First wrong: Euroland leaders have indeed bet it all on saving the currency regime.
A trillion dollars will go a long way towards addressing the immediate problem: the end of credit facilities for the so-called PIIGS. It does not deal with the underlying problem: the PIIGS will have to accept a decade or more of brutal, deflationary downturn in order to remain solvent. A better solution, namely throwing some or all of them out of the euro regime and allowing the PIIGS to grow their way out via currency devaluation, is not in the cards, but it may very well be revisited in a year or two.
Fundamentally, the insolvency remains on the books and, as in the US, the hope of central bankers is that a return to economic growth will allow extend and pretend to work. Whether this is a forlorn hope remains to be seen, but the evidence so far is not encouraging.
Gorilla says: “We can now conclude that the world’s political leaders have about as much control over the world’s financial system as they do over the world’s terrorist system.”
Second wrong: Elena Kagan will be the next Supreme Court justice.
Another triumph of political pragmatism and mediocrity. Kagan’s record as Solicitor General is very uninspiring, but it’s good to have another woman on board what is a very far-right court.
Gorilla says: “We still must root for a contagion that will put Scalia, Thomas, Roberts and Alito into retirement at the earliest possible opportunity!”
Tags: Euroland, Gorilla Meek, Supreme Court