ECONOMICS 101 OR MAYBE 102

“So we are isolated, are we? Cut off, locked out of the room, left on the sidelines, cast out of the inner core – and any other baleful metaphors you can think of. Well, Britain has stood alone before, as I recall, and we defended the idea of democracy in Europe then, too. But we need not get romantically heroic about it. We just have to ask ourselves: what is it exactly that we are outside of? A burning building? With only our triple-A credit rating and our competitive financial industry to console us?

What just happened, after all? We jumped off a bus that was hurtling toward a brick wall. When it eventually crashes, the driver(s) of the bus – who will survive, this being a metaphorical bus – will probably blame us, claiming that if it had not been for our failure to co-operate, the wall might have evaporated. The crash, when it comes, will be truly dreadful, and all the more tragic because a delusional European elite refused to accept its inevitability.”

These are the words of a very talented and incisive political commentator in U.K. named Janet Daly whom I have admired for a long time. She is American by birth, graduated from Berkeley as a flaming liberal, went to England in 1965 and morphed into a political analyst and commentator on the right. She is very bright and insightful, and the above lengthy quotation is part of her take on the euro crisis and Britain’s veto of the proposed new treaty.

Most Americans don’t give a damn about the euro---but, judging by the market reaction, they should., because it is affecting our financial world and economy, as well.

Back in the early nineties when the concept of the United States of Europe was born and the resultant establishment of a common European currency, the euro, the U.K. chose to be part of the European Economic Community (the E.E.C.) as a trading partner for obvious economic reasons but opted out of accepting the euro as currency. When Tony Blair was Prime Minister, he was very pro-European and wanted to push U.K. into making the euro the currency of U.K. and entering into full partnership in the E.E.C. One of the few sensible things Gordon Brown as Chancellor of the Exchequer (like Secretary of the Treasury) did was to resist this idea and stayed with the pound sterling as the currency. He was not so sensible when he became Prime Minister, and England is still paying the price of the mountain of debt he accumulated, necessitating the austere fiscal policy under which they operate today.

David Cameron, the current Prime Minister had the courage to face reality and reject the new E.E.C. treaty where strict financial controls and sanctions for failure are part of the proposed treaty. If he had not rejected it, I might add, he would have probably been drawn and quartered by his own Tory party! But the point is, he did so, to his credit.

Janet Daly has hit the mark right on in her column: Europe is a runaway bus heading for disaster. Yes, they may exercise some financial controls to stop profligate economies from running amok, but they have not addressed the question of growth and economic stimulation. (Does this sound vaguely familiar?) Austerity will be the order of the day, but it will not cure the matter of kick-starting the economy to get things rolling with work and jobs. I think it is going to get messy.

So, take heart, people, we have lots of company in this chaotic economic world. We don’t have an exclusive on problems; in fact, next to Europe, we look pretty damned good. I recall the old adage: “In the kingdom of the blind, the one-eyed man is king.” I guess we’re the one-eyed jack.