Steven Pearstein of the Washington Post writes one of the good economics columns. In this one, “a new bubble of the Fed’s creation” he offers some insights and cautions that make a lot of sense to me.   Highlights:

• Yes, the financial crisis has passed and the economy is growing again, but there’s a good chance that growth will be temporary …  a sustained recovery in 2010 isn’t looking very likely.
• To its credit, the Obama administration has never lost its focus on the goal of creating the conditions for sustained growth.
• Less encouraging is what’s happening on Wall Street. It turns out that all those bold and necessary steps by the Federal Reserve to prevent the financial system from collapsing wound up creating so much liquidity that it has now spawned another financial bubble.
• But the lesson I prefer to focus on is the one from this decade, which is that central bankers ignore financial bubbles at their peril. … As Alan Greenspan discovered, it is also a mistake for central bankers to assume that they can quickly sop up excess liquidity whenever they decide the moment is right.

Translation: a) the 2010 growth we’ve been counting on may not be there, b) the risks of the next bubble crash are already growing.  And c) banks and central bankers still don’t have this right.

Polls showed Obama’s approval ratings dropping during angry August — and sinking with him health care reform.

If the polls are to be believed that mood has shifted.  As the chart shows from this new New York Times/CBS poll, the dominant theme now is uncertainty:  people don’t feel like they know enough.

And I’ve lost the link, but I saw another major poll the other day showing that 3/4ths of people are tracking the health care issue closely or very closely.  That is an extraordinary degree of public focus on one issue.

That mirrors what I’m finding here in the district.  Almost everyone is engaged, few — including me — feel like they know everything they need to know as this historic quest unfolds day by day.

Where does this leave the politicians who are involved in the scrap?  Politico opines that there are so many polls reporting different results from different questions that the pols are uncertain where the public leans.

My recommendation for our national reps: note the high voter uncertainty and focus more on feeding good information to the public than trying to stampede them one way or the other.

For those of you wishing to hear from some experts, here is an excellent, 20 minute discussion online among three experienced researchers in health care economics. Note this is moderated by the now-famous Dr. Atul Gawande, Harvard surgeon and New Yorker author.

Click here.  Note that the discussion is sub-divided into 7 topical parts if you wish to skip around.

Definitely worth your time.

Go here for an excellent, interactive graphic showing year by year the many, many pieces of legislation since Teddy Roosevelt.

At a glance:

An article in the prestigious New England Journal of Medicine reports a survey of physicians and surgeons across the country found very strong support for the inclusion of a public option in the health care reform package.  Their bottom line:

…it seems clear that the majority of U.S. physicians support using both public and private insurance options to expand coverage. A majority of physicians also support the expansion of Medicare [to include the near-elderly]. Support for the public option is consistent across physician specialties, practice settings, and regions of the country, and therefore should be carefully considered by lawmakers as they finalize legislation to reform health care and provide coverage for 47 million uninsured Americans.

Click the ‘read the rest….’ tab below to see a chart showing just how strong the doctors’ support is.

And for a very interesting summary of the last century of health care legislation go to this interactive NEJM graphic — fascinating; will make a good PowerPoint add-on.

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Here’s another ‘tells the whole story’ chart.

Household income, in constant dollars, is now lower than it was ten years ago!

And if we look ahead, the prospects don’t look so good for the next 5 -10 years.  Why?  Un- and under-employment will stay high, meaning incomes will be low.  Our huge federal deficits & debt will depress the economy and hurt buying power.  Our education system is way under performing, meaning large swaths of our citizens have lower earning power.

Not a pretty picture.  Goverment budget writers take heed.

One picture tells it all.

This maps the main roots of our current political-economic woes.

Note the time line — this didn’t start with last year’s recession.  But the speed and the depth of this “worst since the Depression” downturn is directly related.

This is not just a map of poor wages.  It also shows how serious are our problems with education and health care and politics and energy policy.

PS — US national productivity shot UP again last week — and so did unemployment!

Credit: the chart is from this lecture, courtesy Prof. Juan Cole in his Informed Comment blog.

House Speaker Nancy Pelosi is a most impressive legislative leader.  Her appearances and Charlie Rose showed the steel and the legislative expertise behind the patented Pelosi smile.

This 26 minute C-SPAN video of Pelosi’s talk a couple of days ago to the San Franciso Chamber of Commerce and the short press conference which followed is a valuable and reassuring insight into what we’re going to see in the next few weeks of Congressional action.

Definitely worth watching, click here.

Writing in the prestigious New England Journal of Medicine, two doctors say the current health care reform bills do not do enough for cost control.  They propose an all-payer regulation strategy.  The full text of their short article is below the jump.  The spine of their argument:

Successful health care reform requires effective control of health care spending - without it, rising costs will continue to strain federal and state budgets, businesses, and families, jeopardizing gains in insurance coverage. The reform legislation now before Congress, however, cannot be relied on to control spending.

…

The missing link in reform legislation, then, is any mechanism with the potential for systemwide control of medical spending. One straightforward way to achieve that goal would be to adopt a single-payer plan - but that would displace the private insurance industry and remains politically infeasible.

There is, however, another option that could control spending across both the public and private insurance pools. Other countries that have multiple insurers, such as Germany, Japan, and the Netherlands, use all-payer regulation to control costs. In these countries, insurers come together to negotiate, or the government takes the lead in setting, common payment rules for medical care. With a few exceptions, payments to all doctors in a given geographic area follow a standard fee schedule. Hospitals are also paid on comparable terms.

They see 4 advantages: lower overall costs, less cost shifting, simplicity, and successful coexistence of public and private plans — advantages which ought to appeal to business, citizens and the health care industry alike.   Good thinking, definitely worth considering.  Click below to read the whole article.

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