The Daily DOOM

Eugene Robinson just wants to let you free-market ideologues know that he's on to your game. He knows what evil lurks in your profiteering Republican soul. He knows that your shriveled black cinder of a heart burns with joy every time a poor waif is cast out of his house to live among the other urchins on the streets. He knows that you light your $100 Havana cigars with hundred-dollar bills, and then blow the smoke in the face of some poor wretch who came to the door of your solid-gold mansion to beg for a crust of bread. Eugene Robinson points the trembling, enraged finger of blame at YOU, moneybags! YOU!

Teh Bernank loves the feel of freshly-printed cash. Yes he does.

S&P to the EFSF: BAM!

S&P to Portugal: BAM!

Why some countries are rich, and others poor. Bad luck and poor geography have an impact, but incompetence, non free-market economies, dishonest and inefficient government, and a lack of individual initiative are much better predictors of national poverty. Real wealth comes to the well-prepared -- it doesn't happen by accident.

The Greek fiasco may finally be going into the final reel. I remain astonished that this “crisis” has dragged on as long as it has -- it’s been obvious for a year now that default was pretty much inevitable.

Traders brace for Eurozone fallout.

One of the biggest problems facing the Eurozone -- and the EU as a whole, particularly in the case of the UK -- is how to make their economies more competitive on the world stage. Rigid work rules, powerful labor unions, lack of cross-border mobility, language and cultural differences, and other structural problems hinder European business competitiveness. However, ethos plays a large part in the problem -- the European welfare state has produced generations of people who remain unwilling to make the sacrifices and do the work necessary to keep their civilization on a paying basis.

This article trots out the “hours worked” fallacy by noting that the average Greek in a full-time job works 42 hours a week, while his German peer works only 35. However, this distorts the real picture of the economy in important ways. First, Greece has a bloated public-sector where “hours worked” are routinely padded (and where “work” is defined pretty loosely). There’s also the fact that Germans are more productive than the Greeks, per hour of work done: the average German adds more to his nation’s GDP than the average Greek does to his. And finally, Germany employs more people than Greece does in all sectors, percentage-wise.

China’s phase of explosive growth is over, and it remains to be seen if they’ll be able to handle the slowdown without substantial domestic unrest.

Ten gems of wisdom from the late Milton Friedman.

This story reminds me of the brouhaha that broke out after the publication of the book The Bell Curve. It just shows that modern universities are not interested so much in what’s true as in what’s correct (as in, politically correct). This isn’t even a racial issue: when you place people in college who are manifestly unsuited to be there, then of course they are going to underperform. We may argue the hows and whys of that unsuitability -- nature vs nurture, culture, politics, etc. -- but that it is true is a simple reality that we all have to face.

Just in case you forgot: Matthew Yglesias is to economic journalism what I am to professional Sumo wrestling.

GM to launch an employee pension “buyout”?

GM has worldwide pension liabilities of $128 billion that are underfunded by $22 billion as of the end 2010.

GM's U.S. pension plans are underfunded by $12 billion — but that doesn't include $2 billion in stock GM put into its pension plans.

GM has about 700,000 hourly and salaried pension plan participants in the United States.

Emphasis mine. Now you know why the old joke was that GM was actually a pension plan with a money-losing sideline in manufacturing automobiles. (Kind of like how America is rapidly turning into a pension plan with an army.) And remember: this is after Uncle Sugar's "investment" in this little manufacturing concern.

I love optimists because they give me a target-rich population to mock, belittle, berate, and take advantage of. It’s like having a never-ending supply of credulous younger siblings but without the danger of angering your mom.

For being a Nobel laureate, Teh Krugman is easily confused by simple things. Perhaps he’s huffing paint or something, and he’s more to be pitied than scolded. Me? If I have enough money to spend on brown liquor, beef jerky, folding money for Kitzi the pole-dancer’s g-string, and electronic gadgets, I don’t really give a damn that Paris Hilton has about eleventy-billion more dollars than I have. I care how well I’m doing -- not in the small-aperture measure of income, but in the large-aperture measure of quality of life.

Greece is boned: a continuing series. This story falls under “never believe anything until it has been officially denied.” Consider this the official denial.

See, this is the great thing about free-market economics: buyers and sellers come together in the mart of competitive commerce, and the parties agree on terms that are beneficial to both. It brings a tear to this old sea-dog’s eye, it does.

Er...guys...this isn’t what I meant when I said I wanted to buy an “assload of gold”. I realize that the fault is partly mine for using an unclear idiom, but still...I don’t think I can buy this stuff. Or even touch it. I’ll let you pick it up and haul it off.

Clearing houses: the next victims of the downturn? If so, this is bad, because these entities are central to how modern finance works, especially in off-exchange transactions.

My finance-industry pals refer to these guys as the “MIT mafia” (graduates of MIT’s Sloan school). But then, NYU’s Stern School, Yale, and Hahhhhvahd have all contributed their share of economic dunces to the public sector, so it’s unfair to pick on MIT.

More public-sector pension woes, this time in PA. Ben, who sent the link, comments: “Tom Ridge and Ed Rendell f****d us. This is a Republican and Democrat boning.” Isn’t it always?

If you can fog a mirror, you can probably get food stamps. SNAP (food stamps) is a fairly small fish in the ocean of our welfare state, but it’s symptomatic of how out of control our programs for the “poor” have become. We’ve extended our definition of “poor” out to nearly anyone who shows up at the welfare office.

posted by Monty at 08:57 AM

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