Krugman’s piece yesterday was widely quoted and most people chose to focus on this section of it-

Before the bank bust, Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation’s creditworthiness was put in doubt. So Ireland tried to reassure the markets with a harsh program of spending cuts.

Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts.

Which is kind of appalling from a morality standpoint, but it’s also not working on a practical level.

Thanks to Atrios I was able to give you the rest of the story yesterday, but I think it’s instructive to reflect on Krugman’s reporting of the actual factual results-

Strange to say, … confidence is not improving. On the contrary: investors have noticed that all those austerity measures are depressing the Irish economy – and are fleeing Irish debt because of that economic weakness.

…

Last weekend Ireland and its neighbors put together what has been widely described as a “bailout.” But what really happened was that the Irish government promised to impose even more pain, in return for a credit line – a credit line that would presumably give Ireland more time to, um, restore confidence. Markets, understandably, were not impressed: interest rates on Irish bonds have risen even further.

…

(A)t this point Iceland seems, if anything, to be doing better than its near-namesake. Its economic slump was no deeper than Ireland’s, its job losses were less severe and it seems better positioned for recovery. In fact, investors now appear to consider Iceland’s debt safer than Ireland’s. How is that possible?

Part of the answer is that Iceland let foreign lenders to its runaway banks pay the price of their poor judgment, rather than putting its own taxpayers on the line to guarantee bad private debts. As the International Monetary Fund notes – approvingly! – “private sector bankruptcies have led to a marked decline in external debt.” Meanwhile, Iceland helped avoid a financial panic in part by imposing temporary capital controls – that is, by limiting the ability of residents to pull funds out of the country.

And Iceland has also benefited from the fact that, unlike Ireland, it still has its own currency; devaluation of the krona, which has made Iceland’s exports more competitive, has been an important factor in limiting the depth of Iceland’s slump.

…

Ireland is now in its third year of austerity, and confidence just keeps draining away. And you have to wonder what it will take for serious people to realize that punishing the populace for the bankers’ sins is worse than a crime; it’s a mistake.

He did win a Nobel Prize in Economics and stuff.

Well, it’s that holiday time of year again when all you want is some mindless entertainment to spare you from dealing with your relatives and TV programmers screw with you by replacing all your familiar favorites with sappy specials and marathons of your least liked shows made more inpenetrable by the one line crawl of uselessness that TV Guide channel has become.

Thank goodness kindly uncle ek is here to highlight a few moments of blessed distraction as well as some of the potential pitfalls to be avoided.

I look on it as a public service.

My job is made a little easier because of a neat little network ‘day at a glance’ feature of Zap2it TV Listings.  Click on the channel name.  I’m going from my last diary to Paid Programming.  I’m putting the main meat below the fold because the table is too long for the Front Page.  It’s arranged by time and marathons (4 half hour episodes, 3 hour episodes, double features, themes, and Instapeats) may be noted earlier than you expect, but they do also include the running time so you know when they end.

Nothing like watching A Christmas Story 25 times in a row.

I’m rolling publishing again because it’s much easier.  Right now this covers until 10 am and I’m missing 10 channels.  Expect an update.

Update: Now good to 7 am with all 41 channels and you didn’t miss anything.  Tomorrow is the last edition of extended Thanksgiving coverage.

Evening Edition is an Open Thread

Now with 57 Top Stories.

1 US rushes to contain new WikiLeaks damage

AFP

24 mins ago

Iceland Is No Ireland as State Free of Bank Debt, Grimsson Says

By Jonas Bergman and Omar R. Valdimarsson, Bloomberg News

Nov 26, 2010 9:21 AM ET

Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued.

“The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”

…

“Iceland is faring much better than anybody expected,” Grimsson said. The Icelandic state’s liability on foreign depositor claims stemming from Icesave accounts at failed Landsbanki Islands hf should be put to a national referendum, he said.

“How far can we ask ordinary people — farmers and fishermen and teachers and doctors and nurses — to shoulder the responsibility of failed private banks,” said Grimsson. “That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.”

(h/t Atrios)

I don’t have a Nobel Prize in Economics, but unlike Paul Krugman I don’t think this was inevitable.  I blame people and institutions.

I blame Vacuity and prestige schools that will accept and pass any legacy moron (like George W. Bush).

I blame Vanity and an academic atmosphere that prizes novelty and publication above scholarship, teaching, and facts.

I blame Venality and the greed of our upper class elites who can starve to death on mere millions because they can’t conspicuously consume as much as their billionaire brethren and are disappointed because they think it’s a birthright.

The Instability of Moderation

by Paul Krugman, The New York Times

November 26, 2010, 9:40 am

The brand of economics I use in my daily work – the brand that I still consider by far the most reasonable approach out there – was largely established by Paul Samuelson back in 1948, when he published the first edition of his classic textbook. It’s an approach that combines the grand tradition of microeconomics, with its emphasis on how the invisible hand leads to generally desirable outcomes, with Keynesian macroeconomics, which emphasizes the way the economy can develop magneto trouble, requiring policy intervention. In the Samuelsonian synthesis, one must count on the government to ensure more or less full employment; only once that can be taken as given do the usual virtues of free markets come to the fore.

…

I’ve always considered monetarism to be, in effect, an attempt to assuage conservative political prejudices without denying macroeconomic realities. What Friedman was saying was, in effect, yes, we need policy to stabilize the economy – but we can make that policy technical and largely mechanical, we can cordon it off from everything else. Just tell the central bank to stabilize M2, and aside from that, let freedom ring!

When monetarism failed – fighting words, but you know, it really did – it was replaced by the cult of the independent central bank. Put a bunch of bankerly men in charge of the monetary base, insulate them from political pressure, and let them deal with the business cycle; meanwhile, everything else can be conducted on free-market principles.

…

Last but not least, the very success of central-bank-led stabilization, combined with financial deregulation – itself a by-product of the revival of free-market fundamentalism – set the stage for a crisis too big for the central bankers to handle. This is Minskyism: the long period of relative stability led to greater risk-taking, greater leverage, and, finally, a huge deleveraging shock. And Milton Friedman was wrong: in the face of a really big shock, which pushes the economy into a liquidity trap, the central bank can’t prevent a depression.

(h/t Atrios)

Today is a half day trading day in the U.S. and unlike some shills for Wall Street I can’t imagine why you’d want to be long in stocks after Wednesday’s ‘irrational exuberance’.  Sell high, buy low is after all- basic.

Retail investors (it’s hard to call people who own stocks ‘normal’ because they’re a tiny minority) may still hold a majority of corporate equity but they have been leaving the market in droves because after the great financial meltdown of 2008, the Flash Crash, and the recent revelations of systemic Title Fraud and Insider Trading.

As I mentioned, most people don’t own stocks, they invest in mutual funds (Republicans and Blue Dogs like to call them ‘stocks’ to inflate the numbers of the ‘investor class’, but they’re really not), bonds, certificates of deposit, annuities, and other ‘safe’ investments.  Many people just keep their money in a bank because they live paycheck to paycheck and don’t have any surplus to spare.  What savings they have is in the equity of the house they’re living in and in today’s depressed market it’s not what it used to be.

But most people have bank accounts and a lot of them are really, really angry at the banksters.

It’s the same in Europe where ex-soccer star Eric Cantona is urging people to do something about it-

Join a World-Wide Bank Run in December — Move Your Money

Robert E. Prasch, The Huffington Post

November 24, 2010 04:03 PM

(O)rganizers are calling for the use of a new weapon, one available to any of us with a bank account. It is the simple act of removing all of our money from the banks, and doing so en masse on the same day — December 7th.

…

Of late, the famously mercurial temper that Cantona exhibited on and off the soccer pitch has been redirected from rivals and unruly fans. A prominent target is French President Nicolas Sarkozy’s proposal to create a ministry, museum, and mass public debate on “national identity,” all of which Cantona publically ridiculed as “idiotic.” His sights are now trained on the banking and financial system that he — correctly — holds responsible for France’s current economic problems. This is important because Sarkozy and the EU leadership is using this crisis to erode welfare state protections even as ostensibly scarce public monies are deployed to shore up the banks most responsible for the problem.

Which brings us to the economics of a mass withdrawal of deposits from the banks. Will it bring about an actual bank run or financial crash? Certainly not. For one thing, an organized and deliberate action such as Cantona proposes lacks the element of panic so characteristic of bank runs. Additionally, the banks and the central banks overseeing them will have time to prepare for the event, and should be able to reallocate their holdings of cash, reserves, and other assets in advance. If necessary, banks can always borrow short-term funds on the inter-bank market or even directly from the central bank. A mass withdrawal should, however, shrink the profitability of banks, as retail deposits are normally considered cheap and stable sources of funds with which to finance loans. Large European banks, relative to their American peers, are more dependent on retail deposits, so they will especially miss these funds when the time comes to calculate profits and bonuses.

But what of the politics? Here in the United States it is now overwhelmingly clear that a dozen or so of the largest financial institutions responsible for the crash and ensuing recession have gained, not lost, by their irresponsible decisions. They repeatedly tell us that they have “learned lessons.” This is true, they have: Learned that their past decisions have enriched senior management beyond belief. Learned that their market share is now substantially larger than before the crash. And learned that the government has deemed them Too Big To Fail (this latter designation lowers their cost of funds and enhances their profitability). Showing admirable “bi-partisanship,” Republican and Democratic administrations have worked hard and seamlessly to bring about these “lessons.” This summer, the Dodd-Frank Financial Reform and Consumer Protection Act enshrined the perspective of financial elites that reform should be primarily symbolic. In a sentence, over $12,000,000,000 of stock market, real estate, and other asset values disappeared, while rates of home foreclosures and unemployment soared, with virtually NO political or legal consequences. I might be a cynic, but I hope to never be as cynical as those who engineered these outcomes.

Now Prasch may not be aware of it, but this is an idea I’ve heard circulated among the blogs since at least early this year.  There’s nothing new about it.

But I would like to encourage my readers to consider it if they haven’t already.  There’s really no reason to keep your money in a major bank unless it’s more than the $250,000 the FDIC will insure, and at that you may be exposed to more risk than you realize.  If your money is in a Credit Union or a Savings and Loan or a Local or Regional Bank your checks still get cashed and your credit and debit cards still work and most of them will change your pennies to folding money without charging you 10% for the privilege.

Well, it’s that holiday time of year again when all you want is some mindless entertainment to spare you from dealing with your relatives and TV programmers screw with you by replacing all your familiar favorites with sappy specials and marathons of your least liked shows made more inpenetrable by the one line crawl of uselessness that TV Guide channel has become.

Thank goodness kindly uncle ek is here to highlight a few moments of blessed distraction as well as some of the potential pitfalls to be avoided.

I look on it as a public service.

My job is made a little easier because of a neat little network ‘day at a glance’ feature of Zap2it TV Listings.  Click on the channel name.  I’m going from my last diary to Paid Programming.  I’m putting the main meat below the fold because the table is too long for the Front Page.  It’s arranged by time and marathons (4 half hour episodes, 3 hour episodes, double features, themes, and Instapeats) may be noted earlier than you expect, but they do also include the running time so you know when they end.

Nothing like watching A Christmas Story 25 times in a row.

I’ll mention at this point a ton of research goes into these, 41 channels and nearly 150 links, not because I’m complaining but because it’s a little daunting to get them posted on deadline.  This one I’m rolling publishing because I’m still a bit tired from yesterday and I want you to have something to relax you from your early Black Friday forays.  Right now this covers until 10 am.  Expect an update before that.

Update: Now good through 7 am.

Well, this is an easy pick.  I hate the ‘Boys with a passion, not just because they play in the same Division as my Giants, but because their fans are the most arrogant insufferable assholes it’s ever been my misfortune to share a saloon with despite their team’s sub-par mediocre performance for at least the last decade and a half.

And they’re no better this year, at 3 – 7 Dallass is at the bottom of the Division and their Quarterback is out for the season.

The Who ‘Dats on the other hand are 7 – 3 (sound familiar?) and while I’m not expecting a miraculous Super Bowl season like last year I would think they will administer the smackdown to a team that’s not by any measure in their league.

As I mentioned, you know how to root.

Now you’d think living in the armpit of New England as I do I’d be a die hard Patriots fan, but in fact I’m still kind of torqued off at them screwing over Hartford to blackmail themselves into a better Stadium (paid for with Tax dollars btw) in Foxboro.

And the Lions are customarily so hapless that they have the whole underdog thing going for them in addition to being the sentimental favorite of my Troll ancestors.  Thanksgiving Day dinner was never served at Grandma’s house in central Michigan until Grandpa was done watching the Lions (which was usually shortly after the start of the 3rd quarter).

The Patsies (as I like to call them) are 1 – 2 on Thanksgiving and will probably start without Brady.  It is however a matchup of an 8 – 2 team against one that is 2 – 8 and has a notable record of futility (6 straight and 8 of 9 since 2001).

As they say, anything can happen on any given Thursday.  This will be the 3rd game for the Patriots in 11 days.

Last Sunday at noon, 18 Helium Balloons in the shape of familiar and popular cartoon characters stepped off at the intersection of Hoyt and Summers for their 17th annual appearance.

The tallest balloon, Popeye, stands a whopping 65 feet and this year 2 new balloons were added, Fred Flintstone and Scooby Doo.

Over 100 volunteers assist at the event as balloon handlers and Parade Marshals and it’s organized by a permanent steering committee of 3 and sponsored by UBS.  This year’s Grand Marshal was John Starks, formerly of the Knicks and the Master of Ceremonies Alan Kalter of Late Night with David Letterman.

It was quite a spectacular sight and I bet you’re sorry you missed it because there’s just no better way to feel that Master of the Universe consumerist buying spirit of the 4th Quarter than standing in the Hedge Funded Concrete Canyons of downtown Stamford Connecticut and…

You say there’s another Balloon Parade?  In New York City?  And it’s on TV?

Then why was I freezing my ass off… oh, never mind.

Coverage of the Macy’s Thanksgiving Day Parade starts at 9 am on CBS (which is a little up route so you see things first) and NBC (which covers the lame lip syncing at Herald Square).

Liveblogging below.