By Arnold Kling
I think I got to these either from Mark Thoma or Yves Smith.
I have heard credible reports suggesting that the underlying situation of the German Landesbanken is even worse than those estimates suggest. Last year, a story made the rounds in Germany, according to which a worst-case estimate would require write-offs in the region of €800bn – about a third of Germany’s annual GDP. If you were to add this to Germany’s public debt, you might jump to the conclusion that Greece should bail out Germany, not the other way round. While that is probably a little exaggerated, there are serious questions about whether the eurozone is still in a position to issue such massive guarantees.
In Europe, big banks tend to be larger relative to their economies than those in the U.S. To pundits inclined to admire Europe, this suggests that the way to go is a few banks operating in a highly regulated economy. To those of us inclined to be skeptical of concentrated power, it instead suggests a highly fragile system.
The final [Obamacare] bill included a provision that subjected employers of more than 50 workers to penalties if employees’ health care costs exceeded a certain percent of family income.
The problem with this sort of penalty structure is that employers do not have control over workers family income and in general should not even know it. This sets up an absurd penalty structure where employers do not have the knowledge they need to act to avoid the penalty
3. Rand Paul’s opposition research dug up the following quote:
if the poorest families spent as much money educating their children as they do on wine, cigarettes and prostitutes, their children’s prospects would be transformed. Much suffering is caused not only by low incomes, but also by shortsighted private spending decisions by heads of households.
Actually, Rand Paul did not say that. Nicholas Kristof recently wrote it in his New York Times column. Kristof is on the Left. Hence, it is not racist.
Snarkiness aside, what should “we” do about irresponsible parents? The libertarian answer is that “we” should not do anything as a state. Perhaps “we” can help using noncoercive elements of civil society, including charities. However, from the standpoint of the Church of Unlimited Government, that is not enough. From that standpoint, the failure to advocate the use of the state to alter other people’s objectionable behavior amounts to condoning such behavior.