November 26th, 2010

Europe’s day of reckoning

Send not to know for whom the bell tolls,
It tolls for thee.

The more Europe yokes its economies together, the more likely it is that problems with one country will pull the others down. The idea, of course, was the opposite—that the stronger ones would lift the others up.

In good times, yes. In bad times, no.

30 Responses to “Europe’s day of reckoning”

  1. Ye Olden Tymes Guy Says:

    Verily and for soothe, I praye the American coloneys, their Indepenence newely wonne from His Majesty’s Crowne, yoke not their Merchants and Perveyores of Markes of Credit togethere into a single Market, for certainly those poor and spendthrifte States (id est, those Scounderels in vile De La Ware) will drageth downe those States that have managede theire affaires and Fiances moste frugally and Prudently.

  2. david foster Says:

    “Unfortunately in the year XXXX the whole world was one large international workshop. A strike in the Argentine was apt to cause suffering in Berlin. A raise in the price of certain raw materials in London might spell disaster to tens of thousands of long-suffering Chinese coolies who had never even heard of the existence of the big city on the Thames. The invention of some obscure Privat-Dozent in a third-rate German university would often force dozens of Chilean banks to close their doors, while bad management on the part of an old commercial house in Gothenburg might deprive hundreds of little boys and girls in Australia of a chance to go to college.”

    Except for the archaic language, this might be a contemporary description of the risks and stresses of globalization. It is actually a passage from Hendrik Willem Van Loon’s book The Story of Mankind, published in 1921. The date I coded as XXXX is 1914.

  3. gs Says:

    The more Europe yokes its economies together, the more likely it is that problems with one country will pull the others down.

    Same thing with credit default options and other derivative thingies. And maybe our communications and power grids are in a similar situation. Precluding small failures can have the effect of making failure catastrophic when it occurs.

  4. Bob From Virginia Says:


  5. Curtis Says:

    The IMF wants governments to expand social safety nets and create jobs. Mohamed El- Erian, the commenter who states, ““The comforting statements issued by European ministers in recent days must be urgently translated into meaningful actions,” is a past deputy director for the IMF. What LBJ was to America and its ruinous “war on poverty,” so the IMF is to the capitalist nation states of the world. The IMF and all their crowd propose to throw our wealth at a problem they created and then, after making the problem universal, blame capitalism and count on us to vote in the night.

    Watch Nigel Farage say the right things to these scumbags:

  6. Occam's Beard Says:

    Humans naturally have a centrifugal force between them, an urge to compete with others and if possible steal a march on them, and a centripetal one urging cooperation. Which one dominates in a given situation depends in no small measure on the relationship between the parties. Within families, at one extreme, cooperation tends to prevail over competition. Between strangers, the opposite is true.

    Economic policies invariably involve tradeoffs that benefit one segment of the polity at the expense of another. Industry wants high prices for manufactured goods but low ones for food, while agriculture wants the reverse. Similarly, exporters want an undervalued currency, while importers want an overvalued one; borrowers want low interest rates and more inflation, but lenders want the opposite. Setting economic policies therefore inevitably puts someone’s nose out of joint. Ideally the bond between the affected people is strong enough to withstand the resulting tension.

    The EU’s problem is that many policies don’t just benefit a segment of the economy at the expense of another, but also benefit an EU member state at the expense of another. Economic interests coincide with traditional national ones; for example, Germany is largely industrial, an exporter, and a lender, while Greece is the converse. Because Europeans still identify with their national identities more than with the EU, any policy decision inevitably stresses pre-existing fault lines. Far from having a strong bond and a single identity, Europeans have been at each others’ throats for millennia, with brief interludes of relative peace owing first to the Romans and then to the Americans.

    That history, together with the differences in economic circumstances, language, customs, ethnicity, resources, work habits, and outlook on life, absolutely guaranteed from Day One that centrifugal forces would doom the EU.

  7. Tom Says:

    But, O.B., the bureaucrats are the glue that holds the whole thing together. Blessed be the bureaucrats. Heh.

  8. Oblio Says:

    We are passed the tipping point for the EU. Armageddon comes next year, when the Spanish need to refinance EUR 110 billion.

  9. Tom Says:

    Sorry to disagree, Neo, but the idea of the European Union was not for the strong members to do anything to pull the weaker up the ladder. Not even close.

    The EU was an attempt to rebut the Estados Unidos, by creating an open-border free-trade free movement superState with its own currency. The weaker member states were expected to honor their sign-up commitments, e.g. limit your gov’t deficit to no more than 3%/year. The punies, the more ambitious lesser states, and the chronically ill-governed (I submit Greece & Italy) ignored these operating standards. Bad political choices were made (Ireland committed its taxpayers to guarantee ALL Irish bank debt). The housing bubble is blowing up Ireland & Spain. Importantly, there is no sanction or other punitive measure the EU can take; Maastricht did not provide any. Any remedy must be agreed to by the providers of succor and the wayward state; lack of enforcement persists throughout this recurrent process. Greece admitted to egregiously violating the 3% standard, but in doing so, lied about the size of the admitted violation. And not a small lie, that.

    Latvia is going it alone and may be turning a corner. It has not yet converted to the Euro, and I hope it does not.

    Resisting the Turkish effort to join has been the only issue on which the EU has shown even modest strength. Turkish membership would rapidly create Eurabia.

    The EU crisis cannot end well, for all the usual hard number reasons, but also because of the BS that is part of pan-Euro postmodernism.

    The question is not whether to short the Euro, but what price entry point to pick. I was a bit early-April- and chickened out because of self-doubt, but I no longer doubt this Thomas.

  10. Oblio Says:

    Short the Euro versus what? The Dollar? If so, Thomas, you have nerves of steel.

  11. Curtis Says:

    Tom, I recently saw the notable Lt. Colonel Allen West on the TV! Opposing him on the political discussion, was the mugwamp who wrote “Revival,” and this mugwamp tried to direct his puke upon the good soldier, but it didn’t work. I suppose the ex-haler was counting on a typical leatherneck response and hoped to draw out the animal that is, of course, in every tea partier much less MARINE!

    The notable Lt. Colonel Allen West remarked (ever so slyly) that relations among nations are Machiavellian not Kantian. Eyebrows were shot up and coffee cups quickly grasped. What the hell!

    When the notable Lt. Colonel Allen West becomes President of the United States, there will be no lack of enforcement. Damn the irony; full speed ahead!

  12. Tom Says:

    Just read Richard Fernandez’ new piece, “Haircuts Verts” on PJM. A remarkable man. The piece is relevant to our thread here. My link trial did not work.

    West is an American whose color I do not see, the kinda guy that should be in the White House now. I was glad to have contributed to his campaign and wish we had as good here.

  13. Curtis Says:

    If history did not provide not only Miriam Oliphant, but several doppel gangers as well, we could safely say, “All’s well that ends well.”

    Lt. Colonel Allen West is karma’s answer.

  14. IGotBupkis Says:

    > In good times, yes. In bad times, no.

    Yes, but there IS no such thing as “good times” for a Socialism.

    The goal of socialism is to drag everyone down to the same level.

    As the old saw goes:

    A communist looks at the rich man in the silk suit with the chauffeur, and says, “No man should have so much”.
    The capitalist looks at the rich man in the silk suit with the chauffeur, and says, “All men should have as much”.

    Hence, the inevitable result of linking socialisms is that they all drag each other down…

    It’s capitalisms you generally want to link together.

  15. Beverly Says:

    Precluding small failures can have the effect of making failure catastrophic when it occurs.

    Yellowstone wildfires, anyone?

  16. ABC Says:

    Total unity is a total gamble…

  17. rickl Says:

    Allen West is the Antiobama.

  18. rickl Says:

    Allen West is the Antiobama.

    I have no objection to a black President per se, but in the name of all that is holy, why couldn’t it have been him?

  19. Artfldgr Says:

    My fellow Americans in all 57 states, the time has changed for come. With our country founded more than 20 centuries ago, we have much to celebrate – from the FBI’s 100 days to the reforms that bring greater inefficiencies to our health care system. We know that countries like Europe are willing to stand with us in our fight to halt the rise of privacy, and Israel is a strong friend of Israel’s. And let’s face it, everybody knows that it makes no sense that you send a kid to the emergency room for a treatable illness like asthma and they end up taking up a hospital bed. It costs, when, if you, they just gave, you gave them treatment early, and they got some treatment, and ah, a breathalyzer, or an inhalator. I mean, not a breathalyzer, ah, I don’t know what the term is in Austrian for

  20. SteveH Says:

    So do heads of state get harrassing calls from collection agencies too?

    Wife of President: “You gonna get that phone Hun?”

    President: “I ain’t got no friends with an 800 number”

  21. Gringo Says:

    The Bamster and the Dhimmis cry, “Why can’t we be more like the Euros?” Bankruptcy included.

    Artfldgr’s quote is from Sarah Palin, noting the gaffes of the Bamster.

  22. rickl Says:

    Here is the text of a speech given today in Copenhagen by Elisabeth Sabaditsch-Wolff, who is on trial for hate speech against a certain religion. (Any guesses?)

    The Time That is Given Us

    Sounds like the collapse of the EU can’t come a moment too soon.

  23. Knowing Things about History is Useful Says:

    The goal of the European Coal and Steel Community was to link the economies of Germany and France so closely together that another war between them would be unthinkable and materially impossible. In this, it was an overwhelming success. All else–from EURATOM to the EEC to the European Union–is a footnote to this success.

  24. rickl Says:

    Presumably the wholesale immigration of Third World Muslims, and the native European population being told to shut up about it, are additional footnotes.

    The road to hell is paved with good intentions.

  25. rickl Says:

    Knowing Things about History is Useful.

    It certainly is. I fully agree.

    Maybe if the United States hadn’t intervened in World War I (under the Progressive President Wilson), Germany would have won. France was on the brink of collapse in 1917, and her front-line troops were mutinying. With the resumption of unrestricted submarine warfare, Britain would have capitulated eventually.

    Bottom line, a German victory in WWI might have precluded WWII and the Holocaust.

    Maybe the Bolshevik Revolution in Russia could have been averted, though that’s a bit of a stretch. But if it had been averted, then maybe it wouldn’t have inspired other Communist revolutions around the globe.

    Any way you look at it, if America hadn’t gotten involved in WWI, the world of 2010 would look very different indeed.

  26. Wolla Dalbo Says:

    One wonders what has and will happen to all those Brits who were so delighted to decamp to a villa in Spain or France, Majorca, or Lisbon.

  27. Danny Lemieux Says:

    Substitute “California” and “Illinois” for Greece and Ireland and we really aren’t all that different, are we?

  28. Baklava Says:

    Danny, Nope.

    Rickl, In her speech was this nugget:

    We are systematically being silenced.

    I admire the provisions of the First Amendment that all Americans enjoy as their birthright. Its free speech provisions will make the imposition of sharia that much more difficult in the United States.

    But here in Europe we are not so well-protected. Our constitutions and the rules imposed upon us by the EU allow certain exceptions to the right to speak freely, and those little rips in the fabric of our rights are enough to tear the entire structure to pieces.

    We desperately need our own version of the First Amendment. We need leaders who are wise and courageous enough to compose and implement legal instruments that affirm the same fundamental rights that are guaranteed to all citizens by the United States Constitution.

    And here we type…

    Neo, One more thing to consider. As we weaken the dollar that helps the Euro. Time may be on their side as long as we continue the path also.

    Nothing will change in 10 minutes is something I say often in person.

  29. Baklava Says:

    oops. I only meant to bold the word Neo.

  30. Baklava Says:


    I wanted to add this from Atlas Shrugs:

    It is happening in the U.S.

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Previously a lifelong Democrat, born in New York and living in New England, surrounded by liberals on all sides, I've found myself slowly but surely leaving the fold and becoming that dread thing: a neocon.


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