Counterintuitively, the relatively strong Canadian trust in government may have paved the way for government spending cuts, a pattern that also appears in Scandinavia. Citizens were told by their government leadership that such cuts were necessary and, to some extent, they trusted the messenger.
It’s less obvious that the United States can head down the same path, partly because many Americans are so cynical about policy makers. In many ways, this cynicism may be justified, but it is not always helpful, as it lowers trust and impedes useful social bargains.
Forces like the Tea Party movement argue for fiscal conservatism, though it isn’t obvious that they are creating the conditions for success. Over the last year, we have been treated to the spectacle of conservatives defending Medicare against proposed cuts, in large part to curry favor with voters and mobilize sentiment against the Democratic health care plan.
I’m not sure about this economics message: you have Geithner with the “things are going great” and Romer with the “things are far from normal” message. These can obviously be reconciled, but it’s too complicated a political message. Which, I guess, goes to show you about the difficulty of the economic situation.
More on the Goldman situation: how the Magnetar-Merrill trade was substantively similar, and the leaked presentation that earned the SEC’s ire.
The most costly deduction: the mortgage deduction.
Like the US, the UK has experienced no net job growth over the last decade.
Clearinghouses versus Exchanges in derivatives, in chart form.
On American inequality.
The authenticity of The Pacfic.