What Can’t Continue, Won’t

Greece will leave the Euro. There is no choice really. But there is a level of schizophrenia in the Greek voter—apparently 80% want to stay in the Eurozone. Based on the last election most voters are against austerity. The two positions are not reconcilable without large loans from Germany. They will not lend. It is like the little girl who tells her father, “Give me the pretty moon Daddy.” Hysterical crying will follow. This seems to be the official Greek position. 

I do not usually agree with Martin Wolfe, a writer for the Financial Times. His latest article is no exception. But I think he is quite accurate in his portrayal of the consequences of the breakup. 

Start with Greece. It is in a doom loop. Unemployment soared from 7 per cent of the labour force in May 2008 to 22 per cent in January 2012, while the unemployment rate of people aged under 25 jumped from 21 per cent to 51 per cent. Worse, despite fiscal austerity and debt restructuring, the International Monetary Fund estimates that gross public debt will be 160 per cent of gross domestic product in 2013, 50 percentage points higher than in 2008. Moreover, the IMF forecasts that the current account deficit – the balance of trade on goods and services – will be more than 7 per cent of GDP this year.

I think this is accurate and inevitable. The rest of the article is a description of the various consequences of the crisis. In my view he is quite accurate. Have a look. (Note that sometimes links to Wall Street Journal or in this case Financial Times is behind a pay or registration wall. You can avoid this wall by Google. In this case Google “Martin Wolfe” and “permanent” and that will get you there. Do not feel guilty, the papers have designed their websites to allow this.) 

His conclusion is the main thing I disagree with. What can’t continue won’t continue. In this case the Germans cannot continue to loan Greece money. 

Greek exit then would create a choice between big moves to a stronger union and a future of endless crises. It is a choice the dominant creditor nation, Germany, must make – among big steps to integration that horrify many of its people, a future of horrible crises or a horrible break up right now. No good choices exist. But the eurozone must become a stronger union or it will disappear.

It cannot become a stronger union. Will Germans vote to increase their taxes to pay Greek pensions? Really, Mr. Wolfe? Really? 

Nigel Farage in the EU parliament said this recently.

He is mostly right. He is underplaying the troubles that are ahead for Greece-but what can’t continue won’t. Throwing good money after bad will make things worse. Yes most banks in Europe will go under, but they are bankrupt already. The sooner we understand that the present cannot continue, and act, the better off we all will be. Yes, Wolfe is right, even if he exaggerates some—the crisis is severe. The worst thing that can be done is continue on toward the cliff. 

Donna Summer and Robin Gibb

I was always an early adopter of gadgets. One gadget I adopted early was a VHS recorder. The death of Donna Summer and Robin Gibb caused me to think of this. I recorded the following Bee Gee concert and watched it many times over the years. I do not understand why it I can not buy the video today. I would, in a minute. 

I also recorded Donna Summer's 1979 special, both on the same tape to save money! It too is unavailable-but here is one of the songs from Donna Summer around that time. Her oddly apropriate Last Dance:

This is one of Robin Gibbs last performances. It is a cover of Staying Alive by Russian Pop Star Valeria (Валерия). He sang back up. I hope they paid him enough for this.

It is actually a good cover, I like Valeria.

Modern Skooling

I remember my favorite teacher in high school. He was my 12^th grade civics teacher. He began my life-long interest in economics when he had us read Robert Heilbroner's book, The Worldly Philosophers. 

I include the reference to the modern Amazon version. I must have read some of his earlier works. Looking back on that class, I never realized that the teacher was probably a socialist, as Heilbroner was. This is true education, the teacher letting the student think—not spoon feeding data and opinions. 

I think that such teachers have always been rare, but they are more rare now in our public school system. 

Rowan-Salisbury Schools officials suspended a North Rowan High School teacher Monday while investigating an incident caught on camera where the teacher told a student he could be arrested for speaking ill of President Barack Obama. In a nearly 10-minute YouTube video shot by a student in the classroom, Tanya Dixon-Neely, a social studies teacher, told students criticism of the president could lead to jail time.

“Do you realize that people were arrested for saying things bad about Bush?” she said of former President Bush. “Do you realize you are not supposed to slander the president?”

While I suppose that anyone can lose their temper, it seems obvious to me that the reason the student was ready with the recording device was that the student knew what was going to be said. 

This is very appalling. It is not the way I remember high school. Maybe I was lucky. Or maybe the quality of teachers has gone down. Or both. 

It is not fair to make sweeping generalizations based on one bad apple-but does one bad apple spoil the whole bunch girl? Maybe not. 

David Berninski, Mathematician and Skeptic About Materialism

My Dream Car

I really want to buy a Peugeot Diesel Hybrid. It gets very good mileage as a diesel. In addition it has an electric power system. It gets 60 miles per gallon when it is running on diesel. Unfortunately it is too expensive for Peugeot to meet American regulatory requirements. In fact one of these requirements is impossible to meet. The US government defines pollution as the amount of pollutants released per gallon of gas burned, not per mile traveled. So the fact that the Peugeot gets 60 miles per gallon excluding any electric part of the mileage is not factored in. 

Eric Peters has suggested this approach:

A better (because more cost-effective) solution would be to mass-market relatively simple, much-lighter-than-current-average vehicles equipped with updated versions of something like Honda’s old CVCC engine of the mid-1970s fed by a throttle body injector (TBI) teamed up with a modern six speed overdrive transmission or CVT. Such a vehicle, weighing about 1,800 lbs., let’s say, would not need more than about 100 hp (probably less)  to be powerful enough for most A to B driving, would be capable of 60-plus MPG, and – critically – would burn probably 40 percent less fuel than the typical current 270 hp V-6 (and 3,400-plus pound) sedan or crossover – which mostly never sees the high side of 80 MPH anyhow and thus is as pointless as giving a eunuch Viagra.

If such vehicles became mass-market vehicles, the result would be a massive reduction in emissions output (and fuel wastage) without the need to pursue ever-more-elaborate, ever-more-expensive technological solutions in the quest for diminishing returns, tailpipe emissions-wise. Such a machine would not need gas direct injection, or variable cam/valve timing, or multiple sequential turbochargers – just a sampling of the technology the car industry is currently deploying in order to “save fuel” and “lower exhaust emissions” in cars that are morbidly obese and thus require bigger, more consumptive engines that burn more fuel – and produce more total emissions. 

One reason we do not have better mileage cars is that the government will not let us have them. 

Another reason we cannot buy good mileage and emission cars, in this case per passenger, is that the old reliable station wagon is subject to a 25% tariff, but the minivan is not. The result is few traditional station wagons. I would have been a buyer for a station wagon over the last few years as I often have a lot of people in my car, having 6 children and 6 grandchildren. There are a few rare station wagons still made. They are placed on truck chassis and so are technically trucks in order to get by the tariff. 

We have a general lack of common sense in our government. This is similar to religious legalists who forget the purpose of the religious rites they idolize. As Eric Hoffer, longshoreman and philosopher once said: The definition of fanatic is a person who has lost sight of their goal but redoubled their efforts.