North Carolina unemployment continues to surge

North Carolina's unemployment rate jumped an astonishing 1.6 percent from December 2008 to January 2009, according to figures from the U.S. Department of Labor. The January 2009 unemployment rate for the state was 9.7 percent. Only five states--California, Michigan, Oregon, Rhode Island, and South Carolina--had higher unemployment rates.

North and South Carolina had the largest year over year change in unemployment, with the rate increasing 4.7 percent in each state. For North Carolina, the change represents more than a doubling of unemployment in the last year.

The report also indicates that North Carolina is losing jobs, 38,000 from December to January, and nearly 160,000 over the past year.

Pot roast (night #7)

We're on a three dinner winning streak--the baked fish, baked chicken, and now the pot roast (USDA guide, p. 21) were all great. Egg noodles, peas and carrots, orange slices, and left-over peach cake accompanied tonight's dinner.

Everything tonight was easy to make. The chuck roast for the pot roast got browned and then simmered for two and a half hours. The egg noodles were boiled for ten minutes; the peas and carrots were microwaved for about three, and did I mention that we had left-over peach cake.

We'll get left-over pot roast for the upcoming week. The rest of the menu is as follows:

Menu for week 2

	Breakfast	Lunch	Dinner
Monday	orange juice; cereal; English muffins; milk	cold cut sandwiches; apples; store cookies; carrots	stir-fried pork and vegetables; rolls; orange slices; milk
Tuesday	orange juice; cereal; English muffins; milk	cold cut sandwiches; apples; store; carrots	pot roast left-overs; noodles; green beans; lettuce; milk
Wednesday	orange juice; cereal; English muffins; milk	cold cut sandwiches; apples; store cookies; carrots	baked spicy fish; noodles; peas & carrots; milk
Thursday	orange juice; cereal; bagels; milk	cold cut sandwiches; apples; store cookies; carrots	turkey chili; macaroni; peach-apple crisp; milk
Friday	orange juice; cereal; toast; milk	peanut butter & jelly sandwiches; apples; store cookies; carrots	spanish baked fish; rice; peas; peach-apple crisp; milk
Saturday	orange juice; scrambled eggs; turkey ham; bagels; milk	chicken noodle soup; crackers; orange slices; oatmeal cookies; milk	baked meatballs; spaghetti sauce; lettuce; bread; milk
Sunday	orange juice; scrambled eggs; hash browns; milk	tuna pasta salad; crackers; orange slices; oatmeal cookies; milk	turkey cabbage casserole; orange slices; crackers; chickpea dip; milk

We'll end the menu the way it started with the turkey cabbage casserole.

Baked chicken (night #6)

Dinner #6 on the thrifty food plan menu was baked chicken, mashed potatoes, green beens, and peach cake (USDA guide, p. 66). White bread (what else) was also initially on the menu, but there was enough other food that we decided to skip the bread.

The USDA guide didn't include instructions on how to bake the chicken, so we were on our own (baked with rosemary from the garden, Montreal seasoning and butter).

All of the baking (the cake, then the chicken) took a while. As you can see in the picture, one of the diners was a tad impatient.

Besides skipping the bread, we also managed to down just half of the cake, so we've got dessert leftovers for tomorrow.

Two weeks is enough thank you

CNN reporter Sean Calebs has just finished following a food stamp diet for a month. You can read his blog about the experience. Sadly, the blog doesn't have any yummy pictures.

Baked fish with cheese (night #5)

Lots of baking tonight. We had scalloped potatoes that we baked, along with the baked fish (it was supposed to be cod but we went with haddock that was a little cheaper, er, I mean more economical; actually SNAPper would have been more appropriate, if it fit in the budget). The dinner also had fresh spinach and orange slices. Mercifully, we got a reprieve from the white bread.

The potatoes took a few extra minutes to prep; otherwise it was relatively easy. Start to finish, dinner took an hour to prepare with most of that time spent cooking the potatoes.

The only mishap was that the potatoes boiled over in the oven, but that was okay as it was time to clean the oven anyway.

The kids seemed to like everything; they thought that the salad was a treat. Although Cathy and I had to steel ourselves for the fish with cheese, the dish actually worked.

I bet Kim Jung Il wished he ate with us.

The war on the rich (continued)

Daniel Gross also calls "shenanigans" on Obama's war on the rich.

We know from recent experience that marginal tax rates of 36 percent and 39 percent aren't wealth killers. I was around in the 1990s, when tax rates were at that level, and when capital gains and dividend taxes were significantly higher than they are today. And I seem to remember that we had a stock market boom, a broad rise in incomes (with the wealthy benefitting handily), and strong economic growth.

...we also know from recent experience that lower marginal rates on income taxes, and lower rates on capital gains and dividends, aren't necessarily wealth producers. The Bush years, which had lower marginal rates and capital gains taxes, were a fiasco. In fact, if you tally up the vast destruction of wealth in the late Bush years—caused by foolish hedge funds, investment banks, and other financial services companies, it seems like the wealthy have in fact been waging war on one another.

Meanwhile, Cal Thomas spices up his "class warfare" arguments with some good 'ol fashioned trick-down economics.

Class warfare has costs, but not for the people at whom the rhetorical mortars are aimed.

The drumbeat of anger by the many at the few who travel on private planes and live in big houses is having a negative effect on those who don't.

He piously concludes.

This isn't about politics; it is about doing what works. We know what works. The question is, will the president and congressional Democrats stop worrying about the rich and start worrying about the potential for increasing the number of poorer people?

Sounds like "evil shenanigans" to me.

They don't call it the dismal science for nothing

How bad are the February 2009 job numbers? Dismal doesn't begin to describe them. We're fast running out of negative records to break.

Consider the losses in non-farm payrolls.

• 2.0 million jobs lost in the last three months--the worst since the demobilization from World War II in 1945;
• 4.2 million jobs lost in the last 12 months--the biggest loss ever recorded;
• 1.5 percent of jobs lost in three months--the worst quarterly loss since February 1975, and
• 3.0 percent of jobs lost in the last 12 months--the worst since August 1958.

The news isn't any brighter when we look at the household employment status numbers.

• a 3.1 percent decrease in the level of household employment--the worst decline ever recorded;
• an employment to population percentage of 60.3 percent--the lowest in 20 years;
• a continuation of the annual decline in the employment-to-population ratio at 3.8 percent--the worst since 1975;
• unemployment at 8.1 percent--the highest in 25 years (December 1983), and
• a 3.7 percentage point increase in unemployment--the biggest jump in 33 years (May 1975).

Will the last employee out the door please turn out the lights?

What motivates North Korea

The Washington Post analyzes the sad state of food policy and perennial famine in North Korea.

Under the leadership of Kim Jong Il, the country cannot feed its people. Perennially dependent on food aid, North Korea has become a truculent ward of the wealthy countries it threatens. It is the world's first nuclear-armed, missile-wielding beggar -- a particularly intricate challenge for the Obama administration as it begins to formulate a foreign policy.

The "eating problem," as it is often called in North Korea, has eroded Kim's authority, damaged a decade of improved relations between the two Koreas and stunted the bodies and minds of millions of North Koreans. Teenage boys fleeing the North in the past decade are on average five inches shorter and weigh 25 pounds less than boys growing up in the South, according to measurements taken at a settlement center for defectors in South Korea.

Mental retardation caused by malnutrition will disqualify about a quarter of potential military conscripts in North Korea, according to a December report by the National Intelligence Council, a research institution that is part of the U.S. intelligence community. The report said hunger-caused intellectual disabilities among the young are likely to cripple economic growth, even if the country opens to the outside world or unites with the South.

The story goes on to describe how the famine is undermining the authority of Kim Jong Il's kleptocracy, in part through the development of underground food markets.

While Kim Jong Il is punishing and starving North Korea's population, the country's food dependence--and his regime's need to skim some of the assistance for itself--are also leading him to threaten his neighbors.

North Korea's million-ton food gap was filled in recent years by South Korea as part of a bid to ease tension on the Korean Peninsula.

The Seoul government gave a half-million tons of food annually, along with enough fertilizer to grow another half-million tons. Unlike the U.N. World Food Program and other international donors, which have a policy of "no access, no food," South Korea did not monitor who ate the food it gave. But last year, South Korea's president, Lee Myung-bak, changed the rules.

"We have decided to monitor and secure delivery of food using the World Food Program procedures as our benchmark," said Lee Jong-joo, the humanitarian assistance chief in Seoul. "Unfortunately, we have had no dialogue whatsoever on these new conditions with North Korea."

North Korea, instead, got mad. It canceled military agreements and moved a long-range missile toward a launch center. Behind the anger is the food gap.

Turkey stir fry (night #4)

Tonight's dinner, shown on the right, was turkey stir fry (USDA guide, p. 40), white rice, and the ubiquitous white bread. The stir fry, with carrots, onions, and zucchini, had more vegetables than the last two dinners combined. It also used fresh vegetables, which was also a nice change from the last two dinners.

Dessert (not shown) was a peach-apple crisp (USDA guide, p. 65). The crisp was good, but not especially crispy. The crumb mixture didn't completely cook--the recipe calls for 20 minutes of baking but most crisps call for 40-50 minutes (we actually left it in the oven for 40 minutes). Also, most crisp recipes have you put something crunchier in the topping like oats or nuts. That said, the kids devoured it. Normally, that would rate as a success, but as it turns out, the crisp was supposed to last for two meals.

The prep time and cooking time for this meal were longer than the guide suggested. The cooking was also substantially more involved. There wasn't anything that really went beyond what we would normally prepare. But with a lot of chopping and with three hot dishes going at once, it might be more than a parent with active little kids might want to take on.

Saucy beef pasta

I do not propose to write an ode to dejection, but to brag as lustily as chanticleer in the morning, standing on his roost, if only to wake my neighbors up -- and all the better if it be a chanticleer casserole. (with apologies to H. D. Thoreau)

Tonight's dinner is shown in all its glory on the left: saucy beef pasta (USDA guide, p. 24), canned pears, and white bread toast.

Fixing time was the shortest so far, a total of 30 minutes. For all intents and purposes, the meal is homemade Hamburger Helper ® ("beef pasta" flavor), with frozen green beans thrown in.

I liked it and would fix it again; the other three Ribars were neutral. Just so you know, I like Helper, too, and I think I like ®.

One warning for those of you who try this at home, the recipe calls for 6 3/4 cups of egg noodles, or about an entire one pound bag; half a bag was more than enough. Also, the recipe calls for cooking the green beans before putting everything in the oven; I'd recommend just putting them in frozen and letting the oven do the work (they'll come out a little crunchier and a deeper green). Better yet, use frozen peas.

A war on the rich? Hardly

Conservatives have been attacking the President's budget proposal as a "war against the rich" and as "class warfare."

For instance, Michael Gerson wrote today in his Washington Post column today

Candidate Obama was a tonal moderate -- a pragmatist determined to muddle the old divisions of blue and red into a pleasing, post-partisan purple. His mainstream economic appointments seemed to confirm this intention. His stimulus package and bank bailout proposals were expansive and expensive, but not ideologically radical.

And then came the budget -- ideologically ambitious, politically ruthless and radical to its core.

Obama chose a time of recession to propose a massive increase in progressivity -- a 10-year, trillion-dollar haul from the rich, already being punished by the stock market collapse and the housing market decline. This does not just involve undoing the Bush tax reductions but capping tax deductions to collect about $30 billion a year.

And yesterday, David Brooks wrote in a column titled (this isn't a joke), "A Moderate Manifesto"

The U.S. has never been a society riven by class resentment. Yet the Obama budget is predicated on a class divide. The president issued a read-my-lips pledge that no new burdens will fall on 95 percent of the American people. All the costs will be borne by the rich and all benefits redistributed downward.

So how exactly does the President Obama propose to spread class warfare? What's his radical proposal and his massive increase in progressivity? Is the U.S. going to return to the top marginal rate of 91 percent that was in place in the 1950s, the top rate of 70 percent that was in place during the 1960s and 1970s, or the top rate of 50 percent that was in place during the administration of Ronald "the red" Reagan in the 1980s?

No, the President's "radical" proposal is to let some of President Bush's ill-advised tax cuts for upper-income households expire and returning some tax provisions to where they were in 2001.

Specifically, President Obama has proposed increasing some taxes from upper-income individuals by $637 billion over the next ten years. Slightly over half of the increase will come from letting the top two tax rates return to the levels they were at when President Bush took office. Just over a quarter of the increase will come from reinstating rules on personal exemptions and itemized deductions for the wealthy. And the remainder will come from returning the top marginal rate on capital gains for wealthy households to 20 percent. Wealthy households would also benefit from some of the tax breaks that are being continued or extended for lower- and middle-income families, reducing the tax bite below $637 billion.

The President is also proposing just over $200 billion over 10 years in additional corporate taxes, which would also fall heavily on the rich. The lion's share, however, of these corporate tax increases also involve repealing tax breaks given out under the previous administration.

There would be a change in progressivity but hardly a radical change.

Moreover, nearly all of the tax increases are slated to take effect in 2011 or later; wealthy households get to keep nearly all of their Bush-era tax breaks for this year and the next.

The country was running large deficits prior to this economic crisis, due mostly to these tax provisions. Following the crisis, it is entirely appropriate to return some tax provisions to where they were in 2001.

The casserole that taste forgot

Tonight's dinner, shown on the right, was beef noodle casserole (USDA guide, p. 22) with black beans and a medley of orange and banana slices. The cooking time was quicker than last night--15 minutes to prep and 30 minutes more to cook.

The kids liked the beans (the dish that didn't come from the guide) and the medley. The casserole, not so much, though with two teenage boys at the table, it all got finished. If we make the dish, again, we'd do it without the bread crumbs (and better yet without the beef, noodles and sauce).

A lot of my research over the last few years has focused on ways to incentivize work and economic self-sufficiency among food stamp households. We may have hit upon the casserole that would do it.

Turkey cabbage casserole

Pictured to the left is tonight's SNAPpy dinner--turkey cabbage casserole, white bread, orange slices, chick pea dip, and milk. Mmm.

While the presentation suffered from too many red- and brown-hued foods, it wasn't too bad and didn't take too long to fix (about 15 minutes to prep and one hour to cook in the oven).

I'd also post pictures of breakfast and lunch, but you probably already know what cereal and sandwiches look like.

A diet of "thrifty" meals

More than 31 million people in the U.S. currently receive benefits from the Supplemental Nutrition Assistance Program (SNAP), which until last October was known as the Food Stamp Program. The number represents roughly one out of every ten Americans. The SNAP caseload has jumped by 15 percent in just the last year and looks to soar even higher as the economy deteriorates.

The SNAP is a means-tested program, which means that eligibility and benefits depend on people's incomes and some other resources. For households with little or no income, the maximum benefit is set to "meet" a U.S. Department of Agriculture (USDA) food cost plan, called the Thrifty Food Plan. For households with somewhat higher incomes, the maximum benefit is reduced either 24 cents for each dollar of earnings and 30 cents for each dollar of unearned income. The reduction reflects an expectation that these households will contribute some of their own resources to meet the food cost target.

The Thifty Food Plan is the least expensive of several low-cost food plans that the USDA prices out each month. SNAP benefits are adjusted each October based on the food plan for the preceding June. The figures for June 2008 put the weekly cost of meals for a household with two adults and two preadolescent school children at $135.80 per week, or $588 per month. $588 is also the maximum monthly SNAP benefit for a family of four.

Because food costs usually rise, SNAP benefits almost always lag behind these minimum standards. For instance, by December the USDA estimated that food costs for the same family of four had risen to $601. While the SNAP formula adjusts for the number of household members, it does not adjust for the ages of the members. Households with infants and very young children benefit from this, while households with teenagers or only adults lose out.

SNAP households will get a small break, starting this April. A provision in the recently enacted stimulus package will temporarily boost benefits by 13.6%, putting all of these households slightly above the low-end food cost plan.

Is the Thrifty Food Plan a realistic expectation for families? There are arguments to suggest it's not. For example, while the documentation of the plans state that they account for preparation time, the models that are used to calculate them do not incorporate any time use data. Also, in the most recent update of the plans in 2003, researchers kept the costs constant while adjusting meals and diets, rather than working things out the other way around.

To help SNAP families and other families plan their meals, the USDA has published a guide based on its food plan called Recipes and Tips for Healthy, Thrifty Meals. The guide provides an alternative way to test USDA assumptions, and that's what we're going to do.

For the next two weeks, the Ribars--mom, dad, and two teenage boys--are going to prepare and eat foods that follow the guide as closely as we can. We spotted some immediate adjustments that had to be made. For one thing, we needed to rearrange the timing of some meals to meet our work schedules and the boys' activity schedules (a three-hour pot roast works for us on a weekend but not on a weeknight). Along the same lines, we're sticking with our regular bag lunches on weekdays; we can't stay home to cook and eat lunches as the guide mandates. We're also picking and choosing among breakfast menus because of time constraints in the morning. In addition, we will have to adjust portion sizes to reflect the boys' ages (the guide assumes that the children are younger). For some people, these caveats might already answer the "reasonableness" question.

Below is the menu that we've set for the upcoming week. You can judge whether this comes close enough to the guidebook.

Menu for week 1

	Breakfast	Lunch	Dinner
Monday	orange juice; cereal; English muffins; milk	cold cut sandwiches; apples; sugar cookies; carrots	turkey cabbage casserole; orange slices; white bread; chickpea dip; milk
Tuesday	orange juice; cereal; English muffins; milk	cold cut sandwiches; apples; sugar cookies; carrots	beef noodle casserole; black beans; banana orange salad; milk
Wednesday	orange juice; cereal; bagels; milk	cold cut sandwiches; apples; store cookies; carrots	saucy beef pasta; white bread; canned pears; orange juice; milk
Thursday	orange juice; cereal; bagels; milk	cold cut sandwiches; apples; store cookies; carrots	turkey stir fry; steamed rice; white bread; peach-apple crisp; milk
Friday	orange juice; cereal; toast; milk	peanut butter & jelly sandwiches; apples; store cookies; carrots	baked cod w/ cheese; scalloped potatoes; spinach; orange slices; milk
Saturday	orange juice; baked French toast; milk	potato soup; crackers; tuna pasta salad; orange slices; oatmeal cookies; milk	baked chicken; mashed potatoes; green beans; white bread; peach cake; milk
Sunday	orange juice; scrambled eggs; hash browns; milk	potato soup; crackers; apple orange slices; oatmeal cookies; milk	beef pot roast; noodles; peas & carrots; orange slices; peach cake; milk

Our goals here are very limited. We are mainly looking at whether the recipes are at all realistic. Are they really inexpensive? Can they be prepared in a reasonable amount of time? Can we get the kids to eat them?

We also know that our experience isn't going to be anything close to what a SNAP household would face. First of all, we're keeping to a menu rather than a specific budget. Second, following any type of restricted plan for two weeks is much different than following a plan for months or years. Third, we start with a fully functioning kitchen, a pantry full of spices and other basic ingredients, and cabinets full of pots, pans, and appliances.

Wish us luck, especially with the turkey cabbage casserole tomorrow night.

The inspiration for Bobby Jindal

Gov. Bobby Jindal, who reminded us no less than five times last night that he and the GOP "believe that Americans can do anything" seems to have taken his inspiration from this fellow.

Crime watch

Expanding on a theme that has gotten considerable play during the recession began, CNN reports that neighborhoods are becoming more wary of crime as local economies deteriorate.

With the economic downturn, neighborhood watch groups are proving to be a first line of defense in battling property crimes.

The article indicates that these neighborhood fears may be well-grounded.

The Police Executive Research Forum, a Washington, D.C.-based independent research organization made up of local and state police officials, released a survey in January showing that 44 percent of police departments reported increases in crimes they believed could be attributed to the economic crisis.

Of the departments surveyed, 39 percent reported an increase in robberies, and 32 percent said they had seen a rise in burglaries.

Those surveyed also reported a 40 percent increase in thefts, including those of GPS devices from cars and other "opportunistic" crimes.

Empirical economic research also supports the notion that crime rates rise and fall with the economy, though the strength of the relationship may only be modest.

Steven Levitt (the author of Freakanomics) summarized evidence of economic links in a 2004 Journal of Economic Perspectives article. The studies that he reviewed consistently found that crime rates increased with unemployment, but only slightly. He reported that each one percent rise in the unemployment rate was associated with a similar one percent rise in the property crime rate.

The CNN article includes information from a historical study that Price Fishback conducted of crime rates during the Great Depression that lines up with Levitt's findings. Fishback is quoted in the article as saying, "For a 1 percent increase in employment, you found about a 1 percent reduction in the crime rate."

Since the start of the recession last year, unemployment has increased about 3 percent, meaning that property crimes would have increased by roughly the same amount. A troubling result, but hardly a crime wave.

Some other research indicates that the association may be stronger. For example, an article published last year by Meng-Jen Lin reported that the responsiveness of property crimes to the unemployment rate might be as much as six times stronger than the figure used by Levitt. If so, we would expect the property crime rate to have jumped by up to 18 percent over the past year.

If there is a silver lining in the research, it is that the links between the economy and crime rates don't seem to extend to violent crimes.

Evolving standards of humor

I guess that I should be outraged by Wednesday's offensive editorial cartoon in the New York Post, depicting two policemen standing over the body of a chimp that they had just gunned down and saying, "They'll have to find someone else to write the next stimulus bill."

But I used up my outrage at President Bush being labeled as a "smirking chimp," President Clinton's voice being given to an animated gorilla, and this little gem to the right.

Starbucks less overpriced

A mantra of economists is that competition benefits consumers. Apparently, those benefits are now trickling down to those of us who crave caffeine. In an article about Starbucks new "Pairings" value meal, CNN reports this morning that

Research done by William Blair & Co. suggests Starbucks' price premium "has nearly evaporated over the past 18 months, with pricing now largely on par with Dunkin' Donuts." The survey found that when adjusted for size differences, some varieties of Starbucks coffee were cheaper than Dunkin' Donuts. According to the research, McDonald's is still cheaper, but the price gap has narrowed since 2007.

The Pairings will start next month and will include a coffee and food item for just under $4. Give the soft economy some credit for the new value offering along with stiff competition from McDonald's, Dunkin' Donuts, and a host of Starbucks imitators.

Despite the lower prices, brewing your own coffee and fixing your own breakfast remains a cheaper and healthier alternative. Then again who wants to miss out on Handcrafted Lattes and Cinnamon Swirl Coffee Cake. Oops gotta go.

Stimulating discussions in the Times

Paul Krugman's column today in the New York Times calls on the President to turn up the heat on Republicans and press forward unapolagetically for the Democrats' stimulus plan.

So what should Mr. Obama do? Count me among those who think that the president made a big mistake in his initial approach, that his attempts to transcend partisanship ended up empowering politicians who take their marching orders from Rush Limbaugh. What matters now, however, is what he does next.

It’s time for Mr. Obama to go on the offensive. Above all, he must not shy away from pointing out that those who stand in the way of his plan, in the name of a discredited economic philosophy, are putting the nation’s future at risk. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge.

An analysis story in the Times, however, cautions that trillions of dollars of infrastructure investments in Japan did little to improve the economy.

Japan’s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery.

One side says that Japan should have spent more, spent it faster, and spent it more wisely.

One lesson Mr. Geithner has said he took away from that experience is that spending must come in quick, massive doses, and be continued until recovery takes firm root.

Moreover, it matters what gets built: Japan spent too much on increasingly wasteful roads and bridges, and not enough in areas like education and social services, which studies show deliver more bang for the buck than infrastructure spending.

Krugman's column does mention Japan as a cautionary tale, but doesn't mention the failure of the stimulus plan there to achieve results.

And deflationary traps can go on for a long time. Japan experienced a "lost decade" of deflation and stagnation in the 1990s — and the only thing that let Japan escape from its trap was a global boom that boosted the nation’s exports. Who will rescue America from a similar trap now that the whole world is slumping at the same time?

He is advocating for a bigger stimulus.

The other side, however, claims that fundamental reforms and shifts are key to a recovery.

In the end, say economists, it was not public works but an expensive cleanup of the debt-ridden banking system, combined with growing exports to China and the United States, that brought a close to Japan’s Lost Decade. This has led many to conclude that spending did little more than sink Japan deeply into debt, leaving an enormous tax burden for future generations.

Hats off to the Times for a great analysis.

Silly season in Washington

Yesterday's decision by Nancy Killefer to withdraw from consideration as the President Obama's deputy director of the Office of Management and Budget and "Chief Performance Officer" marks a return to silly season in Washington.

Ms. Killefer was eminently qualified for the two positions for which she was nominated. She had previously served in the Clinton administration as the assistant secretary of treasury for management (it's only a hazy memory now, but you may recall that that Treasury Department presided over a budget surplus). More recently, she had served as an executive with the large consulting firm of McKinsey & Co., specializing in management issues for the firm's government clients.

What was Killefer's mistake? She and her husband allegedly failed to pay $298 in unemployment compensation taxes to the District of Columbia in 2003 and 2004 for one or more of their household employees. DC filed a lien against her home in 2005, adding a small amount of interest and $600 as a penalty. She resolved the matter that year. Thus, unlike Timothy Geithner and Thomas Daschle, Ms. Killefer fixed the tax issue when it occurred and not while being considered for a government appointment.

As anyone who has dealt with the District's dysfunctional city bureaucracy can attest, she and her husband deserve considerable benefit of doubt in the matter. However, even if they did make a mistake, a $298 local tax bill that was resolved years earlier should not disqualify someone from taking a pay cut to serve the government.

Yes, there is a principle involved--people should pay their taxes. Moreover, public officials, especially those whose responsibilities include financial management, should be held to high standards. But there also needs to be a sense of perspective. $298, c'mon.

It is no small irony that Ms. Killefer's withdrawal came at nearly the same time that military auditors were testifying about billions of dollars that had been misspent in Iraq and billions more that may be misspent in Afghanistan. It also comes at a time when oversight is needed for the remaining financial bailout, the recovery of billions in Medicare prescription overpayments, the management of a massive (and currently bloated) stimulus package, and the reform of over-extended social insurance programs.