Economy Department with Ezra Klein

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Ezra Klein
Washington Post Business Blogger
Thursday, April 8, 2010; 12:00 PM

Trying to understand health-care reform, but getting lost in the weeds? Don't worry, Washington Post blogger Ezra Klein can help. From individual mandates to health care exchanges, Klein explains it all. He took your questions on health-care reform, economic and domestic policy and pretty much anything you can attach a chart to.

A transcript follows.

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Arlington, Va.: Ezra, if all of the credible economists say that the government has to spend significantly until the economy demonstrates its own capacity to grow, then why is there so much anxiety about our budget deficit and national debt? Shouldn't we be considering post-recession plans for what to do when we get a clean bill of health, but not instill panic within the populace about our current circumstance?

Ezra Klein: Well, credible economists also say that people are rational actors who follow their incentives. And politicians have an incentive to get reelected, and if they're in the minority, regain power. So they're more interested in saying things that sounds good to people than in following the edicts of economists. And the problem, of course, is that what sounds good to people -- I tighten my belt during a recession, and so too should the government -- is the opposite of what economists believe needs to happen.

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Albany, N.Y.: Has anybody studied why health-care expenditures vary so much from state to state? Do higher expenditures correlate with better outcomes?

Ezra Klein: Yes they have, and no they don't. Google "Dartmouth Atlas" or "Atul Gawande Cost."

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Palo Alto, Calif.: Two quick hits:

(1) Odds on climate legislation this year? (2) Odds on immigration reform this year?

Ezra Klein: 1) Low. 2) Extremely low.

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Richmond, Va.: Your blog entry on the economy and the 2010 election (The economy and the 2010 election (with graphs!) (Ezra Klein, April 8) left out perhaps the most important graph of all:

The actual unemployment rate versus the predicted unemployment rate at the time the stimulus was passed as shown in the famous Christine Romer chart.

Aghast at the Latest Unemployment Projections

The fact that the unemployment rate is worse than what Obama's team predicted it would be if we had NOT passed the stimulus package will not go unremarked on by the Republicans.

Obama needs to provide an adequate explanation of:

1. Why the unemployment situation hasn't matched up with his predictions.

2. Why we should expect better results from the same policies (i.e. more government stimulus) and policy makers (his team)

Note that there is a case to be made here, and Paul Krugman makes it best that the initial size of the stimulus was too small give the scope of the problem. But that would require Obama to admit that he adopted a suboptimal policy due to the politics of it, and also doesn't quite match up with his current "freeze" of discretionary non-defense spending.

Ezra Klein: It definitely won't go unremarked by Republicans. The early estimates predicted a milder recession than we ended up having. Republicans try to portray this as the fault of the stimulus, which is patently absurd: The recession beat expectations before the stimulus came into effect. But it certainly makes the administration look bad. As you say at the end of your post, though, I'm always confused by the administration's unwillingness to say, look, we got what we could, we think we needed more, and people should keep that in mind. The desire to sell all accomplishments as optimal, or even sufficient, accomplishments is damaging.

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Alexandria, Va.: A recent GOP talking point, repeated by Newt Gingrich on the Today show yesterday, is that the new health care law means that the IRS will need to hire 16,000 new agents to enforce the new law. Is there any basis for reality for that assertion?

Ezra Klein: No. Read FactCheck.org's dismantling of it.

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Washington, D.C.: Congratulations on being fake-quoted in an Onion article. My question is about the coming battle on financial regulation. What are the metrics you'll use to determine whether the bill is satisfactory? Also, how can the Democrats best exploit this issue politically and pit the GOP as defenders of the big banks? It seems like a no-brainer, but they seem to be having trouble shaking the Frank Luntz-inspired "second bailout bill" talking point.

Ezra Klein: I'm having a lot of trouble with this question, actually. FinReg is hard to boil down. The biggest things are capital requirements that are defined rather than left to regulators and total transparency in the derivatives market, but how you communicate the presence or absence of those things will be difficult.

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Washington, D.C.: Do you think Obama's capitulation on offshore drilling will gain one GOP vote for a climate bill that prices carbon?

Ezra Klein: There's no evidence of it yet.

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Taxes: Ezra,

We've had two top federal officials say that we need to raise taxes. I guess in their opinion, the "pay for everything by taxing the 'rich'" approach isn't enough.

How likely do you think a VAT is? I can't see any Republicans voting for it, but do you think anyone on the Hill has a stomach for it?

Ezra Klein: In the short-term? Pretty unlikely? In the long-term, after some sort of financial crisis forces a deal? More likely.

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16,000 new agents: That's job creation baby!

Ezra Klein: But also, you know, a lie.

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Nate from D.C.: As a regular consumer of your foodie articles, mark me confused. You rave about roast chicken but also demand special vegetarian plates? Did you recently discover an aversion to meat? This is going to be depressing!

Ezra Klein: So I should clear this up. As I've written about in the food section, I limit my meat intake pretty sharply, but I'm not a full vegetarian. My personal rule is that I'll eat five meals with meat a month. That lets me have the occasional amazing roast chicken, but it also means that my aggregate consumption is very low.

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New York, N.Y.: What means does Congress have at its disposal to reverse the effects of the Citizens United decision?

Ezra Klein: They can make it embarrassing or technically difficult for corporations to spend. For instance, if every time a corporation spent money, it had to disclose its name on the ad, maybe they'd be less likely to do it. But broadly speaking, I think it would be more effective to make small donors more powerful than to make corporate donors less powerful. Durbin's Fair Elections Now Act would be a good start.

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Eugene, Ore.: I liked the bill (H.R. 4789/Public Option Act) that Congressman Alan Grayson proposed. It's simple and makes sense. What's the status of this? Seems like it should be a "no-brainer".

Ezra Klein: It just needs the votes.

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Colorado Springs, Colo.: What kind of successive GDP growth would be large enough to put a serious dent in unemployment?

Ezra Klein: It would sort of depend on how the growth was apportioned. Unequal growth -- which we saw in the Aughts -- can leave the working class behind. Basically, what you need is job growth well in excess of 100,000 per month. Why? because the economy gets about 100,000 new workers every month and you have to absorb them.

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Clemson, S.C.: The litigants in the health-care lawsuit lay out some pretty succinct arguments in favor of overturning the individual mandate and the Medicaid mandate on states. Is there a reasonably succinct argument on the other side to counter their claims?

Ezra Klein: I don't know if their arguments are succinct, but the question is whether they're constitutionally correct. Most legal experts say they aren't. That said, if you think of this in terms of campaigning rather than in terms of actual concern for the Constitution -- and I think that's the right way to think about it -- then maybe succinct is important.

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Woodbridge, Va.: Without getting into the merits of Sen. Shelby's recent proposal on a consumer protection agency, the fact that he is even offering a proposal at all seems to ensure that a financial regulatory reform bill will be enacted this year. If the Republicans were unsuccessful in blocking a hot button issue like health care, they don't have a chance of stopping financial reform over relatively obscure issues like derivatives clearinghouses or pre v. post funding of the resolution authority.

Ezra Klein: Well, what worries me is that they do have the potential to screw up a bill by modifying things like derivative clearinghouses and resolution authority. because a bill like this is all details, who wins on fights over the details is really important.

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Baltimore, Md.: Just finished reading Stiglitz FreeFall which is pretty harsh on Larry Summers especially. Then I bumped in to Larry at BWI the other night after midnight and was tempted to hand him my copy of FreeFall. Do you think Larry has read it already and why, oh why, is he still in a position of influence?

Ezra Klein: Doubt he's read it, but I think he's still in a position of influence because Obama thinks he's been doing a good job.

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Climate Control and Vegetarianism: Hi Ezra,

Why is it that when climate control is discussed, no one ever talks about the significant amount of polution caused by factory farming and the slaughter of millions of animals per year. If we cut our consumption of animals in half it would have major positive effects on our environment. And this is something that can happen right away with a simple shift in how we choose to conduct ourselves, what we eat, etc. We can choose to buy hybrids and we can choose to eat less meat. But no one ever talks about that. Why?

Ezra Klein: I talk about it! Google "the meat of the problem."

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Ezra Klein: Thanks, folks.

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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.


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