Levantine doomsayer Nassim Nicholas Taleb, author of "The Black Swan," has been everywhere lately, appearing on a Planet Money podcast last week and then this morning at the New Yorker Summit. (He also co-authored a new research paper.) The upshot of his latest message is extreme: ban debt.

Taleb claims that debt is a risk-enabler. Remember how your financially savvy mother always warned you that bonds are safer than stocks? Well, to Taleb, that's a problem. If I buy a bond, I act as if I'm certain to get that money back, and might continue loaning money elsewhere. When one of those bets (shocker!) fails on me, I have to call in my other loans, and thus trigger a system-wide panic.

Equities (a.k.a. stocks) are, on the other hand, inherently risky; they entitle you to a piece of the profits, but also expose you to business downturns. As Taleb sees it, equity-holders are a lot more cautious about where they put their money.

His proof? The dotcom boom-and-bust was very much equities-driven, and resulted in a mild recession; investors absorbed their losses and moved on. The housing boom-and-bust was debt-led and has, of course, led to a systemwide meltdown. He says:

We have to be a lot more careful going forward, because we have globalization, the internet, and operational efficiency — which cannot accommodate debt.

In other words, today's crisis is the result of a) over-leverage and b) "disappearing slack," as Paul Kedrosky puts it. "We live in a world with less slack than ever, whether you're thinking in epidemiological or financial terms (and they are analogous), and that has immense consequences for runs, of whatever variety."

In 2005, The New York Times ran a now-infamous article about the benefits of a slack-free world:

It had been a busy day for Georgia businesses, and FedEx's regular nightly flights from Atlanta to the company's Memphis hub were overbooked with packages. So the local crew made a call to a sprawling, low-slung room here at headquarters, where people hunch over computer screens showing weather maps and flight plans, and asked for help from the five empty FedEx jets that roam over the United States every night.

The recent birth of that small fleet, at a multimillion-dollar price tag, explains a lot about how the nation's economy has become so much more resilient. Think of it as the FedEx economy, a system that constantly recalibrates itself to cope with surprises.

The United States has endured an almost biblical series of calamities in recent years - wars, hurricanes, financial scandals, soaring oil prices and rising interest rates - but the economy keeps chugging along at an annual growth rate of roughly 3 percent.

It has been able to do so with the help of technology that allows businesses to react ever more quickly to changes.

The question I would pose to Taleb and Kedrosky is, at what point does interconnectedness switch from diluting negative shocks, as it clearly is capable of doing, and instead augmenting them? 

In a new song, Merle Hazard and his singing partner Bretton Wood ask:

Inflation or deflation?

Tell me, if you can

Will we become Zimbabwe?

Or will we be Japan?

Watch the whole thing:

(Hat tip: Calculated Risk)

Taxes are going up in most parts of the world as governments struggle to pay for the financial crisis, but one place they are going down is in French restaurants. Sales tax on restaurants and cafes from Paris to Cannes will be falling from 19.6 percent to 5.5 percent as of July 1st, thanks to a new national VAT cut. 

It's only appropriate that the French, who still spend more time eating and sleeping than any other country (check out stats on that from the OECD's new Society at a Glance survey), would consider encouraging more frequent trips to restaurants as a key part of their national stimulus efforts. Bistros and cafes in particular have been hit hard since the downturn last year, with 3,000 plus closing their doors in 2008 (a new ban on smoking didn't help matters).

Economy minister Christine Lagarde is also hoping that the cut will allow France to "conserve and improve its culinary reputation," and indeed, restaurant owners have promised to go on a hiring spree to improve service. Unfortunately the new tax cut won't apply to alcohol (government ministers don't want to encourage those still unemployed to cry in their bordeaux). But it will make the average cafe meal a whole lot cheaper for lots of summer tourists -- just remember not to order any Freedom Fries.

Please, Sir, May I Have Some More: The latest leak ahead of tomorrow's stress test results has Bank of America needing an extra $34 billion in bailout money. How's the government doing on those bailout coffers, you might ask? ProPublica, diligently tracking every penny, has the scoop.

The Fortunes of Lowlife Grave Dancers: What's to become of ailing small banks in America's ailing small towns? The private equity kings of New York see big profits on the horizon, but the Fed is resistant to letting them completely take over the recession's biggest potential prizes.

All Real Estate Is Local: New data from Zillow.com shows some bright spots amid more bad housing news. The upshot: real estate values in some metro areas are actually rising this year, but the national picture shows that the bottom will be both long and a long way off. (Chart is interesting, and worth the click).

Downers from the Fed: Real Time Economics brings us doom and gloom from the Fed's senior loan officers, who expect credit quality for "all types of loans" to deteriorate this year. It's a cruel about-face, since RTE just posted this optimistic list last week.

Some Economic Sweet Nothings, Please: The Onion declares it so! America is ready to be lied to about the economy again.