1. sneaker said...

Sounds like proof of the futility of joining. The Euro is a wonderful idealistic, theoretical dream that runs aground on the rocks of reality.
Its success would require that Europe is an Optimal Currency Area:
http://en.wikipedia.org/wiki/Optimal_Currency_Area
Cultural, language and geographical concerns are however enormously strong. For example, how many Finns would go to Portugal just to chase work? The only way for the Euro to work is for all European people to blend into one, for national identity to be dissolved but several thousand years of history show that this fails whenever it is tried. Moreover, it is basic animal nature to form groups, which in the human manifest as the instinct to form a tribe with a common language
Whilst the EU Federalists in Brussels press ahead with their laudably theoretical but laughably impractical ideas, we see the exact counter-force with Kosovo breaking away from Albania, Yugoslavia breaking up into Serbia, Bosnia, Croatia and Slovenia, separatist movements as strong as ever in various Russian republics, the creation of Scottish, Welsh and Irish parliaments, and the seeming Irish acceptance of the north/south split.
Never let the facts get in the way of a good theory, and for heavens sake never let the basic wiring of humans get in the way of know-better Socialism.
Indeed, it was the Romans who were the first to try a currency union.
I fear that the credit crunch is going to cause a massive lurch left-wards across the world, given that people perceive the crunch as proof of the inevitable failure of the free market. The truth is that we did NOT have a free market - the CDO was opaque and unanalysable, and mortgage brokers were unregulated. Free markets NEED regulation in order to ENSURE they work. Capitalism did not fail - rather, we have imperfect markets and thus greed was allowed to rule. Common critiques of capitalism allege that free markets are all about greed, but they are not - they are about information. As much as we should not lurch to the far-right with nationalist protectionism, equally we should not lurch to the left with even bigger government and monolithic statist machinery.

The answer is in the pragmatic centre, but the eternal left-right oscillation never seems to stop there for long. Centrism is often called boring. Well the whole point is that economics and markets SHOULD be boring, rather like dentistry, so that everyone can get on with creating excitement elsewhere in their own lives. Alas, I don't see that this is going to happen and I fear that we are entering a very dangerous era in politics as a result. The same greed that caused the boom and bust is now going to cause a lurch to another wrong-headed extreme in the quest for the perfect system of eternal boom. Until this obsession with boom (or even permanent growth) subsides, the oscillation will continue. In my own lifetime, I don't think it will and that makes me very sad.

3. troy said...

Most of us are, in fact, helpless and innocent victims of the breakdown of an economic system rigged to benefit the rich. However much we might have, at times, followed our worst instincts when it came to spending, debt and investments, we are not to blame for our current predicament.
And, finally, we have to get angry, get organized and empower ourselves to change a system over which we have had too little control. It is - and should be - infuriating that economic elites, along with their political enablers, have gamed the system such that they've reaped astronomical benefits while exposing the rest of us to the toxic byproducts of their greed and indifference.
(Michael Bader)

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