I am all for eliminating earmarks to for-profit companies and for extending it to non-profits as well.  All discretionary money should be awarded on an open, competitive basis, with oversight of the executive branch agencies by appropriate Congressional committees.  Earmarks have no place in federal spending, as a matter of principle.  From The Washington Post:

"It ensures that for-profit companies no longer reap the rewards of congressional earmarks and limits the influence of lobbyists on members of Congress," House Speaker Nancy Pelosi (D-Calif.) said, linking the move to earlier decisions to ban gifts from lobbyists and forbid privately financed travel.

Democrats made the move to bar earmarks for for-profit entities despite fierce resistance from many rank-and-file lawmakers who rely on them to spread federal money around their districts and consider them crucial to their political fortunes.

Republicans responded immediately by proposing a moratorium on all earmarks, even those for nonprofits such as universities. House Minority Leader John A. Boehner (R-Ohio) said voters would reward Republicans in the November midterm elections for taking on special interests.

It's not the $20 billion hit to the budget -- federal spending may not even go down if special interest projects are replaced by meritorious projects.  It is the lack of transparency and the potential for corruption that is the problem.  I don't think this ban alone will be enough to stop the corruption -- Congress must do its job to oversee the federal agencies running the competitive processes. 

Elizabeth Green has a must-read feature in this weeks' New York Times, "Building a Better Teacher."  There are several worthwhile parts focusing on effective techniques, but I particularly enjoyed the discussion of what makes teaching different from learning:

Mathematicians need to understand a problem only for themselves; math teachers need both to know the math and to know how 30 different minds might understand (or misunderstand) it. Then they need to take each mind from not getting it to mastery. And they need to do this in 45 minutes or less. This was neither pure content knowledge nor what educators call pedagogical knowledge, a set of facts independent of subject matter, like Lemov’s techniques. It was a different animal altogether. Ball named it Mathematical Knowledge for Teaching, or M.K.T. She theorized that it included everything from the “common” math understood by most adults to math that only teachers need to know, like which visual tools to use to represent fractions (sticks? blocks? a picture of a pizza?) or a sense of the everyday errors students tend to make when they start learning about negative numbers. At the heart of M.K.T., she thought, was an ability to step outside of your own head. “Teaching depends on what other people think,” Ball told me, “not what you think.”

Read the whole thing.

Freshman Senator Michael Bennet of Colorado takes his new institution to the woodshed:

He doesn't go far enough, but at least he's headed in the right direction.  Read more in this dialogue with Ezra Klein.

Yesterday, NPR ran a segment on Diane Ravitch and her new book, The Death and Life of the Great American School System: How Testing and Choice Are Undermining Education.  Once a proponent of school choice and testing, including the way they were supposed to be implemented in the No Child Left Behind Act, she now regards them as threats to our educational systems.  From the segment:

"She says one of her biggest concerns is the way the law requires school districts to use standardized testing."

"The basic strategy is measuring and punishing," Ravitch says of No Child Left Behind. "And it turns out as a result of putting so much emphasis on the test scores, there's a lot of cheating going on, there's a lot of gaming the system. Instead of raising standards it's actually lowered standards because many states have 'dumbed down' their tests or changed the scoring of their tests to say that more kids are passing than actually are."

I don't disagree with her yet.  High-stakes testing is a means to an end -- the ultimate end is evaluation and assessment of school performance.  But there are plenty of ways to evaluate and assess that don't include standardized testing, let alone the strange mix of non-standardized testing that we have observed with NCLB. 

But then she picks the wrong fight. 

I think this op-ed, "Reconciliation on health care would be an assault on the democratic process" by Orrin Hatch has appeared 30 days ahead of schedule.  Reconciliation is not the assault on democracy -- the Senate is the assault on democracy.  Senator Hatch may like the way the Senate requires supermajorities and other obstacles to the simplest version of majority rule that most of us think of when we hear the word "democracy," but he shouldn't go redefining words on his own. That's not what language is for.

And the fun doesn't stop there.  Here are three more offenses against language that jump off the page:

1) Hatch refers to the reconciliation process as "arcane."  I don't think so.  The filibuster that reconciliation would circumvent is arcane. 

2) Hatch again takes some liberties with the definition of democracy:

This use of reconciliation to jam through this legislation, against the will of the American people, would be unprecedented in scope. 

Readers of the blog know I am no particularly fan of the health care bills, but if a majority of the elected representatives in both houses and the elected occupant of the White House all support the bill, then I think that "against the will of the American people" is a pretty tough sell.

Leave aside the broader health care reform debate and what the Democrats want out of this process.  Why are the Republicans not using their elected offices to advance policies that serve their own supporters?

Their main voting constituency is middle class (or higher) white families in the suburbs, particularly the husbands and fathers in that constituency.  They don't face the raft of problems that others do in our society.  But one big problem that they do face is that something beyond their control happens to someone in their family.  Medical catastrophes have to rank high on that list -- they certainly do for me.  If a member of my family were to be afflicted with an expensive medical condition, then I am financialy viable only for as long as I stay insured with my current employer.  Put simply, there are gaps in private insurance markets that leave such families exposed.  This is plain to see and should be the focus of Republican efforts on health care reform, along the lines that I have discussed over the past six months (most recently here).

Macroeconomic Advisers has a blog.  I became a huge fan of their work during my year at the CEA.

If I were giving awards for the most self-interested suggestions for fiscal stimulus, this one from the American Benefits Council would be among the finalists.  From the Council's president, James Klein, in its most recent press release:

"Immediate relief is essential to the preservation of thousands of American jobs. Every day that goes by without a solution means more facilities will close, more layoffs will be planned and economic growth slips farther away. One recent survey found that cash contributions to pension plans will be 400 percent higher in 2010 than in 2009 and another survey found that fully 68 percent of employers reported that unexpected cash outlays for pension plans would cause cuts outside the plan including hiring and workforce training. Do we really need any further evidence that pension funding is a jobs issue?" Klein said.

In an interview for the March/April 2010 issue of the Dartmouth Alumni Magazine, Jake Tapper of ABC News asks Hank Paulson about his role as Treasury Secretary during the financial meltdown.  Here is one question that caught my attention (page 37):

Should there not be any organizations that are too big to fail?

Well they are as big as they are, so the key question is how do you regulate them and how do you have the proper authorities and tools in place so you can let them fail without taking down the rest of the system? This is something that Ben and I had talked with Congress about before Lehman went down. We saw we needed these powers. There’s no way we could get them, and the president and current Treasury secretary still haven’t gotten them. But I believe that with the right tools no institution needs to be too big to fail. You just need the power to unwind them outside of bankruptcy.

According to The Washington Post, this was the reaction of House leaders to President Obama's proposal to use tax credits to expand employment:

The administration also wants to put an additional $100 billion toward an immediate jobs bill. One of the most significant ideas would award tax credits worth as much as $5,000 per new hire to employers that expand their payrolls this year. By the administration's calculations, the tax credit would create 600,000 jobs at a cost to the government of about $33 billion.

That is my reaction as well.  If the Federal government could administer a problem this intricate, I doubt we would be in the shape we are in.  We are over two years into these discussions of stimulus and bailouts, and it is disappointing to continue to see these gimmicks being discussed.  What are we going to have next, "Cash for Coworkers?"  The basic lesson does not seem to have sunk in -- when you are relatively poor, you must be more careful with your money, not less.  You should be spending your money only on what you need and not spending it on what you don't.

So goes the logic (with only mild exaggeration) of one of the most ridiculous policy proposals I've read in a while -- to make up for falling gas tax revenues with a new tax on miles driven.  Ashley Halsey III is on the case in The Washington Post yesterday. 

The appropriate tax instrument to make up for declining or inadequate gas tax revenues is ... a higher gas tax rate.  Compared to a higher gas tax rate, a tax on miles driven ignores the amount of fuel used to drive those miles.  Highway travel is taxed the same as city travel.  Gas guzzlers are taxed the same as hybrids. Neither change makes any sense from an environmental perspective. 

Reports of strong growth in the fourth quarter of 2009 were a welcome addition to the positive growth in the prior quarter, but I remain concerned about the sustainability of that growth.  The recession took down the financially weakest firms and weakened the rest.  Without robust growth in the rest of the economy, we will see the financially weakest of the remaining firms contract as well.  My home institution of Dartmouth is a case in point. 

For those not following the local news, the College has tasked itself with trimming $100 million from its annual expenditures over a two-year window.  The number comes from the simple arithmetic of having lost a billion dollars of endowment (which, at a 5% spending rate, is $50 million) and from making a prudent decision to reduce its spending rate down by 2 percentage points to about 5% (creating the other $50 million, when applied to the remining $2.5 billion).  The College's president has stated, correctly, that this cannot happen without reductions in staffing. 

At the Economix blog on Thursday, Catherine Rampell posted a must-read analysis of the composition of the unemployed population.  But I think her conclusion is too pessimistic.  She writes:

Whatever the underlying cause, the result is disconcerting: compared with previous recessions, many more of the employment gains in this recovery will have to come from new jobs.

That is much easier said than done.

Workers whose entire occupations — not just the previous payroll positions they held — are disappearing (think: auto workers) will need to start over and find a new career path. But the new skills they will need take a long time to acquire.

Even if the employment gains in this recovery will have to come from new jobs, it is not necessarily the workers whose entire occupations are disappearing that will have to fill the new jobs in emerging fields. 

I give President Obama high praise for the parts of his speech this evening where he chastised his own party in the Congress for its ineffectiveness and for telling the Senate Republicans that if they are going to insist on supermajorities to get any policy passed, then they are going to have to share in the responsibility for governing.  Good for him.  Nobody's perfect, but I cannot help but think that the conduct of the Congress in recent years, and the Senate in particular, would be enough to make a Founding Father vomit.

Despite the unusual circumstances of January 2010, much of the speech was the standard fare in January -- everybody should go to college, everybody should be healthy, the environment should be clean, people should save for retirement, and I've got the token programs in my budget to give me the credibility to pay lip service to it.  And, new this year, we will do all of these token programs and giveaways while insisting that we will freeze non-defense discretionary spending at current levels.

One item that stood out as different was the acknowledgement that we are on our way to export-led growth, if we are to have growth at all. 

In today's USA Today, Gene Steuerle discusses the "Fiscal Democracy Index," defined as the percentage of federal revenue not allocated for mandatory programs, including interest payments.  It is not a pretty picture:

and here is something that I did not know (links in the original):

For the first time in U.S. history, in 2009 every single dollar of revenue was committed before Congress voted on any spending program. Meanwhile, most of government's basic functions — from justice to education to turning on the lights in the Capitol — are paid for out of swelling, unsustainable deficits.

Tuesday's special election in Massachusetts was but the first of a number of interesting contests in New England this year.  Likely to rise to prominence over the spring and summer is the contest to succeed Senator Judd Gregg of New Hampshire.  Current Representative Paul Hodes is unopposed on the Democratic side of the ballot, and former Attorney General Kelly Ayotte will likely emerge from the herd of Republicans.  Here is how my very local paper reported on it today:

Hodes currently trails Ayotte by 9 percentage points but beats both Binnie and Lamontagne in one-on-one match-ups, according to the poll.

Mark Bergman, communications director for the Hodes campaign, said the polling numbers do not change Hodes’ campaign strategy.

“This election is going to be about choice,” Bergman said in an interview with The Dartmouth. “The Republicans all support the same failed economic agenda of [former President] George W. Bush that would return us to the failed policies that got us into this [economic crisis].”

If you had told me in November 2008 that Massachusetts would be represented by a Republican in the Senate, I would have had you committed.  And yet that has what has occurred.  From my admittedly biased viewpoint on the periphery of the Boston media market, I thought Martha Coakley ran an arrogant and nasty media campaign.  For example, I'm not sure what she hoped to accomplish by interrupting my football playoffs with ads attacking a guy I had never heard of and blatantly overstating her own accomplishments.What she should have done was to simply say that she was a firm vote in the Democratic camp on the key issues of the day; principally, extending the benefits of more universal health care to the rest of the nation. 

What the nation got, instead, was something other than a firm vote in that camp.  But don't overstate what this means.  President Obama does not now find himself negotiating directly with Senator Brown over his health care agenda. 

Some will say that the new deal reached on the tax on so-called Cadillac health care plans is a giveaway to unions -- and they won't be wrong -- but in isolation it is a step toward "the least worst way to do the wrong thing," which is what passes for success in Washington these days.  Buried in The Washington Post article by Lori Montgomery and Robert D. Shear:

The deal cut Thursday would raise the value of policies subject to the tax to $24,000 for families and $8,900 for individuals. Plans with significant numbers of women or older workers would receive an additional break, as would workers in high-cost states and high-risk professions. Dental and vision plans would be exempt starting in 2015. And workers with collective-bargaining agreements and government employers would be exempt until 2018, giving labor leaders time to negotiate new contracts.

Maybe the best four-minute explanation of how screwed up our policies toward financially distressed firms have been.  What does it say about us that The Daily Show is the best TV news program? That we are lucky to have The Daily Show.

Watch it here.

Donald Marron calls it "sobering," and James Pethokoukis gives nine reasons why it is "bad news" for Democrats.  Mark Thoma discusses the story beneath the story, which is that the decline in labor force participation kept the unemployment rate from rising despite the loss in jobs.  Menzie Chinn also discusses some subtle aspects of the report.