A Wasted Financial Crisis???

Adam Davidson at the New York Times asks: Did we waste a financial crisis?  (see here).  Davidson says:

Remarkably, five years after the crisis, the health of the financial industry is just as hard to determine. A major bank or financial institution could meet every single regulatory requirement yet still be at risk of collapse, and few of us would even know it.

So, while Republicans block every attempt at financial reform and Democrats (those who aren't secretly glad the Republicans are blocking reform) go on the talk shows and decry how "hard" they are trying, the rest of us are stuck with a huge bill for stabilizing the financial sector with the added insult that it most certainly can happen again.

Once again: Why we call it "the Great Recession"

CalculatedRisk updates it's (very informative) graph (see here for more ):

Read Robert Putnam's essay in the New York Times

Robert Putnam's essay "Crumbling American Dreams" is surely worth a read (see here).  Below is a quote from the concluding paragraph:

The crumbling of the American dream is a purple problem, obscured by solely red or solely blue lenses. Its economic and cultural roots are entangled, a mixture of government, private sector, community and personal failings. But the deepest root is our radically shriveled sense of “we.”

Some salary data from The Chronicle of Higher Education

The data below is 2013 data from The Chronicle of Higher Education (see here).

The power of "tax expenditures"

Timothy Taylor over at the Conversable Economist (see here) has a very informative post on "tax expenditures" ("a provision of the tax code that looks like government spending: that is, it takes tax money that the government would otherwise have collected and directs it toward some social priority" as he describes it).  He shows the following table that makes for interesting reading.

Waiting for healthcare

One of the arguments often made against serious healthcare reform is something like "all those other countries offer more access to care and their costs are lower because they make everyone wait so long."  The graph below from Health Affairs, December 2010, might (??) get some folks to rethink that argument.

What is Sheryl Sandberg's point?

I have been watching with some curiosity the discussion surrounding Sheryl Sandberg's book Lean In unfold in the media.  I watched her last night on 60 Minutes.  I wasn't much moved or particularly informed by her interview.  Here is a woman that has made it "to the top" through the not so surprising path of famous connections and Ivy League education (pretty much like lots of men).  So I can't understand how she can be positioned to speak to aspiring middle class women.  It would be high farce if she wasn't taken so seriously.  Here is Judith Shulevitz's take over at The New Republic (see here) regarding why Lean In is no blueprint for contemporary women:

The reason The Feminine Mystique caught on so fast and to such revolutionary effect was that the American housewife saw herself in it. Sandberg and most of the other women discussed in Lean In, on the other hand, are anything but average. They camp in the dormitories of Harvard, occupy offices at McKinsey and Goldman Sachs, and wind up in Palo Alto and the Upper East Side. They inhabit a tiny transnational bubble floating out of reach of the middle class, which itself is slowly vanishing.

And the reach of the middle class is surely "slowly vanishing."  I don't see how Sheryl Sandberg's pontificating makes any difference on this issue.

In my college classes are married and single women who try (sometimes desperately) to fit a college education into their lives while struggling to find affordable daycare and to balance their commitments at home (and they don't have nannies, personal shoppers, etc.).  For the life of me, I can't understand how Sandberg speaks to them.

Impact of Sequester by State

Econobrowser (see here) has a neat graphic (via Wells Fargo via Pew Center) about the impact of sequester on the States.

Here it comes again

After the State of the Union speech, the response given by Mr. Rubio contained the following passage:

This idea – that our problems were caused by a government that was too small – it’s just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.

Now, Mr. Rubio is, by all appearances, a serious and thoughtful person.  But here he is propagating one of the most consistent myths of the Great Recession: that the government caused it.  As Mark Thoma (see here) and Paul Krugman (see here) have shown, this myth has been refuted about as completely as can be done.  But here it is again.  And in a response to a State of the Union address, no less.  You don't think so?  See this summary (here) by Mike Konczal.

This myth is the poster child for a zombie argument.

Uninsured by age

There is an interesting article in the Wall Street Journal today that contains the following graph (see here).

From the article:  The scramble to promote enrollment comes as the law faces considerable opposition from many Republican governors who have declined to create state exchanges or expand their states' Medicaid programs under the law, citing the possible cost.

Mississippi is now one of the states.  So how will the state expand insurance coverage?

Are we entering a "low return" era?

The researchers at Credit Suisse Research Institute (see here) have some sobering data for us:

High five for Crooked Timber

 What we seeing now, is not a shift in the Overton window, but a challenge to this whole approach to determining what views should be taken seriously, a challenge that started with the appropriation by the left of the “reality-based” label pinned on us in Karl Rove’s famous interview with Ron Suskind, and has continued (though very imperfectly) with the rise of fact-checkers. The new approach is based on the shocking idea that objective truth, rather than political acceptability, should be the criterion against which factual claims are tested.

If this view is right, then the most important single development was probably Nate Silver’s successful prediction of the 2012 election. Silver was up against both the pseudo-science of the Republican “unskewers” and the faith of centrist pundits (historically exemplified by Broder) that their deep connection with the American psyche was worth more than any number of least-squares regressions. Given the centrality of horse-race journalism to the pundit class, their defeat by relatively straightforward statistical analysis of opinion polls was a huge blow.

Read more here.

Nice video explanation of Debt Ceiling

David Wessel over at the Wall Street Journal (see here) has a nice 3 minute video on the Debt Ceiling.

Nice graph from Federal Reserve Bank of Atlanta

The Federal Reserve Bank of Atlanta (see here) is experimenting with graphical ways to display information about the economy as it recovers from the Great Recession.  The following "spider graph" (in my opinion) does a nice job conveying the essential data.

They comment on the graph as follows:

The chart tells a familiar, but not too happy, story. Only one of the variables in the collection of employer behavior, employee and employer confidence, and labor resource utilization categories has recovered even half the gap from its prerecession benchmark. The labor resource utilization variables look particularly bad, with one variable—marginally attached workers—actually getting worse over the recovery as a whole. On the brighter side, our leading-indicator variables are looking relatively strong, perhaps portending improvement ahead.

James Fallows and the debt-ceiling fiasco

Regarding the debt-ceiling issue, James Fallows (see here) points to what should be obvious (and, the fact that it isn't says all we need to know about journalism and politics today):

1. Raising the debt ceiling does not authorize one single penny in additional public spending.
2. For Congress to "decide whether" to raise the debt ceiling, for programs and tax rates it has already voted into law, makes exactly as much sense as it would for a family to "decide whether" to pay a credit-card bill for goods it has already bought.

Back to basics

The Economist (see here) reminds us that the "often recommended" approach to investing is so recommended for good reasons.

The Economist says:

The S&P 500 has now outperformed its hedge-fund rival for ten straight years, with the exception of 2008 when both fell sharply. A simple-minded investment portfolio—60% of it in shares and the rest in sovereign bonds—has delivered returns of more than 90% over the past decade, compared with a meagre 17% after fees for hedge funds (see chart).

Health care spending in 2010

From a Deloitte report (see here) we get some data on health care spending (by age) in 2010.  The report finds:

In 2010, total U.S. health-related expenditures were an estimated $3.2 trillion or 23.9 percent higher than reported in the National Health Expenditure Accounts (NHEA). This translates to $10,392 per person.

December jobs report is in

The December jobs report is in and, well, the economy is still rather weak.

Ben Casselman at the Wall Street Journal (see here) summarizes:

The monthly jobs figures, which have substantial margins of error and are often subject to big revisions, are famously volatile. But lately the numbers have shown remarkable consistency. December was the sixth consecutive month of payroll gains between 100,000 and 200,000. December’s one-month addition of 155,000 jobs was close to the three-month average (151,000 jobs), the six-month average (160,000 jobs) and the 12-month average (153,000 jobs). A pace of around 150,000 jobs a month hardly represents robust growth, but it’s been enough to drive a relatively steady decline in the unemployment rate.

2012 Major Asset Performance by Class

The Capital Spectator (see here) has a summary of the performance of major asset classes for 2012.

The fiscal cliff mini-deal

The Wall Street Journal (see here) summarizes the deal reached yesterday on the fiscal cliff.