Thomas Friedman and the Upcoming Generation Clash, Citigroup Hiring Like Crazy, and Jefferson County Alabama Ready to Default?

Thomas Friedman, never the brightest guy when it comes to economics, has a pretty damn good column in the New York Times today highlighting the upcoming generational clash:

Indeed, if there is one sentiment that unites the crises in Europe and America it is a powerful sense of “baby boomers behaving badly” — a powerful sense that the generation that came of age in the last 50 years, my generation, will be remembered most for the incredible bounty and freedom it received from its parents and the incredible debt burden and constraints it left on its kids. 

Class warfare eat your heart out, this will be the war that challenges the status quo of how industrialized countries are governed.  Friedman skips the b/s and gets at the core of the issue.  The generation preceding mine was given lavish entitlements by the generation before and accumulated so much debt that the whole financial industry is literally built upon a fake sense of prosperity.  What Friedman leaves out however is that this mindset has been ingrained in my generation for the most part as many of my peers, not idiots by any means, still don't see the writing on the wall.  The entitlements programs our parents have grown dependent on (if you don't believe me, check out the myriad of polls and studies that show Americans don't save nearly enough for retirement) have also served to ingrain a sense of entitlement in my generation.  Go to any college campus and ask students there if they have "rights' to such things as health care, education, or even water. I bet $100 the majority of kids will say yes to all three.

If you wanna see just how outta control things have gotten, see the following three graphs:

Not to worry though, NYT's token conservative (which is basically a Democrat who likes war mongering) David Brooks prescribes his own solution to curtailing all those expensive end of life treatments: pull the plug!

The fiscal implications are all around. A large share of our health care spending is devoted to ill patients in the last phases of life. This sort of spending is growing fast. Americans spent $91 billion caring for Alzheimer’s patients in 2005. By 2015, according to Callahan and Nuland, the cost of Alzheimer’s will rise to $189 billion and by 2050 it is projected to rise to $1 trillion annually — double what Medicare costs right now.

Obviously, we are never going to cut off Alzheimer’s patients and leave them out on a hillside. We are never coercively going to give up on the old and ailing. But it is hard to see us reducing health care inflation seriously unless people and their families are willing to do what Clendinen is doing — confront death and their obligations to the living.

Brooks basically ends up advocating for a central authority to deny care to the elderly.  No surprise there.

With all the Fed money printing starting to seep its way into the system, this shouldn't be a surprise either:

For 2 1/2 years, Vikram Pandit was forced to hunker down to fix Citigroup's troubled businesses and fend off the bank's critics in Washington.

Now, after reporting a 24 percent profit increase for the second quarter, Pandit, Citi's chief executive, is starting to play offense.

Citigroup has been hiring dozens of investment bankers, dialing up advertising and drawing up plans to add several hundred branches worldwide, including more than 200 in major cities across the United States. The bank is in the middle of stitching together its disparate technology systems - a mammoth effort known internally as Project Rainbow - and spending more than $1 billion a year to keep up its prized global transaction services franchise.

There you go folks, Citigroup is expanding from the benefit of Bernanke's printing press.  This goes along with Silicon Valley, which makes sense if banks like Citigroup are improving their technology infrastructure.

So Meredith Whitney's prediction of multiple municipal bankruptcies may finally be coming to fruition:

(Reuters) - Bankruptcy is still a "very strong possibility" for Alabama's Jefferson County, Governor Robert Bentley said on Saturday -- a move that could make for the largest municipal bankruptcy in U.S. history.
A $3.2 billion bond debt related to Jefferson County's sewer system has pushed the county toward the brink, and a rare Chapter 9 municipal bankruptcy could have ripple effects in the $2.9 trillion U.S. municipal bond market.

If I am lucky, I will have an article in the Press and Journal this week highlighting the similarities between Greece and perhaps the next biggest municipal bankruptcy, the great city of Harrisburg, Pennsylvania.