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December 09, 2011

Completely Wrong Today, Completely Wrong Tomorrow, Completely Wrong Forever!

As always, Robert Samuelson is standing on the Washington Post's steps, preventing reality from getting inside:

Europe’s turmoil is more than a currency crisis and was inevitable, in some form, even if the euro had never been created. It’s ultimately a crisis of the welfare state, which has grown too large to be easily supported economically.

I'm not sure when the Washington Post first began reporting that the welfare state can't be supported economically. I believe it was shortly after Bismark took power in 1871.

For more of Robert Samuelson's uncannily acute understanding of economics, see this column of his from July, 2008:

[O]n the whole, the banking system seems fairly strong ... The paradoxical thing about today's economy is its strength.

BUT THERE'S MORE: Samuelson's 2008 column was endorsed at the time by Greg Mankiw, chairman of the Council of Economic Advisers during Bush's first term and definitely in the top 20 people responsible for our current catastrophe. I will always remember interviewing Mankiw in 2005, and how he got extremely upset when I suggested we might be experiencing a housing bubble.

—Jonathan Schwarz

Posted at December 9, 2011 10:58 AM

Did you interview Greg or Robert? Confused in the Midwest...:/

Posted by: Frank at December 9, 2011 12:08 PM

Samuelson is doubly right.

1. The only countries that have survived the crisis almost unscathed are the Scandies. And we know how much they hate the welfare state up there. Greece, Portugal, and Spain on the other hand have among the lowest welfare protection in Europe and, sure enough, see how they've thrived!

2. Re. banks, Samuelson has discovered a new truth, which is how resilient a bankrupt institution can be when you keep propping it up with taxpayer's money and fiat liquidity.

Posted by: bobs at December 9, 2011 12:24 PM

Frank, thanks -- clarified that. It was Mankiw.

Posted by: Jonathan Schwarz at December 9, 2011 12:39 PM

the banking system is fairly strong??- yeah, howbout strong like godzilla and can stomp on the white house until a trillion bucks gushes out into its maw- samuelson's statement is ironically the opposite of Taibbi's critique of how strong the banking system has become

Posted by: frankenduf at December 9, 2011 01:28 PM


Posted by: Mike Meyer at December 9, 2011 04:13 PM

The welfare state of Amurka has supported the military welfare as a matter of stasis for a long time.

Posted by: Dredd at December 9, 2011 05:59 PM

you can't go around telling the truth too much. it often makes people really mad.

Posted by: N E at December 9, 2011 07:29 PM

On the whole the banking system IS fairly strong (although not in the way that Samuelson implies). It's not just being effectively (thusfar) and profitably propped up by taxpayer money and fiat liquidity as bobs says earlier, but has also managed to lobby and bully and finagle it's way from any substantial prosecution, any effective regulation or oversight, any repercussions whatsoever. Since Samuelson wrote that column MF Global went from a conservative investment firm to an emulator of the worst actors in the crisis, has gone tits up stealing hundreds of millions of customers cash along the way and there's STILL no hue and cry in the establishment to reign in these guys. Banksters are being installed into heads of state in Europe as we speak. The banking system is not "fairly" strong, it's probably the strongest institution on the planet. Since Lehman's collapse and the bailout they've merely been doubling down on their bets with the full knowledge and confidence that they own the house.

Posted by: biernini at December 9, 2011 09:40 PM

biernini: AGREED.

Posted by: Mike Meyer at December 10, 2011 01:18 PM