DOOM: Hard times ain't gonna rule my mind no more

This is the worm at the core of the rotten Social Security and Medicare apple: it asks young and comparatively poor people to transfer wealth to older and comparatively wealthy people.

Since the Census Bureau started publishing measures of poverty in the 1960s, our understanding of the concepts of poverty has changed. As well as better measures of income and spending, we also need to include measures of assets and employment. Then, we need to figure out how to make younger people better off.

Rick Perry's flash-crash. I'm beginning to think that I'll have to write in "Zombie Nixon" on my ballot next year....

Democrats walk away from the Super Committee. Everybody who’s actually surprised by this, raise your hand. This was inevitable and probably the point of the exercise all along for the Democrats. Democrats will die on the entitlement hill -- to the extent that the Democrat Party is about anything, it is about the continuation and growth of the welfare state. They will never vote to roll it back. The Democrats picked far-left ideologues to staff the Committee for a reason. And, just as predictably, they will blame the failure of this farce on the “intractable” GOP.

Italy can’t catch a break. I think the problem investors have with Italy is the same one they have with Spain, Portugal, and Greece: there are no prospects for GDP growth, and thus little hope of paying off the debt. Italy barely squeaked out a 0.6% GDP growth rate during the Euro boom years of the 2000’s; in a recessionary environment, it doesn’t take a genius to see what’s going to happen. And just like the rest of Europe, Italy’s demographics suck -- the population is rapidly aging, and there aren't enough young people to support all the old people. This is not a problem you can fix with a new Prime Minister or a reshuffled Parliament.

Will the West re-discover the principle of "sound money"?

The moral claim real money places on society on behalf of its bearer comes not from the intrinsic value of the token but from the fact that the bearer had previously produced some good or service deemed valuable by others. This is what gives money its moral legitimacy.

Rubber flip-flops, aisle three. 12-pack of 3/2 beer in the cold-case in the back. Chips, peanuts, and pretzels, aisle twenty. Check-cashing, 6-month Certificates of Deposit and car loans, aisle 7, just past the Slim Jim display.

Andy sends word that Jefferson County in Alabama just filed for the largest municipal bankruptcy in U.S. history. Outlier or vanguard? We'll see.

Spiking another myth: public school teachers are not underpaid. Public-sector employees tend to assume that private-sector workers get paid a lot more than they actually do. Public-sector employees also tend to undervalue their own (expensive) benefit packages, and don't include them in their base salaries. Career public-sector workers would be shocked at how little money comparable private-sector workers actually make, especially when private-sector benefits are compared to public-sector benefit packages.

The guitars gently weep.

It seems obvious that the Eurozone is going to have to get smaller, if not break up entirely. The question is: how will the Eurozone nations handle it? They haven't exactly dazzled with their political or economics skills so far.

Only bonds...and gold. Me? I'm a goldbug, so I'll take the barbaric metal.

The Italian crisis: getting rid of Berlusconi won't solve the problem. No more than getting rid of Papandreou in Greece will solve their problems. In every deeply indebted country (including ours), the main problems are chronic and structural imbalances in the economy, exacerbated by demographic pressures. And Europe is in much more dire straits than the US is, especially in terms of demographics.

Tom Dickinson of Rolling Stone is quite convinced that the GOP is the "party of the rich". I guess that should make me happy, seeing as how I'm suddenly pals with a lot of rich people. I wonder if I could give Warren a call and hit him up for a couple hundred mill? It's not much to ask, from one rich guy to another.

Obama's NLRB: no Republicans allowed. His Majesty is quite put out with the GOP, it seems, and he will not have his courtiers and palace lackeys associate with the blackguards.

Slamming the door on the inequality myth.

Robert Reich, liberal Fascist. Rub the paint off a so-called "progressive", and you usually find a totalitarian Statist underneath.

Fannie Mae gets another $7.8 Billion in taxpayer bailout money. Bringing the total GSE bailout bill to around $200 Billion. More or less. Who's counting?

Can you really blame high college-grad unemployment on a poor choice of majors? I think you can, in a significant measure. Prior to the downturn, it was possible to get a high-paying job with pretty much any major as long as you had a degree; the degree itself and not the course of study was the important thing. But as the job market dwindled and the stock of applicants exploded, employers had to winnow down their candidates to people who actually, you know, had a background in whatever field they were trying to get into. If you think of labor as a salable good, it's a buyer's market right now and as a seller you have to offer the best product (your labor) at the best price (your wage). Employers can afford to be choosy.

Some students recently walked out of Greg Makiw's econ class in protest at what they saw as biased teaching. I know what you're thinking, but Mankiw was actually doing a proper job -- the students were objecting to Mankiw's (supposed) libertarian hostility towards Keynesian/Marxist economics. I link this article mainly to show what a bunch of clueless dimwits the walkouts are. (If I had walked out on every far-left dipsy-doodle leftist hippie freak professor I had during college, I would have had precious little classroom time. Sometimes you have to sit through stuff you disagree with. Hell, sometimes you even learn stuff, and discover that your smartass 20-year-old self isn't infallible after all.)

Not a good time to get into equities? It's not a good time for bonds either. Or...anything, really. Investors don't have many good options available to them except to diversify and hope for better days.

UPDATE 1: The financial folly of fairness. I have many differences with Megan McArdle, but this article is really very good.

posted by Monty at 08:42 AM

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