Today is a DOOM! day, sir; shall I lay out your ascot and spats?

Mish Shedlock asks a question we've all been asking for awhile now: What's the real unemployment rate? The government's policy of not counting people who have "left the workforce" for whatever reason as "unemployed" pretty much makes their official number of 9% worthless -- I think we can safely assume that the real rate is probably somewhere closer to 12 or 13%. The rate is worse among men in general (especially black men), and among teens.

Mish also notes that in Illinois, fiscal stupidity is the official state religion.

The next time you see some "professional economist" bloviating on TV or on the interwebs about how thus and such is the case about the economy, remember these words from Greg Mankiw:

After more than a quarter-century as a professional economist, I have a confession to make: There is a lot I don’t know about the economy. Indeed, the area of economics where I have devoted most of my energy and attention — the ups and downs of the business cycle — is where I find myself most often confronting important questions without obvious answers.

Speaking of discredited economic theories: Another nail in the Keynesian coffin. (In fairness, it's worth nothing that Keynes himself advocated a policy that was more laissez faire than the policies governments have since adopted using his general theory.)

Could municipal bonds lose their tax-free status? I doubt it, frankly. Investors would flee in droves if that happened; many municipalities would collapse. Munis have a reputation as being good tax-shelters among other things; if that benefit is lost, there are better (and, frankly, safer) avenues in which to invest your money.

How is Greece like Lando Calrissian in The Empire Strikes Back? They're both complaining that this deal is getting worse all the time. Some are speculating that the Greeks might just tell the ECB and the EU to go pound sand. The problem is, leaving the Euro and going back to the Drachma is a very complicated and fraught business, and will incur costs of its own. The Greeks may decide to take a passive-aggressive stance and merely threaten to leave so that the bailout dollars will keep flowing indefinitely. Meanwhile, Portual and Ireland are looking on and taking notes.

Home values? Still in the toilet. See, this is the thing about bubble-inflated prices -- for the housing market to stabilize, the inflated prices must deflate. Sellers are desperate to avoid the consequences of this, but it must happen if the housing market is to recover. Pumping more air into the bubble only delays the reckoning and makes it more painful when it comes.

One argument I've heard from public-sector employees (especially at the state and municipal level) is that their comparatively-rich benefit packages offset their lower (compared to the private-sector) wages. This is a myth that refuses to die. Average wages for government workers at all levels are higher than the average wage for the same work in the private-sector (allowing for regional differences), even discounting the benefit packages. Add in the benefit packages, and the wage disparity between public and private sectors yawns like a chasm. Public-sector employees really have no idea what people in the private-sector are making, and how lousy the benfits packages are (if they're even offered).

[UPDATE 1]: It's not all DOOM! Mickey D's is profiting quite nicely from the legions of depressed citizens seeking cheap comfort food.

[UPDATE 2]: VDH: Thoughts on a surreal Depression.

What? Is this not an acceptable place to relax? Does not this entire house and all its contents belong to me? Away with you, you nattering nabob of negativism, and bring me a dainty morsel to snack upon. And be quick about it!

posted by Monty at 09:13 AM

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