Where Ano Means Yes

The Telegraph (UK), and by extension the Drudge Report, are expressing wonder that, judging by the credit default swaps (CDS) market, "California is now priced as a greater bankruptcy risk than Slovakia 150."

As a former resident of both states, I can testify that this is an unfair slap…at Slovakia.

An economy that was widely predicted to fail at the time of Czechoslovakia's Velvet Divorce grew at a European Union-leading 10.7 percent last year. Unlike certain countries I could name, the domestic auto industry is booming. Inflation is at 7.5 percent, but trending heavily this past decade in a positive direction. And Bratislava's latest budget deficit figures look a damn sight better than Sacramento's $28 billion nightmare.

In the 1990s a common refrain among Americans journalists covering the great post-communist transitions was, "Would the U.S. ever tolerate economic austerity plans this severe?" In 2008, regrettably, I think we have found our answer.

Comments

[Jordan]

"California is now priced as a greater bankruptcy risk than Slovakia 150."

Faster please.

[Jozef]

I am originally from Slovakia, my entire family still lives there, and I'm fairly active (via Skype) there. While economically the country is in a very good shape and (despite the objections of many people including me) will adopt the Euro as of Jan 1., political issues - primarily creeping communism and unprecedented levels of corruption - may be slowly turning Slovakia into California. Still, for now, I'm none too happy to see my country used as a comparison tool to highlight a failed state within the US.

[Jordan]

Meanwhile, the leeches of another nanny state shithole are about to get their comeuppance:

The state of New Jersey is insolvent. Bankrupt might be a better word. New Jersey is $60 billion in the hole on pension funding and the Governor is planning on skipping payments in a "pension payment holiday" until 2012 so as to not increase property taxes. To top it off, the ongoing plan assumptions are 8.25%. Sorry NJ, that simply is not going to happen.

[Warren]

doom
DoooM
DOOOOM

[classwarrior]

To us on the left, it has always been particularly annoying that the US (through the IMF and World Bank) imposes conditions on developing countries that even a pale shadow of which would never be attempted in the US as politically impossible on an electorate with one of the highest standards of living in the world. Oh, and just to add injury to insult, read John Perkins' "Confessions of an Economic Hitman" to see how America sets these countries up for failure.

[The Chad]

"political issues - primarily creeping communism and unprecedented levels of corruption - may be slowly turning Slovakia into California."

quality

[Mo]

Actually, according to that article, Slovakia's deficit is worse than California's. $28B is a lot, but it's based on a $1.7 trillion economy. The article says Slovakia's deficit is 2.08% of GDP. If CA had the same deficit, it would have a $35B deficit.

[Matt Welch]

to see how America sets these countries up for failure.

But Slovakia isn't failing! Despite the worst efforts of Vladimir Meciar....

[Guy Montag]

Matt,

So does this mean that Slovakia is dropping in attractiveness for single 40something American males as a vacation destination for meeting hot Eastern European chicks who think we are all rich?

Just trying to plan ahead for when I leave the country 🙂

[Paul]

Things are tough all over. And seeprise! Tough in a state uniformly controlled by Democrats.

[Guy Montag]

Things are tough all over. And seeprise! Tough in a state uniformly controlled by Democrats.

But they don't have enough control, that is why they are in trouble. It is all because of Bush and Cheney, or something.

[robc]

Mo,

To be fair in the comparison, shouldnt you include CA's portion of the federal deficit?

[robc]

Guy,

I think it means you can no longer start a hotel in Bratislava for a nickle.

[Naga Sadow]

Guy,

I had a friend who was dating an insanely hot Czech woman. When I congratulated him on his catch, he frowned. Apparantly he had settled for her cuz the "really hot" women were already taken. Good luck to you.

[Vladim?r Meciar]

just wait until i come back to power, pan welsh. all will be corrected.

[Mo]

robc,

Only if the extra amount of federal taxes they pay over their receipts counts too.

[SKR]

Unfortunately, even in the face of financial crisis, Californians' continue to spend money like drunken sailors. I was once again disappointed watching our election returns come in this year.
While in line at the poling place, I overheard a telephone conversation where a voter was explaining his position to a friend. He said, "I'm voting for the high speed rail, because they are gonna tax us anyway, so we might as well pick something good." At this point I had to turn around and say, "Or you could just vote no on spending more money." He looked at me like I was speaking Latin.

[robc]

Mo,

Taxes arent a part of either equation.

The extra money that californians make is already covered as part of the denominator (GDP).

Think of the extra CA taxes as foreign aid.

[Martina]

Im from Slovakia myself, never been to Cali, but spend a year in NYC and i think the big difference is in mentality- slovaks are very paranoiac (right now some slovaks think Hungary will take us over:) and they rather save money than borrow, but Americans used to be very optimistic and pay even coffee with credit card, so as long as slovaks rememer the bad times (communism) and stay paranoiac they shouldnt be in such bad economic situation. Mr. Montag please dont compare Slovak women with russian mail order brides....

[Brendan]

I've lived in The People's Republic of Kalifornia for a long time. It is impossible to fire a rotten teacher, "bridges to nowhere" of all kinds are built in favored places, bloated public pensions and all sorts of public rackets enrich administrators, instead of highly productive people.The pubic servants now live on the hilltops while seeing too it that their famiy members (communist youth) get the best jobs (the pubic rackets are essentially closed shops) and the wives or husbands of these parasites get the "one hour a month" committee payoff appointments. Wecome to the flagship state of the USSA. Yet as was true in the (other) communist states, the solution to "why should the pubic employees be inconvenienced by the economic catastrophy their looting caused" is easily solved. Just raise taxes even more.

F'em. I'm out, as are 12 members of my family, all Ph.D. scientists, engineers, real administrators and even a fashion model, with combined incomes that are passably significant. The brain drain in CA is becoming significant. We're not selfish, just not stupid about criminal public unions extorting us (oh, gee...I forgot. "Its for the children"....RIGHT!). Having a giant parasite class injected under our skins, where minor competencies and plodding outputs become the path to riches, all supported by a posturing and shameless Austrian pimp and his 200 whores is not acceptable. Our idea of the American Way is not the tail wagging the dog, and the tail should know its place, keeping the plumbing out of sight.

[Tom Grey]

While Meciar was PM 3 different times (counting once as Slovak PM while part of CSFR post '89), and has been a close candidate for President of Slovakia, the current Prime Minister is R. Fico.
An aggressive, attacking the free market populist-pragmatist whose administration's corruption doesn't seem much worse than great reformer M. Dzurinda.
Meciar is in Fico's coalition, as is nationalist J. Slota -- because the more respectable parties wouldn't join Fico.

Americans don't know how lucky they are to NOT have proportional representation (vote party list rather than geographic district). As a Libertarian, I used to want it. Being in Slovakia for 17 years (with a still hot hot hot Slovak wife, mother of our four kids), it's clear how much easier it is for p.r. gov't to be terrible in some or many areas.

Israel is another example of almost disfunctional democracy because of p.r. -- but at least in Slovakia, a party must get 5% or more votes to get into Parliament, so the parties are somewhat stabilizing.

Wages are still much lower, but most normal Slovaks got to buy their own condo/flat, for which they pay a high maintenance rent, but they mostly owned without big mortgages.
The real estate boom has come and is now paused; some luxury new built buildings are dropping in price, but few folk are losing cash on houses.

Babes are hot here, still.

[DannyK]

Slovakia should get more credit than it does; it's turned out its local post-Communist strongman (multiple times!) and has a well-administrated flat-tax policy. They're about to join the Eurozone, so that should be interesting to watch.

[Steve R.]

I lived there for a couple of years, arrived there 3 weeks before the Soviets invaded in 68. Also was back in '77, '80, '89, '94, '04 and this year. To see the changes the Slovaks have made is really great.

To invest in Slovakia today, is not unlike investing in America. Banska Stiavnica real estate is now about $200/ sqft.

The only problem with Slovakia (as the comments above indicate) is some people still think it is part of Czecho-.

[Mo]

robc,

What the hell do you think a deficit is? It's spending minus tax receipts. Taxes are a key part of the equation. The national debt is the one that's the non-sequitur. You're mixing up debt and deficit.

[Kevin]

While I'm not from Slovakia, I have tasted souvlaki (it's pretty good), so I believe that makes me almost an expert in the field.

So here's my take on things: California has a lot of hippies. Slovakia doesn't. Slovakia wins!

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