In his proposed corporate tax overhaul, President Obama calls for giving special treatment to manufacturers. The report the White House released today says:

The manufacturing sector plays an outsized role in the U.S. economy with significant spillovers to other sectors that make it particularly important to future job creation, innovation, and economic growth. Furthermore ... both existing and emerging manufacturing industries are subject to more intense international competition than other sectors. Encouraging manufacturing investment and production supports higher wage jobs.

For a counterpoint, we turn to Christina Romer, the Berkeley economist and former chairwoman of Obama's Council of Economic Advisers. She recently wrote a New York Times column column arguing against giving manufacturers special treatment.

She wrote:

Enlarge Dan Kitwood/Getty Images

Dan Kitwood/Getty Images

Below is an excerpt from Adam Davidson's latest New York Times Magazine column, "Why Are Harvard Graduates In The Mailroom?" Read all of Davidson's Times Magazine columns here.

Hollywood is, in some ways, the model lottery industry. For most companies in the business, it doesn't make economic sense to, as Google does, put promising young applicants through a series of tests and then hire only the small number who pass. Instead, it's cheaper for talent agencies and studios to hire a lot of young workers and run them through a few years of low-paying drudgery....While far from perfect, this strategy has done a pretty decent job of pushing those with real promise to the top. Barry Diller and David Geffen each started his career in the William Morris mailroom...

Hollywood is merely the most glamorous industry that puts new entrants — whether they're in the mailroom, picking up dry cleaning for a studio head or waiting on tables between open-call auditions — through a lottery system. Even glamour-free industries offer economic-lottery systems. Young, ambitious accountants who toil away at a Big Four firm may have modest expectations of glory, but they'll be millionaires if they make partner. The same goes at law firms, ad agencies and consulting firms. ...

This system is unfair and arbitrary and often takes advantage of many people who don't really have a shot at the big prize. But it is far preferable to the parts of our economy where there are no big prizes waiting.

Read the full column here.

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Mitt Romney, back in his Bain Capital days.

Are private-equity firms job-destroying monsters? Or are they knights in shining armor, riding in to fix troubled companies and make the economy work better?

When you have a presidential candidate who used to run a private-equity firm, the arguments tend to shed more heat than light.

So we decided to look at what private equity firms actually do — by telling the stories of two companies purchased by Bain Capital, the private equity firm co-founded by Mitt Romney.

On today's show, we look at a deal gone bad. On a future podcast, we'll look at another deal that turned out differently.

Romney's campaign wouldn't comment on tape for the podcast, but they did send us this statement:

Mitt Romney spent 25 years as a businessman and entrepreneur. ... At Bain Capital, he helped launch and guide a private equity and financial services firm. Bain Capital invested in many businesses; while not every business was successful, the firm had an excellent overall track record and created jobs with well-known companies like Staples, Dominos, and Sports Authority.

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Pfizer's gone. Kombucha lives on.

"Instead of rolling our eyes at self-conscious Brooklyn hipsters pickling everything in sight, we might look to them as guides to the future of the American economy," our own Adam Davidson wrote in a recent column.

A nice case-in-point comes to us this week via New York Mag's Grub Street.

The story begins five years ago, when Pfizer, the big, blue-chip American drug company, said it was closing its Brooklyn factory.

As the NYT reported at the time:

The building, on Flushing Avenue, is Pfizer's oldest active manufacturing plant and is on the same site where Pfizer was founded in 1849 by the cousins Charles Pfizer and Charles Erhart of Germany.

Cut to yesterday's report from Grub Street:

The old Pfizer plant on Flushing Avenue will soon become a booming culinary production facility. In fact, Grub Street has learned that Kombucha Brooklyn, Brooklyn Soda Works, and Steve's Ice Cream have already signed the leases and taken up shop. ...

The building's unique (FDA-approved) facilities are ideal for food production. For example, KBBK will be able to brew tea and store live cultures for its kombucha at a specific, controlled range of temperatures.

Kom! bu! cha!

Kom! bu! cha!

Kom! bu! cha!

ABC Television/Getty Images

In his latest column, Adam Davidson argues that Chris Woerhle, an artisanal beef jerky-maker, represents a new era of American manufacturing, one in which artisanal craftsmen will thrive. It will also have far-reaching impacts on our personal lives, as Justin Wolfers and Betsey Stevenson of the University of Pennsylvania explain in the following guest post.

Chris Woehrle's story is familiar to economists. Commercial success for him came with narrow specialization in hand-crafted, all-natural beef jerky. This type of specialization, first articulated by Adam Smith, has reshaped every facet of modern life — not only our work lives, but our family lives as well.

Consider a married couple in the 1950s. The roles of husband and wife were as separate and specialized as those of the various food specialists in Brooklyn. Moms were homemakers. Dads were breadwinners. Even in shared tasks, like raising children, the roles were specialized. Moms nurtured; dads disciplined. The domains of husband and wife were completely separate. Indeed, it's a wonder that couples had anything to talk about at the end of the day.

Thanassis Stavrakis/AP

Messy.

We know the script by now.

1. As Athens burns, Greek leaders push through new austerity measures.
2. Officials from the EU and the IMF and the ECB agree to another massive round of bailouts.
3. Greece manages to pay its debts in the short term.
4. Things don't go as well as expected, and pretty soon Greece needs another bailout.

In the latest round, we're between numbers two and three — officials agreed early this morning to another bailout, which means Greece will be able to pay its debts coming due next month.

So let's get right to number four: Why Greece will need yet another bailout.

Jacob Goldstein/NPR

Countless.

When you walk around a big city in China, it feels like an entrepreneurial free-for-all — guys selling stuff on street corners, lots of little shops, everybody hustling.

But when you pull back the curtain on the country's economy, you find the government everywhere. The government owns, among other things, the country's biggest cell phone carrier, the three biggest airlines and the four biggest banks.

Those state-owned banks in particular play a central role in the country's economy.

Chinese people have one of the highest savings rates in the world, and they don't have many options for investing the money they save. So they put lots of their money in ordinary savings accounts at those state-owned banks.

The banks, in turn, lend a lot of that money out to other government-owned companies, typically at very low interest rates. Those companies go out and build lots of new stuff. All that building contributes a huge chunk of China's growth.

But the building can't go on forever. In fact, China may already have built too much stuff with borrowed money.

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From Crooked Timber, a complete Choose-Your-Own-Adventure story about the Greek debt crisis.

Sample:

"First of all", he says, "we need to decide whether there is any more money on the table. Do you think that Germany (and Netherlands, Finland, etc) can sell any more fiscal transfers to Greece, given their domestic politics?"

If you answer "Yes, I know it's going to be difficult, but we have to plan on that basis", turn to 32.
If you answer "I think we have to plan on the basis that there isn't", turn to 47.

Read the whole thing here.

ED JONES/AFP/Getty Images

Help.

Jiang Shixue is describing to me one of the most exciting moments of his life: The moment earlier this month when one of the most important people in Europe — German Chancellor Angela Merkel — came to visit his workplace.

"She said that the EU would be happy to see if China can offer a kind of helping hand," says Jiang, an academic at the Chinese Academy of Social Sciences.

Merkel never actually said the word "money," or "help." She said "cooperation" a lot. But Jiang says everyone in that auditorium heard one clear message: Europe needs help from China to get through its debt crisis.

"I can't believe that China is now the country that the EU is trying to seek help from," Jiang says. "Twenty-two years ago China was a basket case — a very poor developing country. So I really feel quite proud."

Jacob Goldstein/NPR

This can't go on forever.

China's economy sailed through the financial crisis unscathed — at least in the short run.

When the global crisis hit, the country's government-owned banks started lending out lots more money. The money came largely from the savings accounts of ordinary Chinese people. It went largely to finance big construction projects, which helped keep China's economy growing.

"It sort of explains why China recovered so quickly," Hu Angang, an economist at Tsinghua University, told us. Indeed, China's strong showing through the crisis was seen by some as a vindication of the large role Chinese government plays in steering the country's economy.

But if it turns out China doesn't need all that new stuff it's building, the country will face an economic reckoning, says Michael Pettis, who teaches finance at Peking University in Beijing.

Enlarge Neilson Barnard/Getty Images

Neilson Barnard/Getty Images

Below is Adam Davidson's latest New York Times Magazine column, "Don't Mock the Artisanal-Pickle Makers." Read all of Davidson's Times Magazine columns here.

A couple of years ago, Chris Woehrle grew sick of corporate life and decided to become an artisanal food craftsman — any kind of artisanal food craftsman. "I spent a month making every item I could think of: kimchi, harissa, salsa, every kind of pickle imaginable, a bunch of different herb mustards," says Woehrle, who worked for a music conglomerate. And every time, he quickly discovered, "there were eight companies already doing it well."

This is because Woehrle lives in Brooklyn, ground zero of the artisanal-food universe, where competition is intense. Eventually, though, he and his partner stumbled upon a hole in the market: handcrafted, all-natural beef jerky. And so Kings County Jerky was born. Woehrle expects that the company will be profitable in a year or two, which is pretty good for a new small business.

Storm Crypt/Flickr

This is a public good.

What should the government pay for?

On today's Planet Money, we pose that question to Charlie Wheelan, author of the book Naked Economics, and one-time Congressional candidate. (He lost).

He gives us the econ 101 answer: The government should definitely pay for something if it's a public good, which Charlie defines as ...

something that we all need that will make our lives better, but the market will not and cannot provide

The textbook example is a lighthouse. Why should any given sea captain pay for a lighthouse? As Wheelan says, if somebody refuses to pay, we can't say, "Close your eyes when you sail past this rocky point."

Other examples of public goods include national defense and autopsies. Everyone benefits from the medical knowledge autopsies provide, but it's not really in any individual's interest to pay for an autopsy.

Somehow, this fact leads us to call 1-800-AUTOPSY.

Note: Today's podcast originally aired in 2010. Subscribe to the podcast. Music: Alabama Shakes' "Hold On." Find us: Twitter/ Facebook/ Spotify.

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Athens, Feb. 12, 2012

Greece!

Where the economy shrank by 7 percent last year alone, according to figures released today. Where the rioting never ends, and where national bankruptcy is a given.

It's easy to get numb to it all. But this long New York Times Magazine story does a very good job of making it feel still fresh and real:

Enlarge barockschloss/Flickr

barockschloss/Flickr

The daily swings of the Dow don't tell us much about the economy, Adam Davidson argues in his latest Times Magazine column. So what drives the Dow up and down in the first place? We posed the question to William Goetzmann of Yale University. His response is below.

No one really understands what drives the daily swings of the stock market, despite more than a hundred years of studying the problem. J.P. Morgan perhaps summed it up best when he was asked what the market would do in the future. He responded simply, "It will fluctuate."

Morgan's short answer is less than satisfying to academics like myself, who have worked for years to understand the daily swings of the market. Sometimes it is caused by a technical glitch — like the mistaken trade that caused the famous 15 minute "flash-crash" of 2010, which drove the Dow down 1000 points. Sometimes it is a puzzling thing like the weather. Oddly enough, markets around the world have a slightly higher return on sunny days.