Monday, 22 August 2011

10:11 – The Euro continues to stagger toward its inevitable collapse. Finland, Austria, Slovakia, Slovenia, and Holland have now essentially pulled out of the second Greek bailout, calling into question whether Greece will ever see those funds. Other EU nations, which are still on the hook for their share of the bailout, are rightly questioning why their taxpayers should be subsidizing Greece while those of other EU nations are not. Ultimately, it may be up to Germany to carry the full load, and it’s by no means certain that German taxpayers will agree to do so.

There are increasingly shrill demands for Eurobonds, a proposed solution that will not and cannot work, as the Germans have made abundantly clear. Even if the Germans could somehow magically be convinced to go along with Eurobonds, those bonds would be self-defeating. In essence, Germany would be agreeing to take on the cumulative debt of the spendthrift EU nations, adding that debt to their own balance sheet. If that happened, Germany would lose its own AAA rating overnight, making the cost of its own borrowing skyrocket and causing bondholders to dump German debt and flee to perceived safer havens like the UK and the US bond markets. In effect, by agreeing to Eurobonds, Germany would be cutting its own throat.

There are only two possible solutions to the Euro crisis. First, Germany and the other fiscally responsible nations in the northern tier could withdraw from the Euro, leaving the Euro to collapse, along with the poor southern nations that would still be using it. Second, the EU could adopt complete fiscal integration, with all member nations completing giving up their sovereignty to the EU federal government. That’s not going to happen, and even if it did it would take so long to implement that the Euro would be just a distant memory by the time it was implemented.

We have such a transfer union here in the United States on at least two levels, with richer states subsidizing poorer states, and richer areas of a particular state subsidizing poorer areas of that state. We tolerate that because it’s been that way for so long that few people even think about it. But if the United States were a collection of truly independent states, much as the EU is now, the chances of those 50 states agreeing to form a federal union, with the fiscal integration and ongoing transfers from rich to poor that that implies, would be nearly zero. For that matter, there’d be nearly zero chance that the taxpayers of North Carolina would agree to implement the present system, where those of us in the rich urban areas pay a grossly excessive portion of state taxes, which are then transferred to poor rural areas. That’s the choice that EU taxpayers are faced with, and they’re simply not going to agree to it.

There is actually a third solution, but depending on it would prove truly catastrophic. The ECB can simply print more Euros, and use them to buy back worthless Greek, Irish, Portuguese, Spanish, and Italian debt with inflated (devalued) Euros. The ECB actually started doing this a couple of weeks ago, with the stated intention of propping up Spanish and Italian debt. The more responsible ECB authorities, fully aware of the implications of such an action, argued strenuously against doing it, but they were overruled. However, there’s a big difference between using inflated Euros to buy $30 billion of bonds a week for two or three weeks and spending $50 billion a week in inflated Euros for months or years on end. Even those ECB authorities who supported these bond buys on a short-term basis are very unlikely to agree to continue doing so indefinitely. Even they must realize that doing that must inevitable destroy the Euro, and in a period measured in months rather than years.

11:17 – Several days ago, I mentioned a very encouraging paper on broad-spectrum antivirals, which may eventually lead to a real breakthrough in viral therapies. Derek Lowe, a pharmaceutical chemist, has an interesting take on this paper. If you have any interest in antivirals, Derek’s column is well worth reading (as is the original paper).

21 Comments and discussion on "Monday, 22 August 2011"

  1. Chad says:

    Off topic…

    A WordPress plugin you might find helpful:
    WP Ajax Edit Comments

  2. Robert Bruce Thompson says:

    I just installed an activated a plug-in last night that’s supposed to allow easy quoting, putting a little quote icon next to each existing comment. As far as I can see, it’s done nothing whatsoever.

  3. Chad says:

    I just installed an activated a plug-in last night that’s supposed to allow easy quoting, putting a little quote icon next to each existing comment. As far as I can see, it’s done nothing whatsoever.

    It’s there (I used it for this comment) but the icon isn’t showing up. I did a Ctrl-A in my browser to Select All and I saw a blank block of text below each comment that when you hover over it with your mouse show’s it’s a link. If you click it then it copies and quotes that comment in the reply box. So, it’s 90% working, but the image graphic just isn’t showing up.

  4. Chad says:

    After further examination of the HTML source, it looks like the JavaScript (JS) file needed by your quote plugin is there, but the updated stylesheet is not. The HTML refers to a CSS class named comment_quote_link and that CSS class isn’t showing up in the stylesheet for this site. Perhaps the updated stylesheet didn’t get pushed to the server or properly activate or perhaps there’s an additional supplemental stylesheet for that plugin that wasn’t uploaded and/or references in the site’s header.

  5. Roy Harvey says:

    I use an plug-in for Firefox called BBCodeXtra that helps me with some of the formatting. The problem I have is that every site where I use it supports a different subset of what it has. And without preview there is always some suspense about what will actually show up.

  6. Miles_Teg says:

    I’ve never read any of Pournelle’s SF, so can I get a recommendation on one of his books to gat started on?

  7. BGrigg says:

    Have you read any of his collaborations with Niven? Or are you just wanting straight Pournelle?

  8. Miles_Teg says:

    Either/or. Perhaps one of each?

  9. Chuck Waggoner says:

    Off topic. If you are a chocolate connoisseur, my Aldi is now carrying chocolate powder mix from Germany called Choceur Chocolate Milk Mix.

    This is exactly the same stuff we got in the German Aldi’s, sold under the name Schokofit. Both have a cartoon monkey prominently on the label–just like Nestle Quick has a cartoon bunny,–and the packaging, except for the language, is exactly the same as the German, including the foil sealer (you can tell because it is 28.2 oz, but an even 800 grams). Schokofit has less sugar and a darker, richer taste than American chocolate powders like Nestle Quick. It also does not dissolve nearly as quickly as US powders, except in hot drinks.

    It is very good to turn coffee into a mocha drink. Quick does not work at all for that taste-wise (IMO), but Schokofit and a little added milk will make it taste as good as something concocted at Starbucks.

    I hope enough people buy the stuff to keep it coming. Aldi is slowly bringing more of their German products over here, and many of them seem to be permanent. Their egg noodles called Spätzle (ShPAY-tzul) is now permanent (so the Aldi folks tell me). Tastes like the noodles my grandmother used to make from scratch, and very quick to cook. Now if they would only start importing the German super-thin sliced meats and the better German breads.

  10. Miles_Teg says:

    I went to an Aldi on the weekend (first time in years) to buy a fancy alarm clock (it had other functions too: night light, soft “natural” sounds/music instead of a beeping alarm and so on.) It was advertised in a brochure that was delivered to my home but they didn’t have it. Next Thursday, I was told. Grrrrr.

    I’m not impressed by the layout of Aldi, it all looks really haphazard and the shoppers there look like yobbos.

  11. BGrigg says:

    …and the shoppers there look like yobbos.

    Was there lots of mirrors? 🙂

  12. Miles_Teg says:

    Are you suggesting I’m a yobbo? In fact I’m universally regarded as the definition of a handsome, svelte, manly Australian. I tend to stay at home as much as I can because I get sick of women wanting to have their wicked way with me.

  13. Robert Bruce Thompson says:

    Are you suggesting I’m a yobbo? In fact I’m universally regarded as the definition of a handsome, svelte, manly Australian. I tend to stay at home as much as I can because I get sick of women wanting to have their wicked way with me.

    So you’re a gay yobbo?

  14. Miles_Teg says:

    Neither. I just get sick of women objectifying me.

  15. BGrigg says:

    No. I was just asking if there were lots of mirrors. I like mirrors.

    And I never tire of women objectifying me. Turn about is fair play.

  16. Ray Thompson says:

    In fact I’m universally regarded as the definition of a handsome, svelte, manly Australian.

    The first vision that came into my mind was that of the Geico Caveman, you know, so easy a caveman can do it. And my understanding is that the fellows in that role have no difficulty getting dates with women.

  17. Chad says:

    When I was in Junior High I was a big fan, like any real 13 year old geek at the time, of the Dragonlance series of fantasy novels. I read an article on how Margaret Weis and Tracy Hickman collaborated and it essentially boiled down to: they both came to a consensus on the story and plot development, Weis wrote much the dialogue, Hickman wrote much of the battle scenes and descriptions of monsters, and then they worked together to tie it all together.

    I wonder how Pournelle and Niven split up the work.

  18. Dave B. says:

    Greg, if you have a ebook reader, West of Honor by Jerry Pournelle is available from the Baen Free Library as is Fallen Angels by Larry Niven, Jerry Pournelle and Michael Flynn.

  19. Steve says:

    You’re right about rich states subsidizing poor states. It’s extremely lopsided, and people don’t realize it.

    Here’s hard data for 1980-2005.
    As the two extremes, New Jersey receives 0.61 in income for each 1.00 paid as federal taxes, and New Mexico receives 2.00 for each 1.00 paid.
    There’s some reasonable explainations for some exceptions (I bet New Mexico gets a lot of federal spending for Los Alamos), but Mississipi, the poorest state of the US, also gets 2.00 for each 1.00.

  20. Steve says:

    Oops, forgot to post the link to the hard data I quoted!

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