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January 31, 2012

The Daily DOOM

DOOOOM

Are federal government workers overpaid? Yes. And the wingnut Republican think-tank that came up with this determination? The CBO.

His Majesty never lies, but sometimes events conspire to make previous statements inoperable. It is impolite -- and a commission of lčse majesté -- to point out such things. Best to let them pass unremarked-upon, for His Majesty loves his people and does not wish them to be unduly confused.


The car parts and accessories chain Pep Boys gets bought out (“taken private”) by The Gores Group private equity firm. I mention this mainly because Pep Boys is one of those chains that has been around for what seems like forever. (And no, this firm doesn’t appear to be connected to Teh Goracle in any way. Thought it would have been mordantly funny: the world’s foremost “green” gasbag being an owner of a car-parts chain.)

Here’s some friendly advice to execs at Bank of America: when someone gives you the opportunity to be something other than a bunch of giant douchebags, you should take it.

These dumbasses who want to boycott Apple for basing their manufacturing operations in a low-wage country are...well, dumbasses. What they’re basically saying is that they’d rather the Chinese continue to live in grinding poverty, because that’s the outcome of corporations moving their manufacturing elsewhere. In poor countries -- which China still is -- poor people have to work very hard to earn very little money. So it has ever been: hard work for little pay is the lot of a poor man. Small pay is far better than no pay at all. I think the Chinese factory workers would probably tell the idiot western leftists to shut their stupid cake-holes if given the opportunity. (Bonus shot at Teh Krugman for added fun.)

People are beginning to realize that when (not if; when) the Democrat “blue model” state collapses, public spending will become a zero-sum game. This process is already underway, in fact, as states find public-sector pension and OPEB payments crowding out other spending. (Edsalls’ book can be safely ignored, by the way; note that he is an august professor of Journalism, not Economics; and like most journos he is a stout man of the left for whom all problems can be traced to Republican chicanery of one sort or another.)

The two biggest government programs — Medicare and Social Security — are almost exclusively for them, with a significant chunk of Medicaid going to the elderly as well. By about 2030, America as a whole will have the age structure currently found in Florida. That means the elderly, who vote at above-average rates, are very likely to keep winning political battles. The real question about our fiscal future is not Republicans vs. Democrats but rather whether any coalition can limit benefits to older people. It is already unlikely that the Republicans will gut Medicare or Social Security or get very far in trying. The last major expansion of Medicare came under the Bush administration, and, despite the tough talk of Rep. Paul Ryan’s plan, the Republicans are unable to enact fundamental Medicare cost control because they are too dependent on the white elderly vote.

I think we should hire the MF Global clients who were burned to the tune of about $1.2 billion to be grief counselors when Social Security and Medicare go tits-up. They can pat the backs of the devastated beneficiaries in a friendly fashion and say, “I know, man, I feel your pain. Believe me. I been through it with MF Global and that Madoff mess. The money's gone, and it ain’t comin’ back. You can point the finger of blame at douchebags like Corzine who caused the problem, sure. And maybe you should. But come end of day he’s still got his millions and he ain’t gonna spend any of it to make you whole, you know what I’m saying? Just write the money off, friend. I know it burns like fire, but trust me: the sooner you do it, the quicker you’ll be able to move on with your life. That money is gone forever. Just let it go.”

Boiled down to gravy, this means “a lack of formalized education don’t mean stupid”.

Remember that time 200 Tea Party demonstrators got arrested at a rally? ….yeah, me neither.

How much revenue would the so-called “Buffett tax” raise? In the scheme of things, very little; but that’s not the point. The point is to advance the Democrat class-warfare agenda, not to actually solve any actual problems. It’s a political, not an economic, initiative.

Walter Russell Mead in the first part of a series entitled “Beyond Blue” (i.e., beyond the so-called “blue state” model that is in the middle of falling down around our ears). In this essay, Mead takes on the crisis of the “American dream”.

The family farm didn’t die of thirst in a desert; it drowned in a sea of abundance. 125 years ago, Americans didn’t have to organize themselves to cope with poverty and the erosion of living standards; they had to organize themselves to capture and enjoy the vastly increased prosperity and freedom which new technology made possible.

Like I always say: when things go to shit, they go to shit fast. Spanair collapses suddenly, stranding thousands of travelers. Spain’s response? They’re going to fine the collapsed firm nine million Euros. Yeah, you heard me: the Spanish government is going to fine a bankrupt firm. That’ll teach ‘em!

The problem with ejecting Greece from teh Eurozone had nothing to do with Greece per se. The problem is that such an ejection would make it clear that it was possible to leave the currency union -- and that by allowing one nation to leave (or kicking them out), the EU would then have established a precedent for other debtor nations.

This ought to go without saying, but apparently it doesn’t: I will not accept money that you have squirrelled away in your underwear. Well, I make exceptions for ladies who tuck a hundie in the bra, but that’s as far as I’m willing to go.

Britain has escaped much of the press surrounding the meltdown going in the Eurozone, but that doesn’t mean they aren’t boned. They are indeed very boned. I’ve often said that America’s biggest cautionary tale about the perils of a runaway welfare state is not any nation of the Eurozone, but our cousins over in Albion. (Tell me again how this story doesn’t end in some kind of sovereign default or massive inflation. I’d love to hear it.)

Like German porn, the politics of the Greek bailout just keep getting weirder and more complicated.

Businessmen have never gotten much respect in the arts. It’s not a modern phenomenon.

The “Germanic” economic view.

"To write into law a Germanic view of how one should run an economy and that essentially makes Keynesianism illegal is not something we would do," a British official said.

Yeah, because Keynesianism has been such a smashing success so far. And since Germany is outperforming every other country in the EU economically right now, I think their opinions on how to run an economy carry more weight than indebted basket-cases like Britain.

The 2011 job-creation numbers simply reflect a reality that’s all too obvious: we’re in a recovery, but a very slow and shallow one that could dip back into recession very easily.

Greenspan: “LOL u crack me up dawg”
Teh Bernank: “tru dat ROFL”

Here's an intriguing financial riddle that seems to bolster the Keynesian case but really doesn’t. The mistaken impression it leaves has to do with Bastiat’s “seen and unseen” consequences. The clearing-house function of the stranger’s “loan” only works because the townspeople are able to clear their debts in an impossibly-short period of time...and without the provider of the “loan” being aware of the uses to which his money is being put. The money was essentially stolen by the motel owner (since the visitor hadn’t committed to renting a room yet), so everything that happened downstream of that was based on a fraud. You could have gotten the same “benefit” by using a counterfeited $100 bill. In fact, this example proves definitively why debasing the currency is bad: the “lesson” the townspeople learn is that nothing has to be produced and no wealth has to be generated to pay off debts. The short-term benefits are seen (discharge of debt), but the long-term ruin of the town is not seen. (This is why Austrian economists focus so much on human behavior; much in economics boils down to human intent, action, and consequences.)

Sadly, this kind of advice is probably going to become more and more relevant as time goes by: the 10 best part-time jobs for retirees.

Even if by some miracle the EU and ECB can bail out Greece without triggering a hard default, that’s not the end of the horrorshow by a long shot: Portugal is still queued up right behind Greece.

When you’ve reached a point where nothing effective is practical and nothing practical is effective, the situation has officially spun out of control.

20-somethings are worried about retirement. They probably shouldn’t be, because “retirement” is going to be a pretty hilariously obsolete concept long before they hit old age. On the other hand, if this gets them saving and thinking about their futures, the worry is a good thing and should be encouraged.

This story certainly fits the DOOM charter: on-demand abortion seems to be having the opposite effect of the one the feminists intended. Social engineering never quite works out the way the elites think it will, does it?

This is good news: investment companies and financial advisers must now disclose all the fees related to 401(k) plans. Giving people more choice and more control over their own money is always a good thing. Full disclosure is an essential part of making an informed decision on where to put your money.

Gold: the Chinese know a good hedge when they see one. And they may be planning for some currency “event” in the not-too-distant future. The Chinese people also know that, while living under a repressive Communist regime, it pays to have wealth that is both portable and easily transferable.

Here’s your terrifying chart-fu of the day.


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posted by Monty at 08:48 AM

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