Sunday, May 20, 2012

THE PRAIRIE EDITOR: Not With A Bang, But A Downgrade

If it weren't so disastrous a strategy, President Obama's urging Europeans
to abandon current attempts at "austerity" in favor of returning to their old
policies of creating more public debt through "job creation" spending, would
be laughable. Mr. Obama, now finding his soul-mate in new socialist French
President Hollande and his economic ideas, is not without a political purpose,
however. He is trying to hold off the collapse of the euro currency, and
possibly the European Union itself, at least until the U.S. presidential election
in November. A European economic catastrophe would have much impact on
the U.S. economy in the long run, and it would dash any chance of U.S.
economic recovery in the short tun, the latter almost certainly precluding
Mr. Obama's already problematic re-election.

Mr. Obama's recommendation to Europe could be likened to a proposal that,
after the Titanic had struck the iceberg that cold night in the north Atlantic,
the Titanic crew should have destroyed the few lifeboats they had for the
purpose of making firewood.

After more than a century of central government entitlement spending in the
various European nations, and after two horrific world wars of violence and
self-destruction, "austerity" is a complicated public policy to follow in Europe.
To be fair, European politicians, especially in the smaller member nations
which have more limited resources, have a genuine dilemma. It is especially
difficult, and its measures are especially painful and shocking to those
populations which know no other way of life. When you fully realize that
one-quarter of adult employable Spaniards are out of work, for exaample,
you have some true perspective on the extent of the economic crisis on that
side of the Atlantic.

Compared to Greece, Spain, Portugal and Italy, the French are much more
capable of enduring a program of austerity. The French economy is not in as
bad shape as many others on the Continent. But, for now, the French seem
turned in the wrong direction. Germany is the strongest economy in the
European Union. Chancellor Merkel is being heavily pressured to abandon
austerity measures, not only from the Obama administration, and her EU
partners, but from restless German voters, some on the left and some of whom
no longer want to bail out the rest of Europe.

The indelibly simple reality of world economics today, however, and especially
in Europe, is that forms of "austerity," sacrifice, "biting the bullet," and
adjustments of entitltements, are the only way out of the economic crisis. The
longer it takes to happen, the more severe it will be on the populations of Europe
and its member nations. The idea that the problem can be solved by "job creation"
and more public spending is delusional. It is also a residue of the socialistic ideas
born in Europe almost two hundred years ago, and practiced there to various
degrees and in various forms since.

These ideas clothed in the language of idealism, compassion and egalitarianism
(e.g..,"redistribution of wealth,") have in practice brought  to Europe cynicism,
violence, suffering and depravity for more than a century.

Copyright (c) by Barry Casselman.  All rights reserved.

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