Is that DOOM I See Coming Over the Hill?

Greece, Ireland, Portugal, (maybe) Spain...and now Italy? Contagion. The hope on the part of the EU and ECB was to contain the contagion by throwing money at it, but every time they fill one sink-hole with Euros another one opens up. It's been obvious for a long time that the Eurozone was simply a bad idea, and this crisis has exposed the rotten underpinnings for all to see. Europe wanted to have a currency union just like the United States, but they are finding out the hard way that a monetary union without a fiscal-policy union just won't work. European countries are not like US states -- they have different langauges, different work rules, different governing philosophies...different cultures. The big question in everyone's mind is...now what? Some countries must default, and a default will probably require leaving the Euro and going back to the sovereign currency. But no one knows exactly how this will work, or what the consequences will be.

Some people are floating the idea of a Euro-Bond, but I find that a little nonsensical absent any fiscal-policy union backing it. But of course this may be the point to the enterprise: to "force" Europeans into a closer union without having to go through the messy (and time-consuming) processes of holding a vote. The EU project has never really been a democratic enterprise from the very first -- the Eurozone was implemented without the say-so (even over the protests of) its citizens. If I Eurobond is floated, I expect it to be another example of droit de Seigneur on the part of the Eurozone elite. (And it probably won't work, and will piss away a lot more good money after bad, but none of that has stopped them so far.)

President Obama runs a bluff, and House Speaker Boehner calls the bluff. What you're seeing here is a fundamental and bedrock difference between the two parties: the Democrats want higher taxes, less Defense spending, and a status quo maintenance of the welfare-state apparatus; the Republicans want cuts to the welfare-state, status quo on Defense spending, and fewer (and lower) taxes. No one's going to get everything they want -- we'll know a compromise has been reached when everybody comes out of it pissed off and thinking they got fleeced.

"Why We Don't Recover", by Nicole Gelinas at the City Journal. The losses exist and must be recognized sooner or later. We can't keep them off the books forever.

Minnesota moves into week two of the state government shutdown. I haven't noticed much difference, but then again I'm not a heavy user of state services. Note the numbers involved: Minnesota will in any event spend more this year than last; it's just that Governor Dayton wants to spend $1.4B more than the GOP does. This isn't a "small government vs. big government" fight. This is an argument over how much bigger to make the government.

The first sentence in this story tells you all you need to know about why we're doomed: "An extraordinary amount of personal income is coming directly from the government." What flabbergasts me is that more people don't understand what a huge problem this is, and why it is unsustainable even over the short-term.

Via Insty: Economic rebound "not happening" in 2011. Yeah, I think we all understand that by now.

UPDATE 1: Signs of the times. Pawnshops and payday lenders are hot.

UPDATE 2: The disappearing black middle class. The near-unanimous penchant for black Americans to vote Democrat has always mystified me, given the destruction Democrat policies have wreaked on black families over the decades. But hopefully the rise of conservative black politicians like Rep. Allen West (and Latinos like Marco Rubio) portend a conservative shift in traditionally-Democrat constituencies.

UPDATE 3: The scariest jobs chart ever.

UPDATE 4: "Turbo Tax" Timmah: "[I]t's going to feel very hard, harder than anything they've experienced in their lifetime now, for a long time to come." Ah-heh-heh-heh-heh. "Hard".

The were-cat would be a dangerous foe were it not for the beast's innate laziness and disdain for humans.

posted by Monty at 09:03 AM

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