California has long had a tenuous grasp of what the rest of us regard as consensus reality. But two new pieces of legislation suggest they’ve gone off the deep end into full Victimhood Identity Politics land:
Of course, that’s not all that’s new on the Texas vs. California front:
“California taxpayers paid out big bucks to state workers in 2014. How much? More than the Gross Domestic Product of 100 countries, according to new data published by the State Controller’s office. In 2014, more than 650,000 state employees earned a total of $32 billion in wages and benefits.” It gets better: “Nine hundred sixty-nine state employees earned more than the President of the United States.” Added irony:
The lowest paid average workers represented agencies focused on the environment, women and people with disabilities. According to the state’s 2014 payroll data, the average salary for the 11 state employees at the California Commission on Disability Access was just $15,213 per year, slightly more than the $14,494 average salary paid to the four employees at the Commission on the Status of Women.
TV’s CHiPS never seemed to be involved in ethics scandals the way the current administration is, including no-bid contracts to European companies. (Bonus: it’s also suitable for Dwight’s Art Acevedo watch.)
California’s “Green Jobs Initiative” spent $297 million to create 1,700 jobs.
“Prime Minister Alexis Tsipras resigned on Thursday, hoping to strengthen his hold on power in snap elections after seven months in office in which he fought Greece’s creditors for a better bailout deal but had to cave in.”
Nor were his actions popular with members of his own party, 25 of whom have broken off to form the new National Unity Party, who will evidently return to the “demand free ice cream and insist others pay for it” strategy Tsipras abandoned in the face of the sinister force know as reality.
We’re in that happy honeymoon period after Greece gets more money and before Eurocrats are shocked, shocked that Greece’s economy is still a festering pile of fail that all those and promised economic reforms haven’t actually been implemented.
So I haven’t done a Greek update in a while, since after Greece caved into the inevitable (Newsflash: broke people generally do not have leverage over those lending them money), it was all over but the shouting. Now that Greece and its creditors supposedly have a third bailout deal inked, and Greece settles into its clearly defined misery, let’s take a look at exceptionally bankrupt Greece these days, shall we?
Via Zero Hedge comes former Greek finance minister Yanis Varoufakis’ detailed review of the bailout agreement. It’s a mixture of self-serving lies (trying to distance his own Syriza party from the horrific economic mess they made acutely worse) and brutal truths (about just how screwed Greece is by the agreement).
Speaking of Varoufakis, it looks like he’s going to be up on hacking charges…for preparing emergency plans to float the drachma.
“As I dug the bodies of several women out of the rubble, one of the other rescue workers asked if I’d heard that Cecil the Lion was killed. I froze in shock, dropping part of what I assume was once a human arm on the ground. ‘Not Cecil the Lion!’ I exclaimed. ‘Not him! Truly, is there no innocence left in this world?’ I cried harder than when we discovered my brother was gay and ISIS forced us to throw him off a building.”
The news, like Hollywood, became trapped in creating and fawning over celebrities. Getting Anderson Cooper publicized became more important than breaking the big story. When you have celebrity reporters telling you how they feel about being in Iraq instead of reporting on how our troops are doing you begin to lose perspective. With guns, instead of going to gun ranges, gun-owner’s homes, instead of interviewing women who’d stopped an attacker, and instead of really trying to understand the world such women live in and what they’re going through, they just tell us how they feel.
Respectable Dallas Observer liberal Jim Schutze goes to a Social Security office to get a replacement card for the one he lost. Simple, yes? Eh, not so much.
Speaking of the Dallas Observer, here’s one of their writers praising the Tea Party. Dogs and cats sleeping together!
Oakland’s monthly rent has doubled in the last five years, but the Oakland police are laying off people and no longer investigate property crimes. (As Zero Hedge notes, average rent is now more than it was in San Francisco in 2012.) How’s that Blue State model of high taxes, high public union salaries, and declining basic services working out for you California?
Only voters can stop California’s union pension crisis. “Government union bosses are desperate to protect their gravy train at taxpayers’ expense. That’s why they are spinning a web of lies about the [ballot initiative].”
“With CalPERS’ actuaries demanding a pension funding increase from $3.7 billion to $7.25 billion by 2020, the state must either cut payroll by 30 percent or find a massive new tax source, like overturning Prop. 13.” (Hat tip: Pension Tsunami.)
“Thanks to our low-tax, low-regulation environment that allows all businesses to thrive, the State of Texas has become the national leader for technology job creation, and we continue to attract tech companies from around the country and around the world,” [Governor Greg] Abbott said. “On behalf of the State of Texas, I am pleased to welcome LiveOps to the Lone Star State as the company seeks to transform cloud-based customer service. With their help, the State of Texas can, and will, continue to lead the nation in job creation within the technology sector.”
While not unexpected, this certainly isn’t good news for the global economy. “The commonwealth paid a mere $628,000 toward a $58 million debt bill due Monday to creditors of its Public Finance Corporation. This will hurt the island’s residents, not Wall Street. The debt is mostly owned by ordinary Puerto Ricans through credit unions.” That’s like Johnny Boy paying $10 on his $2,000 debt in Mean Streets.
It doesn’t help that Puerto Rico has the U.S. minimum wage and relatively generous welfare benefits. “Less than half of working age males are employed, [and] 35 percent of the island’s residents are on food stamps.”
There are plenty of free market solutions to Puerto Rico’s problems, but those are precisely the ones the Obama Administration won’t let be enacted…
Via ZeroHedge comes renewed information of a point I’ve hit home again and again: Thogh Greece is an extreme outlier on unsustainable welfare state spending in Europe, it’s also the canary in the coal mine, as toxic debt continues to rise all across Europe, with several countries exceeding a debt-to-GDP ratios of over 100%, including “Greece (168.8%), Italy (135.1%) and Portugal (129.6%).” Post-bailout (and bail-in) Cyprus is still over 100% as well, as is Ireland, though Eurostat didn’t have Irish DGP numbers, though supposedly the ratio should be trending down. And Spain and France are hovering just under 100%.
To my mind the great mystery is how Belgium’s debt-to-GDP ratio now tops 111% with such a fat cushion of Brussels Eurocrats to sit on.
The problem is not Greece’s only. The problem is that the western liberal welfare state, as currently constituted, is economically and demographically unsustainable.
I’m sure I’ve driven this point home to regular readers of this blog, but I’ll continue driving it home until our leadership class is actually willing to do something about it…
The self-inflicted destruction of Greece has been accomplished, but they’re still going to be picking up the pieces for years, if not decades. And there’s no guarantee the heavy manners Germany and the troika are imposing will actually be enough to rescue it.
So, enjoy a random collection of Greek headlines, since I don’t quite have time to pen a piece on The Greater Meaning Of It All:
Stratfor says that the Greek referendum backed Germany into a corner, and forced them to come down twice as hard. “The leading power of Europe will not underwrite defaulting debtors. It will demand political submission for what help is given. This is not a message that will be lost in Europe, whatever the anti-Greek feeling is now.”
Former Greek finance minister Yanis Varoufakis is not at all happy, saying the agreement makes Greece a “vassal of the Eurogroup.” Hey Yanis: You and the rest of the Greek ruling class are the one who baked the gypsy pie with your reckless spending to prop up your bloated welfare state. You’re just upset that Greeks, not Germans, are the ones having to eat it…
Many observers are wondering how the left-populist renegades of Greece’s Syriza party, which rose to power in January on the promise of delivering relief from austerity and renewed its mandate with a massive victory in the July 5 referendum, managed to negotiate a bailout deal on Monday that is substantially worse than what was available to Greece before Syriza took office.
That would be because they were idiots who lied to voters about what they could accomplish.
For those who missed today’s festivities in Brussels, here is the 30,000 foot summary: Europe has given Greece a “choice”: hand over sovereignty to Germany Europe or undergo a 5 year Grexit “time out”, which is a polite euphemism for get the hell out.
As noted earlier, here are the 12 conditions laid out as a result of the latest Eurogroup meeting, which are far more draconian than anything presented to Greece yet and which effectively require that Greece cede sovereignty to Europe, this time even without the implementation of a technocratic government.
Broadening the tax base
Sustainability of pension system
Adopt a code of civil procedure
Safeguarding of legal independence for Greece ELSTAT – the statistics office
Full implementation of automatic spending cuts
Meet bank recovery and resolution directive
Privatize electricity transmission grid
Take decisive action on non-performing loans
Ensure independence of privatization body TAIPED
De-Politicize the Greek administration
Return of the Troika to Athens (the paper calls them the institutions… for now)
Greece must also hand over €50 billion in assets to an escrow fund it can’t control.
Just think: If Tsipras hadn’t been such an ass, Greece could have reached a far-less onerous deal to continue the farce another year or so, and probably before their banks started running out of money.
It seems that Yanis Varoufakis’ ideas about game theory don’t work when one side holds all the cards and the other is dead broke. Who knew?
It looks like we have an actual, honest-to-God compromise, in that Greece, in exchange for not having their economy collapse and descend into anarchy and cannibalism, will pretend to implement real reforms, while the Troika, in exchange for those promises, and not being blamed for the impending global recession, will give Greece still more loans, write down some previous loans, and pretend this actually fixes the problem.
So expect to see another round of this dance in six months to a year.
A cursory look at the “new” Greek proposal to creditors suggests PM Alexis Tsipras may have sold out the referendum “no” vote in a final, desperate attempt to avert an economic catastrophe and the collapse of the country’s banks which will be cut off from ELA as of Monday morning in the event Brussels and Athens do not come to terms over the weekend.
And indeed, the austerity outlined in the latest proposal is more severe than the version voters rejected last Sunday. Among the proposals evidently agreed to: No retirement until age 67 or 40 years of paying into the system. Caveat: Pension reforms don’t actually kick in until October, so they’re still kicking the can down the road on that as well.