becoming more and more irrelevant, and sucking up more and more in the way of public funds.

Hope you all like those Christmas cards.

I agree with Kevin Drum when he says that “Mass, long-term unemployment is one of the most corrosive things any country can go through”. But then he follows with “The fact that we’re basically doing nothing about it is not just disgraceful, it’s genuinely dangerous.” This sounds great. But what, precisely, are we supposed to do?

You see the same thing in every recession for the last twenty years, at least: as jobs get scarcer, employers get pickier about filling their positions. Programmer jobs that once demanded anyone with a pulse and a C++ manual now require that you also have at least three years of experience designing websites for a fast food multinational, speak fluent Tajik, and be proficient in hacky sack. So just as employees are flooding the market from industries that need to permanently downsize, it becomes harder to transition into a new industry or job description.

The result: long term unemployment. What is the government supposed to do about that? Let’s do some math: by generous estimates from non-White House sources, the $787 billion stimulus has created (or saved!) something under 2 million jobs. Currently, there are 11-12 million people unemployed. Soaking up half that would require three more huge stimuluses, even if you assume that returns are linear and do not diminish with more money spent. Yet even then, we would not guarantee that we helped the long term unemployed; we might just as easily boost employment for people who aren’t finding it particularly hard to get a new job.

Roosevelt could make some actual inroads into the plight of the worst off by the simple expedient of hiring them. But this was before public sector unions got powerful, and the government wrapped itself in yards and acres of procedural red tape surrounding federal hiring, and public works projects. It was also in an era when public works involved considerably more raw human muscle power, and a larger percentage of the workforce was employed in relatively undifferentiated manual labor.

The sad fact is that there’s not much to be done for the long term unemployed, other than the obvious step of making sure that they don’t miss any meals. Government retraining programs have a dismal record. So do tax credits for hiring workers, which are notoriously easy to game. Stimulus is a blunt tool. And the government can’t hire the workers itself. What’s left? Threatening employers at gunpoint?

The answer is, nothing. We can, and should, ease the pain of those who lose jobs. But the government can’t find you a job any more than it can find you a spouse or a hobby. The process of matching individuals to employers can only be done by individuals.

(Image: bobster855/flickr)

I’m glad that Jim Bunning wants to be fiscally responsible.  But the extension of unemployment benefits is really not the right place to start.  His cunning plan to put a hold on the reauthorization of unemployment benefits until the Democrats agree to fund them out of existing stimulus dollars will not do much good, and it could do great harm.

As you may know, Seaworld experienced a tragedy:  one of its orcas has killed a trainer, apparently by grabbing her ponytail.  They’re having a press conference now, and in many ways, it’s a textbook case of what not to do.  When asked by a reporter about the fact that this same whale has apparently killed three other people, he repeatedly makes the irrelevant point that it only killed one other person at Seaworld . . . small comfort to the folks who take their tykes there.  He also repeatedly refers to the whale as a valued member of the Seaworld team, which seems to me to be taking animal rights a little far.  After all, a valued member of the Seaworld team who kept killing people would open up the company to enormous liability dangers.

(Photo Credit: Wikimedia Commons)

So, the health care summit. What do we think?

I had to do a bloggingheads this morning, so I’m just tuning into the health care summit after an hour absence.  For the first time, I’m starting to think that this has been a mistake for the administration.  It seemed like a good way to lay out the parts of the plan that people like, and try to make the Republicans look obstructionist.  And indeed, people are getting in a lot of good complaints about the health care system.

Representative Issa just asked Secretary LaHood whether our ownership stake in GM has caused the NHTSA to ease off on the level of scrutiny the company’s cars are subject to.  This seems not particularly plausible–if nothing else, the timeframe’s a little short for any serious regulatory capture to have developed.  But if this heralds a Republican strategy to bring up the despised automaker bailout at every opportunity, the hearing seems likely to further degenerate as Democrats start using their time to defend the bailout, rather than, I don’t know, investigating the seriousness of the problems with Toyotas.

I’m watching the Toyota hearings, which at the moment feature secretary Ray LaHood.  He just had a very interesting exchange with Representative Mark Souder, who has a GM auto plant in his district.  Souder obviously has an interest in defending the interests of automakers, but he asked a good question:  doesn’t excessive punishment of companies that have problem–either in law, or in the court of public opinion–discourage them from being aggressive about finding problems in the first place?

Business Insider notes a new article arguing that sitting by itself makes us fatter, even if we make a point of working out.  This is one of the more plausible arguments for America’s expanding waistlines that I’ve seen.  Even jobs that weren’t particularly strenuous have probably gotten less so over time, as more and more information gets funneled straight to our desktop rather than having to be physically retrieved somewhere.  I’m seriously considering getting one of those treadmill desks when we finally have the space.

Ann Althouse suggests that liberal magazine sales are down now that Obama is in office. From what I understand, that’s not exactly surprising; the conventional wisdom around here is that political magazines do best when their party is out of power.  On the other hand, there is this recession on, and I don’t know that conservative magazines have seen their circulation rise.  Personally, I just decided not to renew our subscription to Harper’s, not because it’s run out of anti-Bush hate, but because I’ve been reading it less and less.  On the other hand, I guess you could argue that Bush hatred infused the magazine with an energy that it’s now lost.

The New York Times has a pretty gripping series about the quest to develop a targeted drug for certain forms of metastatic melanoma.  As of the second installment we’re at a cliffhanger (spoiler alert): the new drug is producing almost magical shrinkage of tumors.  But one patient has died from cancer that crossed the blood-brain barrier — which the new drug cannot penetrate.  Will the other patients in the early stage trial also succumb?  How long will the remissions last?

I don’t know how it will end, but I think it illustrates one of the primary problems that will afflict any attempt to control health care costs.

When you read the description, it’s hard not to be awed at the
difference this drug made in the lives of people afflicted by a pretty
nasty cancer.  But presuming it survives all the trials, this drug will
probably be pretty expensive.  It serves only a fraction of people with
melanoma, those whose cancer has a very specific gene mutation.  It
probably won’t cure them, but only buy them a few weeks or months or
years.

That’s how cancer treatment has mostly advanced–not with
a spectacular cure that can be funded by better targeted NIH money, or
identified by comparative effectiveness research.  It grinds out small
improvements one at a time, experimenting with combinations of drugs
and radiation and surgery, dosages, and timing.  A lot of the
improvement in mortality rates comes from better detection–but that
means a lot of money wasted on tests, and biopsies for false positives.

Will
the drug be “worth it?”  What’s the price of giving someone six months
instead of one to say good bye to their family, or shrinking their
tumors so that they don’t die in pain?  Technocrats can’t answer those
questions.  We have to.

Jonathan Chait is enjoying what you might call “pre-schadenfreude” about health care’s apparent revival.  One can understand the urge, given how little opportunity liberals have had to actually revel in GOP despair over the past few weeks.  But I think it’s more wishful than warranted. 

Despite having declared the death of the health care bill before almost anything else, I don’t want to say that the thing’s impossible.  But the House has lost three of the votes it used to pass their bill 220-215 . . . which means that you have to persuade someone (probably a Blue Dog) to vote for it, who already voted against it.  Progressives have been making the almost-plausible argument that the public is going to treat a vote for the House or Senate bill as a vote for final passage, so Democrats might as well go ahead and pass the thing.  But their best argument totally falls apart for those who originally voted no. 

And that’s the best case scenario.  It assumes that you can keep Bart Stupak’s pro-life caucus, even though it’s unlikely that they’ll be able to “fix” the Senate’s more liberal abortion language in reconciliation.  This is a pretty heroic assumption.  If you lose many of the Stupak folks, then the bill’s done; there is not a snowball’s chance in hell that you are going to persuade any significant number of the prior “no” votes in the Democratic caucus to throw their careers on the pyre of Democratic health care ambitions.

Meanwhile, it’s not clear how many senators are nervous.  Are we sure they have 51 Democrats for reconciliation?  Reid has made these sorts of claims before, only to slip another deadline.

And deadlines are yet another big problem.  Reid says they’ll be ready to do reconciliation within 60 days.  Really?  Democrats are going to pass a mongo, costly new entitlement right around tax day?  The caucus might as well pass the hat for the GOP election fund.  But if you delay it, you’re leaving an unpopular bill very fresh in peoples’ minds as they go into the 2010 elections.  You’re also eating up air time that senators and congressmen would presumably like to have for initiatives that are actually, y’know, popular.

I’m not seeing it.  And neither are any of the people I know who opposed the bill.  They’re worried, but at about the level of worry you give toe fungus, not stage-three metastatic cancer.  Mr Chait is going to have to wait a little while for his freak-out.  Unless that’s one hell of a health summit Obama puts on, he’ll probably have to wait forever.

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See Also:

• The White House’s New Healthcare Strategy: Make It All About TAX CUTS
• Obama Switches To Healthcare Reform Plan B: Price Controls
• Premium Health Insurance Is Overrated, And Most Folks Would Be Fine Just Paying For Healthcare Out Of Pocket

Jonathan Chait is enjoying what you might call “pre-schadenfreude” about health care’s apparent revival.  One can understand the urge, given how little opportunity liberals have had to actually revel in GOP despair over the past few weeks.  But I think it’s more wishful than warranted.

Despite having declared the death of the health care bill before almost anything else, I don’t want to say that the thing’s impossible.  But the House has lost three of the votes it used to pass their bill 220-215 . . . which means that you have to persuade someone (probably a Blue Dog) to vote for it, who already voted against it.  Progressives have been making the almost-plausible argument that the public is going to treat a vote for the House or Senate bill as a vote for final passage, so Democrats might as well go ahead and pass the thing.  But their best argument totally falls apart for those who originally voted no. 

And that’s the best-case scenario.  It assumes that you can keep Bart Stupak’s pro-life caucus, even though it’s unlikely that they’ll be able to “fix” the Senate’s more liberal abortion language in reconciliation.  This is a pretty heroic assumption.  If you lose many of the Stupak folks, then the bill’s done; there is not a snowball’s chance in hell that you are going to persuade any significant number of the prior “no” votes in the Democratic caucus to throw their careers on the pyre of Democratic health care ambitions.

Meanwhile, it’s not clear how many senators are nervous.  Are we sure they have 51 Democrats for reconciliation?  Reid has made these sorts of claims before, only to slip another deadline.

And deadlines are yet another big problem.  Reid says they’ll be ready to do reconciliation within 60 days.  Really?  Democrats are going to pass a mongo, costly new entitlement right around Tax Day?  The caucus might as well pass the hat for the GOP election fund.  But if you delay it, you’re leaving an unpopular bill very fresh in peoples’ minds as they go into the 2010 elections.  You’re also eating up air time that senators and congressmen would presumably like to have for initiatives that are actually, y’know, popular.

I’m not seeing it.  And neither are any of the people I know who opposed the bill.  They’re worried, but at about the level of worry you give toe fungus, not stage-three metastatic cancer.  Mr. Chait is going to have to wait a little while for his freak-out.  Unless that’s one hell of a health summit Obama puts on, he’ll probably have to wait forever.

It seems to me that there is a market opening for the brave young entrepreneur who is ready to redefine the gendered engagement ring for the gay community.  But I’m a little puzzled about the idea of gay wedding rings.  We bought ours yesterday, and though there was a big difference between men’s and women’s rings, I can’t say that any of the rings in either gender screamed “gay” or “straight”.  The form factor for a circular band seems to have been pretty well settled, and I’m just not sure there’s a lot of room there to express your sexual preference.