Economy Department with Ezra Klein
Thursday, June 11, 2009; 12:00 PM
Ezra Klein writes a Post blog about economic and domestic policy, and he will be online to take your questions about collapsing banks, cap and trade, health care reform and pretty much anything else you can attach a chart to.
Washington, D.C.: Hey Ezra,
My mother is terrified of losing her healthcare in the event of the enactment of the Kennedy legislation. She says that her plan does not cover eye care or mental health, and that the new legislation requires this coverage.
Since she believes her insurer will not grant her this coverage, she'll be forced to go on a public plan. I know this is contrary to what Obama campaigned on (being able to keep your healthcare if you're happy with it) and I doubt that there will even be a public plan to opt for, so I'm skeptical of her fears. Do you know what she's talking about? And is there a chance that she would lose her coverage due to healthcare reform?
Ezra Klein: I'm not really sure where your mother is getting this. No one will ever, under any circumstances, force her into the public plan.
It is possible that some insurance plans won't meet the minimum benefit packages required for coverage. I can't say if that's true for your mothers because no one knows what the minimum benefit package will be. But that doesn't mean anyone will be pushed into a public health plan. It means that they'll take advantage of subsidies -- up to 400 percent of poverty, we expect -- to purchase slightly more comprehensive insurance coverage. In other words, if things go like your mother expects, and her plan is too stinhy, the result won't be that she's forced into the public plan. It'll be that she has vision and dental coverage.
Washington: Executive pay -
Why not just set a ratio of executive pay compared to the median of a companies workers and anything over that limit and there is no tax break for the corporation.
That way there is no hard cap.
Ezra Klein: Because America is not nearly as socialist as I'd like it to be. The difference between CEO pay and median worker pay -- and more to the point, the difference between what it is today and what it was in the 60s -- is appalling. But for all that, I tend to be more interested in fixing these issues through the tax code. It's tricky for government to intervene in how much CEOs are paid. It's trivial for them to change how much they're taxed.
Philadelphia: I realize this may be a bit outside of your normal health care policy purview, but I'm wondering if you've been following the new Patient Safety Organization initiative. I'm deeply suspicious of just about everything about this program, and it seems to be doing its thing far from the light of any media scrutiny.
Ezra Klein: Nope! But I'll look into it.
Montreal: Why are economists already talking about a "recovery" while the banking system has not yet been restructured, the financial regulations have not been laid out, the health care issue has not really been solved, education is still clearly lacking resources... no change has occurred. Sure, the US economy will show growth, but what good is that if we return to the old ways which got us in the crisis in the first place?
If not now (or, a couple of weeks ago), are Governments going to able/willing to restructure anything when the economies return to their "healthy states"?
P.S. what is your kung Pao recipe?
Ezra Klein: Well, we can recover from the crisis without necessarily getting on stable long-term footing. The result of that will probably be boom-bust cycles. A few good years followed by a few bad followed by a few good followed by a few bad. It'll be an excellent economy for lovers of volatility. But that said, returning to a more normal unemployment rating (5 or 6 percent, say) would be a real improvement over where we are now. My concern, however, is that recovery will sap the political system of the will to make the long-term changes.
On the other hand, it's not clear the political system ever had the will for the long-term changes.
And my kung-pao recipe is here. To be honest, though, I'm more into ma po tofu in the summer months. Ask me for that recipe, sometime.
Fridley, Minn.: What in your opinion are the chances that the following things become U.S. policy this year:
- Cap n' Trade
- Health Care Reform
- HCR with pubic plan
- No more Don't Ask Don't Tell
- Another Stimulus
- Laws passed that Al Franken voted on
And personally what would you wish the priorities were on these.
Ezra Klein: 1) Good cap and trade? Near to nil. Bad cap and trade? 20 percent.
2) 70 percent
3) 50 percent
4) Not really sure
5) 15 percent
6) 80 percent
Los Angeles: Ezra you know as well as I do that the insurance companies and the AMA own congress and the White House. There is nothing they won't do to prevent Americans from getting the health care we need unless we pay through the nose. This goes for everything else double.
What do you propose we do?
Ezra Klein: Organize.
I'm not being facetious. Why does Congress fear special interests? Because they think they can make them lose elections. Because they are activated and voters are not. But voters, of course, have much more direct control over elections. When they're activated, Congress listens to them. Put slightly differently, the best way to predict the outcome of a congressional vote is ask who the representative is most scared of in the near-term. If it's you, then he'll listen to you.
Eureka, Calif.: Ezra, We live in Rural Northern California. I quit my job and now pay $1300/month for COBRA (such a cuddly word to describe a Health Care Plan) for my family of four with two preexisting conditions. It's good for 18 months. My question is: Will a public option that agrees to insure my family be available to me to purchase by August, 2010? Single payer would be nice, but my current main concern is a public option that won't say no. Good luck with the new position.
Ezra Klein: in health reform, none of the options, public or private, will say no. The insurance industry has already agreed to guaranteed issue (they can't deny you coverage) and community rating (they can't base your coverage premiums on your past health history). Whether it'll be up and running by Aug 2010? Maybe. I'd be surprised, though.
North Bethesda, Md.: Executive Pay - why is this such a big deal? Seriously? Yes they make a lot of money, but in the grand scheme of things, on corporate bottoms lines, they barely make a dent. Isn't this just a populist movement that channels the general public's anger into CEO scapegoats?
Ezra Klein: Sort of. It's a pretty big deal because payment structures matter for the way people do their jobs. For instance: If the Post paid me based on how many page view I got this month, I'd make my blog really sensationalistic. But since they pay me based on a vaguer set of criteria (am I running a good blog?) over a longer period of time, I write about things like health insurance exchanges and executive compensation.
The problem with financial pay structures was not that total compensation was too high (though it was, oh my god it was), but that they rewarded short-term risk. People were given huge piles of cash in return for incredibly dangerous plays. That made everyone a lot less likely to stop and ask if this was safe in the long-run. As Keynes didn't really say, in the long-run, we've already spent our bonuses.
Washington, DC: How would you evaluate Sen. Conrad's plan about non-profit co-ops in place of a public plan? Is that a fair substitute? Could it be a fair compromise?
Ezra Klein: Definitely not. But it's a good idea on its own merits. It should be done alongside a public plan. Matt Yglesias had a good post on this yesterday.
Princeton, NJ: Ezra, if you read my postings to your blog, you know that as a mathematician, I have a number if issues with what you write. One is your constant use of projections as predictions. Here is a projection. "If all 5 of the Nationals starters each win 20 games , the Nats will win their division." As a projection, it's pretty good. The associated prediction, "The Nats will win their division," stinks. Remember the projection in 2000 of "surpluses as far as the eye can see"? Nobody even knows what assumptions went into that one.
The Social Security projections are another good example. They make 14 assumptions about quantities which are unknowable because they depend on future events. They have been consistently wrong. They have not even been consistent. Look at a graph (hate this text editor) of the date the trust find will be depleted as a function of the year the projection was made. If these projections were consistent, that would be a horizontal line. In reality the graph is all over the place. These projections when used as predictions are no more accurate than reading the entrails of a goat.
In fact, the Japanese have a saying which applies to all such economic predictions.
"An inch ahead lies darkness."
Ezra Klein: I try to be careful, and it's of course true that projections aren't predictions. But point taken.
Portland, OR: Are the Blue Dogs going to kill healthcare reform (or rather, the public option in any coherent form?)
Ezra Klein: Probably won't kill it. Will they water down the public option? Maybe. I'd be much more worried about so-called Senate moderates than congressional blue dogs. Pelosi runs that place like the Politburo. (and I say that with admiration!) Plus, congressional blue dogs don't have a filibuster to dangle.
insurance industry has already agreed to guaranteed issue: Ezra, I have a bridge you may interested in buying.
Ezra Klein: Really? How much is it?
More seriously, you have to think of the insurance industry's calculation here. If the health system really collapses because of cost, it collapses on them. We like doctors, use hospitals, and need pharmaceutical and medical devices. We don't need insurers. And they know it. They'd much rather have a leisurely reform they can help shape now -- particularly one that gives them 47 million new customers -- than a crisis-oriented reform that runs them over later. As the oft-used line goes, they want to be at the table so they're not on the menu.
Cleveland: Ezra- Much has been written about the relative merits of a strong or weak public option in the health care reform, but I've seen very little characterization of the Rockefeller proposal. How far short of your ideal public option does it fall? Is it the best politically possible public option?
Ezra Klein: It's very close to the strong public plan. But I don't see where it gets congressional support from. It's a good proposal, in other words, but I'm not convinced it's a meaningful one.
Laguna Beach, Calif.: Was the New America Foundation's policy brief, "Making Medicare Sustainable," the model for Rockefeller's S.1110 MedPAC legislation?
Ezra Klein: Sort of. They do have a variant of the MedPAC idea in there, though as I remember, they actually create a whole new agency that isn't Medpac. It's the same basic idea, though. This is one of those situations where there are many ways to skin a cat. You can make it a federal reserve like agency. You can make it a BRAC-like commission that sends legislation for a quick vote. You can make another agency with similar powers. So long as you make the recommendations actionable.
Philadelphia: How about looking at statistical facts. The US has a higher mortality rate than other Western countries with either socialized medicine or govt backed medicine. The infant mortality rate is also higher here. How can anyone say we have the best health care when 50-plus million don't have any?
Ezra Klein: Word. Though infant mortality and life expectancy can be a bit misleading. The secret about health care reform is that it's mainly about health care spending. It's not going to make people all that much healthier. If you really wanted to cut childhood mortality and increase life expectancy, you'd do things like early childhood education, subsidies for nutritious food, walkable communities, and so forth. The Robert Woods Johnson Foundation just had a good report on these questions, actually. It was called Beyond Health Care.
Anonymous: Temecula, California
It seems that California is on the brink of economic disaster right now. What do you foresee happening?
Ezra Klein: Government bailout. I don't really see another option. You can't have the largest state in the union default. My hope, though, is the the Feds decide to play IMF and attach the money to political reforms that make California a more governable state.
In particular, Prop 13 has destroyed revenues, as has the requirement for a 2/3rds majority to raise taxes. Meanwhile, the ballot propositions have attached all sorts of new spending that the legislature never voted for. So you're in a situation where California's lawmakers can't control how much money they raise or spend. That's a recipe for disaster.
Baltimore, Maryland: Can you comment more on how you see old-skool print media and you dirty blogger types working together for better overall news reporting? I am appalled by how un-web savvy the Baltimore Sun is: They have a few in-house bloggers (like yourself), but in their regular reporting they exist in a web vacuum - they may mention that an issue was covered by a blog but provide no external link. I'm curious as to how you see potential synergies evolving for the benefit of quality reporting, and for maybe keeping newspapers in the black.
Ezra Klein: This requires a long answer, I fear. But I'll say this: I don't now, and never have, seen newspapers and bloggers in opposition to one another, any more than newspapers and op-ed pages are in opposition to one another. They play different roles.
I think my role is to be very good at reading newspapers and explaining policy concepts. Put another way, I try to add value to things that my reporter colleagues write. The information they bring to bear makes my work possible. The additional sources, explanation, and analysis I offer makes their work more valuable to my readers. It's not a competitive relationship.
Satellite Beach, Fla.: You must be kidding with your "not as socialist as I'd like it to be" comment. This is not a socialist country, if that's what you want, feel free to head on over to China, I'm sure they'll be happy to have you.
Ezra Klein: I would never kid. About anything. Ever. Everything I write, in fact, should be assumed 100 percent serious unless it comes with [joke] [/joke] tags.
Also, I'd love to live in China for a bit, though I'm attracted by the food, not the government.
More seriously, socialism and capitalism exist on a continuum. Some things in America are very capitalist. TV purchasing, for instance. Some things tilt more towards socialism, like the military. I think we need a larger safety net and a bit more regulation of the market, which is to say, I'd like us to move left on that continuum. It does not mean I'd like the government to take over the means of production.
Miami, Florida: You mentioned in an earlier question that you only give Cap'n'Trade a 20% chance of passing this year.
Really? That seems depressing. Could you speak more about that?
Ezra Klein: Sure. I'm terribly depressed about the chances for cap and trade. I don't see much in the way of senatorial strategy or courage on the issue. My sense is that you couldn't get one of four US senators to give you a coherent explanation of the policy or, for that matter, the problem it means to solve. I think Republicans have been pretty effective at previewing their argument that it raises the price of dirty energy (which it does) and I think Democrats have been bad about explaining that a) you get that money back through a tax credit and b) we shouldn't totally destroy the earth.
I'm also concerned about the composition of the interest groups. You seem to have advocacy groups interested in c and t legislation. But it looks to me like business, energy, and all manner of other interests are going to fight viciously against it.
That could leave you, as the legislative process usually does, with some totally weird bill that exempts all manner of industries and hands out credits for free and protects coal interests and all the rest. And that might be better than nothing. But given the feedback loops and general uncertainty around global warming, this isn't an issue like health care, where you can make it better without solving the problem. If you don't solve the problem here, and quickly, you probably can;t make it better, and you certainly can't return in 35 years for another look.
Chicago: Hey Ezra, is this going to be a regular chat?
Ezra Klein: Hope so!
Washington, D.C.: I've never understood the "why don't you move to China/France/Canada" impulse when I argue for more social insurance. Usually I patiently explain why I believe what I believe, but perhaps instead of trying to come to a common understanding I should yell back, why don't you move to Somalia!? Any thoughts?
Ezra Klein: Mockery. Pointing. A threat to take away that person's Medicare, or their ability to drive on roads. That sort of thing.
Arlington, Va.: Regarding cap and trade, there is evidence that Europe's systems are not working. For political reasons, the governments have been issuing so many credits to indutries that there is no market for trading them.
Ezra Klein: Yep. It's really very worrying.
Rockville, MD: Ma po tofu recipe, please! I'm always looking to make mine better.
Ezra Klein: Here you go. Probably the easiest and cheapest sichuan dish to make. Look up Fuschia Dunlop's recipe for dry-fried green beans if you want a nice side.
It's not going to make people all that much healthier.: Of course it will. Uninsured people and underinsured people are substantially less healthy than others. It won't solve all the problems, but it's a start.
Ezra Klein: I've got a feature coming out on this -- my last AMerican Prospect article, at least as a staffer there -- but it's not really true. Researchers have looked into amenable mortality -- essentially, deaths that could be averted through different interventions -- and inadequate health care gets about 10 to 15 percent. Behavior and environment are much larger.
Hickory NC: What is being said/proposed about lowering drug prices by using the Government's bargaining power? This was a big issue a few years ago but I don't hear much about it now. Thank you.
Ezra Klein: Good idea. Probably not going to happen. Our legislators our pretty into pharmaceutical industry donations. But its always worth pointing out the absurdity of the Canadian reimportation debate here. That's literally a policy idea that's emerged because Americans go to Canada to buy drugs produced and sold in America because the Canadian government negotiates such incredible discounts. And pharma has fought to make that illegal.
Prescott, Ariz.: If Republicans are going to continue to whine about government run health care, why doesn't some savvy Dem get a bill on the floor that proposes getting rid of the V.A., Medicare, and Medicaid and let them vote their beliefs?
Ezra Klein: Good question!
Washington, D.C. : Some banks will start repaying the bailout money and it is supposed to be recycled into more lending until the program runs out. Since TARP is borrowed funds, at what point does the government pay that back?
Ezra Klein: Hard to say. The government hasn't put a lot of effort into repaying long-term debt recently. At some point in the future, theres going to be a painful reckoning where taxes go up and government spending goes down -- akin to what we saw in the Clinton years -- but right now, it's sort of like a game of hot potato, as both parties try to implement their priorities and leave the other party holding the bag.
Socialism in the Military: I'm in the military and I have my and my family's healthcare paid for by the government without any premiums, etc. Why can't we expand this to all tax paying citizens?
Ezra Klein: Because the military is un-American. Haven't you been paying attention?
Ezra Klein: I think that basically does it for me. Come check out the blog! http:/
Ezra Klein: Oh, and also check out our new economic solutions page, which is aggregating our forward-looking crisis commentary.
Editor's Note: washingtonpost.com moderators retain editorial control over Discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions. washingtonpost.com is not responsible for any content posted by third parties.