DOOM!...and other discontents

Let's begin abroad by explaining why Spain is boned. Spain suffers from the same disease as the rest of the continent generally -- socialism, postmodernism, an ossified job market, an unsustainable welfare state -- but in more concentrated form. Spain is so boned that their main export these days is young 'uns (h/t Andy).

If you look at the countries currently in the midst of insolvency in Europe -- Ireland, Greece, Portugal, and (shortly) Spain -- it's obvious that they are different entities altogether from their more prosperous European peers. For one, most of them are recent entrants onto the first-world stage. Spain languished under Franco until the mid 1970's; Ireland only emerged from decades of civil strife (both amongst themselves and against England) in the early 1990's; and Portugal was (and still is) a third-world nation glued to the continenet almost as an afterthought. Portugal is more properly thought of as a North African developing country than a first-world European country, whatever the maps say (h/t rdbrewer).

The Euro project hid those problems...for a while. Cheap credit allowed the dysfunctional European countries to borrow enough money to pretend to a first-world standard of living for more than a decade. There was real growth in the various economies -- particularly in Ireland -- but much of the "growth" was mainly borrowed money with little attendant economic or social reform.

The Great Downturn of 2008 did not cause the problem; it simply exposed what a sham the whole thing had been all along.

England is watching the drama play out on the Continent, and thanking $DEITY that they never signed on to the Euro. England still has serious problems, but they also have options that the other European nations do not have because they control their own currency.

Teh Krugman finds Ryan's budget "ludicrous and cruel". Which, to my mind, is praise of a very high order. Krugman is a perfect reverse barometer: the more he hates it, the more good it is likely to do. Alexander Pope once wrote (all unknowingly) of Krugman: " “Sir, I admit your general rule/That every poet is a fool/But you yourself may serve to show it/That every fool is not a poet.” Burn!

[UPDATE] The Hammer likes Ryan's plan, though, and his opinions -- unlike those of Teh Krugman -- actually carry some weight.

More on the "man-cession". The unemployment rate among young men is higher, but older men may find themselves permanently shut out of the labor market:

A Bureau of Labor Statistics study found that many older workers who lose jobs never go back to work again. Of those aged 55-64 who were displaced from 2007 through 2009, 21 percent were out of the labor force as of January 2010. "I have heard some people say, 'It's not necessarily a bad thing. Maybe people are just making voluntary decisions about work-life balance,'" says Michael Feroli, chief U.S. economist for J.P. Morgan Securities. "In principle that's possible, but all of a sudden people wanted more work-life balance? I don't think so."

The government "shutdown" still looms as of this writing.

"At this point, whether or not the government shuts down tomorrow night is almost entirely in the hands of the Democrats in the Senate and of the skinny guy with the ears. This suggests that the decision will be determined principally by the Democrats’ calculation: will it, or won’t it, pay off politically?"

Obama, in a bid to force a solution to the budget impasse, issues another proclamation: "Huh! Buh! Hojanga blabbo schmuh! Flart! Bing jingle ho-jam!" Or words to that effect.

You have to take your hilarity where you can find it, I guess.

New York City officials: "Apparently, our wildly optimistic rate-of-return calculations are to blame for our pension shortfalls. Not our overly-generous retirement benefit packages!" Monty: "Well, yeah, but aren't you having to assume these ridiculous rates of return because of these generous benefits you've promised?" New York City officials: "Shut up-a you face, you!"

But in the face of all this DOOM!, let us savor the few exquisite moments of victory that come our way.

[UPDATE 1] I'm not sure if this counts as good news or not. Europe's aggregate "distressed debt" is running around $2 Trillion, which is higher than that of the US. So this might count as a "Woo hoo! We live to suck another day!" kind of thing.

[UPDATE 2] Chuckit sends a link that explains how California continued to bone itself even while the recession was raging. Foolish optimism? Pure stupidity? Cynical self-interest? There's no reason it can't be all three, I guess.

"Spare a dollar, mister? They've got a two-for-one sale on Night Train down at the package store, and I want to get in on that action before they run out."

posted by Monty at 08:58 AM

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