I’ve got a cold and my dog had major dental surgery yesterday, so pardon me if I seem out of it.
Archive for the ‘Economics’ Category
Just because the European Debt Crisis hasn’t been in the headlines much as of late doesn’t mean it’s gone away.
Greece’s government has fallen again and they’ll be holding general elections next month. “Opinion polls point to a victory by the radical leftist Syriza party, which wants to wipe out a big part of Greece’s debt, and cancel the terms of a bailout from the European Union and International Monetary Fund that Greece still needs to pay its bills.”
The problem is that Greece wants to continue spending other people’s money to prop up a bankrupt welfare state, and the rest of Europe has decided they would really prefer to stop pouring money down that particular rathole. Syriza is against “austerity,” which is to say they oppose the Greek government even pretending to practice fiscal restraint. Because pretending is all they’ve done.
Remember, real austerity is reducing outlays until they match receipts. All those “austerity” street protests were over lowering Greece’s budget deficit from 9% of GDP to 7.5% of GDP. The rest of Europe didn’t ask them to stop digging their own grave, they just asked them to dig more slower. And this year, Greece’s budget deficit stood at 12.2% of GDP. Evidently even fake austerity is too much to ask of them; even the illusion of fiscal restraint is intolerable. This is why all news that Greece has “balanced” next year’s budget should be taken with several grains of salt.
So we’ll see another election, and if Syriza wins we’ll see another round of demands for more bailouts and debt writedowns, with Greece threatening yet again to exit the Euro. We’ve seen this movie before. The most likely outcome is that another cabal of EU-phillic insiders in the Greek government will engineer a last-minute cave-in to demands from Brussels and Frankfurt, ram another toothless austerity measure through parliament in exchange for still more credit (and perhaps even a small symbolic measure of debt forgiveness), dissolve the government again following the inevitable public outrage, then have the Greek bureaucracy ignore even those woefully inadequate reforms, setting the stage for the farce to repeat itself in another 12-18 months, or until mean old Aunt Angela finally cuts up the credit card.
Europe has had several years to acclimate itself to the fact the Greece might exit the Euro, and the possibility of a “grexit” has been priced into the markets for some time now. I do not pretend to understand the intricacies of the European banking system, but my impression is that much of the “stress testing” of European banks this year was to prepare for one or more of the PIIGS leaving the Euro. I suspect that the European elite have minimized their own exposure to a Greek default (which is really all they care about), and that the EU and the European Central Bank has found new, sneaky ways to put taxpayers on the hook for any possible sovereign defaults, strengthening the banking system without addressing Europe’s long-term economic problems (unsustainable levels of debt to support cradle-to-grave welfare states for shrinking populations).
It would be great if Greece actually undertook real structural reforms of their bloated, dysfunctional government, but I see precious little evidence that they’ve actual done so. Expect more pain ahead, and at least one more bailout…
Two bits of news dropped right after I put up the most recent Texas vs. California update.
First, Texas added 34,800 nonfarm jobs in November, and 441,200 more jobs year-over-year, more than any other state. And this happened despite the drop in oil prices.
One reason Texas does so well is that it has the highest level of economic freedom of any state (tied with South Dakota).
Needless to say, those two facts are strongly correlated. In the long run, free states produce jobs and economic activity while less free states produce dependency and stagnation.
(Hat tip: TPPF.)
Here in Austin, we’re enjoying a temporary respite from Winter in November, but I don’t expect it to last long.
The growing impression that politicians don’t play straight with their constituents is completely toxic, particularly to Democrats, who actually want to use government to improve people’s lives. It’s one thing to downplay unpalatable choices made in the law; it’s another to never disclose the consequences of legislation until it’s too late for anyone to react. Combine that with the moustache-twirling of a Jonathan Gruber, saying that the idiots should be happy for what they got, and you have basically every conservative stereotype about liberal elites confirmed.
Also: ObamaCare is designed for people buying insurance through it to get a nasty sticker shock in year two. (Hat tip: Instapundit.)
Illinois: only state in Midwest in which food-stamp enrollment outpaces job creation since recession ended pic.twitter.com/yKyIdoOHMv
— Corey Brooks (@CoreyBBrooks) October 24, 2014
Well well well, what have we here?
It’s a jeremiad by Democrat Bill Curry about how his party has abandoned its soul for the sweet smell of Wall Street crony capitalist dollars.
Democrats hooked on corporate cash and consultants with long lists of corporate clients were less attuned to Nader’s issues.
Democrats today defend the triage liberalism of social service spending but limit their populism to hollow phrase mongering (fighting for working families, Main Street not Wall Street). The rank and file seem oblivious to the party’s long Wall Street tryst. Obama’s economic appointees are the most conservative of any Democratic president since Grover Cleveland but few Democrats seem to notice, or if they notice, to care.
These days, says Curry, Democrats “don’t believe in ideas because they don’t believe in people” and calls for a Nader-esque populism. (Indeed, Nader’s latest book seems to provide the spine for his piece.)
Curry actually sees the populist Tea Party energy on the right and laments its absence on his side of the aisle. “If there’s a true populist revolt on the left it is as yet invisible to the naked eye.” (Though I note one very hot populist issue, widespread opposition to the Democratic Party’s push for illegal alien amnesty, is conspicuous by its absence from his piece.)
“Democratic elites are always up for compromise, but on the wrong issues. Rather than back GOP culture wars, as some do, or foreign wars, as many do, or big business, as nearly all do, they should back libertarians on privacy, small business on credit and middle-class families on taxes.”
This advice is far from the worst Democrats have received, but they are congenitally unable to follow it for numerous reasons:
There are also numerous areas where Curry appears unable to shed his blue-colored glasses:
Of course, since it’s Salon, the piece has more than one inside-the-blue-bubble howler:
Indeed, when you get right down to it, Curry’s piece could be boiled down to “Talk vaguely about populism while pushing the same Big Government, redistributionist schemes liberals always push.” Maybe the Nader book itself is bolder (and if someone wants to pay me to review it, I’d happily give it a go), but Curry’s piece is very old and undistinguished wine decanted into a slightly shinier bottle.
No matter how many times liberals declare “This is it! I’m finally fed up with the Democratic Party!”, the party’s fat cats know the truth. Come November 8, 2016, they’ll remember they loathe Republicans far more than they love reform, and pull the (D) lever no matter how many jeremiads Bill Curry and his ilk pen.
We’ve seen this movie before, and we know exactly how it ends.
Time for another random roundup of news and links:
As to Mr Earnest’s point on “what Congress intended”, who can say? No Congressman who voted for the bill read it. Presumably, some legislator’s staffer wrote that actual line about “established by the State”. If we could locate him among the vast entourages of the Emirs of Incumbistan, we could ask him what his “intention” was. Until then, calibrating the competing degrees of deference to a corrupt bureaucracy, a contemptuous executive, a politicized judiciary and a feckless hack legislature brings to mind Samuel Johnson’s line about arguing the precedence of a louse and a flea, with a tick and a cockroach thrown in.
— Maddy Perennity (@Madel_Schmadel) July 19, 2014
Twas once a Vancouver Philly Whose political race was a dilly After the shouts She had to drop out For shaking dew off the lily @rsmccain
— BattleSwarm (@BattleSwarmBlog) July 22, 2014
This bad (click to embiggen):
— zerohedge (@zerohedge) June 25, 2014
Gross domestic product, the broadest measure of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 2.9% in the first three months of the year, according to the Commerce Department’s third reading released Wednesday. That was the fastest rate of decline since the first quarter of 2009, when output fell 5.9%.
Just about every sector was down:
GDP broken down by components: aside for the collapse in PCE, everything was negative in Q1 pic.twitter.com/zuikiCaHkV
— zerohedge (@zerohedge) June 25, 2014
My takeaway is that ObamaCare has been twice as bad for the economy as the subprime meltdown.
Hot on the heels of Hillary Clinton claiming that her family was dead broke in 2001 (for certain values of “dead broke” that include being worth more than $20 million) comes news that Hillary has doubled down on the “shucks, we’re just regular folks” gambit.
In an interview with The Guardian, Clinton said she isn’t “truly well off”:
But with her huge personal wealth, how could Clinton possibly hope to be credible on this issue when people see her as part of the problem, not its solution?
“But they don’t see me as part of the problem,” she protests, “because we pay ordinary income tax, unlike a lot of people who are truly well off, not to name names; and we’ve done it through dint of hard work,” she says, letting off another burst of laughter. If past form is any guide, she must be finding my question painful.
The full quote is actually more damning than just the “not truly well off” bit because it suggests an even more radical disconnect from the economic reality most Americans face every day. Evidently Hillary is suggesting she gets a pass from class warfare envy because: A.) She and Bill have actually deigned to obey the law by paying taxes, and B.) Americans know just how hard it is for Bill to give $103 million worth of speeches.
A few choice reactions:
— Elliott Schwartz (@elliosch) June 22, 2014
— BattleSwarm (@BattleSwarmBlog) June 22, 2014
— Shaughn (@Shaughn_A) June 24, 2014
Moreover, Hillary’s daughter seems to have picked up on her mother’s entitlement issues. It seems that the woman married to a former Goldman Sachs manager who started his own hedge fund, the woman who owns a $10 million Manhattan apartment, the woman who was given a $3 million wedding and the woman who MSNBC paid $600,000 a year to (or $26,724 for every minute she appeared on-air) says she doesn’t care about money.
At least one pundit has suggested that Hillary’s clan suffers from “Status-Income Disequilibrium”, in which people with All The Right Opinions suddenly realize how much wealthier fellow members of the Overclass are. Or, as Rush Limbaugh puts it, “in [Hillary]‘s world, $50 million is peanuts.”
Let’s give Bill Clinton one small piece of praise in all this: As far as I can tell, on this particular subject he’s apparently been smart enough to keep his mouth shut…