From Marketwatch today, “Morgan Stanley warns on sovereign defaults”:
“Outright sovereign default in large advanced economies remains an extremely unlikely outcome,” they said. But bondholders could suffer losses from forms of “financial oppression,” such as repaying debt with devalued currency, the analysts warned.
From last week’s Acton Commentary by Sam Gregg, “Deficits, Debt, and Self-Deception”:
Simon Johnson and Peter Boone wrote an interesting article the UK Telegraph Saturday called “The New Feudal Overlords of Europe will be the bankers of the ECB.”
Johnson is also the co-author along with James Kwak of a thoughtful and provocative book 13 Bankers as well as a blog on economics. Also on the ECB see my colleague Sam Gregg’s Piece at Public Discourse
This week’s Acton Commentary:
Our economic life is concerned with more than just the objective exchange of goods and services. Far from being morally neutral, it is an expression of how we understand our dependence on God and neighbor and is the means by which we fulfill, or not, our obligations toward them. Both for reasons of morality as well as long term economic efficiency, we cannot overlook or minimize the centrality of personal virtue, and of a culture of virtue, to the success of the free market. It is not enough for me to be good; we must be good together. Or at minimum, and whatever our personal moral shortcomings, culturally we must value and reward moral excellence.
The AP reports that of the roughly $379 million spent by the US government on relief efforts in Haiti, less than 1% has been in the form of direct government to government aid.
In my commentary this week, “America’s Uncontrolled Debt and Spending is the Real ‘Waterloo,’” I offer the well known point that debt and spending threatens our liberty and prosperity. It is becoming very evident that it will be up to citizens to demand accountability from their lawmakers, as I mentioned. What has been tried before has not worked.
Read more on America’s Uncontrolled Debt and Spending is the Real ‘Waterloo’…
As Dave Ramsey admits, all of the advice he gives is something that you would be able to get from your grandma. It’s a sad commentary on our society that this basic wisdom, that prudential use of money (i.e. thrift) is a virtue, is so alien to us.
Thanks to Clear Channel Radio, I was able to attend Dave Ramsey’s event in Grand Rapids last night. I used to listen to Ramsey on the radio quite a bit as a seminary student in Kentucky and I was always impressed by how much he was inspiring American families to live within their means and become better financial stewards of their resources and income. His own personal faith testimony is very real and inspiring and that brings me to another point concerning his presentation last night.
Picking up on themes we’ve touched on here, here, and here, last week NYT columnist David Brooks weighed in on the culture of debt in the United States.
“The social norms and institutions that encouraged frugality and spending what you earn have been undermined,” he writes. “The institutions that encourage debt and living for the moment have been strengthened.”
Is this supposed to be capitalism?
Geoff Colvin writes that a motivating factor in the recent crash in corporate profits, as well as the sharp decline in home values, was the phenomenon that “people began to believe that the more they borrowed, the better off they would be. Their thinking went like this: With the cost of capital so low and asset prices rising steadily, risk was evaporating.”
One sector of the American public that hasn’t missed out on the government’s purpose for the economic stimulus package is the advertising and marketing industry. Savvy marketers are targeting sales and special offers to the federal rebate checks, which start to go out today.
