Good morning. Just a few items to start the day, including — how financial innovation causes bubbles, more on Toyota and some great iPad comedy.

Ditching health reform will only dig us into a deeper deficit (Washington Post)

The economic collapse of 2008 and 2009 did so much damage to the United States that only now can we begin to measure the devastation.

A sentence buried in the budget that President Obama submitted to Congress this week screamed for attention. “Household net worth fell from the third quarter of 2007 to the first quarter of 2009,” it said, “by $17.5 trillion or 26.5 percent, which is the equivalent to more than one year’s GDP.”

How financial innovation causes bubbles (Felix Salmon)

Up until now, I’ve thought that the harmfulness of financial innovation was largely a function of its role in enabling regulatory arbitrage. But Smith’s idea I think is stronger. Financial innovation, on this view, is in large part the art of turning illiquid assets into liquid assets. And once an asset is liquid, it’s susceptible to highly-dangerous booms and busts.

The war on Toyota (Financial Post) The Canadian perspective on one of our topics from yesterday:

While it may be technically true that President Obama’s team didn’t explicitly reach a decision to target Toyota, nobody in this crowd needs a presidential order to turn the Japanese auto giant’s Sudden Unintended Acceleration (SUA) problem into a national industrial advantage for the United States. The owners of union-dominated Government Motors can spot a strategic economic opportunity without waiting for the memo from head office.

Patchwork Nation: Toyota (PBS NewsHour)

The iPad is the butt of great comedy (BNet) Some pretty funny stuff.