[Excerpted from Defending the Undefendable. An MP3 audio file of this article, read by Jeff Riggenbach, is available for download.]

The Bank of Canada raised its key interest rate on Tuesday, the first G7 industrialized economy to do so after the global recession

Homeowners have started to get wise to the fact that, even if they don’t bother making payments, lenders won’t be evicting the residents any time soon. For a while now, more and more articles have been appearing the press noting big increases in the number of people who simply stop paying their mortgages. In the past, however, the attention has tended to focus on people who walked away from their homes. But why walk away when you can live in the house for free?

In 1896, Brooks Adams wrote a book called The Law of Civilization and Decay. Like most late-19th-century commentators, he believed that his country was nearing a watershed in its history. But unless America rallied around a strong leader, the center of world power, which he thought might be about to shift from England to the United States, would shift instead to Russia.

Many commentators (the majority of whom are not economists) blame the imminent crisis in the eurozone on malevolent speculators. I find it necessary to take up the cudgels on the traders’ behalf and explain why they are not culpable for the current mess.

Apple recently passed up Microsoft in market capitalization to become the world’s most valuable technology company. Check out this nice New York Times chart, which tracks the two companies’ market caps since 1990. Cursor over the little “i” flags to see company-history milestones.

Paul Krugman is fretting that the Organization for Economic Cooperation and Development is listening to the “Pain Caucus“, since it is recommending austerity measures.

Not to worry Mr. Krugman, Team Profligacy is on the case!

From Spiegel:

Europe is eager to begin paying down sovereign debt. The US wants to see Germany and France continue stimulus measures. (…)