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December 21, 2011

DOOM: Sorry is the fool who trades his love for hi-rise rent


Thou shalt not doubt the yellow metal. This is the goldbug's creed. (I wish I had a Scrooge McDuck-style mountain of gold coins in my vault. Not so much because of the "rich bastard" aspect, but because then I could slide down it while laughing in childlike glee.)

China is not our problem. We are our problem. I inveigh against the China-boosters not because I’m afraid the Chinese will “replace” us in some way (they won’t and they couldn’t even if they wanted to) but because it distracts us from the real root of the problem: ourselves, our behaviors, our culture, our society. Salvation cannot come from outside; it must start within. This is as true of a nation as it is of an individual.

Note from the Greek government: “Dear Taxpayer: You know that tax refund you’ve been waiting on? Don’t hold your breath. You’ve been dodging your taxes for years, you bastard, and turnabout is fair play.”

North Korea’s per-capita GDP is the same as America’s! Well, the same as America’s was in 1826.

Speaking of North Korea...noted philosopher and economist Ms. Whoopi Goldberg points out this stunning revelation about Communism: “On paper, it makes perfect sense.” In real-world terms it didn’t work out so well, but what’s a hundred million murdered innocents more or less?

MSNBC’s headline: “Unemployment fell in 43 states in November”. My headline: “Millions of discouraged workers left the labor force in November.”

In praise of housewife economics.

You've heard me say that the big story of the 2020's is likely to be the decline of Japan from a major first-world power to a second-tier regional power. Japan seems to be feeling some premonitions about this themselves. Japan is carrying about 200% of their GDP in debt, and the only thing that's kept them going so far is that most of this debt is being held by Japanese citizens. But Japan has one of the oldest populations in the world, and all those thrifty Japanese savers are about to retire and start drawing down their savings. The minute Japan has to go to international markets to roll their debt, they are boned.

No more DOOM! All of our problems have been solved and we can now move on to more important things, like re-electing his Majesty the King Barack Hussein Obama. Equities investors, known for their reliance on bedrock research, reliance on fundamentals, and disdain for emotion-based investing, judge that the international financial situation has materially improved in spite of having no evidence to back up that assertion. Major economists admit that they’ve been wrong about every projected economic upturn since 2008, but claim that this time they’re “pretty much almost absolutely certain” that the improvement is real. (Boy, it’s almost like this whole “have no fear!” news-dump is a deliberate end-of-year push to keep the peasants calm or something. Fear not, citizen! Buy! Consume! Purchase, and be happy!)

I kid, I kid...sort of. There has been real -- if weak -- improvement in the domestic economy in the fourth quarter. Our manufacturing sector is actually doing pretty well, given the state of world markets. I am all about the DOOM, but it’s important not to become a cheerleader for DOOM. An economic upturn is a good thing. However, this “upturn” is being blown completely out of proportion, and I do suspect that the news media is over-reporting it to help out the Democrats.

I’ll go on record here: 2012 isn’t likely to be much better than 2011 was. We’ve been fooled by the chimera of “recovery” before. The simple fact of the matter is that nothing fundamental has changed -- all of our problems are still here, unsolved. I’m also betting that 2012 is the year the Eurozone breaks up (or collapses outright), and the year that the Chinese bubble finally pops for real.

Is America in decline? Maybe not...but national decline is usually only clear in retrospect. America has many strengths, but our strength and capabilities are not limitless. Success is not our right, and it didn’t happen by accident. Even maintaining what we already have will take a huge amount of work.

The budget battles of the past couple of years are not just petty partisan bickering. There are real and substantial differences between the parties at work. Issues having to do with fundamental questions of governance, the relationship of the citizen to the government, and the sustainability of the welfare state. It’s not a small thing. I just wish we had a better political class with which to confront these issues, but you go to war with the army you have.

In news that will prove devastating to English professors and other snotty Europhile academics, Saab files for bankruptcy. Where will Ivy League professors go to buy their idiosyncratic Scandi automobiles now? Well...there’s always Volvo. (Though Volvo is actually Chinese now.)

“Envy and confiscation become no less ugly and objectionable when gussied up as social policy.”

Friedrich von Hayek, whom Teh Krugman derided as being “irrelevant”, has once again been vindicated. Sooner or later, reality always asserts itself. Always.

Truly bad economics. Best quote: “I wouldn’t accept this paper from a sophomore undergrad.”

Athens is turning into Detroit, crime-wise. This tends to discourage the tourists, as Detroit could have told them if they’d called Mayor Dave Bing and asked him.

There may be hard limits to how much growth a mature economy can experience. It’s not just a function of population; it’s also a matter of increasing energy for decreasing returns, a matter of balancing culture and societal mores with rapidly-changing conditions, and preserving the aspirational spirit in a materially-wealthy society. So is the solution to get smaller rather than larger? It does seem to be the fate of large polities to fracture and break apart over time.

If the re-unification of the two Koreas is even possible, it’s not clear to me that the South would even desire it at this point: the costs would dwarf those incurred by Germany during their re-unification since East Germany -- as bad as it was -- was nowhere near as dysfuncitonal and destitute as North Korea is. North Korea is like an insane asylum, where the people have been so brutalized and brainwashed over the decades that integration back into the world will be a slow process of decades. It’s highly unlikely that South Korea could re-integrate them alone; the South Koreans would need massive infusions of cash from the rest of the world to even attempt the enterprise. Unfortunately, the rest of the world is broke.

The Eurozone is a runaway train, and it’s way too late to slam on the brakes now. This also illustrates the hilarity of the EU bailing itself out -- just about everyone in the Eurozone is broke, so any internally-funded mechanism is ruled out axiomatically.

The Keystone XL project would boost private enterprise, not government. And as Insty points out, this is probably why Obama and the Democrats hate it.

The Iranian rial is cratering. This is just a reminder that governments cannot control markets even when they devoutly wish to; markets are simply a reflection of reality, and reality will assert itself sooner or later.

AT&T drops their $34B T-Mobile bid in the face of government hostility towards the merger. I’m not sure the merger was a particularly good idea, but the objection of the US Government -- that it would reduce competition -- is pretty weak too. It’s not like T-Mobile is much of a player in the market anyhow, and a much bigger problem in the mobile space is a lack of available spectrum...which is of course due to the Government’s monopoly over the issuance of said spectrum.

Just remember to add "PBUH" after every Tweet, or you’re gonna get banned.

The Occutards believe not only in ruining their own job prospects, but also those of their friends and fellow students.

Veronique de Rugy: Occupy AARP!

If you don't want to lose it, make a backup. Words to live by.

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posted by Monty at 09:09 AM

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