To me, Felix Salmon has become like a serious version of Michael Lewis. Like Lewis, Salmon writes about an incredibly important subject– banking and finance– in an entertaining way. Unlike Lewis (or even more, Matt Taibbi), you don’t get the sense that Salmon’s writing is skewed to tell a particular story.
Two posts today demonstrate why his blog is essential reading these days.
The first is on today’s Eurozone summit, and how stupidly the central players– in particular Germany, but also the ECB– are behaving:
I thought disasters were all meant to happen over the weekend? Somehow, in Brussels, EU leaders have contrived to pull defeat out of the jaws of victory on Thursday night, leaving Friday for finger-pointing and recriminations and wondering whether anybody who signed on to this deal has any chance at all of even getting re-elected, let alone being remembered as one of the leaders who saved the euro.
Remember how Wolfgang Münchau said that the Euro zone had to get it right at this summit or it would collapse? Well, the Euro zone has most emphatically not got it right. Take any of the list of prescriptions of the minimum necessary right now — from Münchau, from Larry Summers, from Mohamed El-Erian — and the one thing that jumps out at you, especially in light of the most recent news, is that if you look at anybody’s list, there’s an enormous number of items which has zero chance of actually happening.
Yes, this is a good read, but Salmon also closes with a clarification of what’s at stake:
A continent which has risen to multiple occasions over the past 66 years has, in 2011, decided to implode in a spectacle of pathetic ignominy. Its individual countries will survive, of course, albeit in unnecessarily straitened circumstances. But the dream of European unity is dissolving in real time, as the eyes of the world look on in disbelief
Europe’s leaders have set a course which leads directly to a gruesome global recession, before we’ve even recovered from the last one. Europe can’t afford that; America can’t afford that; the world can’t afford that. But the hopes of arriving anywhere else have never been dimmer.
To paraphrase Churchill, Merkel Draghi & Co. had a choice between economic disaster and dishonor; they’ve chosen dishonor, and they will have disaster.
The second is a piece examining the roots of the animus wealthy people feel toward Obama:
[Recent studies show a] very strong correlation between tax cuts for the rich… and increased wealth for the rich (on the y-axis). This correlation comes as no surprise, of course. But… lower top marginal tax rates don’t translate into higher growth — which means that the extra wealth going to the 1% really is a zero-sum game, and being taken out of the pockets of the 99%.
But it’s hard for a gazillionaire to come out and say that he wants more of everybody else’s money.