It's the Economy, Stupid.

                                                                     
Over the years the title of this blog has stalked me like a debt collector. While confining posts, by and large, to Big Stuff and not indulging in little, teensie, weenie, stuff I have had to make only glancing references to some Big events, earthquakes for example. And when making those glancing references I have just written that since the title is “Public Occurrences” and an earthquake is a Big public occurrence, I was thereby recording that on such a date a ‘quake hit Haiti or Chile or Japan.

The most important public occurrence in the ten year existence of this latter-day Public Occurrences (the original lasted one day) has been Islam. We have covered that subject. The second biggest though, certainly since 2008, or was it 2009—see I can’t do this—has been the economy, the American economy, the world economy, The Economy.

That has not been covered here.

I can remember only two posts, one suggesting that New York Times columnist—and Nobel economics laureate—Paul Krugman visit a whorehouse to improve his mood, the second lauding President Obama on an unemployment report.  The reason there have been only two posts is because I’m in over my head here, or perhaps more accurately, because I’m in over my head here and I know I’m in over my head.

I cannot balance my checkbook.

The reasons for this post, which I hold constitutes a third post on The Economy, are a report today from the International Monetary Fund, via Reuters, that the U.S. and Europe are “playing with fire” on their budget deficits, and a report earlier this week (I think) that China is in danger of “a hard fall.”

Now they’re talking my language.

I have played with fire, last night I splashed my hand with boiling water. I was taught by my parents, or I learned “the hard way” that “playing with fire” is bad, it hurts. And, being a boy, I have had hard falls, fell out of a tree once, tippy-top. Boom. And so, it will probably not win me a Nobel Prize but I feel that—at this level—I can write intelligently about The Economy.

I hold that Greece is really playing with fire. Really, really, really, really. Playing with fire. Their budget deficit is too big. Really too big.  Greece…do something about that.

On China, some guy, I forget who, but really impressive credentials, flew into Shanghai. Said the shiny new airport was half-empty. Took the mag-lev train around town. Said the train was ¾ empty. Looked out the window of the mag-lev train. Said the new super-duper highways were uncrowded. According to this guy (it really was an impressive article) all this meant China was in danger of a “hard fall” because it had overbuilt. Chinese weren’t using this stuff. The commanders of the command economy have gotten way out in front of the foot soldiers…Actually,  I’m not 1000% sure how that adds up to a “hard fall.” I guess I don’t really understand what a “hard fall” is, economically.  I do suggest that Chinese start using the mag-lev.

And I read that President Obama’s stimulus plan is over this month, that all the good that it did for the American economy, and it doesn’t seem like it did enough, well that’s as good as it gets.  And I saw the movie As Good As It Gets. Really liked it. After the end of this month, which is in only 13 days, President Obama has got to try something else.  And I suggest he do that.

I have been following a little the budget negotiations between the White House and the Republicans in Congress on lifting the debt ceiling. The Republicans don’t want to do that. That has really gotten economists like me worried because if the debt ceiling is not lifted then we will go into temporary default on our financial obligations and our credit rating will fall and that’s playing with fire. And so I hope the Republicans do that—or maybe the White House should agree to the Republican spending cuts—both. I urge that the country not go into default.

All of this goes back to the housing “bubble” of a few years ago. Somehow it all goes back to that and I’ve read that home prices are still inflated which means there’s still something of a bubble out there and we need to pop that bubble.

In conclusion, The Economy is in bad shape. It is very fragile, it doesn’t seem to be getting better in a permanent way and we don’t have many good options. The world economy today seems to me to be intertwined in a way that Europe was when President Wilson warned against “entangling alliances," when in the summer of 1914 one little man can reasonably be said to have caused the whole damn world war, and now one little country, Greece, or some other little thing like an Icelandic volcano or an American housing bubble, or Shanghai mag-levs, could cause another Great Depression.  I don’t know how that could be.  I thought an intertwined world economy was good, that a European economic union was good.