India, China in Economic Warnings: Eurofail Damages World
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  • It’s not Eurofail, it’s Keynsian economics fail. Von Mises predicted every aspect of this almost a 100 years ago. read The Theory of Money and Credit, it’s all there.

  • WigWag

    “Europe may or may not save the euro. But the costs of the euro, and of the frantic efforts being made to sustain it, are making the world a nastier and poorer place.” (Walter Russell Mead)

    European austerity may be making the world a “nastier and poorer place” but the question is whether Professor Mead celebrates the fact that the world is getting nastier and poorer or whether he laments it.

    Only a few months ago, Professor Mead was so giddy at the prospect of European austerity that he was ready to pin a medal on one of the major architects of that austerity program, David Cameron. In fact, the more that Prime Minister Cameron emulated Ebenezer Scrooge the more giddy Mead became.

    Finally, on October 7, 2011, Professor Mead could no longer control his elation and he penned a post entitled, “Great Britain’s Man with a Plan.”

    So far, Prime Minister Cameron’s austerity program has done little or nothing to improve Great Britain’s economic plight and the nation is on its way to becoming a political outcast in Europe, but Professor Mead said,

    “All the mediocrities in Britain will be in a confederacy against these plans, and it is risky for the Prime Minister to shake things up while governing through a coalition which could fissure. But this Prime Minister is a rare thing: A leader with a vision for the future and the courage to stick to it.”

    After comparing Cameron to Clement Attlee, Winston Churchill and Margaret Thatcher, Professor Mead informed us that,

    “David Cameron understands that it is time to make another leap into the future; it is too early to predict whether he will succeed, but it is already time to congratulate him on the kind of courage and vision that over the last 300 years have kept Great Britain in the forefront of human affairs.”

    At the time he was beatifying Britain’s pencil-necked geek of a Prime Minister for cutting 20 percent out of the expense budget of many British agencies and departments, Mead had little or nothing to say about the British victims of Cameron’s counterproductive strategy.

    Does Professor Mead really expect anyone familiar with his essays to believe that the sympathy he is expressing for the suffering being experienced in developing nations because of European austerity represents anything more than his crocodile tears?

    Professor Mead’s supposed sadness that the world is becoming “nastier and poorer” is revealed for what it is by his claim that Prime Minister Cameron is “putting the Great back in Great Britain.”

  • Kenny

    “As Europe contemplates its choices in the rubble of its current monetary union, one hopes European leaders will spare a thought for the huge numbers of people in the developing world whose hopes of escaping poverty depend on growth in the west.”

    Are you kidding?

    And if the Third Worlders depend essentially on growth in the Europe, then their economic advance can be looked at artificial to a significant extent.

  • Jacksonian Libertarian

    I’m glad to see you have recognized my thesis that the building of the American Global Trading System has uplifted Billions of people out of abject poverty. Now you just need to get on board with my solution to the export model economies present dilemma and the industrialized world’s as well. Namely, payoff all the foreign held treasuries in order to rebalance and strengthen the system, and get the stalled economic engines pulling again. The liquidity would allow the export model economies to purchase the food, fuel, and technologies they require for continued growth, and at the same time provide an export driven recovery to the industrialized economies which would now have a price advantage for the first time in many decades. The deflation the 1st world is now experencing with the debt crisis, would be stopped in its tracks as Trillions in orphaned capital seeks to be reinvested and put to work. The oncoming wave of protectionism as the export model economies get stressed by falling sales and declining growth, will be halted by wallets filled with foreign currencies and a wealth of products they can now afford to buy.
    America Sale! Planes, Medical equipment, Chemicals, Pharmaceuticals, Heavy equipment, Entertainment, Autos, Food, Disney World, High Quality High Tech Products at low low prices, America Sale! We want your business, you are our favored customers, because you have full wallets and we love you! Come visit and enjoy the American experience, you’re rich now and can afford it. LOL

  • Eurydice

    You know, I’m starting to get a headache from this circular argument. The boomer generation, the US, Europe, all of Western Civilization are greedy pigs and thoughtless spendthrifts. Their world has come to a screeching halt – a fitting punishment for their profligacy and hubris. Except…how dare they be so selfish as to only think of their own balance sheets – don’t they realize the rest of the world has to eat?

  • Gene

    More withering scorn from WigWag, who I suspect is a former student of WRM, still bitter over a poor grade or criticism of a term paper. Don’t worry WW, when you make Emperor and finish solving all these thorny world problems you can turn your efforts to a thorough discrediting of the professor.

  • Luke Lea

    WigWag may have a point. Reading Liaquat Ahamed’s financial history of the Great Depression, “The Lords of Finance,” it’s hard to think austerity is the answer to our problems right now. It’s a great book but if you haven’t time here is a good C-span interview with the author.

    Maintaining global liquidity in the face of possible defaults is would seem to be the first order of business. A moderate,sustained, world-wide inflation would also seem to be called for if you read between the lines, though of course nobody likes to say so out loud, central bankers least of all.

    As to how China fits into all this, I really don’t know.

  • teapartydoc

    Wig Wam as usual misses the point entirely. European austerity is mandatory at this time. The only alternative is a break up of the EU. The choice is between a decade of pain and a few years of utter chaos. The Europeans appear to be ready to endure the pain. Or at least their leaders are willing to put their people through the pain. I don’t think Wig Wam would be the kind of person who pines for the break up of the EU. Personally, I couldn’t care less either way. But I think what our author was lauding is the ability of the Europeans to at least recognize the necessity of austerity and their will, at least for now, to endure it.

  • Luke Lea

    Here’s a nice overview if you respect Noriel Roubini, which I do:

  • JohnMc

    The exposure overhang is a policy error. Yes countries should develop the resources that they are preeminent in whether raw goods or finished product. But the fact is, many of these countries did so swimmingly at the expense of their domestic markets. A lack of balance is part of this problem.

  • Remember the tempest-in-a-teapot over EU regulations on the curvature of bananas? That and millions of other economic activity killing regulations are still there, stifling jobs and economic growth. Their broad based elimination to provide the opportunity for entrepreneurs to start new businesses and hire people is considered a worse alternative to massive austerity and even chaotic breakup of the EU by every major EU political block worth discussing.

    This unspoken reality (which exists in the US as well) is a legitimate reason behind the street rage. Repealing economic activity killing regulation might not solve the entire problem. But to bypass its helpful effects and even continue to write new regulations that put job creation on the back burner is obscene.

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