Greece Surrenders to the Underground Economy

The Guardian recently published Greece on the breadline: cashless society takes off, an all-too-brief look at what's happening in the streets of Greece in response to their government's international monetary woes. This paragraph is what triggered my reaction and the title of this post.

The Greek parliament recently passed a law encouraging "alternative forms of entrepreneurship and local development", including exchange networks such as Volos's, giving them official non-profit status for tax purposes.

As I read it, Greece has surrendered to the underground economy by writing off a significant chunk of future tax revenue, and it has to do primarily with "exchange networks such as Volo's." To understand, we have to go back to the top of the Guardian's story.

Around the Web 3/23/12

Here are few interesting articles that I've noticed in the last week or so that I thought might be of interest to those who enjoy The Tireless Agorist.

Pizza Federalism, Kickstarter and the Arts

Discussion of federalism is all the rage these days among conservatives. Such conversations are generally framed by the Tenth Amendment, interpreted as an issue of "States Rights," and then dismissed by the left as a throwback to the days of the Civil War.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

I believe a more honest appraisal of the concept requires consideration of the Ninth Amendment as well, and others are becoming at least tangentially aware of that idea.

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

When both the Ninth and Tenth Amendments are included in the discussion, federalism expands to encompass "pushing government decisions down to the lowest democratic level possible," as Jonah Goldberg notes.

Government Integrity Analyzed

A consortium led by the Center for Public Integrity, a "nonpartisan" watchdog group, released a report on the integrity of state-level governments on Monday.

Not one state got an "A," the breakdown was 5 "B"s, 19 "C"s, 18 "D"s, and 8 "F"s.

I found it particularly telling that this "nonpartisan" watchgroup did not issue grades for either the District of Columbia or the federal government.

Here's how they begin their lament.

The Booze Cause of the Economic Crisis

Everybody should believe in something; I believe I'll have another drink.
Author unknown
Appearing at Real Clear Politics today, Causes of the Crisis, wherein Robert Samuelson proclaims "Four years after the onset of the financial crisis -- in March 2008 Bear Stearns was rescued from failure -- we still lack a clear understanding of the underlying causes."

He makes note of the two competing theories; that Wall Street, unregulated, took too many risks, and that mortgage-lending standards created the housing bubble. He then examines the case for a root cause of both.

Actually, both theories are correct -- and neither is... But the fact that these theories are not mutually exclusive suggests that both were consequences of some larger cause. Just so. What ultimately explains the financial crisis and Great Recession is an old-fashioned boom and bust, of which the housing collapse was merely a part.

In this, Samuelson is correct. He then proceeds to give a history lesson, pointing out that the boom began with the decisive defeat of double-digit inflation in the early 1980s, (while failing to address the cause of, or cure for, that inflation, however). He points to two mild recessions in the ensuing years, and gives credit to the Federal Reserve for "defusing" those two threats. He then states "booms become busts because justifiable confidence becomes foolish optimism," and continues his history lesson by spreading the blame everywhere; on investment banks, households, lending standards, regulators, ethical standards, even criminals. But not one word of explanation as to how "justifiable confidence becomes foolish optimism."

Exploitation: A Matter of Perspective

Matt Yglesias asked what was perhaps a rhetorical question at Slate on Friday, in his column The Real Story Is Everywhere In China Where They're Not Making Apple Stuff.

He first notes that "Public radio's popular This American Life episode about abuses in the Foxconn factories that make Apple products has been retracted on the grounds of the "significant fabrications" it apparently contained."

Matt then suggests that perhaps Apple's real sin was in "exposing our delicate western sensibilities to the misery [of Chinese workers]."

As he points out, "You don't read articles about working conditions in factories making socks destined for export to Kazakhstan, and you don't read articles about working conditions on the rice farms that people eagerly leave to go toil in the sock factory."

And then it's time for the rhetorical sucker punch. I use that term as a compliment, not a pejorative; it's an important question to ask.

When you read something bad about a Foxconn factory and then see that thousands of people line up for the chance of a job at one of them, that really ought to make you wonder. What were those guys doing the day before they decided to stand in line? How did that look?

Well, Matt, thanks to the New York Times, this Tireless Agorist can answer that question for you, through the eyes of a young man born in China and now attending an American university. He sent the following note to David Pogue, who included it in his column What Cameras Inside Foxconn Found.