MainStreet.com (a personal-finance-oriented offshoot of TheStreet.com) just released its Happiness Index, a Prozac-addled tweak on the famous Misery Index. The latter, which combines unemployment and inflation statistics, captured the prevailing worries of the stagflation-prone 1970s; now that inflation has been tamed, MainStreet.com clearly felt it was time to throw housing into the mix. 

The list ranks the fifty states and Washington, D.C. on three measures: unemployment, foreclosures and non-mortgage debt. It's a bit silly to call it the "Happiness Index," since, as we all know, money doesn't buy happiness (although maybe credit card debt could...). But it does provide a quantitative and fairly substantive accounting of the states hardest-hit by the housing bust.

So which states were most miserable? Not surprisingly, Sunbelt States like California, Nevada and Florida make up most of the bottom 10, largely because of their high foreclosure rates. The most miserable state was a bit surprising though: Oregon. Maybe it's all the rain?

If you're in need of a pick-me-up, skip the pharmaceuticals and move to Nebraska, the happiest state on the list. (Personally, I'd settle for the fourth-happiest state: Hawaii.)

“Oil prices' recent highs were fueled in large part by the fact that speculators comprised a massive share of those "investing" in oil. Fears of U.S. war with Iran if McCain was elected and the subsequent shutdown of the Straits of Hormuz, a massive world oil trade route, drove prices way, way up to their highs of between $100 and $150 U.S. per barrel. So the "highs" that we recently saw were really not that reflective of the true value of a barrel of oil.”

That’s true – violence and the threat of supply cut offs are always a big factor in oil prices, although the fundamental reason behind the most recent run up (West Texas crude peaked at an all time high of $147 last July) was a lack of investment into the industry. In the 1990s, oil prices went as low as $12 a barrel. A lot of smart people left the business, the number of new geological engineering grads fell, offshore rigs sat around rusting, and companies simply didn’t put much new money into research and development. The result: when prices began to rise, and demand picked up, the industry wasn’t ready to deal with it. When I interviewed then BP CEO John Browne back in 2006, prices were rising sharply, and he was having trouble finding offshore rigs for $500,000 a day. The same investment problem could eventually force prices up again; this time around, the issue is that big multinational firms only have access to about 20 percent of the world’s known reserves, thanks to major oil nationalization during the recent price run up. Bottom line: they don’t have many places left to put money, even if they wanted to.

On a different note, reader Rich Monk makes the following point:

“The war in Iraq and Afghanistan is about oil! The Niger Delta war in Africa is about oil! Besides religion…oil is the culprit in human suffering to this day!”

Putting aside that fact that most of us (unless we’re totally off the grid) use oil in some form every day, he’s got a point. UCLA professor Michael Ross has done research showing that while conflict around the world has been decreasing over the last couple of decades, conflict in oil states is going up. Reason enough to hope for a Green Revolution….

The Smoot-Hawley Tariff has become a bogeyman in economics circles, a piece of misguided, Depression-era legislation that raised tariffs to exorbitant rates and choked the world trade system near to death. I was surprised, then, to find this piece in Prospect magazine, by highly regarded development expert Ha-Joon Chang, who teaches economics at Cambridge, arguing that Smoot-Hawley actually did little to worsen the Great Depression. "The '1930s: never again' story assumes that protectionism is always bad," Chang writes. "But this is not true."

I asked Jagdish Bhagwati, a professor at Columbia University, senior fellow at the Council on Foreign Relations, and one of the best-known defenders of globalization if he cared to respond. He agrees that Smoot-Hawley didn't cause the Depression, but it did "accentuate" it. "When we say today that we must avoid repeating history and succumbing to protectionism, we are basically saying that, yes, we have repeated 1929 (the crash has already occurred) but we should not go on to repeat 1930 through 1934 (i.e. spreading protectionism)."

Further, Smoot-Hawley has become a great marketing tool. "Al Gore, who could not get the Senate to ratify the Kyoto Treaty on Global warming -- they were opposed to it 99-1 under the Clinton regime --- managed to get the world to change its mind on the subject because of the melting glaciers, the penguin film and the polar bears!  We free traders have Smooth-Hawley to play the same role! It is too important to be undermined by misleading argumentation."

Newsweek's daily serving of news and view from around the world:

Obama's Budget Conundrum: Think the G20 was a big deal? Not compared to the U.S. budget debate, says FT's Clive Crook, and he's not happy with Congress. They've all but nixed the main revenue-raising idea, while ensuring the most expensive proposal--health care reform--will pass with or without Republican support. As is, a budget gap would remain ten years out.

Inflation in an Emerging Market, Like the U.S.: Over at the Baseline Scenario, Simon Johnson reasons that the IMF's concerns about inflationary pressures in middle-income emerging markets could also apply for the American economy.

Beating the Treasury War Drums: Banks' board members could be next to get the ax from the federal government, Tim Geithner warned in an interview with CBS on Sunday. He also described GM's restructing plan as "not quite there yet."

China's Smooth Operating: Bob Samuelson says China is heavily implicated in the failings of the globe's dollar-based economy (yes, the same ones they've criticized), citing the artificially depressed currency that long kept Chinese export prices low. But despite cooperative rhetoric at the G20, they're looking out for #1 in how they maneuver themselves out of the fix.

The Communist Comeback?: Not quite. The Russian Communist party hoped to draw 5 million people to its rally in Moscow on Saturday, but the Moscow Times reports that only one or two thousand showed up. Given the predictions for the Russian economy in '09, perhaps they'll have better luck in October.