The biggest story domestically was the Democratic National Convention. Last week we argued that conventions are increasingly irrelevant, and the falloff in viewership of this week’s spectacle suggests many Americans agree. This week we argued that closely following the horserace is a fine enough past-time, if the political junkie understands that that’s all it is:
[F]ollowing politics in this sense isn’t a serious pursuit, anymore than being a fanatical hockey fan or a Civil War re-enactor is a serious pursuit. And while most hobbyists and sports fans are realistic about the value of their fixations, politics fans often labor under the delusion that they are being serious and engaged when they are in fact goofing off. Election coverage often feeds this delusion, both because it is good business for the media to flatter its customers and because many pundits and reporters themselves get so caught up in the chase that they lose perspective on the inconsequential nature of so much of what they cover and write.
Case in point: look at the useless kerkuffle the press managed to gin up over some last minute changes in the Democrats’ platform. It’s a tempest in a teapot—a distraction from what’s really important.The big story in Europe was the emergence of the European Central Bank as a truly sovereign lender of last resort—despite protests from Germany. The events militating for this kind of development are familiar to regular VM readers. Just this week, we noted troubling macro symptoms plaguing Italy, as well as the Eurozone as a whole. Why did this happen just now? Sheer necessity, we argued. No other European institution is even close to being up to the daunting task:
People submit and even cooperate because the clear alternative is disaster. It was “follow Lincoln” or let the union fail. It was give Churchill whatever he wanted or watch the Nazis march up Oxford Street. And it is let the ECB do what it will or watch the European economy and the union with it fall apart.
And the lack of solid governing institutions doesn’t just limit the EU’s ability to cope with crisis. It cripples it from even articulating a coherent trade policy, making it easy prey for foreign powers using a divide-and-conquer strategy—a situation akin to what the United States endured under the Articles of Confederation.India was also in the news, stretching its wings in its near-abroad. Delhi hosted the Chinese defense minister, the Tajik president, and the Mekong-Ganga Cooperation ministerial meeting. Economic cooperation and development in its northeast is a particularly pressing concern for India these days, especially after ethnic tensions in the region sparked a panic across the country. WRM’s recent trip to Kolkata underscored the urgency:
Kolkata’s problems are partly policy driven, to be sure, but the city’s basic problems come from the loss of its economic hinterland. For Kolkata to flourish, Burma, Bangladesh and northeastern India have to begin a process of economic integration and cooperation, and they’ve got to attract both domestic and foreign investment to make that happen. Fortunately for Kolkata, this is a time when all the local parties plus Washington, Tokyo and many others want exactly that kind of regional integration and development to take place.
Just as India has ambitions for its periphery, so does Russia. Vladimir Putin penned an op-ed this week in anticipation of Russia’s first-ever hosting of the Asia Pacific Economic Cooperation Leaders’ Meeting in Vladivostok. Via Meadia welcomed Russia’s increased engagement in the region:
Even so, from an American perspective, a revival of Russian power and economic activity in the Far East would be good in almost every way. There is simply no way that Russia can ever be the main threat to the Asian balance of power—unless, I suppose, China were wiped out in a plague and a tsunami washed Japan into the sea. And given that fact, simply by existing and prospering, Russia makes the Asian balance of power more complex and therefore harder for any one country to dominate.
This insight was motivating Hillary Clinton’s efforts this week, as she worked on a peaceful, diplomatic solution to the various conflicts in the South China Sea. Her efforts have at least partially paid off, as the Chinese foreign minister seemed to commit China to a consensus-based code of conduct for the region.Other stories we touched upon:
- The jobs report made for grim reading. Maybe that’s why President Obama is being cautious with his plans for his second term.
- Syria’s civil war got messier still. As refugees flee the country, foreign jihadists are pouring in.
- Who wins during the pensions crisis? Wall Street does.
- Fact of the week: The United States healthcare waste is larger than the entire Pentagon budget.