The Euro's Collapse Is Not Just About the Euro
How do you say Schadenfreude in French? Or Spanish? Or Greek? Because, three years into the failed economic policies of a failed president, Schadenfreude -- knowing that, however bad our situation may be, the state of affairs in the Eurozone is much worse -- is all that is left to us.
And it is worse, make no mistake about that. And, it increasingly appears, irreversible. Which is why those of us who saw this day coming must resist the urge to gloat now that the poulets européens have come home to roost. Let us instead, let out a sigh of relief as we observe the Euro-debacle from a safe distance and draw what lessons we can, lest their fate become ours. For the euro's increasingly probable collapse is about more, much more, than the euro.
George Mason University economics professor Tyler Cowen almost gets it when he writes, in the May 26 New York Times:
We thus face the danger that the euro, the world's No. 2 reserve currency, could implode. Such an event wouldn't be just another depreciation or collapse of a currency peg; instead, it would mean that one of the world's major economic units doesn't work as currently constituted.
Note the qualifiers, "could," and "would." In fact, the euro is imploding and said implosion does mean that "one of the world's major economic units doesn't work as currently constituted." And it's a pretty sure bet that whatever new constitution the Euro-elites conjure up for their "newly constituted unit" won't work, either -- certainly not if it's "newly constituted" by the same people who constituted the current one.
The good professor writes: "The final lesson of this debacle is that smart nations with noble motives can make very big mistakes." But at the same time Cowen states the obvious, he also misses the obvious by failing to name the Euro-debacle's true culprits. For regardless of what "smart nations with noble motives" may or may not do, the guilty parties here are not "smart nations," but arrogant, soi disant "experts," who consider themselves accountable to no one due to their self-perceived brilliance, but who in fact are not nearly as smart as they think (and would like us to think) they are. Conversely, had, say, "the first 2,000 names in the Berlin telephone directory," been allowed to vote on whether they wanted to surrender their national currencies, and the control thereof, into euros that would be out of their control, a large majority of them almost certainly would have voted no and the whole Euro-mess that was shoved down their throats and must now be vomited up, could have been avoided.
Cowen continually dances around issue, coming close, but never making the real point and I suspect that the reason for the fancy footwork is because Cowen is a liberal, or at least one who is rooting for the euro to succeed. So allow me to state clearly what Cowen would not.
The plain and simple fact is that the euro's failure is about more, much more, than the euro. For it is not just the euro that is failing, but the entire liberal, elitist worldview that underlies it. That worldview, in a nutshell, is the notion that human nature is as malleable as a lump of clay and that any utopian society one can imagine can be created in the real world simply by writing it down on a piece of paper and voting for it.
And so here we are, leaving the world, including we Americans, divided, essentially, into two groups: those who understand that liberalism's day of reckoning has come, that the debate is over, that collapse is inevitable and that the only course now is to manage, as best we can, the process of changing direction; and those who do not.
Abandoning a currency, as we are learning, is no easy task. But it's a far easier task than abandoning a worldview upon which literally millions if not hundreds of millions of people have built and lived their lives, and which has held a considerable hold on political thinking -- and governance -- for almost a century.
Europe may or may not succeed in arresting its decline. But we Americans, paradoxically, are made of both sterner and more flexible stuff and so one can confidently predict that it is only a matter of time before the old guard is cast out, to be replaced by a new generation of leaders with a vision that looks forward, not back.
One senses that that day is not far off. In the meantime, protect your assets, do what you can to avoid the falling debris as the old order collapses, and prepare for a hard fight in the years ahead.