Monday, April 26, 2010
Macro Man was struck by two things over the weekend: the ongoing meltdown in Greece, where public sector workers continue to demonstrate for their right to remain bone-idle, and the orgy of attention lavished on the NFL draft.
The Greek crisis should reach some sort of denouement this week; 1yr CDS are now trading at 1200, which isn't far off the yield on the 2 year GGB. The Germans continue to play hardball, which to a degree is understandable; one would presume that the Greek government is working overtime to hash out a deal with the IMF (well, at least those that aren't marching to protect the 12 hour workweek, or whatever it is that the Greek public sector slogs through.)
The NFL draft, meanwhile, is a nonpareil example of American (champagne) sporting socialism. Rather than a free market of new players, such as one finds in world soccer, American sports allocate new talent via a draft process, wherein the worst team from the previous year gets first choice of the incoming talent pool. The system is designed to ensure relative parity amongst the teams; it tends to work quite well in the NFL but less so in sports like baseball where the development trajectory of young players is less certain.
In any event, the NFL draft has morphed into a 3 day extravaganza, where an industry of full-time analysts has emerged to break down the physical minutiae of hundreds of young college students. It would make for entertaining viewing if it wasn't so drawn-out; still, it generally serves the purpose of allowing wretched teams to improve themselves through shrewd player selections. (As an aside, the draft has generated a quite interesting market in microeconomic analysis; given the often extravagant salary demands of the first pick, it carries less expected economic value than second round picks.)
Anyhow, the juxtaposition of the Greek crisis and the draft caused Macro Man to wonder: what if there was an annual "policymaker draft" for the world's countries? Those deepest in the mire could have first choice of any policymaker of recent vintage, with the draft proceeding in order of relative economic outcomes.
We can probably assume that Greece would have first choice...but who would they choose? They'd need someone committed to smaller government, someone willing to stand up to the civil servants and unions, someone who wouldn't be afraid to be unpopular.
Macro Man can just imagine Dominique Strauss-Kahn approaching the podium and intoning "With the first pick in the 2010 policymaker draft, the Hellenic Republic chooses Margaret Thatcher, prime minister, Oxford University."
Who would the rest of the PIGS choose? The US? The UK? China? Who would countries like Canada and Norway be left with? 'Twould be a fascinating endeavour, and surely cure the economic sciences of their "dismal" reputation.
Moreoever, it's not at all clear that such a draft would substantially alter the nature of popular analysis one whit. Imagine Mel Kiper breaking down the policymaker draft ("Greenspan's really sliding down the Big Board on character concerns...")
...while the CNBC clowns break down which quarterback the hapless Browns should take....
Macro Man for one can't really tell them apart....