Don't worry about him. He's got you wrapped around your little finger, and he knows it. He knows that you get upset whenever he starts to goof around, and he says things to you that annoy you.
His lack of work ethic will catch up to him eventually. Currently, your boss feels that with the tight labour market, he can't afford to lose anybody no matter how much of a loser he thinks they are. But once the market loosens up, he'll be the first to go. That's why he gets the bigger cheques - your boss thinks that once he's let go, he'll have a hard time finding a new job. Strange but true; this is how managers think.
Stop worrying about him. Stop reacting to him. All it does is make you look bad. If you feel you somehow have to make him productive, don't bother. Don't give him any tasks. Just let him mope around - if that's what he truly wants to do, then very well.
He has his opinions about the city. That's fine. Just because it doesn't jibe with your views doesn't mean that you need to get worked up about it. From his point of view, you're the one that looks kooky for liking something that he doesn't. Let him have his say - everybody's gotta flap their lips while at work.
I'll give you some perspective. I've worked with persons like the one you've described. Experience has taught me that they eventually get what's due to them. And as far as "bad" employees go, this guy's pretty low on the totem pole. I've worked with some fairly sociopathic people. I was on the team at WestJet with the guy that "broke into" Air Canada's website. Now he wasn't too fond of me, so he decided to give me the software that he used to screen scrape AC's website. I immediately gave the CD to my manager and then emailed him a web site link to a guide to ethical behaviour in the workplace. I figured he did this so that he could blame me if something went wrong. I quit the day after, tired of the lunatic's actions.
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