danalwyn: (Default)
Passport ran an interesting prediction of what would happen to Texas if it actually managed to secede from the union.

The long and short of it is that Texas's economy would experience precipitous decline if the US decided to let it go, because the US would probably kick it out of NAFTA (and pressure Mexico into doing the same), basically destroying most of their economy. In addition, taxes would rise as Texas was forced to maintain a much larger military (proportionally) to contain not only the occasional American adventurer, but also drug traffic in their own state.

The real kicker is that, to maintain any level of functionality, Texas will have to get foreign aid and trade deals from friendly powers. The most logical local choices are Cuba and Venezuela, to which the new president of Texas will have to kowtow to. Across the oceans, Texas will have to make friends with the big donors, China and Russia. And part of that will probably involve Texas being forced to adopt the socialist rhetoric and practices of its new protectors.

So, long live the People's Socialist Republic of Texas!
danalwyn: (Default)
We've now begun the long and lengthy process of recapitalizing American banks by buying up preferred stock, and injecting capital directly instead of merely buying up bad assets. This is probably a good thing, as nobody seems to have suggested a better plan (other then the Chicago people - whose plan requires a great deal of temporary wishful thinking). I'm not entirely happy with it, but I'll live with it.

But how did we arrive at this point when the most powerful man in America, Hank Paulson, claimed that he was in no way going to resort to this just a few weeks ago?

Now that the dust has settled, it becomes possible to trace back a bit of a trend. The Americans did it, of course, because the Europeans did it. And the Europeans did it because the British had already started out by introducing a massive bank rehabilitation package. And the British? Well, they did it because the Irish had already guaranteed 400 billion euros from their six largest banks.

Think about that. The Treasury Secretary of the United States of America, arguably the most powerful man in the most powerful country on Earth, was just forced to spend, against his will, hundreds of billions of dollars to recapitalize some of the largest financial lenders in the world, because of a decision made by a nation with the population of Alabama. That's kind of impressive.

Welcome to the new global economy.

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August 2017

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