There are two broad views on our newly resurgent global bubbles--the increase in asset prices in emerging markets, fuelled by capital inflows, with all the associated bells and whistles (including dollar depreciation). These run-ups in stock market values and real estate prices are either benign or the beginnings of a major new malignancy.

The benign view, implicit in Secretary Geithner’s position at the G20 meeting last weekend, is most clearly articulated by Frederic (Ric) Mishkin, former member of the Fed’s Board of Governors and author of "The Next Great Globalization: How Disadvantaged Nations Can Harness Their Financial Systems To Get Rich," in the Financial Times this morning.

Jacob S. Hacker is the Stanley B. Resor Professor of Political Science at Yale University, author of The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream, and an occasional contributor to The Treatment.

Diane Archer is the director of the Health Care Project at the Institute for America's Future and the founder and past president of the Medicare Rights Center.

How short memories are in Washington. A few weeks ago, when it looked possible that Nancy Pelosi could marshal enough Democratic support to create a “robust” public insurance option with rates tied to Medicare’s, everyone was talking about the big savings and reduced premiums that a series of estimates by the CBO showed this option could create. Then, the concern was that the public insurance plan would put private insurers out of business by using the government’s bargaining power to drive too hard a bargain with providers, creating an “un-level” playing field.

Now, however, the punditocracy is abuzz about the latest CBO estimates that show that the public plan eventually embraced by Pelosi--one that would negotiate rates with providers, rather than base them on Medicare’s--might actually charge higher premiums than the average private plan. No matter that the CBO estimates clearly state that the higher projected premiums reflect its expectation that the public plan will disproportionately enroll less healthy Americans--which might be seen as a virtue, since these are folks private insurance tends to serve most poorly. And no matter that a subsequent CBO letter to the House stated that even a public plan with negotiated rates would still place “downward pressure on the premiums of private plans.” Suddenly, in the commentariat, the public plan isn’t a fearsome predator. It’s a complacent kitten. Initially not worth having because it would be too strong, it’s now, according to critics, not worth having because it would be too weak. 

In truth, both the initial fears and current dismissals are overblown. The CBO’s declining estimates of savings certainly make a strong case for having the public plan use modified Medicare rates, as we have long argued. It’s a shame the House will not be considering a bill that shows how substantially a public plan can contribute to freeing up federal dollars to help Americans afford coverage. But we should keep in mind that the prime argument for the public plan has never been about a particular payment formula. It has been that a public insurance plan is vital as an institutional check on private plans, its role evolving to reflect the emerging weaknesses (or strengths) of regulated private competition. Put simply, health reform is much more likely to succeed with a public health insurance option, even one with negotiated rates, than if private insurers are left to run the show.

If your image of Milwaukee is largely derived from Laverne and Shirley re-runs, think again. My recent visit with leaders of Milwaukee’s Water Council showed me how communities in the Great Lakes are beginning to tap the “magic” of water for economic revitalization (the words of Milwaukee Mayor, and maybe-gubernatorial candidate, Tom Barrett). 

The Milwaukee River running through town used to be a mess, and the only thing that looked out on it was the backs of factories. Metropolitan Milwaukee Association of Commerce CEO Tim Sheehy explained, “We opened it up for development; now it is lined with shops, restaurants, condos and offices. When we bring CEOs to town, we don’t put them in a car. We put them in a boat and show off our city.”

These efforts in Milwaukee and other Great Lakes metros are getting a major shot in the arm with President Obama signing a bill that provides $475 million in Great Lakes cleanup dollars. This “down-payment” on a long term multi-billion dollar federal-state-local plan to clean water and reboot municipal waste systems (so beaches are open and not closed for weeks during the year); to cleanup toxic hot spots still lingering in Great Lakes harbors and rivers, and protect and reclaim wetlands and scenic areas was promised by then-candidate Obama last year. 

The promise he made during the campaign to follow up on a Bush-era Great Lakes clean up plan that had been languishing in Congress, was muscled forward, aided by the Healthy Waters, Strong Economy economic analysis of its prospects.

While Congress slogs through the final months of the health reform debate, the American people remain focused on the economy. With good reason: We’re in a very deep hole, and it’s not clear how we’re going to get out. 

After four quarters of decline, GDP finally grew, and at a pace--3.5 percent annually--not seen since the summer of 2007. As my colleagues Alan Berube and Bill Galston point out, and as I argued last month, signs of economic growth don’t necessarily mean a rapid recovery, a sustained recovery, or even a recovery that feels meaningful to the vast majority of Americans. But that’s not the horse I want to ride today. Instead, I want to read the tea leaves (the details of the GDP numbers for the third quarter of this year) to see what they suggest about the geography of the recovery--which metro areas are likely to be recovering and which aren’t.

First, the obvious.  

• The cash for clunkers program temporarily boosted auto sales and, most likely, the economic fortunes of the 62 metro areas (mostly in the Great Lakes and South Central regions) that depend heavily on making cars and auto parts. 
• The first-time homebuyer tax credit, now set to expire at the end of November but possibly up for renewal, probably boosted housing sales and prices (or at least kept prices from sliding further) in the metro areas of Florida and the Southwest that were hit hardest by the collapse of the housing bubble. (The most recent Case-Shiller house price numbers bear this out, showing house prices rising over the summer in Los Angeles, Miami, Phoenix, San Diego, and Tampa and slowing their pace of decline in Las Vegas.) 
• Federal government spending grew (although not by as much as in the second quarter of this year), largely as a result of the economic stimulus. That should especially benefit Washington, D.C., and metro areas such as Virginia Beach that have large military installations. 

Now, the not-so-obvious.

California is a mess, but I love it all the same--especially the Bay Area, where I lived for 15 years. I went to Berkeley in 1962--a refugee from Amherst College, which at that time was dominated by frat boys with high SAT scores. I didn't go to Berkeley to go to school, but to be a bus ride away from North Beach and the Jazz Workshop. In a broader sense, I went to California for the same reason that other émigrés had been going since the 1840s. I was knocking on the Golden Door.

Jacob S. Hacker is the Stanley B. Resor Professor of Political Science at Yale University. An expert on the politics of U.S. health and social policy, he is author, coauthor, or editor of numerous books and articles, both scholarly and popular, including The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream (2006; paperback, January 2008) and Health At Risk: America’s Ailing Health System and How to Heal It (2008).

As closed-door discussions continue in the Senate, the idea of triggering the public health insurance option is once again on the table. Advocates of the trigger cast it as a compromise that will attract the support of the small number of conservative Democrats who have expressed reservations about the public option, as well as Republican Olympia Snowe, who has proposed a trigger. But to be a compromise between public plan skeptics and the majority of Senators who support a public plan because it is central to ensuring affordable coverage while limiting the budgetary costs of reform, a trigger must have some prospect of working—and a trigger inserted into the two Senate bills now being merged would not.

Last week’s Conference on Automotive Communities and Workforce Adjustment, sponsored by the Federal Reserve Bank of Chicago and held at the bank’s Detroit branch, understandably focused a lot on Detroit and southeastern Michigan. In my talk at that conference, though, I pointed out that the metropolitan areas that depend most heavily on the auto industry (including assembly and parts, foreign companies as well as the Detroit Three) aren’t just in Michigan, and most aren’t anywhere near the size of Detroit.

There are actually 62 metropolitan areas (shown on slide three of the attached PowerPoint file) where motor vehicle and parts manufacturing make up at least 1.12 percent of all jobs, which is at least double the nationwide percentage. That may not sound like very much, but remember that lots of other jobs, in car dealerships, dentists’ offices, restaurants, and a host of other local service companies, depend on the auto-related jobs. If a metro area with 1.12 percent of its employment in motor vehicles and parts lost all those jobs, it could lose more than 3 percent of all its jobs (maybe more in small metro areas and less in big ones). That’s a big hit. 

Some of these 62 highly auto-dependent metro areas are located in Michigan and nearby Great Lakes states. But others are in the south-central states (Kentucky, Tennessee, Alabama, Mississippi) and parts of the southeast (Virginia, the Carolinas, Georgia), and there are a few auto parts manufacturing centers located in the Western states.

For the past decade or so, every time the US Census Bureau released new data, headlines would blare “Immigration Up in the US.”  More recent headlines have been hopeful: “Immigration offers Cleveland a chance to import the future.” Others wistful: “Current waves of immigrants offer hope for St. Louis' future.” But mostly, they just repeatedly announced that immigrants were still coming to the United States in large numbers. “Area Immigration Booming; Census Finds Steady Flow Despite Economy, 9/11 (2004),” “Census Shows Growth of Immigrants (2006),” and “Immigration at Record Levels (2007)”

So it may have surprised some then, when new data from the Census Bureau’s 2008 American Community Survey released last week showed that the U.S. foreign-born population dropped during the Great Recession of 2008, after 40 years of sustained growth. Those from the restrictionist camp would like to claim enforcement is working. Others wonder if the drop means more immigrants are emigrating or if just fewer are coming.

While the net decrease in the national immigrant population is small at around 100,000 (and it is not statistically significant for those who care), it does signal a leveling off or decline in the immigration flow.

Today’s release of data from the 2008 American Community Survey offers demographic data-hounds their first detailed glimpse of the effects that the Great Recession is having on America’s population (no income and poverty numbers yet, however).

By far the most reported finding was an apparent drop in the number of immigrants in the United States. This hit the headlines in the Washington Post, the Wall Street Journal, USA Today, and the Chicago Tribune, among others. The Los Angeles Times reported a drop in immigrants nationwide and in California.

Though the annual ACS is indeed manna for said data-hounds, buried a few paragraphs down in most of those stories (not in the Post’s, notably), however, is the revelation that the reported decline between 2007 and 2008 in the number of immigrants in the United States—about 100,000—“falls within the margin of error.” In fact, the data suggest there’s about a 17% chance that the U.S. foreign-born population was the same in 2008 as in 2007. Typically, statisticians reject as insignificant results that would be attributable to chance at a probability greater than 10 percent (or sometimes 5 percent).  

“First Fridays” these days find Wall Street investors and Washington policymakers and pundits holding their collective breath. At around 8:30 AM, on the first Friday of each month, the Bureau of Labor Statistics releases the latest round of job and unemployment figures. And then the buying, selling, and spinning begins.

But this insider obsession begs the question: Do these numbers reflect what’s happening on the ground?

To get a better appreciation of how workers and firms across the country are experiencing the downturn--and whether they are on the cusp of recovery, still staring into the abyss, or somewhere in between--we conduct a quarterly assessment of economic conditions in the nation’s 100 largest metro areas, which together account for about two-thirds of U.S. jobs. Today marked the release of the second MetroMonitor, which examined trends through the second quarter (April through June) of 2009. In looking at the 100-metro map of overall performance over the course of the recession (see below), a few patterns stand out:

On Labor Day, President Obama appointed Ron Bloom, head of the administration’s auto industry task force, as his manufacturing “czar.” A former United Steelworkers staffer, Bloom recognizes the importance of high-wage manufacturing to the U.S. economy and to the well-being of the Great Lakes metropolitan areas that have been its center for more than half a century. But his experience is mainly in structuring financial deals. Does he understand the non-financial obstacles to reviving American manufacturing? If he is to help the administration craft an effective manufacturing policy, he’ll need to advocate for the following policies:

Ayatollah Ali Khamenei and Mahmoud Ahmadinejad like to blame the uprising in Iran on outside influences. They particularly like to point their fingers at the British and the Americans, along with a requisite nod in the direction of the Zionists--a time-honored pretext for avoiding blame for discontent in their country. But, for all the phantom rabble-rousers, there’s one outside influence that has actually helped shape events: the Falun Gong.

To most metropolitan Americans, the Falun Gong are the yellow-shirt-wearing adherents of a Chinese religious sect who hand out flyers on street corners. Those flyers describe the group’s struggle against the Chinese government, which has banned the Falun Gong and subjected its members to organ-harvesting, electroshock therapy, and gulags. But, as the Chinese have escalated their efforts to stamp out the Falun Gong, the group has grown ever savvier in outwitting its oppressors. And it was the protestors in Iran who benefited from this savvy.

• The Courtship: The Story Behind Obama's Bromance with David Brooks, by Gabriel Sherman
• Is There Actually Reason to be Excited About the Upcoming Israeli-Palestinian Peace Talks? by Shmuel Rosner

The Forgotten Man: A New History of the Great Depression By Amity Shlaes (HarperCollins, 464 pp., $26.95)

Herbert Hoover By William E. Leuchtenburg (Times Books, 208 pp., $22)

Nothing to Fear: FDR's Inner Circle and the Hundred Days that Created Modern America By Adam Cohen (Penguin Press, 372 pp., $29.95)

Jacob S. Hacker is Professor of Political Science and Co-Director of the Center for Health, Economic, and Family Security at U.C. Berkeley.

Over the last 25 years, liberalism has lost both its good name and its sway over politics. But it is liberalism's loss of imagination that is most disheartening. Since President Clinton's health care plan unraveled in 1994--a debacle that this magazine, regrettably, abetted--liberals have grown chastened and confused, afraid to think big ideas. Such reticence had its proper time and place; large-scale political and substantive failures demand introspection, not to mention humility. But it is time to be ambitious again.