James Fallows Is Shrill (Health Care Edition)
Washington Post Crashed-and-Burned-and-Smoking Watch (Jonathan Cohn Questions the Literacy of Robert Samuelson Edition)

links for 2009-08-10

  • Bottom Line:  For those still fretting that the economy remains poised for the ultimate end-times collapse, you need to remember the following:  In aggregate, nothing truly bad will happen as long as the Federal Reserve can print money and the US Treasury can spend it.  We simply have not hit that wall yet (although one can see it coming, as the history of monetary policy for the last two decades is one of diminishing returns - it apparently takes more to accomplish less).   At the same token, acceptance of the reality that the recession is set to end does not oblige one to adopt a V-shaped outlook.  Far from it, as patterns of consumer spending and labor market activity, not to mention the undeniable impact of government support, all point to a tepid recovery characterized by a jobless recession.  Such an outcome, however, will not be proven or denied by the end of the year at the earliest.
  • Conservative columnist David Brooks thinks Rush Limbaugh has gone too far in comparing President Barack Obama to Hitler. Brooks was stunned by the comparison when he first saw it on NBC's Meet the Press Sunday. "I hadn't seen the Rush Limbaugh thing. That is insane. What he's saying is insane," said Brooks. Brooks went on to criticize Sarah Palin for saying that health care reform would create a "death panel" to euthanize older Americans. "Again, that's crazy. The crazies are attacking the plan because it'll cut off granny, and that's simply not true. That simply is not going to happen," explained Brooks.
  • [T]he Obama administration, having failed in its early weeks to calm the financial markets, eventually managed to do just that. It pushed for a stimulus bill, over unanimous Republican opposition in the House, that... has already saved more than 500,000 jobs, according to separate estimates by two prominent research firms, IHS Global Insight and Moody’s Economy.com. The White House also endured withering criticism from liberals who argued that credit markets would remain dysfunctional without a government takeover of banks. “Bernanke, Obama, Geithner and Summers were intelligent enough to know that the right-wing crowd was crazy to say, ‘Let the banks go bankrupt,’ and confident enough to ignore the left-wing ‘Nationalize the banks’ crowd,” said Robert Barbera, a longtime economist and author of the recent “The Cost of Capitalism,” which criticizes the Fed for allowing the housing bubble to grow so large. “I give them very high marks”...
  • What’s so mind-boggling about this is that it commits one of the most basic fallacies in economics — interpreting an accounting identity as a behavioral relationship. Yes, savings have to equal investment, but that’s not something that mystically takes place, it’s because any discrepancy between desired savings and desired investment causes something to happen that brings the two in line. It’s like the fact that the capital account and the current account of the balance of payment have to sum to zero: that’s true, but it does not mean that an increase in capital inflows magically translates into a trade deficit, without anything else changing (what John Williamson used to call the doctrine of immaculate transfer). A capital inflow produces a trade deficit by causing the exchange rate to appreciate, the price level to rise, or some other change in the real economy that affects trade flows...

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