With WRM traveling in India, Via Meadia’s guest bloggers were contributing essays. Adam Garfinkle wrote about the meaning of the Arab Spring late last week. Roger Berkowitz looked at the latest report from bond maven Bill Gross, who suggests that the expected return on stocks of 6.6%—an accepted benchmark among financial planners—is merely a historical accident, and that therefore the coming pensions crunch may be much worse than anyone thinks. Berkowitz cautions us to take Gross very seriously, while remaining skeptical of his prophecies. Berkowitz also looked at the state of the humanities in higher education, and concluded that for this crucial course of study to continue, professors are going to have to specialize less and work on being better generalists, writing for broader audiences. And John Ellis broke down the grim choices facing the New York Times Company, and speculated as to what the Grey Lady might look like after the twin challenges of the Internet and the financial crisis were through with it.Blue shenanigans in California were at the forefront of our attention this week. The cash-strapped state, instead of either reforming its prisons or reforming its incarceration laws, has passed the buck down to the local level, sending low-level offenders to county jails which are ill-equipped to house them. The state is also planning on lifting the statue of limitations on survivor death benefits for police and firefighters, which amounts to giving the public-sector unions a free life insurance policy. There are plans afoot to create a backup state-run pension fund to supplement Social Security for private sector workers—a dubious approach when the state can’t even make good on its current obligations and debts. And finally, a scheme to drop the jaw of even the most jaded California-watcher: the Poway Unified School District borrowed $105 million using a “capital appreciation bond”, which allows the district to make no payments on the loan for 20 years. The total interest on the $105 million of principal? $877 million. War against the young, indeed.Another perennial VM story in the news this week has been the slow-motion car crash that is Europe. As Greece looked to be increasingly locked in an fatal tailspin, Hollande’s socialist policies began to bite in France, Mario Draghi’s bluff was spectacularly failing, the ECB’s bailout funds looked to be drying up, and signs of contagion began showing up in Germany, people have been seriously considering what kind of eurozone breakups are really on the table. Bad news for us all.Finally, some posts related to the sub-continent:
- The redoubtable economist and former IMF chief Raghuram Rajan was appointed chief economic advisor in India. This is great news for the rising power.
- India abstained on a vote for a General Assembly resolution calling for Assad to step down. This is progress of sorts. The urge to always vote for strict state sovereignty is a historical tendency among many Indian intellectuals and policymakers.
- A story which rarely appears on Western news radars: the desperate plight of India’s migrant workers. As India’s clout slowly increases, the treatment of Indians living abroad will become a more salient international issue.
- Are Pakistan and the U.S. about to start cooperating on counter-terrorism? VM hopes so, but we’re not holding our breath.