Another bailout is going crump. The cash for clunkers is starting to look like a failure. It merely sucked fall sales forward and the slump is back on.
All of these bailouts are a waste of time since they are aimed at the same thing: a revival of the debt-fueled economy. The only program with potential is debt retirement for the middle class.
The immediate remedy involves: simpler and easier bankruptcy, low cost government sponsored loans that allow a wind down of debt with excessive rates (credit cards, mortgages, etc.), and principle reductions on underwater mortgages.
The longer term fix is returning to the old social contract that rewards increases in worker productivity to increases in incomes.
NONE of this will happen: ergo the secular decline of America will inexorably continue.
This example makes the case that a stable of great bloggers can drive print sales. The Atlantic, for example, would benefit mightily from being the location of where the best journalism/writing on 21st century warfare is being done. I'm not seeing that with Kaplan and Fallows is in China.
Tom Barnett contends that they improve. I contend that they fall: to the minimum necessary for interconnection. Here's an interesting quote from the currency chief at HSBC that backs the later:
The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards, it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case. Look at the UK – debt is racing up to 100pc of GDP.
Strategic defaults (i.e. an N-1 strategy). People are learning to do what businesses do (they learned it the hard way: businesses they have relationships with routinely default on or avoid upholding their contracts, from insurance coverage to pensions) when their investments crump: they default. In this case, it's people learning to walk away from a big mortgage on an underwater property. Who's doing it? The people with an ability to pay and great credit scores. The reason: they understand that the short term pain of a lower credit rating is nothing compared to a crushing debt load on an asset that may not recover to a level sufficient to cover the debt until 2032 (according to recent estimates).
Moralistic behavior, in this environment, is for chumps. Legalistic behavior is becoming the new standard.
I'd wager that the care you got 10 years ago isn't much different than the care you get today. Yet:
The Kaiser Family Foundation said the average premium for a company-provided family health insurance plan rose from $5,791 in 1999 to $13,375, a 131 percent jump. Separately, the Business Roundtable, an organization that represents large U.S. corporations, said per-employee costs will jump to $28,530 in 2019 from $10,743 currently if nothing is done.
New study says that 7% of human genome is "new." 100x the rate of previous periods. Most of the evolution appears to have been focused on living in either close quarters (disease) or due to a move to agrarian societies (diet).
Was the Chimerica construct, the pattern of trade/finance in place since 2001, really just a scam?
In the scheme everyone benefited (the finance sector, China, Multinational corps, the US gov't) except the American citizen. The benefits of any perceived economic growth didn't flow down -- and as a result didn't become real.
A scam like this is unsustainable. It has to be unwound. However, since none of the parties involved want to rebalance to a sustainable solution, it's inevitable that it will end badly. This puts the recent pronouncements from the church of "free trade" on the recent trade spat between the US and China in perspective.
Free trade is an ephemeral concept that is so elusive that a sighting of it is akin to witnessing a Catholic miracle.