Amid the dark clouds of the Great Recession, more than a few people have identified a possible silver lining--reduced inequality in America. Job losses on Wall Street, and talk of reining in executive pay and raising taxes on the wealthy, suggest at least a temporary end to rapid growth of salaries at the highest end of the market--a trend which produced the highest share of income on record for the nation’s top 10 percent of families in 2007.
But this is short-term thinking at best. Besides, is reduced income inequality so great if all it means is that the super-rich are getting whacked more than the poor? Indeed, the character of this recession suggests that it could actually accelerate a longer-run increase in inequality, especially among workers with different skill levels.
The chart below offers some initial evidence on this question. For each major industry, it compares job loss over the course of the recession (the vertical axis) to wage inequality, measured as the ratio of the wage at the 90th percentile of the industry distribution to that at the 10th percentile of the industry distribution (the horizontal axis). Bubbles are sized by the number of jobs in the industry as of September 2009. Here’s the breakdown:
Republicans are proclaiming victory after their candidates won statehouses in New Jersey and Virginia. And well they should. These were both states that went for Barack Obama in 2008. But how much do these elections really say about Obama and the prospects of the national Democratic Party? Some network commentators, citing suspiciously high approval ratings for Obama in New Jersey and Virginia, claim the elections say nothing at all about the president and his party.
Anthony Wright is executive director of Health Access California, the statewide health care consumer advocacy coalition. He blogs daily at the Health Access Weblog and is a regular contributor to the Treatment.
When Senate Majority Leader Reid held a press conference announcing the inclusion of a version of a public health insurance option in the merged Senate health reform bill, he didn’t mention the outcome of another major difference between the two Senate committee proposals--what would be responsibility of employers with regard to on-the-job coverage. And not a single reporter asked.
It’s strange that on-the-job coverage gets relatively little attention in the debate, even though more than half of Americans have health coverage through their employers. That's more than the Americans in programs like Medicaid and Medicare (around a third of the population) and much more than the Americans who buy coverage as individuals (less than a tenth of the population).
For all its flaws, employer-based coverage generally provides good benefits to workers and their families. It pools together shared contributions by employer and employees, leveraging group purchasing power for better premiums and/or a better level of benefits. Among other things, employers use their purchasing power to prevent any of their workers from being denied for pre-existing conditions. The workplace provides an easy place to sign up for coverage--and sometimes a useful ombudsman to deal with the insurer. It is also efficient way for insurers to get multiple customers at once, rather than incurring the expense of marketing and selling policies one at a time. That helps keep premiums down.
But despite its dominance, employer-sponsored insurance doesn’t extend to all workers. More than 80 percent of the uninsured are workers, or family members of workers. And without reform, on-the-job benefits are eroding. The percentage of Americans who get coverage through employers shrank by over 5 percent in the past decade. And in some states, like California, it’s about to go under the half-way mark--which is why the state has been exploring setting some minimum standard for health benefits. With the overall cost of health care rising, employers are scaling back coverage or in some cases dropping it altogether.
The WSJ reports (online): “The U.K.’s top treasury official Sunday said the government is starting a process to rebuild the country’s banking system, likely pressing major divestments from institutions and trying to attract new retail banks to the market.” The British style is typically understated and policymakers always like to play down radical departures, but this is huge news.
There are all sorts of lingering questions about the timing of the Senate climate bill. It's not just a matter of whether something will pass. What are the odds something will pass before the Copenhagen talks? Earlier this week, John Kerry told a group of activists that he was "confident" his bill could win a floor vote before international negotiations pick up again in mid-December, but that seems awfully ambitious.
This is pretty great.
Secretary of State Hillary Rodham Clinton expressed doubt Thursday over Pakistan's failure to locate top al-Qaeda leaders in the eight years since they escaped over the border from Afghanistan, telling a group of Pakistani journalists that she found "it hard to believe that nobody in your government knows where they are and couldn't get them if they really wanted to."
Something wonderful, or terrible, is taking place in Philadelphia. The city's sports fans, whose only consistent love has been for an inanimate object--the statue of Rocky--are becoming warm and fuzzy.
It’s a mistake to put too much weight on the results of any single public opinion survey. That said, Peter Hart and Bill McInturff are an unusually experienced and fair-minded bipartisan team, and I’m inclined to take their work for NBC and the Wall Street Journal seriously. Their latest results offer little encouragement for the president, either political party, or the political system as a whole.
The Senate Environment and Public Works Committee is holding hearings this week on the new chairman’s “mark” of the draft Senate climate and energy legislation released Friday night by committee chairman Barbara Boxer and Sen. John Kerry. This document will be the starting point for the next round of debate, and with this draft, we get to see for the first time how the bill proposes to allocate the revenue it would raise through the sale of pollution allowances.
So how does it look? Well, as an earlier, less detailed draft released late last month forecasted, the new draft very much resembles the Waxman-Markey bill that passed the House, which means it’s a mixed bag (and quite disturbing on at least one key point).
On the regulatory side, the outlines are almost identical, with one exception. Like the House, Boxer and Kerry call for a cap-and-trade emissions reduction system, very much like the one the House enacted. Like the House, the senators propose a specific emissions reduction goal--one that would cut emissions by 20 percent below 2005 levels by 2020 and so is slightly stricter than the target in Waxman-Markey. The Kerry-Boxer outline would allow Environmental Protection Agency to set its own emissions regulations for major point sources under the New Source Review provisions of the Clean Air Act while Waxman-Markey would not. But other than that, the bill largely tracks with the House approach on the regulatory side, and even the emissions goal isn’t all that much tighter than that in Waxman-Markey, as a weekend post by Dave Roberts over at Grist makes clear.
My colleague Mark Muro suggested a couple of days ago in this space that federal agencies should reward metropolitan alignment and collaboration in various grant competitions, following HUD’s lead in dispensing Neighborhood Stabilization Funds.
Another intriguing model comes from a most unlikely source: The Department of Homeland Security.
DHS’s Urban Area Security Initiative grant program, aimed at the 62 U.S. urban areas most at risk from terrorist attacks, flat-out requires metro collaboration, even in metros that span state borders. Grant recipients can’t just make vague promises to coordinate their security and preparedness efforts. They have to create a multi-jurisdictional working group with a charter on file with the feds that explains the group’s membership, governance structure, voting rights, grant management and administration responsibilities, and funding methodologies to dispense the grant dollars and coordinate their spending.
For reasons explained before, we'll likely all be driving electric cars long before we ever see mass-market vehicles powered by hydrogen fuel cells, which was once the great clean-car hope. Still, the fuel-cell approach is obviously worth researching, and now researchers have lit upon a particularly promising fuel source. Oh yes, urine:
Speaking beneath the twinkling crystal chandeliers of the Capitol Hilton ballroom this morning, America’s Health Insurance Plans (AHIP) president Karen Ignagni declared that the insurance industry is still on board with the Democratic health care reform effort, pushing back against the presumption that the two sides have declared war. “Our community was one of the first to position ourselves very actively to a massive overhaul of the insurance market,” Ignagni told the audience members, who were attending the organization’s conference on state insurance issues. She added that AHIP is still pushing for “a massive restructuring of how markets work and a massive change in the way the administrative process works” within insurance companies.
Altogether, Ignagni was trying to present the insurance industry as one of the major visionaries behind health care reform--not one of its obstructionists. This runs counter to the message that’s only growing louder from the Democratic leadership in Congress--not to mention the activist left, who organized a mass demonstration directly outside the AHIP conference this afternoon (more on this shortly). Throughout her speech, she kept reiterating that AHIP has “very specific proposals” that would bend the cost-curve by 1.5 percent. She even concluded with an Obama-like rallying cry to encourage the state-based insurance executives and officials in attendance to support the process: “Yes, we can achieve reform, yes, we can make it work, and yes, we can contribute to that effort!”
President Obama faces an enormous political challenge in figuring out how to respond to General Stanley McChrystal's request for more soldiers in Afghanistan. One the one hand, resisting troop requests from the military during a time of war is difficult for any chief executive--particularly for Democratic presidents. On the other hand, Americans are showing little stomach to once again commit more troops to a distant, war-torn region: No recent survey has found majority support for the idea.
With a just-released Brookings report suggesting that high speed rail (HSR) could mitigate excessive congestion at airports, it would be nice to know if and where rail is a viable investment. The Harvard economist Ed Glaeser sparked a useful debate on the merits of high speed rail with a few recent posts at Economix over at The New York Times.
Glaeser concluded that HSR was not likely to be an efficient investment, but, as with any analysis, examining the assumptions is key.
Though Glaeser’s core approach is sound, if we tweak two of his assumptions ever so slightly--in a more realistic direction--we see that the net benefits go from negative to positive. I’ll focus on just those aspects of Glaeser’s analysis which merit criticism: the interest rate and the costs per passenger.
On July 25, Najibullah Zazi, a lanky man in his mid-twenties, walked into the Beauty Supply Warehouse in Aurora, Colorado, a suburb of Denver. The visit was captured on a store video camera. Wearing a baseball cap and pushing a shopping cart, Zazi appeared to be just another suburban guy.
Of course, not many suburban guys buy six bottles of Clairoxide hair bleach, as Zazi did on this shopping trip--or return a month later to buy a dozen bottles of "Ms. K Liquid," a peroxide-based product. Aware that these were hardly the typical purchases of a heavily bearded, dark-haired young man, Zazi--who was born in Afghanistan and spent part of his childhood in Pakistan before moving to the United States at the age of 14--kibitzed easily with the counter staff, joking that he had to buy such large quantities of hair products because he "had a lot of girlfriends."
Now, two people will have to choose. The fate of the health care bill is largely in the hands of Barack Obama and Olympia Snowe.
The Finance Committee's vote on Tuesday to send its bill to the Senate floor vindicated President Obama's strategy of giving Congress wide latitude to write the early drafts. Major health reform has advanced further than it ever has before.
Bobby Keppel’s bases-loaded fastball clearly grazed Brandon Inge. Joe Mauer’s slicing drive down the left field line landed fair by at least two feet. And Chase Utley needed not one, but two blown calls to reach base safely in the ninth. Or at least these misfortunes were clear enough on instant replay. But the umps ruled otherwise and another World Series dream was deferred for the Tigers, Twins, and Rockies—all small-market clubs, conspiracy theorists will be pleased to note.
We’re only through the division series, but Major League Baseball’s umpires have made enough blatantly bad calls that commentators have already begun their yearly rite of harping on umpire mistakes and raising the specter of broadening the use of instant replay in baseball. Equally true to form, Commissioner Bud Selig has already reiterated his staunch opposition to anything of the sort. Arguing against the innovation, Selig (and many others) cite the negative impact it would have on both the length of the games (already really long) and the integrity of the sport (its humanity at risk of being overrun by techno-wizardry). Both points are bogus.
Robert Altman: The Oral Biography
By Mitchell Zuckoff
(Knopf, 592 pp., $35)
Here is your exam question: who is the last American movie director who made thirty-nine films but never won the Oscar for best director? Name the film by that director that cost the most money, and name the film of his that earned the most. Clue: The Departed, which must have been around Martin Scorsese’s thirtieth picture, and did win the directing Oscar, cost $90 million (four times as much as any of this man’s films cost)--so don’t go that way. Background info: Gosford Park cost $15 million; Nashville cost $2.2 million; M.A.S.H. cost about $3.5 million, and earned around $70 million; Popeye cost $20 million (in 1980). Here is your assignment: assess and reconcile these allegations in an essay of approximately 3,000 words. (Note: banish from your mind any insinuation that nowadays a director who makes thirty-nine films has to be given a best director Oscar--though it is not easy to think of many that fecund who don’t have a bronze fetish to nurse at night.)
Over the weekend, America's Health Insurance Plans circulated a study it commissioned from PriceWaterhouseCoopers. In a memo to AHIP members, reproduced here, president Karen Ignani explained its significance:
The report makes clear that several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system. The report finds that the proposal “will increase premiums above what they would increase under the current system for both individual and family coverage in all four market segments for every year from 2010-2019.
For example, the analysis shows that the cost of the average family policy is approximately $12,300 today and will rise to:
--$15,500 in 2013 under current law and to $17,200 if these provisions are implemented.
--$18,400 in 2016 under current law and to $21,300 if these provisions are implemented.
--$21,900 in 2019 under current law and to $25,900 if these provisions are implemented.
In fact, between 2010 and 2019 the cumulative increases in the cost of a typical family policy
under this reform proposal will be approximately $20,700 more than it would be under the
current system.
That's pretty damning stuff. And Ignani's description of the report is absolutely correct, at least based on my reading of it.
But is the report itself correct? That's not so clear.
While the debate surrounding surface transportation authorization commands most of the recent transportation news, there’s another serious authorization debate taking place on Capitol Hill: FAA reauthorization.
And the debate couldn’t come at a better time. Recent research found that the average air travel arrival delay grew from just over 40 minutes in 1990 to nearly 57 minutes in the most recent twelve month period. Part of this is due to the growth in delays over two hours: They’ve more than doubled since 1990.
Just as importantly, these delays don’t occur in a locational vacuum. Rather, the largest share of delays, especially the longest ones, occur in 26 metropolitan-wide hubs, the nation’s centers of air travel.
In an increasingly globalizing economy, the ability to efficiently connect to major metropolitan hubs and international destinations is critical for our long term economic health and competitiveness.
Via Alex Massie, I notice that New Gingrich is saying really, really crazy things (again!). Basking in the warm embrace of the National Review staff that interviewed him, the former speaker sounds positively deranged. The interview itself, portentously titled 'Our Heritage,' contains lots of goodies:
Obama spoke at the National Counterterrorism Center today:
Ten years from now, if health care reform is a boondoggle, you might be able to trace that failure back to a decision in the wee hours of last week's Senate Finance Committee hearings.
The most-watched case of the Supreme Court's last term, which ended in June, invited the justices to hold unconstitutional a key provision of the Voting Rights Act. The law required certain jurisdictions--largely in the Old South--to "pre-clear" any changes in their electoral systems with the Department of Justice. It was intended to prevent states with poor civil rights histories from changing their voting systems in ways that would keep blacks from voting. From the questions asked by the justices at the oral argument, the betting among the cognoscenti was that the Court's five-person conservative majority would strike down the law on the notion that things had changed and federal supervision was no longer necessary.
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.
