From the New York Times:

Citigroup’s revelation that hackers stole personal information from more than 200,000 credit card holders makes it one of the largest direct attacks on a major bank.

....Details remain scarce, but the disclosure of the Citigroup breach on Thursday quickly turned into a debate on whether the banks and major credit card companies had invested enough money to safeguard the personal information of their customers.

....“We’re not dealing with 14-year-old hacker kids,” said Steve Elefant, the chief information officer at Heartland Payment Systems, which overhauled its security measures after the systems it used to process credit and debit card transactions were hacked in 2008. “We’re talking about 21st-century bank robbers — sophisticated, organized criminal gangs, located mostly in Eastern Europe and the U.S.”

....Big credit card lenders are loath to acknowledge another reason that the breaches keep happening: they are in the business of reducing the financial losses stemming from fraud, not preventing data theft in the first place. As a result, analysts say, they have devoted the bulk of their resources to trying to stop fraudulent transactions from occurring.

Banks might indeed be loath to admit it, but the Times delicately hints at the reason this keeps happening: banks don't care. And the reason they don't care is because there are no serious penalties for these kinds of breaches and consumers have no ability to sue over them. What's more, it's consumers who end up having to clean up the mess if the hack results in ID theft or some other kind of fraud, not the banks. So why bother?

This is something that really ought to be a bipartisan outrage. Banks and other financial players don't care very much about this stuff because they don't have to pay much of a price for things like ID theft and data breaches, but they'd start caring if Congress passed legislation that made them responsible for these costs. That's what Congress did in 1968 for credit card fraud, and banks started figuring out clever ways to reduce fraud mighty quickly. Make them responsible for data breaches and I'll bet they'd figure out how to reduce those too. Alternatively, we could just pass some heavy-handed rules, as Europe has done. One way or the other, though, banks should be responsible for the cost of their own mistakes. That's really not something that Republicans and Democrats should have much reason to disagree about.

Say what?

Former House Speaker Newt Gingrich’s presidential campaign imploded Thursday afternoon with his entire senior staff resigning en masse, according to multiple sources familiar with the moves.

“When the campaign and the candidate disagree on the path, they’ve got to part ways,” said Rick Tyler, a longtime Gingrich spokesman who was among those who left the campaign.

Tyler....Rob Johnson....Dave Carney....Katon Dawson....Sam Dawson....Craig Schoenfeld....Walter Whetsell....Scott Rials have all stepped aside. Much of Gingrich’s early state operation was also headed for the exits, according to a one senior campaign source.

....Among the issues leading to the resignations, according to knowledgeable sources, was the two-week vacation that Gingrich and his wife, Callista, insisted upon taking against the advice of his top political staff. Coming as it did after one of the most disastrous campaign launches in recent memory, it raised questions as to whether Gingrich would be willing to “commit time to the grassroots,” said Tyler.

Hmmm. Something tells me that it takes more than disagreement over a vacation to drive a candidate's entire senior staff away. However, here's a prediction: once we learn the whole story, Callista Gingrich will somehow be involved.

UPDATE: Fred Barnes kicks off the Callista bashing: "The problem was the wife. Aides to Newt Gingrich have resigned from his presidential campaign in protest of what they felt was a takeover by Callista Gingrich, the candidate’s wife since 2000."

The Fed’s Jeremy Nalewaik argues that a measure of GDP using income levels is a more reliable guide to the actual business cycle than the traditional measure of GDP using spending. If that's true, says Justin Wolfers, the recession started nearly five years ago and was much deeper than we think: GDP per capita dropped 7% and is still well below its pre-recession level.

And what are we doing about this? Pretty much nothing. Apparently we're content to follow Japan into oblivion.

Mike Konczal writes today about both our short-term deficit and our long-term deficit:

Why do we have to worry about the second, long-term deficit in the “two deficits” scenario? My understanding of the neoliberal landscape was that it was to convince the bond market that further stimulus would be temporary, thus allowing a larger short-term stimulus to drive down unemployment without freaking out the bond market....You can doubt that a second stimulus would panic the bond market (I do), but the logic makes sense.

But now, he says, news reports suggest that the Obama administration views long-term deficit reduction simply as a good in itself because it will spur "confidence" in the economy:

This new idea is that making the bond market happy in-and-of-itself will produce prosperity and full employment through increasing confidence. The major drag on the economy isn’t low aggregate demand but confidence. Now the assumption isn’t that we have to keep the bond markets as happy as they were but instead make them much happier, which will then increase investments and spending through this increase in confidence. Hence long-term spending cuts, lots of gimmies to incumbents in supply-side investments and other things powerful interests love but don’t necessarily make demand-based economic sense.

I simply don’t see any evidence of why, or even how, this would work. What are the arguments that confidence is the major check on the economy? I understood the “two deficit” argument, but this new approach is just substituting in the interests of bondholders for the entire economy. If a very-polite version of expansion austerity is guiding the administration’s thought this is even more of a disaster than these stories convey.

At a guess, there are two things going on here. The first is the one Mike talks about: there are a lot of people — Wall Street is full of them — who fundamentally believe in a kind of folk economics in which austerity and discipline are rewarded and profligacy is punished. So if you demonstrate some discipline, businesses will start hiring again because they have confidence in the future.

The second thing is simpler: the political landscape for serious stimulus spending is so grim that no one has the energy to effectively argue against the folk theories. What's the point, after all, when even the most brilliant argument will immediately founder on the reality that Congress just flatly isn't going to pass a stimulus bill? And if that's the case, then why not make the best of a bad situation and argue in public that long-term deficit reduction is good in and of itself? It's better than nothing, after all, and who knows? Maybe it'll work. What's more, politically it's a lot better to cut a deficit deal that makes you look like a leader than it is to barnstorm the country talking up a stimulus and getting nothing for your efforts. That just makes you look like a loser.

I have no idea which of these two dynamics is dominating the decisionmaking at the White House. But I'll bet they both have a strong influence.

Ross Douthat replied yesterday to my post earlier this week on assisted suicide. Among other things, I argued that allowing assisted suicide was unlikely to lead us down a slippery slope in which suicide becomes far more widespread than it is now. Here's Douthat:

Well, yes: The slippery slope that I discussed in the column doesn’t amount to much if you don’t disapprove at all of people deciding to take their own lives....I was making an argument premised on the idea that suicide is generally wrong and helping someone kill themselves is generally a form of murder, and addressing myself primarily to readers who share that premise.

But here's the thing: nowhere in Douthat's original column did he make the case that we should disapprove of suicide per se. I knew perfectly well that he did, of course, because I knew that he's a committed Catholic and Catholic doctrine holds that suicide is a sin (in Dante's telling, it gets you into the 7th circle of hell). But again: this is the problem with trying to make an essentially religious argument in secular form. If you accept a priori that suicide is sinful, then of course assisted suicide is also sinful and anything that potentially encourages even a little bit more of it is sinful too. But if you decide to forego the religious argument, then you need to make a secular case for suicide being unacceptable before you can make a case for assisted suicide being unacceptable. Douthat never did this.

At the end, he tosses things back to me:

For Drum, though, a question: Assuming that the would-be suicide is of sound-enough mind and uncoerced, are there really no secular, non-Judeo-Christian reasons to think that assisting in self-slaughter might be morally problematic? And a follow-up, in the spirit of the daughter test: If Drum had, let’s say, a middle-aged friend confined to a wheelchair by an accident who had spent a few years battling waves of entirely-understandable despair over his condition, and a “merciful” Swiss clinician then prescribed that friend a fatal dose of sodium pentobarbital (after subjecting him to a battery of “common sense” psychological evaluations, of course), would he see no non-religious grounds on which to describe that doctor as a murderer?

For what it's worth, I don't really see suicide as morally problematic. It's obviously tragic, and no one ever wants to see a friend (or anyone else, really) descend to a state in which suicide seems preferable to life. But that's a pragmatic concern, not a moral one. I'd want them to get all the help and support we could offer, but in the end I accept that it might not be enough. So while I'd be heartbroken if a close friend ended up asking for that dose of sodium pentobarbital, I wouldn't have any moral qualms about their decision. Nor about the doctor who prescribed it.1

But that's a personal view. And I'm going to take a guess here: aside from our religious differences, I suspect that one big difference between Douthat and me is that I've suffered from chronic depression nearly my entire life and he hasn't. Luckily, my case is moderate, and I've never felt like drowning myself in a bathtub. Still, I understand keenly what it feels like, which makes it easy for me to have a pretty good sense of what it would feel like if it were more serious. And that deep-seated understanding of what serious, long-lasting, incurable depression probably feels like is part of what drives my policy preferences here. I can actually imagine myself being in a situation where I'd want that prescription available to me, so reasons of self-interest dictate that I'd prefer it to be legally available. If you can't even conceive of such a situation in your own life, you'll probably feel differently.

1With the usual caveats that I assume I don't have to repeat here.

Joe Romm has the right take on yesterday's announcement of a "massive" new oil find in the Gulf of Mexico:

The discovery doesn’t prove we have ‘abundant’ oil reserves, as [House Natural Resources Committee Chair Doc Hastings] claims. It proves the exact opposite, that ‘Drill, Baby, Drill’ can’t solve our problems. Steve Greenlee, president of Exxon Mobil’s exploration business, unintentionally admitted that when he said, “This is one of the largest discoveries in the Gulf of Mexico in the last decade.”

One of the clearest indications that the planet is running out of oil is the fact that discoveries of giant oil fields have slowed so dramatically in the past couple of decades. This new field in the Gulf is supposed to hold 700 million barrels of recoverable oil, which puts it at the low end of the category (a "giant" oil field contains 500 million barrels or more of crude), and these days that counts as a major find. But historically speaking, this is a pipsqueak, and we're finding damn few fields of even this size. The fact that this is so big a deal is a bad sign for the oil industry.

Irvine, California, 8:37 am.

America the Fanciful

Welcome to America:

A large majority of Americans say the U.S. economy would probably suffer serious harm if Congress fails to give the federal government more borrowing authority. But barely half support raising the government’s debt limit, even if lawmakers also sharply cut spending.

Is this just an example of pure fantasy-based thinking? A cri de coeur that's nothing more than an inchoate expression of frustration? A token of tribal solidarity? Proof that many Americans simply have no idea what the debt ceiling really is? Evidence that many Americans think America deserves to be seriously harmed? All of the above? Something else? Somebody needs to do some kind of in-depth interviewing to figure out what's really going on here in the minds of our countrymen.

Ryan Chittum takes a look at two stories about delays in writing new financial regulations, and concludes that the Murdochization of the Wall Street Journal's news pages is proceeding apace:

The Journal’s frame is that Wall Street is upset over the delay of derivatives rules and that it’s causing “uncertainty.”....The Times, though, points out that it’s Wall Street that is delaying the rules.

....This is a prime example of the Times out-Journaling the Journal, giving us the context and background we need to get our arms around what’s really going on. The WSJ misleadingly presents the story almost as if it’s a natural disaster—delays that just happen for no reason or, if you read between the lines, government incompetence....Which just goes to show you, as we’ve seen before with the Journal, that “uncertainty” is a red flag that an argument is almost surely utterly bogus corporate PR.

The Journal's news pages used to be first rate. There's still plenty of good stuff there, but hackery has been advancing steadily ever since Rupert Murdoch bought the paper and started installing his own retainers in top positions. It's pretty sad.

Matt Steinglass:

David Brooks had an op-ed in the New York Times yesterday that proclaimed the near impossibility of restraining costs in health care through centralised government efficiency evaluations, which is being justly ridiculed by people (Jon Chait, Jonathan Cohn, Ezra Klein) who note that every single one of the world's centralised government-regulated health-care systems is far cheaper than America's relatively decentralised private-sector one. Mr Brooks has surely had this explained to him a thousand times by now, and his failure to process the fact or incorporate it into his worldview seems to me most likely to reflect an absence of the ideological furniture on which the fact could sit.

My post about Brooks's op-ed was a little lighter on the ridicule than many, and this might be a good chance to explain why. There are two things to be concerned about in the world of healthcare costs: levels and rates. That is, we want to know how much we spend on healthcare in America compared to other rich countries and we want to know how fast it's growing compared to other countries.

On the former, the evidence is clear: our spending is far higher than any other comparable country's. Adjusted for wealth (richer countries don't just spend more on healthcare, they spend a higher percentage of GDP on healthcare), America spends $2,500 more per person than any other country in the world. Aaron Carroll probably has the best single summary of this state of affairs here (or you can just read the conclusion here), and it turns out that we simply spend more on everything. More on doctors, more on insurance, and more on drugs. And we also provide more treatment. We love our diagnostic tests in America.

The fact that other countries do better on this score is almost certainly a testament to centralized planning. France and Japan and England mostly have overall healthcare budgets set by the state, and since those budgets depend on taxpayer dollars, there's a strong incentive to keep them pretty tight. And they do. As a result, they pay less for doctors, less for administration, less for drugs, less for everything. Individuals are mostly free to spend more on themselves if they want to, but the state itself has a pretty firm limit on what it will pay.

But that's only half the story. What about rates of growth? Here's a chart based on OECD data collected by the Kaiser Foundation, and it shows that spending is increasing everywhere. The U.S. growth rate is high, especially considering that we started from such a high point, but it's hardly an outlier. The problem of healthcare spending growth isn't something that centralized systems have been able to solve much better than we have.

So Brooks is wrong to be so dismissive of expert panels and top down budget control. They really do work. At the same time, they aren't panaceas, and various forms of competition — between hospitals and insurers, between healthcare organizations bidding for Medicare contracts, and between doctors competing for patients — is something worth trying too. You don't have to drink the tea party Kool-Aid to think that it's worth keeping an open mind on this stuff.