... but the beatings will continue until bond yields improve!
Let's try a thought experiment. Imagine you walked into the bank, told them you were going to be taking pay cuts for the next few years, and then asked for a loan. You'd be laughed out of the office or else pay an interest rate so high that "usurious" wouldn't do it justice. The logic is simple: If you're in debt and your income is shrinking, it's mighty hard to pay back what you already owe.
It's not any different when it comes to countries that can't print their own money. That brings us to Spain.
The following charts (courtesy of Reuters) show overall and youth unemployment across the euro zone. Spain tops both measures, with truly depression-level joblessness.
Nearly a quarter of Spain's population is unemployed. Half of its youth are out of work. And it's only going to get worse. Spain is supposed to trim its deficit by some 5.5 percent of GDP over the next two years. That's not a recipe for growth. Just ask the IMF, which downgraded its projections for Spain's economy back in January.
What matters for a nation is its GDP. That's a country's equivalent of personal income. If Spain's GDP is set to fall for the foreseeable future -- and it is -- then who would want to lend to Spain? The markets gave their answer -- practically nobody! -- and ECB was forced to fill the void by giving Eurobanks free money to then invest in sovereign debt. Yields came down. European policymakers declared "Mission Accomplished."
But now the free money is gone. It's unsurprising that Spanish borrowing costs are surging again.
Unsurprising to everybody who isn't a Eurocrat, that is. Consider this mind-boggling quote from the chairman of the euro zone finance ministers, Jean-Claude Juncker:
I invite financial markets to behave in a rational way. Spain is on track.
On track? For national bankruptcy, yes. But for recovery, absolutely not. Juncker's quote betrays a fundamental misreading of what is making markets anxious. He thinks markets shouldn't worry because Spain is going to follow through on its budget cuts. But markets are worried that Spain is going to follow through on its budget cuts. Austerity would almost certainly shrink the economy and make the country's unconscionable unemployment even worse.
If you're persuaded by my opening analogy, you can see why lenders are so concerned about growth. It's why they don't actually like austerity. But just today, the Bundesbank -- Germany's national central bank, and the real power behind the ECB -- came out and told countries not to worry about growth. Telling a country in a debt crisis like Spain not to worry about growth is like telling man in debt to not worry about finding a job. The most polite way to characterize this advice is "delusional."
To crib from Keynes, Europe's policymakers have blundered in the control of a delicate machine, the workings of which they do not understand. They're not evil. But they're almost certainly wrong. Rather than consider the possibility that the economy might work differently than they think, they have settled on a simple message: The beatings will continue. Unfortunately, morale will continue to not improve. Eventually, you have to think leaders in Europe's beat-up countries will begin to wonder if life might be better outside the euro zone. Hopefully, the ECB will come to its senses first.
19 Kids and Counting built its reputation on preaching family values, but the mass-media platforms that made the family famous might also be their undoing.
On Thursday, news broke that Josh Duggar, the oldest son of the Duggar family's 19 children, had, as a teenager, allegedly molested five underage girls. Four of them, allegedly, were his sisters.
The information came to light because, in 2006—two years before 17 Kids and Counting first aired on TLC, and thus two years before the Duggars became reality-TV celebrities—the family recorded an appearance on TheOprah Winfrey Show. Before the taping, an anonymous source sent an email to Harpo warning the production company Josh’s alleged molestation. Harpo forwarded the email to authorities, triggering a police investigation (the Oprah appearance never aired). The news was reported this week by In Touch Weekly—after the magazine filed a Freedom of Information Act request to see the police report on the case—and then confirmed by the Duggars in a statement posted on Facebook.
New research confirms what they say about nice guys.
Smile at the customer. Bake cookies for your colleagues. Sing your subordinates’ praises. Share credit. Listen. Empathize. Don’t drive the last dollar out of a deal. Leave the last doughnut for someone else.
Sneer at the customer. Keep your colleagues on edge. Claim credit. Speak first. Put your feet on the table. Withhold approval. Instill fear. Interrupt. Ask for more. And by all means, take that last doughnut. You deserve it.
Follow one of those paths, the success literature tells us, and you’ll go far. Follow the other, and you’ll die powerless and broke. The only question is, which is which?
Of all the issues that preoccupy the modern mind—Nature or nurture? Is there life in outer space? Why can’t America field a decent soccer team?—it’s hard to think of one that has attracted so much water-cooler philosophizing yet so little scientific inquiry. Does it pay to be nice? Or is there an advantage to being a jerk?
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
In an interview, the U.S. president ties his legacy to a pact with Tehran, argues ISIS is not winning, warns Saudi Arabia not to pursue a nuclear-weapons program, and anguishes about Israel.
On Tuesday afternoon, as President Obama was bringing an occasionally contentious but often illuminating hour-long conversation about the Middle East to an end, I brought up a persistent worry. “A majority of American Jews want to support the Iran deal,” I said, “but a lot of people are anxiety-ridden about this, as am I.” Like many Jews—and also, by the way, many non-Jews—I believe that it is prudent to keep nuclear weapons out of the hands of anti-Semitic regimes. Obama, who earlier in the discussion had explicitly labeled the supreme leader of Iran, Ayatollah Ali Khamenei, an anti-Semite, responded with an argument I had not heard him make before.
“Look, 20 years from now, I’m still going to be around, God willing. If Iran has a nuclear weapon, it’s my name on this,” he said, referring to the apparently almost-finished nuclear agreement between Iran and a group of world powers led by the United States. “I think it’s fair to say that in addition to our profound national-security interests, I have a personal interest in locking this down.”
Advocates say that a guaranteed basic income can lead to more creative, fulfilling work. The question is how to fund it.
Scott Santens has been thinking a lot about fish lately. Specifically, he’s been reflecting on the aphorism, “If you give a man a fish, he eats for a day. If you teach a man to fish, he eats for life.” What Santens wants to know is this: “If you build a robot to fish, do all men starve, or do all men eat?”
Santens is 37 years old, and he’s a leader in the basic income movement—a worldwide network of thousands of advocates (26,000 on Reddit alone) who believe that governments should provide every citizen with a monthly stipend big enough to cover life’s basic necessities. The idea of a basic income has been around for decades, and it once drew support from leaders as different as Martin Luther King Jr. and Richard Nixon. But rather than waiting for governments to act, Santens has started crowdfunding his own basic income of $1,000 per month. He’s nearly halfway to his his goal.
Singapore’s mind-bending logical riddles are so last month. Enter: Vietnam, the latest country to be swept up in what could easily be known as “the viral-math epidemic of 2015.”
This one might even trump its Singaporean predecessor, which became a global legend earlier this year. That quandary, for those who aren’t familiar with it, asked fifth-graders to figure out the birthday of a certain “Cheryl,” who gave two of her friends—“Albert” and “Bernard”—a list of 10 possible dates. She then privately told Albert the month, and Bernard the day. (“Albert: I don’t know when Cheryl’s birthday is, but I know that Bernard does not know too. Bernard: At first I don’t know when Cheryl’s birthday is, but I now know. Albert: Then I also know when Cheryl’s birthday is.”)
In any case, people have probably heard the phrase in reference to something gone awry at work or in life. In either setting, when the shit does hit the fan, people will tend to look to the most competent person in the room to take over.
And too bad for that person. A new paper by a team of researchers from Duke University, University of Georgia, and University of Colorado looks at not only how extremely competent people are treated by their co-workers and peers, but how those people feel when, at crucial moments, everyone turns to them. They find that responsible employees are not terribly pleased about this dynamic either.
The former secretary of state jettisons sweeping rhetoric, and focuses on specific policies.
Hillary Clinton has been an official candidate for president for five weeks, and she still hasn’t done the thing most candidates do on day one: given a speech laying out her vision for America. Nor is she planning on doing so anytime soon. Politicoreports that Hillary’s “why I’m running for president,” speech, initially scheduled for May, has now been delayed until June, or even later.
There’s a reason for that: The speech is unlikely to be very good. Soaring rhetoric and grand themes have never been Hillary’s strengths. That’s one reason so many liberals found her so much less inspirational than Barack Obama in 2008. And it’s a problem with deep roots. In his biography, A Woman in Charge, Carl Bernstein describes Hillary, then in law school, struggling to articulate her generation’s perspective in an address to the League of Women Voters. “If she was speaking about a clearly defined subject,” Bernstein writes, “her thoughts would be well organized, finely articulated, and delivered in almost perfect outline form. But before the League audience, she again and again lapsed into sweeping abstractions.”
This weekwe have photos of an 80-foot-high tire in Michigan, dozens of Siberian students smashed into a car, two volcanic eruptions, yet another nail house in China, synchronized swimmers in a pond at the Chelsea Flower Show, a view from the top of the 104-story One World Trade Center, cows on the beach along the Mediterranean, a solar halo above Mexico, and much more.