All Snarking Aside

... it's been a pretty instructive week. Here's what we've learned (or re-learned) from the week's events in Europe.

• Entitlements make people irrational. The Greeks are destroying their own country after having run up unpayable bills giving themselves goodies they couldn't afford. They're behaving like addicts whose drugs are being taken away.


• Government interventions in the financial markets take care of small-to-medium problems, not big ones. The Euros and the IMF rolled out a Greek solution larger than anything previously discussed and it was washed away within hours.


• Spain is screwed. Every event this week was bad news for them.


• By extension, European banks are screwed. A Greek default would be painful, a Spanish default will be terminal for many of them.


• Smart money is getting out of Europe. Where it's going is the subject of another post.


• The Bush team of Bernanke and Paulson are looking smarter every day. Faced with a similar problem, they went to the nuclear option immediately and got a mountain of cash so large that it actually lasted beyond the crisis and left some available for all kinds of earmarkery later. Whatever waste and fraud occured at the end of the TARP money, the contagion was stopped stone, cold dead.


• The Euros have only one option left and that's the Bush option - the central bank is going to have to print Euros and buy up everything yucky. They're still fighting this notion, but they've not yet seen Spain falter.


• Addendum: This only works as a one-shot fix. Before you start down this road, you've got to be sure that the people you're rescuing will show fiscal restraint, otherwise this becomes just so much financial heroin. Permanent Greek (and Spanish and Portugese and Italian) budget cuts are a prerequisite for a EuroTARP.


• Things move faster than governments can react. On Monday Greece was bailed out and by Friday the place was a wreck and money was leaving even faster than before. In between, government officials made ineffectual statements and got run over by the markets.


• The entitlement society is D-E-A-D, dead, dead, dead. It may thrash around a bit more, but it is dead. Here in the US, we'll continue to get Obama and Waxman and Frank and Pelosi pitching for more and more entitlements, but as wreckage and ruin spreads across Europe from demographic decay and socialist entitlements, only those who believe in compassion™ with religious faith will continue demanding more.

There. That's a start. Comments?