Tuesday, June 3, 2008

A heapin helpin of shorters

Megan is indeed back. The stupid flows free and easy, and yet in a more manageable form than Conor Freihofer could ever manage. It's the difference between a hyperactive five year old kid who screams in your face and throws crap at you and his older sister who just sits in the corner having incredibly disturbing conversations with her stuffed animals. Anyhow, let's get to it. There's so much to cover this will probably end up a two-parter.

Surprise! The states are out of money again.:

This story is not exactly an evergreen--more of a counter-cyclic perennial that blooms every time the economy slows down. At each turn, the news that tax revenues fall during recessions is greeted first with surprise, and then with indignation. This is perhaps why no one has expected the states to anticipate this bewildering state of affairs by building up their reserves to levels adequate to weather the really rather moderate financial storms that beset them during lean times.
You fools. You poor, stupid fools. You have to listen Megan. YOU'VE GOTTA CLOSE THE BEACHES!
Too, these articles rarely see fit to mention the other ways in which these wounds have been self-inflicted--the habit of making ever more lavish pension promises to the public sector unions, for example. Public pension funds are now officially a disaster. Politicians promised benefits without funding them. The befuddled fund managers seem to have mistaken beta for alpha, pouring their assets into riskier asset classes because they couldn't make up the deficit on a safe, modest appreciation every year. If these were private companies, most of those managers and their bosses would be under indictment. The problem is about to get worse, of course, because when do pension funds need the most topping up? During downturns, when asset values decline.
So wait, investing pension funds in the stock market is a bad idea? That's unpossible. It must be having pensions in the first place that's bad. Remember, folks, being a conservative means that, when you break something, you can just say "see? I told you it was cheap crap." Fixing it would just encourage them.

70's redux?:
The longer you remain in denial, the harder it becomes to face reality.
Does this mean Megan is going to quit? Oh, right, I forgot. She's a special person, and not subject to the weaknesses she sees in the rest of humanity.

The cultural sustainability of the welfare state: When reality proves you wrong, question it. Megan quotes another blogger as saying
when we see that European social democracies are some of the most substantively and formally free nations on the face of the earth, we must grapple with the fact that either Road was wrong, or it was right about a system that has little relevance today. That’s not to say that Road wasn’t an important contribution in 1944, when many British socialists were promoting an incredibly technocratic, “enlightened totalitarian” model, but it’s hard to discern its relevance today when the most “socialist” states (Scandinavian social democracies) have the freest economies.
and responds
I wonder if this will continue to be true. It occurs to me that Scandinavia, with its homogeneous population, may have been spending down the accumulated social capital of its pre-welfare state society. Before the widespread welfare state, people who attempted to free ride by collecting benefit when they could be working faced both internal guilt and considerable external social pressure; the neighbors essentially functioned as the fraud police.
Remember, welfare fraud is a MASSIVE PROBLEM that undermines the legitimacy of the entire system, and is so endemic Reagan had to make up fucking stories to make his case against it. Only Megan would lie awake at night worrying that some blond guy getting food he didn't really earn will bankrupt his country.
But as the generations who grew up before the kribbe-to-grav safety net die off, and are replaced by a newer generation perfectly comfortable with broad public charity, this is clearly breaking down. Sweden's rates of long term disability, sick leave, and so forth, are very high. The Scandinavians I know generally report that the once-famous work ethic is not really all that impressive any more, and there's little stigma attached to malingering on long-term sick leave.
There's no selection bias in the group "Scandinavians personally known by Megan McArdle", meaning her sample is statistically valid, even if it's not numerically quantified. They aren't, perhaps, Scandinavians who work in the US by choice and are politically opposed to the nature of their homeland. They're flaming socialists who have TONS in common with Megan and just happen to completely agree with her on this. FFS, do you realize people in Scandinavia might take an extra day or two of sick leave? Can you sleep at night knowing this? The only solution is to dismantle their school system, obviously.

Union-paid actuary takes New York for $500 million: Now, of course this story is a very bad thing, that shouldn't have happened. That said, get comfortable with this tale, folks, because Megan is going to mention it every other day for the rest of her life. An actuary for a government bureaucracy fucked up, so you know what that means; state-run anything, anywhere is baaaaaaaaaaaad. Whenever it's easier for Megan to pretend she's smarter than an entire government than do her homework and prove it, she'll bring up this story. As she dies, Megan will tell the bored caregiver waiting to process her corpse about this story. In the throes of passion she'll scream the name "Jonathan Schwartz!". When she hits spinster age and buys a small poodle, it'll be named "Jonathan Schwartz". And so on.

Back with part 2 in a few.

1 comment:

Anonymous said...

Shorter Megan is better Megan ... if only she'd take it to its logical conclusion.

Planned economies are bad? Gee, I bet the Japanese would've loved to know that back in the 70s & 80s - when their planned economy was kicking everyone else's ass.