On the Daily Show last night, Bill O'Reilly was griping about the great $16 muffin affair and Jon Stewart had no idea what he was talking about. So the whole thing passed without any pushback, and now millions more people think Uncle Sam is paying $16 for hotel muffins.

Once again, then: it's a myth. There were no $16 muffins. It's just an artifact of the way hotels aggregate costs for events and bill them all to a few line items instead of breaking down every charge separately. In fact, for the event in question, DOJ came in exactly on budget. All the details are here.

Now, can we please hear no more about this?

San Francisco Meetup

In the comments downblog, a few people asked if I planned to meet up with Bay Area readers while I was in town. This slipped my mind, actually, but as it happens I'm free Thursday night. So here's the deal: I'm going to be largely tied up most of the day, so someone will have to organize this in the comment section. If it's just one or two people, that's fine. If it's a bigger crowd, that's great too. I have a strong craving for Chinese food at the moment, but anything else will do if the masses speak up in unison for something different. I can make it to any place that's fairly easily accessible from downtown.

So.....any takers for dinner on Thursday? I'll try to check in around noon, and if there's some kind of consensus I'll post it as an update.

UPDATE: I don't have access to comments at the moment, but compromising a bit between various suggestions, times, and closeness to my hotel....how about R&G (on Kearney just north of Sacramento) at 7:00? Can I get a show of hands in comments for how many people are OK with that? (It's fine to show up late or leave early, of course.)

CONFIRMATION: This is to confirm the meetup. We'll be at R&G at 7:00 tonight. It looks like maybe half dozen folks will be there. But maybe more! See you there.

Back in 2008, during the worst of the financial crisis, I remember that many of us were shaking our heads a bit over Europe. American banks were clearly overleveraged, which led to the collapse of Bear Stearns and Lehman and Wachovia, and the near collapse of several others, but European banks mostly came through unscathed. Outside of Great Britain (and Iceland, of course), Europe suffered only a few bank failures, and they were pretty easily contained. And yet, European banks, on average, were more highly leveraged than ours. Shouldn't they have collapsed even worse than ours? What gives?

Well, now we know: European banks were in worse shape than ours, but they were overleveraged in a different way that allowed them to hang on a couple of years longer. But now the jig is about up. Greece is about ready to fail, and after that, maybe Spain and Italy too. Ezra Klein talks to Desmond Lachman about what this means:

EK: And if some of these dominoes fall, how bad are things likely to get?

DL: What’s really at stake here is the European banking system. These countries might be relatively small, but if you just look at Greece, Ireland and Portugal, that’s $1 trillion in sovereign debt. If you add Spain, that’s another trillion. If you add Italy, that’s another $1.9 trillion. If the European banks take the hit, that could really cause another Lehman moment. It would be a credit crunch that would throw the European economy into a meaningful recession.

Bummer. But hey, that's just Europe. At least we'll be OK, right? Sadly, no. We're highly exposed in a number of ways to trouble in Europe. In fact, it might even be worse this time around:

EK: And what are the chances that this leads us back into a recession?

DL: If you want me to depress you some more, let me tell you what really worries me. If we do go into recession this time around, what will be different from 2008 and 2009 is even if the recession isn’t as deep, we either don’t have the policy ammunition to fight it or we have convinced ourselves that we don’t have the policy ammunition to fight it. So what will the policy response be? Bernanke just showed you he thinks he has very little ammunition left. There’s no way Congress will go in for another big stimulus package. And the Europeans are tied up in the belief that they need to balance their budget.

Just remember: it doesn't have to be this way, no matter how often and how loudly Republicans shriek about austerity and budget deficits. If we want them to, both monetary and fiscal policy can have plenty of bite left. Bottom line: If we plummet into a second recession, it will be solely the fault of fanatical conservatives in Congress who refuse for reasons both partisan and ideological to acknowledge that we can do something about this. It'll be the Tea Party Recession of 2011.

Housekeeping Note

I'll be in San Francisco for the next three days at a MoJo staff meeting, so blogging will be light. Maybe even nonexistent. It all depends on my mood, my schedule, and the vagaries of WiFi availability. Catblogging, however, will appear normally, though it will be reduced by 50%. I'll be back this weekend, and normal blogging will resume on Monday. 

Headline of the Day

Someone on the New York Times copy desk pretty much nails it today:

It's a slow news days, so everyone is highlighting the latest Kaiser report on healthcare costs. Guess what? They're up!

I don't have a ton to say on the fact that healthcare costs are increasing, but it's worth pointing out what this means for household incomes. In the last year, for example, the Census Bureau reports that median household incomes dropped from $49,777 to $49,445. That's a decrease of 0.7%.

But households also got compensation in the form of healthcare insurance. According to the Kaiser report, the employer share of healthcare premiums increased from $9,773 to $10,994. So let's add this up:

  • 2010: $49,777 + $9,773 = $59,550
  • 2011: $49,445 + $10,994 = $60,439

Suddenly, instead of a decrease, we have an increase of 1.5%. Adjusted for inflation, this is still a net loss, but it's a smaller one: about -1.2% instead of -3.4%. (All numbers are a bit rough since the sampling periods aren't identical. But they're probably accurate within a tenth of a point or two.)

Obviously the Great Recession is still taking its toll on household incomes. But so is healthcare. Household cash incomes have dropped considerably over the past decade, and that's a sign of something seriously wrong with the economy. But it's also a sign that instead of cash, we're increasingly taking our compensation in the form of ever more healthcare. That's probably a bad deal for most of us.

More 11-dimensional chess from President Obama! He says he has no interest in further gun control, and he's done nothing to restrict gun ownership, but NRA president Wayne LaPierre sees what the rest of us don't:

Obama himself is no fool. So when he got elected, they concocted a scheme to stay away from the gun issue, lull gun owners to sleep and play us for fools in 2012. Well, gun owners are not fools and we are not fooled.

Sotomayor, Kagan, Fast & Furious, the United Nations, executive orders. Those are the facts we face today....President Obama and his cohorts, yeah, they're going to deny their conspiracy to fool gun owners. Some in the liberal media, they are already probably blogging about it. But we don't care because the lying, conniving Obama crowd can kiss our Constitution!

What good is 11-dimensional chess when your opponents are playing in 12 dimensions? Obama has met his match.

The constant drumbeat of attention being paid to New Jersey Governor Chris Christie is really starting to grate. The guy says he's not going to run. Why not take him at his word and just let him govern New Jersey until 2016?

Answer: because Republicans are in a panic. They don't trust Romney, they're increasingly worried that Perry is unelectable, they think Bachmann is a nutcase, and the rest of their field are just fill-ins. So Christie is their once and future saviour. He yells at constituents! He killed a tunnel that liberals loved! He yells at teachers! He cut budgets! He yells at Democratic legislators! What's not to like?

Lots, it turns out, and Dan Amira finally tallies up Christie's weak points with the Republican base in a convincing fashion. Christie does like to yell at people, but unfortunately, he likes to yell at crazy conservatives too. In particular, he's taken very loud, very public positions on illegal immigration, gun control, climate change, education, and Sharia law that are precisely the opposite of the tea party positions. Any one of them would probably be enough to doom his chances, but five? Fuhgeddaboutit. He'd crash and burn before he even had his first chance to yell at a debate moderator for asking him a stupid question.

Note to Republicans: your field is set. Your choice is between an apparently inept Rick Perry and a transparently insincere Mitt Romney. Them's the breaks. Make the best of it.

Money and Medicine

Via Aaron Carroll, a new survey of doctors reports that 42% of them think they're overtreating their patients. But why are they overtreating their patients? The top answers were fear of malpractice suits, mandated performance measures, and too little time with patients. Aaron finds all three unlikely and then adds this:

Notice what’s not in the top reasons? Money. Could it be that doctors might practice more aggressively because when they do, they make more? Well, only 3% believed that financial considerations could influence their own practice. Most, however, thought that other physicians would be affected by such things.

I'm sure doctors aren't alone here. We're all pretty sure that other people are motivated by grubby concerns like money and status and power, but we're equally sure that our own motivations are always pure and humanitarian. See, for example, both sides of every political fight ever in the history of the world.

Anyway, Aaron says in a followup post that more than a few doctors were pissed off about his suggestion that money influences their decisons. I don't blame them. Still, the rest of us should probably assume that money does indeed influence them, just like it influences every other human being on the planet. As usual, doctors are pretty good at diagnosing others, but not so good at diagnosing themselves.

It's probably not a wise use of time to obsess too much about David Brooks, but.....I just don't get the guy. Today he argues that the global economy is on the verge of a train wreck and neither Democrats nor Republicans are thinking big enough:

We need an approach that is both grander and more modest. When you are confronted by a complex, emergent problem, don’t try to pick out the one lever that is the key to the whole thing. There is no one lever. You wouldn’t be smart enough to find it even if there was.

Instead, try to reform whole institutions and hope that by getting the long-term fundamentals right you’ll set off a positive cascade to reverse the negative ones.

Simplify the tax code. End corporate taxes and create a consumption tax. Reshape the European Union to make it either more unified or less, but not halfway as it is now. Reduce the barriers to business formation. Reform Medicare so it is fiscally sustainable. Break up the banks and increase capital requirements. Lighten debt burdens even if it means hitting the institutional creditors.

Wow. Eliminate corporate taxation! Completely reform the EU! Fix Medicare! Break up the banks! Declare a debt holiday! And do it all now now now. This is coming from a guy who likes to think of himself as a Burkean conservative?

At a grand policy level, it's not even that I disagree that much. I've written in favor of all these things except for simplifying the personal tax code (sort of trivial on the scale Brooks is writing about) and reducing the barriers to business formation (the World Bank ranks us pretty satisfactorily on this already). But whether or not these are good ideas, this is a pretty mind-boggling list of things to just casually toss off with one sentence apiece. I mean, what's the pitch to the Europeans? You've probably never thought about this before, but you need to either dissolve the eurozone or create a United States of Europe. Tick tock, time's a wasting. What's it going to be? [Cue Jeopardy theme music.]

It's probably not a good idea to dash off a column right after you've jerked awake in a cold sweat in the middle of the night. Especially one week after writing a column castigating President Obama for cynically proposing ideas that "couldn’t get passed even when Democrats controlled Congress." But implementing a VAT, getting healthcare costs under control, reforming the tax code, and breaking up the banks could? In which universe?

In the universe we actually do live in, Democrats are willing to talk about the kinds of things on Brooks's list. Maybe not as bravely or as fully as Brooks would like, but at least they'll entertain his ideas. But Republicans? They're dead set against any tax reform that isn't effectively regressive; they're dead set against a VAT; they're dead set against any new revenues for Medicare, which is plainly required as part of any serious reform; they're dead set against breaking up banks; and they're dead set against any kind of debt relief. Until conservatives like Brooks manage to get their more rabid compatriots to abandon this antediluvian approach to just about everything, there's not even a faint hope of getting anything on his wish list done. That's Job 1. In the meantime, there's hardly any point in writing about anything else.