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Wonkbook: Trade deficit up; $3 bill for jobless homeowners; climate fight moves to states


The latest trade deficit data provides yet another unwanted data point that the recovery is slowing; the Obama administration is spending $3 billion to help unemployed homeowners stave off foreclosure; when considering the Obama administration's challenge in the midterms, consider that a majority of Americans don't know that it was George W. Bush who signed TARP; and statewide initiatives against climate change are being tested in 19 elections.

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The trade deficit widened to $49.9 billion in June, reports Neil Irwin: "Ask some of the more optimistic forecasters out there where they see economic growth coming from in the years ahead, and a frequent answer is trade. Higher exports (and a more favorable overall trade balance) should drive job creation, simultaneously helping the U.S. recover more quickly and helping to right long-standing imbalances in the world economy...It seems like every data point that has come out lately has been disappointing, and this is one more in the line."

A large majority of Americans don't know that George W. Bush signed TARP into law:

The Obama administration is providing $2 billion through states, and $1 billion federally for unemployed homeowners, report Nick Timiraos and Meena Thiruvengadam: "The Department of Housing and Urban Development will provide bridge loans to help unemployed borrowers who are delinquent on their mortgages...The initiative, modeled after existing state programs, will offer interest-free loans of up to $50,000 for eligible borrowers to be used to make mortgage payments for up to two years."

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Nineteen gubernatorial elections feature disputes about state-level climate action, reports Darren Samuelsohn: "Nowhere is the battle more intense than in California, where Democratic Attorney General Jerry Brown and Republican Meg Whitman are at odds over the state’s landmark law to reduce heat-trapping emissions to 1990 levels by 2020. Whitman favors a one-year suspension of the law, known as AB 32, to give the state’s economy time to recover from the recession."

British dance-pop interlude: Hot Chip play "Ready for the Floor" live.

Still to come: Home prices are up due to the housing tax credit; green jobs aren't globalization-proof; up to one in twelve American children are born to undocumented immigrants; Scott Pilgrim the comic.


The home price bump caused by the homebuyers' tax credit may be shortlived, reports Nick Timiraos: "Economists have warned that the gains could prove fleeting if a faltering economy saps demand and if the pace of foreclosures rises. Signs of a slowing market are already evident. Newly signed contracts plunged in May and haven't rebounded since. Those lower sales levels won't be reflected until July because it takes one or two months for sales to close. As inventories of unsold homes rise, many economists see home prices declining later this year."

Employers are filling open job positions unusually slowly:

Many delinquent mortgage-holders may not have to pay more than 10% of their loan back, reports David Streitfeld: "'When houses were doubling in value, mom and pop making $80,000 a year were taking out $300,000 home equity loans for new cars and boats,' said Christopher A. Combs, a real estate lawyer here, where the problem is especially pronounced. 'Their chances are pretty good of walking away and not having the bank collect.' Lenders wrote off as uncollectible $11.1 billion in home equity loans and $19.9 billion in home equity lines of credit in 2009, more than they wrote off on primary mortgages, government data shows. So far this year, the trend is the same, with combined write-offs of $7.88 billion in the first quarter."

The Fed faces yet more difficult decisions after its easing move:

The SEC's FOIA exemption is drawing criticism, reports Daniel Strauss: "There are now a number of bills to amend it, one backed by Rep. Darrell Issa (R-Calif.) and another spearheaded by Sens. Patrick Leahy (D-Vt.), John Cornyn (R-Texas), Ted Kaufman (D-Del.) and Chuck Grassley (R-Iowa)...'The Dodd-Frank Act mandates a number of new responsibilities for the SEC to protect investors, including new authority over hedge funds, private equity funds and venture capital funds,' [SEC Chairwoman Mary Schapiro] wrote. '...In order for our efforts to be successful, it is important that registered entities be able to provide us with access to confidential information without concern that the information will later be made public.'"

John Carney questions Fannie and Freddie's exemption from Dodd-Frank's risk-retention rules:

Matt Miller wishes the state aid bill had tough requirements for state budgets: "The auto emergency offers the right template -- because the industry was forced to restructure as a condition of its bailout. The states haven't been. Borrowing from China to skirt devastating state layoffs is one thing. But borrowing from China to keep runaway Medicaid programs in New York and California free from fundamental overhaul, and gargantuan unfunded public pensions untouched, seems mad. In California, more money is spent each year on compensation and pensions for 70,000 prison employees than on the state's entire higher education system!"

William Poole makes the case for the outright abolition of Fannie and Freddie:

Movie/comic mashup interlude: The Scott Pilgrim Vs. The World trailer redone with the original comic panels.


Some green jobs are facing outsourcing, reports Joseph White: "Michigan solar cell maker Energy Conversion Devices, Inc... will move final assembly of some of its existing solar cell products out of an Auburn Hills, Mich. plant to Tijuana, Mexico. The decision means 140 of ECD’s Michigan workers will be out of a job this fall, the company says. About 750 ECD jobs will remain in Michigan, it says. ECD’s decision to shift what it described as low-skill assembly jobs to Mexico is part of a broader effort to cut costs and compete with solar cell makers which have manufacturing operations in China, Malaysia and other lower-wage nations, says Martha Duggan, ECD’s head of government and regulatory affairs."

Energy efficient light bulbs are falling in price faster than expected:

Supporters of green energy are balking at the funding behind the state aid package, reports Stephen Power: "To help pay for the aid bill, lawmakers cut $1.5 billion from the Department of Energy’s renewable energy loan guarantee program. It’s the second time in roughly a year that Congress has raided the program to fund other priorities. Last summer, lawmakers cut $2 billion from the DOE’s renewable energy loan account to extend the highly popular Cash for Clunkers program. Congress has not repaid the agency that $2 billion, despite frequent promises by its leaders to do so."

Germany is considering a tax on coal:

Investors are concerned about the effect of repealing California's climate bill on tech firms, reports Todd Woody: "'Proposition 23 will kill markets and the single largest source of job growth in California in the last two years,' declared Vinod Khosla, a leading green tech investor, referring to the clean energy economy. 'Not only that, it'll kill investment in the long term for creating the next 10 Googles.' Chipped in Weihl: 'For California, we can either lead in this and invest in it and participate in this huge growth sector or cede that to China, India, and other places. It would be crazy for us to sit back and let others take that opportunity.'"

Dave Roberts details how coal regulators at the EPA are making up for lost time: "To understand what's going on at EPA, you have to keep in mind what's happened for the last eight years -- namely, nothing. Bush came into office in 2000 and immediately dismissed the lawsuits the Clinton administration had filed against a raft of old power plants. For the next eight years, coal utilities were effectively allowed to regulate themselves; industry representatives staffed and administered EPA air programs. Relentless effort was made to weaken the law and enforcement was utterly gutted...what Lisa Jackson's EPA is doing as we speak: updating a whole panoply of Clean Air Act and other pollution standards. That's what has coal utilities terrified."

Bradford Plumer sings the praises of biochar as an emissions reduction method:

Adorable animals overcoming adversity interlude: The world's cutest legless cat.

Domestic Policy

One in twelve American children have undocumented immigrants as parents, reports Miriam Jordan: "The report, based on Pew's analysis of the Census Bureau's March 2009 Current Population Survey, also found that the lion's share, or 79%, of the 5.1 million children of illegal immigrants residing in the U.S. in 2009 were born in the country and are therefore citizens...Under U.S. law, children have to wait until they reach the age of 21 before they can petition for permanent legal residency for their parents...Mr. Passel said that the Pew analysis found that more than 80% of the undocumented immigrant mothers who gave birth in the U.S. had been in the country at least a year, and that many had been here about a decade."

Research suggests policymakers aren't doing enough to prevent people from falling into poverty:, as opposed to helping them out of it:

States are experimenting with decentralized learning, writes David Graham: "A smaller but growing number of states, from Florida to New Jersey to Kentucky, have begun allowing students to earn credit through internships, independent studies, and the like. It’s a logical extension of the realization that simply being in a seat from bell to bell doesn’t guarantee intellectual development. Students--and their parents--are at least theoretically attracted to the idea of studying what they want, at the pace they want."

The Senate is reconvening to pass border funding to tomorrow:

Debbie Wasserman Schulz and Rosa DeLauro tout preventive care measures in health care reform: "Preventive care is fiscally responsible. Paying for regular mammograms is a lot cheaper and a lot more beneficial, in terms of money and quality of life, than paying for and undergoing surgery, radiation, chemotherapy or hormonal therapy. In short, preventive care goes a long way toward reducing surging health care costs for American families. Even Republicans who voted against the health care reform law and went out of their way to prevent its passage have now lauded these reforms. Recently, on the Senate floor, Sen. Jon Kyl (R-Ariz.) actually took credit for the preventive care provision."

Constitutional scholar Walter Dellinger explains the historical background of birthright citizenship:

Ray Fisman thinks improving schools may require firing most new teachers: "The researchers went through a simulation exercise, building on prior findings about the impact that great teachers have on their students, the fraction of incoming teachers who turn out to be strong performers in the classroom, and the "signal-to-noise" ratio in a teacher's performance during her first couple of years (i.e., how hard it is to tell whether a teacher is bad or just unlucky). When they ran the numbers, the answer their computer spat out had them reviewing their work looking for programming errors. The optimal rate of firing produced by the simulation simply seemed too high: Maximizing teacher performance required that 80 percent of new teachers be fired after two years' probation."

Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard.

By Ezra Klein  |  August 12, 2010; 5:50 AM ET
Categories:  Wonkbook  
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Next: Portrait of a frustrated electorate


Health care (transformation) is one of the best issues this current administration has done thus far. With this change individuals will have the opportunity to seek professional and quality health care services. Who would want to return to the days of the horse and buggy, b/w tv sets, manual typewriters, pac man, you get the point? That's about how old the health care system was in the USA. Each day the news is filled with social tragedies in which lives are taken at the hands of known acquaintences and/or family members. Our society is stricken with the institutions of white collar crime permeating throughout this great nation and greed which tends to strike at the very fabric of our country. If you are looking for affordable health insurance check out . I hope everyone will soon recognize and use the resources made by this transformation to seek professional medical attention as the need arises rather than turning to illegal and criminal activities to resolve their issues.

Posted by: lillypurce12 | August 12, 2010 6:41 AM | Report abuse

Get information on how to reduce your debt by filing for bankruptcy

Posted by: jokristy12 | August 12, 2010 6:42 AM | Report abuse

whatever you do, don't mention the war!

Posted by: bdballard | August 12, 2010 9:11 AM | Report abuse

what does that say of us all that the highest percentage was "what's twitter?". Sad.

Also Kyl is the epitome of hypocrisy. You can't rail against it as he did and then take credit. You can say it ended up being good (if it does) but you get no credit.

Its also very comforting to know that those of us that paid our bills and lived within our means will be helping those that over-extended themselves in home equity loans and not a whole heck of a lot was done to stop it from happening again. Sure there are some that didn't over-extend and just were the result of job loss, bad luck etc but I'm sick and tired myself of paying for the "Jones'" . The price of credit is still too low.

Posted by: visionbrkr | August 12, 2010 9:37 AM | Report abuse

"Ray Fisman thinks improving schools may require firing most new teachers: "The researchers went through a simulation exercise, building on prior findings about the impact that great teachers have on their students, the fraction of incoming teachers who turn out to be strong performers in the classroom, and the "signal-to-noise" ratio in a teacher's performance during her first couple of years (i.e., how hard it is to tell whether a teacher is bad or just unlucky). When they ran the numbers, the answer their computer spat out had them reviewing their work looking for programming errors. The optimal rate of firing produced by the simulation simply seemed too high: Maximizing teacher performance required that 80 percent of new teachers be fired after two years' probation.""

Did anyone check if that computer was a card carrying member of the tea party?

But more seriously, an 80% firing rate is going to have other negative effects (e.g. who would spend four years to get an education degree where there is an 80% chance they'll need to go back to school for a new line of work after 2 years).

Posted by: justin84 | August 12, 2010 10:34 AM | Report abuse

What is the point of including in wonkbook a piece by Democratic congresswomen that is basically just propaganda for PPACA? And it only makes it worse that they are fast and loose with the facts: more preventive care does not save money.

Posted by: ab_13 | August 12, 2010 10:36 AM | Report abuse


I normally agree with you 99.9% of the time, but IMO that's wrong. Why not pay $200 for a mammogram if it catches breast cancer early enough to save tens or hundreds of thousands of dollars?

Sure in the short run it costs a bit more but in the long run it saves.

Posted by: visionbrkr | August 12, 2010 10:49 AM | Report abuse

@visionbrkr: Pretty much all of the available research says that any long-run cost savings are outweighed by the upfront costs of more preventive care. There are some categories of preventive care that are cost-effective, but in general it is not the case.

Note: this does not mean we shouldn't do preventive care, but you can't use cost as a rationale for doing it.

Posted by: ab_13 | August 12, 2010 11:07 AM | Report abuse


Given that healthcare costs are rapidly rising and that sooner or later many of us are likely to get some severe illness which is expensive to treat, does preventative care really save money in the long run?

As an example, suppose we spend a little bit on a mammogram and it catches a 60 year old's breast cancer early when it is easily removed. That surely saves money now, and for years the total health care dollars is almost certainly going to be lower than if the screening had not been done. But then suppose this woman now gets cancer again, at age 75, after 15 years of health care cost inflation. I'd expect total costs under the preventative care scenario to be higher. While 15+ years of extra life is a real benefit which outweighs those costs, the costs are still higher.

Of course, this same person could die of a heart attack in their sleep or drive into a tree and so the costs aren't guaranteed to be higher, but in many cases they probably will be. Are there any studies which take this effect into account?

Posted by: justin84 | August 12, 2010 3:42 PM | Report abuse


I see your point but I also see the fact that people are living through many illnesses that killed them much sooner looking back 20-25 years ago.

If that same individual in your example didn't get the mammogram and contracted cancer but treated it and lived through the first episode and then again through the second then the costs would still be higher.

The only thing that I can point to is the fact that mortality tables for life insurance have increased over the last 10-15 years.

Posted by: visionbrkr | August 12, 2010 4:28 PM | Report abuse

@justin84 and @visionbrkr, see here:

Posted by: ab_13 | August 12, 2010 4:48 PM | Report abuse

RE: Preventative care saving money...

I did a lot of reading on this topic during and after the health care debate because the subject was controversial on this blog back then as well. My conclusion from that extensive informal research is that much of the controversy arises from confusion on how broadly one defines prevention.

Many insurance plans now happily waive the co-pay for simple periodic "wellness" exams and tests, because it is true that money is saved overall as a result of early detection and intervention, rather than having some major illnesses go undetected and untreated until an advanced stage.

However, (for example) if during a "wellness" exam, your doctor detects high cholesterol, and prescribes an expensive statin that you continue to take indefinitely for years to come (along with all the follow monitoring of your blood work), this sort of "preventative" intervention may be more expensive (system-wide) than treating the smaller number of heart attack victims and cardio-vascular disease cases that might arise if none of the same patients had been placed on a statin regime. Evaluating the total savings inherent in treating all cholesterol cases with statin drugs involves some fairly complex (and controversial) questions about precise risk levels, effectiveness of the medication, etc. It really is not that easy to quanitify.

And obviously far more money would be saved if the patient succeeds instead in lowering his or her cholesterol with diet and exercise. Doctors who are good at nagging their patients instead of just reaching for the prescription pad do a lot to add value to preventative care.

There was a good article in the New England Journal of Medicine (I think in 2008...sorry I don't have the cite) that discussed the tendency to over-simplify the savings, or the lack of savings, that arise because of preventative care. That term is simply too broad for purposes of intelligent discussion about savings, and it is better to avoid generalizing in either direction.

Of course, whenever we can prevent death and disease, that's the preferable option, even if it happens to be a little more costly than just having us all taking our chances. Avoiding illness, when possible, is a big part of the value of having medical care at all.

Posted by: Patrick_M | August 12, 2010 8:57 PM | Report abuse

America spends $256 Billion/year for foreign oil, plus $250 Billion/year annual trade deficit with China, resulting in sending $5 Trillion dollars overseas in 10 years for Oil and products made in China.

U.S. Imports by Country of Origin:

Over a Barrel: U.S. Oil Addiction:

America uses 25% of the Worlds oil but has only 2% of it. No amount of Domestic Drilling (Onshore and Offshore) will adjust that number a Single Percentage Point or have a 1% effect on the price of Oil on World Markets. What will have the greatest effect on Creating USA Jobs and Reducing USA Dependence on Oil, Saudi Arabia, Iran, Iraq, Venezuela and OPEC is “Using a Lot Less”. America can Use less Oil and Create “Private Industry” manufacturing and Jobs by;

• Passing Home Star, Building Star and Clean Energy and Jobs legislation
• Enacting a strong Renewable Energy Portfolio Standard of 25% by 2025,
• Pricing Carbon from Large Scale Polluters $30~$50/ton
• Taxing All Imported Oil a Modest $.50 cents/gallon
• Developing Freight Rail (such as along the I-81 corridor);
• Ending Wall Street Energy Derivative speculation that drives up the Price of Oil;
• Decoupling Energy Utility earnings from increased Sales
• Improving Transportation Efficiency;
• Expand Domestic Biofuels and Cellulosic Ethanol production;
• Enacting a Feed-In-Tariff for Wind, Solar, Biofuels, and Biomass;
• Lowering Corporate Taxes to 25% with a mandatory 15%

These actions provide the greatest Bang-for-the-Buck for Energy Jobs, manufacturing and Investment without sacrificing other Multi-Billion dollar Industries, Fresh Water, Wildlife, Seafood and White Sand beaches.

The argument “leads to higher energy costs” and “evil energy tax” is like an argument to keep your Children uneducated because higher education costs more; or keep your country weak because you refuse to invest in making it stronger, smarter and more efficient.; or offshore manufacturing to China and keep Americans unemployed because you don’t want to make an investment in Clean energy jobs and manufacturing.

Posted by: Airborne82 | August 12, 2010 10:05 PM | Report abuse

Yeah absolutely you can save huge on your auto insurance by making these simple changes find how much you can save

Posted by: lillypurce12 | August 13, 2010 1:37 AM | Report abuse


As you know this is kind of up my alley. In your example once the doctor finds the issue, it no longer is considered preventative and rather diagnostic care and ongoing treatment using statins are considered treatment.

Posted by: visionbrkr | August 13, 2010 11:08 AM | Report abuse


Treating elevated cholesterol in order to prevent atherosclerotic problems was specifically discussed in the New England Journal of Medicine article I referenced as an example of preventative treatment.

The fact that we have to stop to think about whether lowering cholesterol is preventative or diagnostic makes the point as to the complexity of what constitutes prevention or treatment, and why ab13 may conclude that preventative treatment is not a money-saver.

Posted by: Patrick_M | August 13, 2010 12:50 PM | Report abuse

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