DOOM: A candy colored clown they call the sandman

You say you want a revolution? I would remind the Democrats of something: if you keep asking for a fight, sooner or later someone is going to give you one.

A funny little man was standing on the streetcorner this morning, hectoring the passers-by. He was wearing a sandwich board upon which was scrawled: SPEND, SPEND, SPEND!!! I was told that once upon a time, this crazy dude was actually a respected economist. It's sad, really.

The emergence of money: compensation for pain and suffering inflicted on others? I’m skeptical, but then again I’m a proponent of the Austrian school that Graeber apparently hasn’t much regard for. (Whenever I hear an academic, especially a “social sciences” academic, blathering about economics, I want to reach for a heavy club.)

The “judicial recession”. (Also: California is boned.) This is what happens when the government runs out of other people’s money. The socialist state starts eating itself.

This isn’t financial DOOM; this is sure enough, grade A, End of Days DOOM. Part of the problem is that the low-hanging technological fruit has been plucked. Our technology growth going forward isn’t going to be a huge steep incline, but more of a slow expansion marked by long plateaus. This is the norm for most of human history, actually -- the last two centuries are highly atypical in terms of technological progress. And take note of this:

Like technology, credit also makes claims on the future. “I will gladly pay you a dollar on Tuesday for a hamburger today” works only if a dollar gets earned by Tuesday. A credit crisis happens when earnings disappoint and the present does not live up to past expectations of the future.

Neal Stephenson on “innovation starvation”. My view? The missing ingredients in the modern age are optimism and confidence. You have to believe in yourself, and in the future, to invent new things and start big projects. No one really believes that we can do the “big stuff” any more. We’re too risk-averse -- which is a signal of an aging society. We want to hoard what we’ve already got rather than build more. Our time-horizons stop with our own deaths; we no longer care much for posterity or legacy.

Why the crisis in Europe might cause a recession here. It's become a cliche to point out that the world's financial systems are deeply intertwined, but it's a cliche because it's true.

The Most Boned Cities. New Jersey holds the distinction of hosting three of the most boned cities in America. Michigan gets two: Detroit and Pontiac. Interesting note: all of the most boned municipalities are east of the Mississippi -- I fully expected to see several California cities on this list. Of course, this article concerns itself only with bond ratings and not other metrics.

The Neverending Recession has apparently turned us all into a bunch of penny-pinching cheapskates. We only thought the motto was “Hope and Change”; it was actually “I hope I get some change.”

The modern version of the Smoot-Hawley Tariff bill picks up steam in the Senate. It probably (probably) won’t get past the GOP-controlled house, but this is just more evidence that our politicians don’t even bother to study our own history any more. This would be a colossally stupid move if the effort succeeds, but I have learned never to underestimate the stupidity, venality, or cowardice of our political class. (China swears to retaliate if the bill passes, by the way. And thus does the bloodletting begin.)

Greece’s “death spiral” was in large part caused by the stubborn refusal of the EU and ECB to allow Greece to default back when it might have nipped this crisis in the bud. Now Greece’s sickness has already spread to the peripheral countries of the Eurozone and threaten the core.

In related news, Greece’s October 13 finance meeting with the Eurozone finance ministers has been delayed until November. This may be a prelude to some kind of formal Greek default -- though I suspect the EU will tie itself in rhetorical and legal knots thinking of ways to call it something other than a “default”. But it will end with the holders of Greek sovereign debt taking steep haircuts on their holdings. And these cuts won’t be voluntary.

Gold is way off its highs, but is trending back up again. I ought to buy some more before it gets out of reach again. Silver likewise is off its highs at $30/oz or so.

Investor's Business Daily finally finds a reason to praise President Obama. If I were Bammer, I'd clip that article and put it in the scrapbook; he's not likely to get much praise on his economic policies again any time soon.

Is economic uncertainty the primary reason our economy is not recovering? The GOP has been insisting that uncertainty is a primary factor in the stagnant economy, but the Democrats have been airily dismissing that argument. James Pethokoukis shows why the Democrat dismissal of the "uncertainty" argument is chock full of FAIL.

UPDATE 1: The markets are breaking bad today. Most of the unease stems from worries about the Eurozone, but there is also a lot of generalized alarm in the investing public right now -- that alarm is in part why things are so volatile. Investors are in full herd behavior, stampeding to and fro on news, rumors, and gossip. It's the endless war between yield and safety.

UPDATE 2: Interesting discussion on gender and personality differences in an economic context. (NOTE: I am neither type "A" or type "B". I am type "C" -- pay me the money you owe me or I'll send a large fellow around to redecorate your face.)

posted by Monty at 08:41 AM

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