 EVA from two years ago (for part one of the essay, click here; part two, click here;l part three, click here). The US political process remains intellectually ossified. Neither party can figure out that its traditional nostrums are no longer working in the post-global financial crisis world. The Democrats seem incapable of comprehending that the private sector does a much better job of running almost everything than does the government (especially when the former isn’t crippled by an onerous and Byzantine regulatory structure).
The Republicans don’t seem to grasp the fact that in a wealthy, modern, and aging country, a significant amount of socialism is unavoidable. The political coalition that realizes capitalism and socialism need to symbiotically co-exist will be the one that bends our present downward trajectory back up toward true fiscal sustainability and economic prosperity.
Although most of The Next Supermodel article centers on Sweden, it also examines the various challenges countries like Finland (with its overreliance on fallen tech giant Nokia), Norway (with its overexposure to oil), and Denmark (which lacked either world-class companies or energy resources) all had to face in reinventing their economies and social contracts. And, in each case, it took an existential crisis to catalyze the drastic overhauls.
As the article repeatedly points out, the Nordics are inarguably still grappling with vexing problems, mostly a legacy of their past "sounds good/works bad" hard-left economic policies. As Danish historian Viby Mogensen has observed: "The welfare state we have is excellent in most ways. We only have this little problem. We can’t afford it."
Eventually, that same inescapable reality will permeate the psyche of the American left (though I have my doubts Paul Krugman will ever come around). As I’ve noted in numerous past EVAs, it’s often the nominally liberal party that institutes essential reforms. This was also the case with our new favorite destination for bond investments, Canada. Its metamorphosis from the Banana Republic of the North to one of the world’s few remaining AAA sovereign credits has become legendary. In my view, it’s no coincidence that the Nordics are also in that select AAA-rated—and steadily shrinking—group. They all essentially followed a remarkably similar recovery plan, heavily focused on entitlement reform.
But back here in the good ole US of A, there seems to be almost no sense of what needs to be done. What’s it going to take to change that incredibly reckless attitude?
True north. It has been my contention that one of the worst consequences of the Fed’s "binge-printing" (kudos to Evergreen’s Jeff Otis for that pitch-perfect description ) is that it undercuts any urgency by the politicos to make the hard but essential decisions. It’s so easy to keep imitating an ostrich when you can finance record-breaking debt at less than it cost years ago when we owed much less. Thus, the Fed is the enabler of our government’s deficit addictions as it hoovers up nearly all longer term Treasury issuance.
Combined with the stock market’s steady rise, heavily propelled by the Fed’s limitless liquidity injections, there is a growing perception that things must not be as bad as most of us sense in our guts. This leaves folks like me in the unenviable position of pointing out that this bull market’s foundation is imported straight from the Sahara Desert.
One of the smartest political pundits around is Greg Valliere. As relayed in an EVA last fall, Greg is convinced our inspired "leaders" are going to stay in their present blissful state of denial (with a few commendable exceptions) until the next cataclysm. Unfortunately, I believe he’s right.
The Fed’s inevitable multi-trillion dollar portfolio liquidation gets my vote for when this delusional state will be thunderously shattered. Then, I believe, being the long-term optimist I am, a few brave souls in our nation’s capital will step forward and implement the type of reforms that the role model countries of Scandinavia put in place 20 years ago.
Once that happens, the resulting surge of confidence, along with the powerfully positive trends of US energy abundance and the accelerating return of manufacturing to this country, will catalyze the next bull market breakout. It will be the real deal, not a Fed-manufactured phony.
In case this all seems too much to hope for, consider the alternative. Well, there really isn’t one other than going through the paroxysms that southern Europe has endured (with more to come, I’m afraid). And at the end of the day, even if we do go down that sorry road, the rationalizations of the welfare state still need to occur.
To throw in another ray of sunshine to end this otherwise sobering EVA, I’d like to relay a set of prescriptions to restore America’s solvency and stature from David Rosenberg. As many EVA readers know, David is chief strategist and economist at Toronto-based investment firm Gluskin Sheff, and his 10-point recovery plan is right up there with the best I’ve come across (see on the next page). In addition to being one of the most glittering stars in the forecasting firmament, he is a native Canadian. As you’ve already read, it’s abundantly clear they know a thing or two about how to turn a country around. It’s time to swallow our American pride and follow the northern lights, whether they radiate from Canada, Scandinavia, or even, based on its extraordinary recovery, the wee country of Iceland.Maybe not super obscure, but I gotta chip in. Certainly under-appreciated, imo. [Fantasy Black Channel, by Late of the Pier](https://www.youtube.com/watch?v=IcemTGZEsnU). A few of you might remember the name, but for the most part these guys have been forgotten (though if you've heard of LA Priest recently; he was the front man). This is a massive formative album for me, one of the major turning points on my journey to art-obsessiveness and still one of my cherished works of art. I discovered this album when I was ~13 and didn't let go until I was 16. There were at least two years of pure worship somewhere in there. I put their music in my high school assignments. Maybe it's nostalgia painting things, but I still love this album as much today as I did back then. There are bands and albums from that period I've since realised weren't as great as I thought, but if anything my appreciation for this record has deepened for its consistency and replay value over ~8 or 9 years now. I don't know if I'm crazy for being the only one who still remembers this thing, or if everyone else is for forgetting it. I'm totally open to the idea that I'm seeing greatness where it may not necessarily be. That said, I find this album really incredible.

 This album is everything I love in art. Youthful playfulness, fun, experimentation with (and mastery of) style and form, headbanging energy, pure rockin creativity. There are so many sounds on this thing: touches of strange glitchy EDM at the end of Broken and Focker (seriously, check 26:10 onwards out), world music on The Bears are Coming, the genius disco break (29:17, 29:46!!!) wedged between breezy indie sections on the Enemy Are The Future, glam rock on Bathroom Gurgle, pure punk energy on Whitesnake and at the end of Heartbeat, the bold splashes of electro and indie rock throughout (see 35:16 for a great crossover moment) and god knows what else. And it all flows so well. These guys are masters of creating interesting and unusual sounds and arranging them into perfectly catchy song structures and passages and transitions that make total sense. Seriously, this album is just electric and thrilling to listen to.

I think Random Firl and VW sum it up well. Both short songs but packed with greatness. The drum groove on VW slaps. So many weird sounds in that one, like the horn section throughout and especially the filthy distorted bass coming in at 22:11. And Random Firl is just totally elating, such a strangely emotional and uplifting song.

 These guys had a really unusual approach to making music. There was a band member who pretty much just played the sampler. They would create these elaborate and unusual digital/electronic sounds on synthesizers and programs and have the sampler guy set them off live. See the gorgeous glockenspiel coming in at 13:27, pretty much everything on The Bears Are Coming and all the weird non-drums-guitar-bass sounds on Enemy are the Future, great little touches like the whistling at 19:43, etc. They approached making indie rock with the same precision and attention to detail and minute variation used in electronic music production, which makes this album an absolute joy to listen to again and again.

I don't know. This album means so much to me, and I see so much in it, but I've never once seen it mentioned anywhere. Listening back, there are issues. Maybe the singing isn't spectacular (though I think he has quite a bit of range and suits the rough-edged and energetic feel really well). Maybe the spasticity and shrillness and chaotic energy don't sit so well with others. I suppose, at the end of the day, it is just