what happened

'it feels like i must have had some fun'

we all must have had some fun...what else could explain the unpleasant aftermath hanging over us [and yet in early stages]?  broad decay of society through an economic lens...

the employment situation is bad.  as always, 'good news is on the way', but for now it looks pretty bad to me.  long term unemployment in the us is higher than any point since 1948 when the bls started tracking - data here.  in spain the unemployment rate hit 20% according to the most recent government report.  back in the us, unemployment benefits have been extended to ~100 weeks in response to the crisis, but we can not afford it.  wages are steadily declining so government bravely steps in to ease the pain.  the result: large scale population dependency on central government that is economically reckless.

what could go wrong?  i am not predicting the next greece just yet, but close attention to the modern greek drama should be informative.

on to solvency...apparently the big us banks were solvent all along - per the official line.  i do not personally believe this, but assume it is true [i will come back to the banks].  the next question is whether the governments who backed the banks are solvent.  this seems to be open for discussion.

greece is clearly insolvent, pending unnatural and politically unpopular wealth transfers from foreign tax payers.  paul krugman traces the evolution of the present euro dilemma here.  my guess is that the bailouts will delay but not prevent debt restructuring.  bond markets seem to agree - the yield on greek two year bonds moved close to 20% this week.

here in the us things are not nearly as bad, not yet.  like greece the us is at the mercy of debt markets that can change quickly.  the weakness in europe makes us debt more attractive for the near term, but easy money was also an option for greece in the not-too-distant past.

back to the banks.  anyone may know my regard for the big banks: they work largely against the interest of society to benefit the economic and political elite [with a thin line separating these respective elite classes].  i was hostile toward goldman prop trading long before it became mainstream...

a mix of journalism, government investigation, and investor lawsuits has put the unethical and antisocial behavior of goldman on center stage.  other firms will follow.

however the government investigation is suspect, grandstanding and fist shaking for the camera aside.  they are late to act and in many cases complicit in unethical [and possibly illegal] activity.  our government feeds alongside wall street at the same circular trough full of money and political favors.  hopefully the doj will add henry paulson and geithner to their criminal investigation, for aig if nothing else.

so where does this leave us?  a society with weakening appreciation of productive effort, pro-social values, and personal accountability.  there is a collective desire to consume more than we produce, a strong sense of entitlement that it is our right to do so, and an expectation that someone else should be accountable for making it all happen.  the political class welcomes such dependency to fuel the expansion of increasingly parasitic government.  the economic elite conspire with the state to hoard massively disproportionate resources.

the question becomes: who is the sucker?  we all are because none of this is sustainable.  [the good times are killing me]