The hamburger economy
Start here:
When I go to Vons to buy a steak, most of the time I get USDA Choice, but on occasion I’ll get USDA Prime. So literally, ‘choice’ is by definition, ‘sub-prime’.
And yet it’s still Choice. Now consider this:
The facts in question were exactly how many subprime and other mortgagees were defaulting or likely to default. The alarming news was something on the order of 4 percent, which was double the usual amount. And now as we squawk comfortably like Santelli, we rather blithely accept that about 92% of mortgage holders are not going to default.
When I get a 92% on any test, I consider that an A-. An A- is subprime. And similarly, people are freaking out that we have unemployment of 10% here in California. That would be 90% employment. Also an A-, also subprime.
(Aside: The unemployment rate in the Oklahoma City metro is 4.6 percent.)
I suspect, though, that this is right at the threshold: were California unemployment to rise to 12 percent, leaving a presumed B-plus 88 percent, it would be decidedly more difficult to dismiss.
And besides, the issue isn’t so much the grade of, um, beef as it is the likelihood of nonbeef substances being found in various tranches.
McGehee »
8 March 2009 · 11:43 am
If California unemployment were to rise to 12 percent, I’d want to know when Jerry Brown got elected governor again.