Most of the early public skirmishing over health care issues has centered around nebulous fears of a “government takeover” of the health care sector. My sense of the state of play in congress, however, is that the votes almost certainly exist for the kind of regulatory overhaul that will change the nature of our health care system for the better. The sticking point is that ensuring the availability of affordable health care involves a substantial up-front expenditure of funds. As Peter Orszag explains, health reform is the best chance to put costs on a sustainable path over the long term. But over the short term, it takes money. And there’s no clear congressional consensus over where to find the money.

Steve Benen observes that the latest CNN polling indicates a similar issue in public opinion. 63 percent say “they would favor an increase in the federal government’s influence over their own health-care plans in an attempt to lower costs and provide coverage to more Americans,” indicating that scare stories about bureaucracy aren’t a key stumbling block. But then they asked:

“Would you prefer a health care reform plan that raises taxes in order to provide health insurance to all Americans, or a plan that does not provide health insurance to all Americans but keeps taxes at current levels?”

The split was 47-47. That’s not deadly. Indeed, I think it suggests that politicians who want to do the right thing have plenty of wiggle room. But the problem is that even if you have a senator who’s willing to raise “taxes” in the face of 47-47 public opinion, you have an additional hurdle when the subject turns to any particular tax.

I find the debate about whether or not we’re seeing “green shoots” to be a bit confused. Moreover, I don’t believe I can see the future. What I can see is the present, where markets react to any sign of good economic news with a big jump in oil prices. And the news in question is of the “things aren’t getting bad quite as quickly as we feared” genre of good news. What if six months ago, the economy is actually growing? Not growing rapidly. But just growing. Like, the number is above zero rather than below it.

Well it seems to me that we’ll be right back where we were in the summer of 2008 where sky-high gas prices were clobbering everything. And we haven’t really done anything over the past year to leave ourselves better-prepared for that situation.

Meanwhile, over the past six months the rising unemployment rate and falling asset values have been partially offset by the fact that thanks to energy price declines, real incomes for the employed majority have actually been rising. A spike in oil prices will put a stop to that and further hammer consumption. And the ensuing rise in inflation, though it’ll be non-core inflation, will probably make the Fed queasy about expansionary monetary policy.

Which is to say that if the recession ends, then it seems likely that we’ll slip right back into a new recession. I wish that weren’t the case, and that everyone would just react to an oil price spike by biking to work, but realistically we don’t seem to have made nearly the scale of adjustments that would be necessary to let the country shrug off a return to oil that costs over $4 a gallon.

A couple of more points on the allegedly “preferential treatment” that Michael Goldfarb thinks Sonia Sotomayor received during her Princeton years. First, as Michael O’Hare says:

I remember arriving at Harvard (a decade before SS went to college) from the Bronx HS of Science, whence Harvard had admitted eleven students a year since forever, out of a graduating class of about 800- of whom, we learned, none had ever graduated less than magna. There I found many things of interest to a New York kid, for example (1) Protestants! (2) …who seemed to be in charge of everything! My social justice gland went into overdrive as I started to meet the thirty-odd Pomfret students (a third of their graduates) in my class through my roommate, and compare them just on general smarts to the BHSS students who hadn’t made the cut with me.

Right. When I was at Harvard in the early days of the 21st Century, it seemed that there was very little year-to-year variance in the number of kids admitted from Dalton to each class. Similarly, there was very little year-to-year variance in the number of kids admitted from Stuyvesant to each class. These were two very good high schools in New York City. One was very expensive, one was free. Admission to Dalton was competitive, but only a minority of families could afford the tuition, and many of the students had been admitted in kindergarden. Admission to Stuyvesant was done via a standardized test administered to eighth graders. Naturally, the more-or-less fixed formula had Harvard take in a higher proportion of any given Dalton graduating class than any given Stuyvesant graduating class. Consequently, while the Dalton kids were considerably worldlier and in some ways more sophisticated, on average the Stuyvesant kids were smarter.

Which is to say that, as everyone knows, the main affirmative action at fancy private colleges is for the well-to-do in general and legacies in particular. Read about the “z list” (see also) and then complain about preferential treatment.

Meanwhile, it turns out that the specific innuendo Goldfarb was peddling about Sotomayor was false in all its key particulars. he didn’t get “preferential treatment” by being allowed to teach her own class

Via a distraught Conor Clarke, I see that not only did Greg Mankiw once write a cheeky paper arguing that maybe we should impose a height tax, he also goes in for some odd philosophical claims. To try to reconstruct his argument, he believes:

1. The main arguments in favor of redistributive taxation are grounded in utilitarianism.
2. Utilitarian theory supports taxing tall people more heavily than short people (this is the thesis of the paper).
3. Therefore, people should either sign on for the height tax or else abandon their support for redistribution.

He concludes with this:

A moral and political philosophy is not like a smorgasbord, where you get to pick and choose the offerings you like and leave the others behind without explanation. It is more like your mother telling you to clean everything on your plate. If you are a Utilitarian redistributionist, the height tax is like that awful tasting vegetable your mother served up because it is good for you. No matter how hard you might wish it wasn’t there sitting on your plate, it just won’t go away.

I think there are a ton of mistakes being made here. This goes back to a point I was making a while ago about how dangerous it is that the public discourse is so dominated by low-quality freelance philosophy done by people with PhDs in economics. I’m fairly certain that if Mankiw were to walk over to Emerson Hall he could find some folks (possibly T.M. Scanlon who I know sometimes reads this blog) who could explain to him that there’s little grounds for the belief that a commitment to utilitarianism is the main justification for redistributive taxation.

So point one is factually wrong.

But that aside, I think the “smorgasboard” argument is a confused way of thinking about moral reasoning. A great many crucially important questions in normative ethics are easy. Is it okay to murder Greg Mankiw to steal the money in his pocket? No, it isn’t. But a lot of foundational questions in ethical theory are hard. And a lot of meta-ethical questions are hard. Normal people don’t even understand what all of these questions are. And those of us who’ve thought a little bit about them, but decided not to go into the professional philosophy game may be aware that there are issues in these areas about which we’re uncertain. There’s a certain hyper-literal sense in which these questions all form a hierarchy. First I must decide where I stand on meta-ethics. Am I a reductive moral realist? A quasi-realist? A practical reasons theorist? An old-school “moral facts are facts too, damnit” moral realist? Are there theological issues in play? Then I need to decide if I’m a utilitarian (and if so, what kind of utilitarian!) or maybe some other kind of consequentialist or maybe I have a more Kantian view. So then depending on those answers, I can say “killing Greg Mankiw to steal the money in his pocket is wrong because…” and then lay the whole thing out.

I think what Mankiw is implying with the “smorgasboard” argument is that this is how people should actually engage in moral reasoning. So if I find myself uncertain about a broad question in ethical theory, this uncertainty must logically inflict my first-order moral judgments. Maybe killing Greg Mankiw really is okay? And if I’m not uncertain, if I say “the reason it’s wrong to kill Greg Mankiw and steal his money is that the murder would reduce net utility” then the murderer can counter with “well, if you believe in utilitarianism, you ought to believe in a height tax.” Then I say “well that sounds wrong!” And then, having debunked utilitarianism, Mankiw gets shot and everyone agrees that justice has been done.

Something’s gone wrong there. We don’t abandon considered convictions about normative issues that quickly. Murder is wrong. If forced to contemplate the alleged contradiction, there are a bunch of things we might want to consider. Maybe the analysis of the height issue has gotten something wrong, utility-wise. After all, though the paper is clever, it’s hardly a comprehensive review of all of the hedonic issues in play. Or maybe utilitarianism isn’t the best theoretical grounding for the conviction that murder is wrong. Or, maybe the height tax thing actually is a good idea, albeit an unrealistic one. But since this isn’t a “live” subject of political controversy, and since there seem to be a lot of other more clear-cut policy issues, we decide to spend our time and energy thinking about less outlandish policy suggestions.

My friend Julian Sanchez, another not-especially-Hispanic blogger/pundit, has an excellent post on Sonia Sotomayor and the baffling tactics of the conservative movement. I’ll just quote the conclusion:

Look, it’s not racist to oppose a Latina judicial nominee, or to oppose affirmative action, or to point out genuine evidence of ethnic bias on the part of minorities. What we’re seeing here, though, is people clinging to the belief that Sotomayor has to be some mediocrity who struck the ethnic jackpot, that whatever benefit she got from affirmative action must be vastly more significant than her own qualities, that she’s got to be a harpy boiling with hatred for whitey, however overwhelming the evidence against all these propositions is. This is really profoundly ugly. Like Yglesias, I don’t think I’m especially sensitive to stuff like this, or particularly easily moved to anger, but I’m angry. I don’t think Republican pundits really appreciate the kind of damage they’re probably doing, for no reason I can discern given the slim odds of actually blocking the nomination. Which, perhaps, goes to Sotomayor’s point: They really have no idea how they sound to anyone else.

One thing conservatives might want to ask themselves is what would they be saying about Sotomayor if she had the exact same background and record but was a middle class white woman from Riverdale instead of a poor Latina from the projects. Of course, they still wouldn’t like her but they’d find a non-offensive way to express that. They’d say things like “she’ll probably vote with Ginsburg and Breyer whereas I would prefer a justice likely to vote with Scalia and Roberts.” That’s a perfectly good reason to be unhappy with a judicial nominee. Instead, they’re freaking out about her name, about Puerto Rican food, about the idea that she’s bitchy, that she’s benefited from “preferential treatment,” that she must secretly be stupid, that she’s a Klan member, and all kinds of other nonsense that’s only explicable as a hostile reaction to her ethnic background.

Conservatives ought to picture an anti-abortion, gun-owning, married, male, prosperous, Cuban-American small businessman living in the suburbs of Miami. Picture him reacting to the news of Sotomayor’s nomination. Perhaps he’s happy in some sense to contemplate a Latina on the bench, but perhaps not. Either way, the guy’s still a solid conservative. Now picture him listening to G. Gordon Liddy say “I understand that they found out today that Miss Sotomayor is a member of La Raza, which means in illegal alien, ‘the race.’” That’s not going to play well.

The new General Motors is going to be a strange enough entity—a state-owned automaker with its own union and the government of Canada on board as major junior partners. But the situation in the new GM Europe, which is mostly composed of Opel, is even odder. It initially looked like Opel was going to be sold to Fiat, which is also buying Chrysler, as part of Fiat’s campaign to become a legitimate first-tier player in the auto market. But Magna, a Canadian car parts company (that’s also to some extent Austrian), was also interested in Opel. And the German government seems to have decided that a Magna-owned Opel would preserve more German jobs than a Fiat-owned Opel would. So the Germans helped stitch together a deal also involving Sberbank, a very large state-owned Russian bank.

And part of the appeal of that to the Russian government is that GAZ, Russia’s number-two car manufacturer, will now start building Opel cars on its assembly lines rather than terrible, terrible GAZ cars. Thus, jobs will also be saved in Russia.

In other words, the Russians and the Germans appear to have taken action to guarantee even more overcapacity in automobile production. And with essentially all global automakers operating with some level of government support, it’s hard to see how anyone can stay in the game without continuing government support. At some point, aren’t we going to have to start unraveling this?

Gary Gorton wrote a 20,000 word paper I’d been meaning to read since Ben Bernanke represented it. Ezra Klein did a summary, though, so I didn’t actually read it. Gorton’s main contention is that moving forward we need to make the “shadow banking system” more like the regular banking system, in which there are explicit government guarantees paired with regulation.

I totally follow the logic of this, but I think it’s dead wrong for the reasons Felix Salmon lays out:

In my view of the crisis, it’s precisely the demand for informationally-insensitive assets which is the problem. And we need to get individuals, companies, and institutional investors out of the mindset that they can do an elegant little two-step around the inescapable fact that anybody with money to invest perforce must take a certain amount of risk. If you have a world where people are all looking for risk-free assets, you end up shunting all that risk into the tails. And the way to reduce tail risk is to get everybody to accept a small amount of risk on an everyday basis. We don’t need more informationally-insensitive assets, we need less of them.

That seems right to me. The combination of FDIC insured bank accounts and treasury bonds seems to me like an adequate supply of safe savings vehicles for the people who need them. People sitting on huge pots of money have perfectly good reason not to want to accept the low interest rates involved in those vehicles. But the price you pay for higher returns is more risk. But more risk should be acceptable to people with larger pots of money. What’s needed is for more time and energy to be put into people thinking about what kind of risks are worth bearing, instead of all this time and energy being put into trying to “engineer” the risk away. I think Gorton’s proposal would amount to basically shifting the engineering function out of the private sector and onto regulators, but this seems much more likely to wind up concentrating the risk at the tale (what if the regulators massively screw up?) than to actually make it go away.