If I weren't Annie in Washington, but were, say, Anthea in Athens, I'd consider moving right about now. The Greek economy is cratering. Unemployment is skyrocketing. Taxes are rising. Social services are being slashed. Greece's participation in the European Union means that I can move and get a job anywhere in it, without a visa. So, I'd figure -- I'm young, childless, and college-educated. I'll try my prospects in Strasbourg for a couple years. 

The problem is: I'm useful to the Greek economy. I work hard and pay taxes, but don't use much in the way of social services like healthcare. I do spend plenty of my income on things like clothes and food, though, and might even open a business if given the chance. Alas, it seems, I am leaving Greece by the thousands.

I used Eurostat to make this chart of the growth changes in the Greek population, broken down by age group. Blue bands are growing and red are shrinking. Eurostat only had data up until 2009, but I imagine we will see trends accelerate in 2010, with a veritable exodus of young members of the work force. On one hand, this might leave jobs for other workers and therefore lower unemployment somewhat. On the other, the trend just does not bode well for the Greek economy. 

At the Financial Times, Harvard professor Martin Feldstein argues for letting Greece take a holiday from the euro, allowing it to devalue its currency and ease its severe economic woes. It's a nice idea, but a bit pie in the sky. Barry Eichengreen explains why:

The insurmountable obstacle to exit [is] procedural. Reintroducing the national currency would require essentially all contracts -- including those governing wages, bank deposits, bonds, mortgages, taxes, and most everything else - to be redenominated in the domestic currency. The legislature could pass a law requiring banks, firms, households and governments to redenominate their contracts in this manner. But in a democracy this decision would have to be preceded by very extensive discussion.

And for it to be executed smoothly, it would have to be accompanied by detailed planning. Computers will have to be reprogrammed. Vending machines will have to be modified. Payment machines will have to be serviced to prevent motorists from being trapped in subterranean parking garages. Notes and coins will have to be positioned around the country. One need only recall the extensive planning that preceded the introduction of the physical euro.

The introduction of the euro did require extensive planning -- and extensive costs, costs Greece might not want to pay for. Let's do a bit of back of the envelope math. When the eurozone adopted the physical currency, in 2002, the French bank BNC Paribas calculated the price tag for the switch at 160 to 180 billion euros -- 188 to 212 billion euros today. Greece is about 2.5 percent of the eurozone economy -- so the government might be looking at something like a 4.7 to 5.3 billion euro cost.

That is not much. In fact, it is so little Greece might be able to afford it; the government already needs to borrow 53 billion euros to service its debt this year. But that doesn't include the dramatic cost to businesses, individuals, and banks, or the political and plenary trouble of executing such a maneuver. Alas, Feldstein's is a nice idea, but not one I see working.

Here are a chart and a graph showing the PIIGS' and the United States' indebtedness -- more specifically, their public debt and 2009 deficit relative to GDP.

Just glancing at the chart, and remembering that the PIIGS are among the weakest economies in Europe, it seems that the United States isn't in great shape either. It's just on par with Spain, whose economy is struggling.

But the United States has a number of advantages that make its debt and deficit picture brighter. In the future, Washington might answer to Beijing when it comes to its debt addiction. But for now, it determines its own fiscal and monetary policy measures. Not so for the euro-using PIIGS. Washington can slash its interest rate to zero, devalue the dollar, and perform quantitative easing -- none of which the PIIGS can do. Plus, Washington has much lower debt costs; much of the country's debt is basically free, due to the dollar's status as the world's reserve currency.

In contrast, countries like Spain and Greece are mostly at the mercy of their partners in the Eurozone. At The Guardian, economist Claus Vistesen notes that there is no "systemic set-up," no playbook, for what the Eurozone should do to prevent or counter the default of one of its members.

The European Central Bank can't bail Greece out, per Europe's own rules -- the Maastricht treaty says that "the Community should not be liable for or assume the commitments of central governments, regional, local or other public authorities of another member state." Simon Johnson argues that the IMF might be the obvious player to step in, but throws cold water on the idea -- would it have enough money to bail all of the flailing PIIGS out? Would it provide the same sweetheart deals it did to Eastern European countries? Where would that leave the Eurozone? 

I'm a bit more bullish on the prospect of the IMF stepping in with an emergency deal. But I think it is more likely the strongest of the big European economies, led by Germany, will eventually come around to coming together along with other partners to write a check and keep Greece afloat.

In addition to running their own stock exchange, it seems that Somali pirates might be getting into real estate in neighboring countries as well:

Even as housing prices have dropped sharply in the United States, prices in Nairobi have seen two- and three-fold increases the last half decade.

"There is suspicion that some of the money that is being collected in piracy is being laundered by purchase of property in several countries, this one being one of them," said government spokesman Alfred Mutua. "Especially at this time when we are facing global challenges of security such as terrorism and others, it is very important for us to know who is where and who owns what." [...]

Pirates in Somalia say they invest their ransom money outside their war-torn country, including in Kenya. One pirate who gave his name as Osman Afrah said he bought three trucks that transport goods across East Africa. A second pirate, who only gave his name as Abdulle, said he's investing in Kenya in preparation for leaving the pirate trade.

"Pirates have money not only in Nairobi but also other places like Dubai, Djibouti and others," said Abdulle. "I have invested through my brother, who is representing me, in Nairobi. He's got a big shop that sells clothes and general merchandise, so my future lies there, not in the piracy industry."

My colleague Elizabeth Dickinson has argued that pirates' financing is the achilles heel, and by investing in highly visible sectors like real estate, they seem to be sticking that heel pretty far out. Also, the fact that the AP's Tom Odula was able to get not one, but two pirates to tell him about their investment strategies, suggests that these guys might be getting a little overconfident.

Hat tip: Marginal Revolution

The New York Times reports over the past two years a piece of land in Bossaso increased in price 66 percent, a pair of men's shoes is up 150 percent. The reason? Pirates.

It appears the massive amount of booty being swashbuckled by Somali pirates is having very real effects on the consumer market.  In a sign that not much has changed in piracy over the past few centuries, the Somali pirates are spending their plunder on prostitutes, booze and drugs.

Last month alone, Somali pirates raked in over $3 million; and the E.U. reports that 11 ships are being held by pirates off the Somali coast, paydays waiting to happen.  This is translating to a giant disparity on the shore, as pirates drive around in luxury SUVs and don't even bother to collect their change after buying something. People who can't afford consumer goods often use the excuse, "we are not pirates."

They're not exactly romantics, though. ''Pirates do not waste time to woo women, but instead pay them a lot,'' said Sahro Mohamed, owner of a beauty salon.

MOHAMED DAHIR/AFP/Getty Images

Today, as over the weekend, markets shuddered at the news that Dubai World, a state-controlled investment company, has delayed some debt payments. Investors feared that Dubai World might default or collapse, hurting its counterparties (especially fragile British banks) and perhaps even tipping the world back into recession.

But, as many commentators have noted, even if Dubai World went totally belly up, it wouldn't have anything close to systemic effects. Why? It just isn't big enough. Here's a chart of the debt on its books, in comparison with Lehman Brothers, when it declared bankruptcy. 

Last week, the Hurun Report released the top two on its 2009 China rich list, a ranking of the wealthiest people on the mainland: Wang Chuanfu at $5.1 billion, whose company makes electric cars and batteries, and Zhang Yin at $4.9 billion, whose company produces recycled paper products. The rest of the list comes out this month.

A few things about these two titans and the rich list and its older versions interested me. First, as the United States' billionaires are getting fewer and poorer, China's are getting more plentiful and richer. There are now 131 dollar billionaires in China -- compared with around 350 in the United States.

Second, an exceedingly obvious point but one to marvel at: Rich people in China own companies which make things. The country remains the organ that produces the world's stuff -- batteries, cars, paper, widgets, tires, you name it. And these companies remain relatively undiversified, vertically, not horizontally. One member of the rich list, for instance, owns a company that produces pig feed. 20 years from now, he might own a conglomerate that makes pig feed, feeds it to pigs, slaughters them, and sells the meat. Then, 20 years from then, he might own a holding company which subcontracts out all of those functions to workers and producers in cheaper markets.

In contrast, the 10 richest people in the United States (in descending order: Bill Gates, Warren Buffet, Larry Ellison, assorted Waltons, Michael Bloomberg, and Charles and David Koch) run diversified companies which trade in finance, technology, information, and real estate.

I also took a bit of interest in the producer of the Hurun Report -- one Rupert Hoogewerf. He's a Luxembourgian alumnus of the accounting firm Arthur Andersen who produced Forbes' China rich list between 1999 and 2003. At that point, it seems that Forbes fired him, possibly due to "public doubts and questions of the accuracy and authority of the wealth ranking year after year," according to state paper China Daily. It added: "It is understood that he received no compensation settlement from Forbes."

The official line is that Forbes simply decided to have a Shanghai editor manage the production of the list. But I like the idea of list-maker Hoogewerf going rogue. Does make you wonder about the accuracy of those lists, though...

European leaders are starting to follow suit; Britain's five largest banks have agreed to publish the pay of their key staff members, and will spread bonus payments over three years. French president Sarkozy has announced a set of even tougher and more broadly applied regulations.

Of course, not everyone thinks that bonus reforms are the way to go. Nobel prize-winning conomist Robert F. Engle III says

We shouldn't ban bonuses, but restructure the way they're paid so they're more commensurate with the risk the company is taking....What's important is we give the banking system the right incentives to figure this out. When companies get too big and too complex to fail, they would face a higher tax rate, which would go into a rescue fund. The banks are not excited about it, they would rather go back to business as usual."

Earlier today, former Alaska governor and Republican vice-presidential hopeful Sarah Palin gave a speech to a group of investors in Hong Kong, for which the brokerage firm CLSA allegedly paid her $300,000.

Former McCain foreign-policy adviser Randy Scheunemann and a bevy of other veteran Republican aides reportedly prepped Palin for the speech, which Politico and other outlets have suggested implies she's prepping herself for 2012.

No reporters were allowed into the private event, but some investors passed good information on to Bloomberg News (which dryly notes that Palin first got a U.S. passport in 2007). The Wall Street Journal also seems to have some inside sources. Washington Wire offers a number of lengthy quotes.

Let's take a look.

The foreign-policy sections were something of a snooze -- some gentle urging for China to become more responsible on human rights, some criticism of its treatment of ethnic minorities and aiming of arms at Taiwan, some commentary on the trade and currency imbalances, some criticism of the United States for utilizing China as a "lender of first resort."

Regarding economics and the recession, though, Palin got a lot more interesting.

Foremost, she pinned the blame for the financial crisis on the U.S. Federal Reserve. Not the interplay of investment-bank profits, trade imbalances, the rise of securitization, the creation of zero-deposit loans, oil prices, the housing bubble, the credit rating agencies, and other commonly cited factors. Just the Fed.

"How can we discuss reform without addressing the government policies at the root of the problems? The root of the collapse? And how can we think that setting up the Fed as the monitor of systemic risk in the financial sector will result in meaningful reform?," she said. "The words 'fox' and 'henhouse' come to mind. The Fed's decisions helped create the bubble. Look at the root cause of most asset bubbles, and you'll see the Fed somewhere in the background."

She added, "The government forced lending institutions to give loans to people who, as I say, couldn't afford them." (Emphasis mine. These assertions reportedly caused two observers to walk out, saying "It's awful." Notably, the Chinese government actually does force banks to lend.)

Finally: "[Alaskans] have much in common with Hong Kong. We're both young and transient, independent and libertarian. Places that continue to show the world, the power and the resilience of the free-market system at a time when too many are questioning it." (Emphasis mine.)

It seems Palin -- whose prior public pronouncements have been somewhat ideologically incoherent -- has finally picked her strand of conservatism: libertarianism. It's a choice that makes sense. If the economy recovers well by 2012, conservatives of all stripes will have, well, several trillion reasons to talk about government spending and U.S. deficits.

But, I really think if Palin wants to establish her economic conservative credentials she should head back to the statehouse and encourage the state to go Galt -- turning Alaska into the United States' Hong Kong, a relatively tax-free, regulation-free, federal government-free zone. It would be rough. Alaska receives more federal subsidies per capita than any other state. But managing the Last Frontier without this Washington cash would demonstrate her executive prowess -- and would show that no entity should need interventionist government life-support to thrive.

But, sigh, I guess she'll probably just continue to brush-up on foreign policy and beef up her conservative credentials in more conventional ways.

Photo of Palin's resignation speech by Eric Engman/Getty Images

Last week, Peter Bergen wrote an optimistic post titled "The Afghan Phoenix" over on the AfPak Channel, giving some counterfactuals to the doom and gloom over the plight of Afghanistan and the U.S. mission there. Five million refugees have returned to Afghanistan. One in six Afghans owns a cell phone. And, he notes, "You were more likely to be murdered in the United States in 1991 than an Afghan civilian is to be killed in the war today." This statistic struck me most, though: "In 2008, Afghanistan's real GDP growth was 7.5 percent. Under the Taliban the economy was in free fall."

I won't argue that Afghanistan's economy was anything other than terrible, and worsening, under the Taliban. It was and remains an impoverished country with a host of profound basic infrastructure and business development challenges -- from the lack of roads to the surfeit of bombs to the high illiteracy rate. It has a massive black-market economy. 80 percent of working-age men are involved in subsistence farming. A woefully high proportion of its population relies on the drug trade.

But I still don't find the 2008 GDP growth figure too much of a reason for optimism. Why? Afghanistan's GDP isn't growing because of booming Afghan production and consumption, or rising wages. Afghanistan's GDP is growing because of all the Americans and other foreigners -- around 65,000 troops and 200,000 nongovernmental workers -- building and buying things there (with dollars, no less), and because of the $57 billion pledged by international donors since 2002.

For an illustration of the phenomenon, see this chart of Afghan GDP in inflation-adjusted dollars, which I made with UN data. The Taliban took over in 1996, and Afghanistan's economy dwindled. The U.S. invaded in 2001, and it boomed. Afghanistan's GDP depends entirely on the armed force in charge. This isn't to say the local commerce supplying the 265,000 relatively flush foreigners in Afghanistan isn't real. But were the United States to drawdown, aid workers and military contractors and commerce would follow. My guess is that much of the GDP growth comes from service-sector jobs, not from new production. 

That's the real issue. Foreign spending in Afghanistan is a good thing for GDP. It's less clear whether it has fostered economically meaningful development. Dollars are all well and good -- but won't do much unless they help create businesses, employment, infrastructure development, and longer-term growth. (This is why Jonathan Zasloff's plan to hand out cash to Afghans wouldn't do much more than stoke inflation.) Whether they can remains the question.

Plus, many worry the U.S. troop presence cannot foster the foreign direct investment, local economic growth, agricultural development, and security and economic paradigm the country so desperately needs. But the U.S. military is hoping so. The civil-military plan by U.S. Ambassador Karl Eikenberry and Gen. Stanley McChrystal Laura Rozen posted today mentions the Afghan economy, licit agriculture, cross-border commerce, and reconstruction dozens of times.

The financial crisis, which has already hit Cuba's economy hard, is about to give the country another big kick, this time in the tuchas. Literally. Cuba is on the verge of a toilet-paper crisis.

Devastating hurricanes have left the state-run company that produces the country's supply, without the raw materials necessary to keep up with demand. In addition to which, President Raul Castro recently announced a 20 percent cut in imports, meaning a lot less goods on state-run store shelves. Cuban officials are saying they may not have sufficient TP supplies until the end of the year.

Worldwide, toilet paper is a booming business, especially in the United States where consumers use up to 50 million pounds of TP a year. It seems American bottoms have a "soft-tissue" fetish, one that's not only costly, but harmful to the environment. In order to get the fluffiest tissue, suppliers take from the world's rainforests. Earlier this year Greenpeace released a toilet-paper guide listing the more planet-friendly products. 

One penny-saving option for Cuba would be to use recycled lavatory paper, a much cheaper alternative on the whole. Indeed, many countries are already using the eco-friendly alternative, even if it is a little ... rough.

For Cuba, this could be an opportunity to take that initiative one seriously brave step further to becoming a leader to an "greener" planet: Go cloth.

Chip Somodevilla/Getty Images

This past week, Vitaliy Katsenelson wrote a great Foreign Policy web feature on the big old asset-price bubble developing in the Chinese economy, called "The China Bubble's Coming -- But Not the One You Think."

Recent news seems to bear the theory out.

The Financial Times reports:

Chinese regulators on Monday ordered banks to ensure unprecedented volumes of new loans are channelled into the real economy and not diverted into equity or real estate markets where officials say fresh asset bubbles are forming.

The new policy requires banks to monitor how their loans are spent and comes amid warnings that banks ignored basic lending standards in the first half of this year as they rushed to extend [around $1 trillion] in new loans, more than twice the amount lent in the same period a year earlier.

I feel a bit strange saying this.

But, over the past year, in the midst of the worst economic crisis since the Great Depression, I've really come to admire the Chinese central bank. 

This fall, it recognized the need for massive stimulus -- and did it. Then it realized it was pushing too much money into the economy, creating bubbles and distorting the lending market -- and so it stopped. The central bank will raise reserve requirements for lenders. And presto, they'll stop lending so much. The bubble will ease, rather than popping.  

Of course, I'm wary of my own oversimplification here. The Chinese economy has some very trying issues ahead of it, particularly as related to its currency, its U.S. reserves, and the quality of its economic growth. Plus, the impact of the lending spree (and its halting) obviously won't be clear for some time. 

But, for the moment, this move just seems really prudent. Another way of thinking of it? Being a command economy has its advantages when there's need for a whole lot of emergency economic commands. 

On Friday, Britons Lady Joan and Sir Edward Downes, a prominent orchestral conductor, committed suicide with barbituates provided by the Dignitas clinic in Switzerland. According to British newspapers, Joan, 74, was suffering from terminal pancreatic cancer and had but weeks to live; Edward, 85, was going blind and deaf and did not want to live without her. The couple had been together for 54 years. 

The story has reignited the debate over assisted suicide in Britain -- where every family that makes that horrific trip to Zurich commits a political act.

Indeed, in a brief interview with the Evening Standard, the Downes' son said,  "It is a very civilized way to end your life, and I don’t understand why the legal position in this country doesn’t allow it." He also mentioned that he and his sister rang the police themselves to inform them of the deaths. 

British police are questioning them, as assisting a suicide is illegal in Britain. But the justice system is unlikely to do anything. At least 117 Britons have committed suicide in Switzerland, where it has been legal to help terminally ill people end their life since 1998. No members of their families have ever been prosecuted. Britain, in essence, turns a blind eye.

I don't have much to say about the validity of assisted suicide laws. But one thing about the story struck me.

It's an expensive way to die -- it costs 4,000 Euros for Dignitas' services, plus the cost of bringing out one's family. And, because it is so expensive, only the wealthy seem to choose to do it. The titled Downeses. Businesspeople. University professors. Doctors.

One can imagine other terminally ill patients, in extraordinary pain and with no quality of life, wishing to end their life in a manner of their choosing, but being unable to do so because of the cost.

Britain's laws, de facto, make it possible for the rich to die via assisted suicide, but impossible for the poor to do so.

It reminds me of one of the common arguments over abortion laws. Women in countries like Portugal (which has restrictive abortion laws) or states like South Dakota (where virtually no clinics provide the service) often need to travel far distances to obtain the service. Which means the rich are able, and the poor aren't. 

And access to such services should be determined by law, not class. 

I have an article up on ForeignPolicy.com today about a subject which is a bit hard to sex up but is vitally important to countries and governments and people: youth unemployment. 

The point of the piece is that unemployment among under-25s has risen to frankly horrific levels in a number of European countries -- nearly 40 percent in Spain, 35 percent in parts of the Baltics, more than 20 percent in a dozen more.

Why's that so bad? Well, the obvious reason of financial hardship, for one. But there's also a plethora of economic research showing that young people suffer lasting damage from spells of joblessness -- in everything from weight gain to reduced earnings down the road. The effects aren't so pronounced or persistent in older workers.

I'll elaborate on the part of the article I found most interesting but unfortunately didn't get a chance to expand: a demographic phenomenon making the situation much worse in the ex-Soviet countries (now, emerging eastern Europe) which happen to be particularly hard-hit by the Great Recession.

These socialist governments used to encourage families to have children, keeping the birth rate and the population rising via social and economic policy. That ended when the Wall fell. Between 1989 and 1991, birth rates plummeted throughout eastern Europe, as economic uncertainty and political collapse and (in some countries) the easier availability of birth control options meant women started having smaller families.

So, say you visited a kindergarten classroom in Saint Petersburg in 1993 (so the children were born in 1988), and all its 20 desks were filled. If you returned in 1998 (for kids born in 1993), there would only be 12 kids there. That big of a phenomenon.

Fast forward to today. Those Saint Petersburgian kindergarteners from 1993 would be 21 -- in the work force or graduating from college this year. They represent a demographic peak, a blip, for the job market.

That is compounding the problem of youth unemployment -- which is happening for all sorts of reasons across Europe.

The upside? Starting soon, within a few years, as the recession lifts, there will be fewer and fewer school-leavers and other young workers in these eastern European countries, worst-hit by the recession. Which means the youth unemployment rate should drop as precipitously as it's risen.

To illustrate the point, I made a chart, above. It shows the 18-to-24 population of each country. Pretty crazy, huh?