Wonkblog

How to cut defense without resorting to the sequester

The Pentagon has no shortage of dire warnings about the defense sequester, and Deputy Defense Secretary Ashton Carter added his own Wednesday morning.
Ashton Carter is willing to cut this much from the Pentagon’s budget. (Evy Mages/The Washington Post)

“The sequester would have devastating effects on our readiness and workforce,” the Pentagon’s No. 2 man told the American Enterprise Institute, describing the cuts as arbitrary and irrational reductions that would heap “absurdities” upon military leaders.

Health Care

Congress debates ban on sex-selective abortions as researchers explore how often they happen

Congress opened debate Wednesday afternoon on legislation that would outlaw sex-selective abortions. The bill, introduced this year by Rep. Trent Franks (R-Ariz.), could subject an abortion provider to jail time for neglecting to determine whether gender was a motivating factor in a woman’s decision to terminate a pregnancy.
Rep. Trent Franks (R-Ariz.) has sponsored legislation that would ban abortions based on gender. (Matt York/AP)

There’s a lot of debate over what this bill would mean for women’s health. Reproductive health advocates have called it “a sneak attack” on abortion access, arguing that the consequences could deter doctors from performing a legal, medical procedure. The American College of Obstetricians and Gynecologists, which instructs its members not to perform sex-selective abortions, opposes this specific bill because it could deter access.

How big can the Internet get: Exabytes? Zottabytes?

Over at Gigaom, Stacey Higginbotham highlights this chart on the monstrous growth of the Internet. According to Cisco, the world is on pace to generate 1.3 zettabytes of data by 2015. That’s four times the amount created in 2011 and it’s the equivalent of “more than 38 million DVDs streamed in an hour.”

There are some other tidbits of interest in Cisco’s report. The company estimates that more than half of the world’s Internet traffic will come from WiFI connections by 2016. And all that data will likely require a lot of power-hogging data centers, which already consume 1.3 percent of the world’s electricity.

Health Care

Maybe medical school debt isn’t the problem

The high cost of medical school often gets tossed around as a key reason why doctors don’t go into primary care jobs, instead choosing specialties such as radiology and surgery that prove more lucrative. When physicians graduate with an average of $161,290 in debt, it’s hard to see money not factoring into career decisions.

FAQ: Why is Spain now in crisis? And can it be fixed?

Spain is back in the headlines, threatening to drag down the global economy. The panic started last week, after the country’s fourth-largest bank, Bankia, announced that it needed $23.5 billion in aid. But how did Spain get to this point? Here’s our explainer on the crisis:

Yikes. (Daniel Ochoa de Olza - AP) Let me guess, Spain is in trouble because its government spent way too much and ran up big deficits, right?

Not exactly. Before the financial crisis hit, Spain was actually running smaller deficits than even Germany. Its public debt was just 27 percent of GDP. Spain was considered a model of fiscal responsibility.

Then how did Spain get into its current mess?

It all started with a housing bubble. During the 2000s, thanks to low interest rates and an influx of foreign capital, Spain had a furious boom in housing construction — houses that, it turned out, the country didn’t really need. Below is a graph of the price-to-rent index in Spain, which gives a sense of the sheer size of the bubble. In 2007, the bubble finally burst. And Spain still isn’t anywhere close to recovering. Economists Cinzia Alcidi and Daniel Gros have estimated that housing prices have fallen 26 percent, but that’s still only about half of the total decline that will ultimately need to happen:

Lunch break: A baby otter learns to swim

Otters might appear as adept as fish when it comes to swimming. But it turns out that baby otters have to be taught to swim and — like most human toddlers — don’t seem to enjoy their first dip. Via Jezebel:

Posted by Sarah Kliff

Environment

Europe’s a mess, but it’s meeting its climate goals

These days, the news about Europe tends to be unrelentingly negative, so here’s something slightly different. The European Union is still on track to meet its climate-change goals under the Kyoto Protocol, according to new data released Wednesday.

Under the Kyoto treaty, 15 European Union countries committed to reducing their overall greenhouse gases 8 percent below 1990 levels by 2012. (The other countries have individual targets, save for Malta and Cyprus.) Even though the continent’s emissions grew in 2010, thanks to a brief economic recovery and a cold winter, the E.U.-15’s emissions are still 11 percent below 1990 levels overall.

There's plenty of data in these charts from the European Environment Agency. Between 1990 and 2012, some countries, like Germany and Denmark, have reduced their carbon emissions by quite a bit, which has offset rises in countries like Spain and Portugal.

(Source: European Environment Agency)

Are IPOs good at creating jobs?

During the dot-com boom, firms that went public often used the new influx of cash to go on hiring sprees. The bust, however, erased many of those gains. Since then, firms that have gone public often don’t use the new equity to expand their payrolls so rapidly, as the Kauffman Foundation explains in a new report.
(SOURCE: KAUFFMAN FOUNDATION) “There are still lots of hot three-year-old technology companies raising huge amounts of equity and using it to hire loads of people. They’re just doing it in the private markets rather than the public markets,” explains Felix Salmon, who flagged this chart earlier. By contrast, he continues, IPOs have simply become “financial tools used by financial professionals to make money”— a way for a company to cash out and pay back some of its early investors (along with its owners and employees.

James Surowiecki also has a good column explaining why today’s startups are shunning IPOs altogether.

Posted by Suzy Khimm

Health Care

Massachusetts promises to rein in health-care costs. Experts question whether it can deliver.

BOSTON — It’s taken as a matter of fact among Massachusetts health-care wonks: The state legislature will, by the summer’s end, pass a law aiming to reduce health-care costs by $150 billion in 15 years.

Where experts are confident that legislation will pass, they also have
Massachusetts Gov. Deval Patrick has pushed legislation that would reduce the growth in health-care costs. (Chip Somodevilla/Getty Images) serious concerns about whether that bill can actually work — and deliver on the big health-care cost reductions that it promises.

“I’m not optimistic about [the legislature’s] ability to deal with cost,” said Nancy Turnbull, a senior lecturer on health policy at the Harvard School of Public Health.

The bill in question aims to reduce costs by overhauling how doctors, hospitals and other providers get paid. It would provide incentives to move toward “global payments” — flat fees for all the care delivered for a specific individual or group of individuals. The hope is to take away financial incentives to provide more care when less might be equally effective.

2012

Wonkbook: Romney clinches GOP presidential nomination

By Ezra Klein

Karl Singer is writing Wonkbook this week while Ezra is on vacation.

Wonkbook dashboard

RCP Obama vs. Romney: Obama +2.0%; 7-day change: Obama +0.1%.

RCP Obama approval: 48.4%; 7-day change: -0.3%.

Reconciliation

— Why used televisions are often overpriced.

— The case against hedging.

— A survivor’s guide to the end of the euro zone.

— Why walkable neighborhoods cost so much more to live in.

— Michael Wolff on how Facebook will collapse and take down the ad-supported web. And here’s Alexis Madrigal on the case for Facebook.

Posted by Brad Plumer

Today in European stereotypes

What do Europeans think of each other? A new poll from the Pew Global Attitudes Project offers some insight. Over at the Atlantic, Derek Thompson sums up some of the findings with this chart:

Poor Greece. Everyone thinks that Germany is the most industrious of all countries and Greece is the laziest. Everyone, that is, except the Greeks, who think of themselves as the busiest of all bumblebees. So who’s actually correct here?

Environment

Why regulating gas fracking could be cheaper than the alternatives

We’re living in a “Golden Age of Gas,” says the International Energy Agency. Trapped in shale-rock formations around the world are trillions of cubic feet of unconventional natural gas. And drillers now have the technology to pluck it out. That’s a lot of cheap fuel — and it’s lower-carbon than coal.

Not a fan of fracking. (Mike Groll - AP) But as always, there’s a catch. The technology used to extract natural gas from shale rock — known as hydraulic fracturing — carries all sorts of unsettling side effects. The gallons of chemicals used for drilling could, potentially, contaminate nearby drinking wells. The disposal of wastewater has been linked to earthquakes in places like Ohio. And there’s the possibility that methane leaks from fracking could make natural gas even worse for global warming than coal.

That, in turn, has led to a prickly debate over how fracking should be regulated. Industry groups sometimes argue that too much regulation will stifle drilling and make this potent new energy source more costly. But Michael Levi points to a new IEA report suggesting that careful regulations might end up being cheaper for the industry than no regulations at all. Why? Because unrestrained fracking could lead to mass opposition that limits new gas development altogether.

Women’s pay increases faster than men’s...until they hit age 30

The gender pay gap starts early: 22-year-old women earn, on average, $8,900 less than their male counterparts for jobs that typically require a bachelor’s degree, according to Payscale, a salary-data collection service. Early on in their careers, however, women have a little bit of headway in playing catchup: The percentage growth in their pay is slightly higher than men’s pay growth throughout their twenties. By age 30, they still earn $14,300 less than men, but their pay raises up until that point had been higher than men’s, in percentage terms.
Guess who has to take him home? (Michael Yarish/AMC)

That trend, however, abruptly stops after the age of 30, when college-educated women typically start having children. Their wage growth then slows significantly for the rest of their working years, compared with men’s, and then almost levels off completely at age 39, as Payscale charts:
(SOURCE: PAYSCALE)

(h/t Catherine Rampell)

Posted by Suzy Khimm

Lunch break: Monkeys + synthesizers

What happens when you put six species of monkeys and six synthesizers together? It might not be Mozart, but something sure happens:

Chaser: hamster on a piano.

(h/t Laughing Squid)

Posted by Suzy Khimm

New Yorkers drink seven times as much coffee as the rest of us

New Yorkers really love their coffee: They drink 6.7 times as much as do people who live in other major cities. Philadelphians, however, look to be especially partial to pretzels, eating about five times as many as those who live elsewhere, according to the number crunchers at health-care start-up Massive Health. Here’s part of a much larger infographic comparing how people in various cities differ in what they eat:

Can “eurobonds” fix Europe?

Lately, there’s been lots of debate in Europe over whether the broken euro zone needs some sort of “eurobond” to alleviate the continent’s debt woes. French president Francois Hollande has made this one of his top priorities. Yet the most recent E.U. summit ended without much progress on the topic. So what are eurobonds? And would they actually work?

Probably not talking about eurobonds. (JUAN MEDINA - REUTERS) The Guardian has a handy primer on the concept. The basic idea is that, right now, lenders and investors are nervous that a bunch of individual countries on the euro — from Spain to Portugal to Greece — might not repay their debts. So the cost of borrowing money for those countries has been spiking at various points. (Spain is the latest casualty.) That, in turn, makes their debt crises even worse, which raises the risk of a horrible death spiral, and so on.

The logic behind eurobonds is that, rather than individual countries trying to borrow money on their own, the entire continent would borrow money together, as a unit. Spain and Greece would, in effect, pay the same interest rates on their debts as France and Germany do. Since the euro zone as a whole is large and rich, that would calm the panic over individual countries. And troubled nations would get a bailout. If Portugal only had to pay the average interest rate of euro members, its annual debt payments would fall by €15 billion, or 9 percent of its GDP.

The politics of the super-rich, in one chart

When it comes to politics, where does the 1 percent park its cash? Larry Bartels flags a recent study by political scientist Adam Bonica, who analyzed the campaign contributions of Forbes’ 400 richest Americans — who’ve given $460 million since 1979 — and mapped their donations to over 50,000 candidates on a liberal to conservative scale:

(Adam Bonica)

As Bartels notes, the super-rich were most likely to give to Republicans (that’s the grey section above), but not to the most ideologically extreme candidates. A good chunk of the Forbes 400 gave to both parties, occupying the ideological middle. Democrats received significantly less support from the super-rich, but the donations still piled up.

Posted by Suzy Khimm

Lots of debt but no degree: the catch-22 for college dropouts