The Daily DOOM

PSA: If you just can't get enough DOOM in the morning post, now you can get your DOOM all day long! DOOM is now available on Twitter by following @AoSHQDOOM. All DOOM, all the time. The usual Daily DOOM will be a digest of selected Tweets from the previous 24 hours (with perhaps a bit more smartass commentary from yours truly).

The recent CBO report is chock full of really unhappy economic news, but it's nothing we didn't all see coming. Of particular note is the Social Security Ponzi scheme, which is tipping into the red far more quickly than the con-artists who run it thought it would.

The “it’s the economy, stupid” trope is itself quite stupid, and I don’t know why people keep trotting it out every election cycle. The economy is important, but there are other polarizing factors at play that may well trump economics in the modern political climate. Obama’s hard leftist base is clearly where his heart is, and people who plan to vote for him are well aware of this -- even the so-called “centrists” who always seem to lean left when the chips are really down. Democrats will turn out for Obama for reasons other than the state of the economy: Obama benefits if the economy goes up, but he’s not going to suffer unduly from voters if it goes back down. Black voters, for example: there is nothing that will peel off any large segment of this voting bloc from Obama. Obama could do nothing so wrong that black voters would not find a way to forgive him for it. Hispanics will also go for him in large majorities, regardless of how the economy is doing. The only demographic where the economy will factor into the vote is white independents (who lean socially liberal as a rule). I think Obama’s got quite a good chance of winning a second term regardless of the state of the economy, particularly given the lame GOP field that will oppose him.

Why isn’t founding LOTB member Illinois getting the same attention as Greece? Illinois is just as boned as Greece, but it is an American state and is backstopped by the power of the federal government. That counts for a lot (probably more than it should, given the state of our federal government, but never mind). One of the biggest stones weighing on Illinois at the moment? Public employee pensions.

Looking at the bigger picture, the state has a backlog of about $8.5 billion in unpaid bills and owes about $27 billion in outstanding bonds. And then there’s the roughly $80 billion owed to the state’s public employee pension funds.

All this, mind you, is after a gigantic 67% state tax increase. (Anyone who thinks that tax will actually expire in 2015 was obviously born on an alien world and is new to our ways.)

The glories of capitalism, as expressed in the salty-snacks aisle of the supermarket. When you have a surfeit of a good or service, the value-add stops being the utility-value of the good and instead becomes esthetics or status. That’s why rich people drive Rolls Royces and Ferraris instead of Toyotas and Fords. As cars, they all do pretty much the same thing and in pretty much the same way; but the value-add of a Ferrari lies in aspects not directly related to the utility value of the vehicle. You can say the same about nearly any other commodity class, from clothes to electronics...to snack foods.

Brendan Erne makes an observation I’ve made myself: this notion that we can simply go back to some mythical golden-age of industrial manufacturing is just silly. Automation means that even if we make more stuff, we can do it with fewer people -- and that trend is only going to accelerate. “Manufacturing” is not a jobs panacea, nor should it be an official rallying cry for political policy. It represents a (misguided) nostalgia for a time that is now gone, and will not be coming back again. Look forward, not back.

California facing a “perfect storm” of public-employee pension obligations.

Actuary recommends that CalSTRS cut its assumed pension-fund return from “ludicrous” to “merely ridiculous”.

“There is a less than 50 percent probability that the current assumption” of 7.75 percent will be met “over the long term,” Milliman actuaries wrote in their report. Over 10 years, the fund gained 5.4 percent, according to a statement Jan. 24.

Emphasis mine.

Illinois would do well to remember that when terms like “financial disaster” are being thrown around, business as usual won’t cut it.

Teh Krugman only tells half the story on the British austerity push? Well, Teh Krugman has made a career out of only telling half the story...and getting the half he tells wrong more often than not.

Government pensions: at some point, you just have to strip away the facade of probity and responsibility and admit that you’re just gambling with other people’s money. And that you have no real plan for what to do if you roll snake-eyes.

Does Italy now have its own version of the Tea Party? Decades of abuse by the statists and welfare-state leeches are finally driving the producers to cry foul.

At least one sector of the economy is booming.

Michael S. Greve's series "The Debt Trap" (part one). (See also part two and part three.)

Amazon takes a pretty big hit to the bottom line. Jeff Bezos has proven that he knows how to squeeze profits out of a low-margin business, but Amazon's recent expansions and new product offerings (such as the Kindle Fire) are taking a toll.

What's a a trillion dollars or so between friends? It's not like it's real money or anything.

MSM on the economy: ALL IS WELL! Reality on the economy: Yeah, not so much.

China's commodity bubble about to pop? China's recent moves (like their huge gold-buying binge) leads me to think that the Chinese government is expecting some kind of large economic shock in the not-too-distant future.

posted by Monty at 08:45 AM

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