TMFTheDoctor (80.08)

The Dalek Daily News for Monday, July 19

July 20, 2010 – Comments (2)

Apparently border protection makes things worse (http://bit.ly/arcOGk)

I don't feel I understand the immigration issue well enough to enter the debate with anything more than an uninformed opinion. That said, this WaPo article has a great discussion on how twenty years of increased border protection has done little, if anything, to curb illegal immigration, and may have even made the problem worse.  A better idea, the article suggests, "would be far more rigorous enforcement of labor laws on wages, hours and overtime, and of worker safety laws." Somehow I doubt this idea will have as much support as, say, arresting and deporting anyone who looks Mexican.

Economist's View has the blow-by-blow in the Krugman/Galbraith Keynesian catfight (http://bit.ly/cYiZgx)

Jamie Galbraith recently gave a testimony to the Commission on Deficit Reduction, basically trying to explain to them how our monetary system works and how it is technically impossble for us to go bankrupt unless we actually decide to. His argument hinges on the fact that US banks are legally required to accept checks from the US government, and so long as the government is capable of enforcing laws, bankruptcy is not a problem we should be worrying about. Anyone who thinks the US has the same problem as Greece fundamentally does not understand how our monetary system works. Nonetheless, fellow Keynesian Paul Krugman issued a counter-argument saying that Galbraith is technically correct but in the real world, in extreme circumstances, borrowing could cause a default or even infinite inflation. There's some back and forth between the two and it ends up sounding a lot like some of the arguments I have with friends over whether Captain Picard is the best Star Trek captain because he is cool, or because he is awesome. Galbraith closes the argument by suggesting Krugman just retract the whole thing because in a couple months the austerians will use it against him, a fact which I'm surprised Krugman hadn't already thought of.

Pragmatic Capitalist has some more discussion on the near-impossibility of a US default (http://bit.ly/bTJ0Un) 

Here the discussion revolves around the historical precedent for very high debt-to-GDP ratios. The US, the UK, and Japan have traditionally had pretty high debt-to-GDP ratios, and contrary to popular worry, it hasn't caused any real problem. Again the US/Greece contrast is put forward, explaining how countries like the US, the UK, and Japan fundamentally have the ability to take on more debt than countries like Greece. I often wonder how the public debt debate would be different if more people understood that public debt does not function the way household debt does.

The Reformed Broker has a perfect description of the current state of the economy (http://bit.ly/desZXt)

Josh Brown has some charts and anecdotes about the man on the street's view of the recovery. For those of us who know or are people living in the real world, the economy still sucks bad, whatever the S&P may have done since March 2009. The last two sentences of his post basically perfectly sum up what's going on in the economy right now.

Milk Trader channels Bruce Lee with some great advice on the markets (http://bit.ly/9WLa3C)

His quote reminds me a lot of that famous Bruce Lee quote about how you must be like water: http://bit.ly/bynlvt