EUro Dis-union

One of my all-time favorite economic historians is Harvard’s Niall Ferguson, who does a very good job dissecting the transatlantic political and economic cultures with characteristic British clarity in erudition.

He’s not perfect, however: witness his bad judgment in affixing his name to a worn-out political rag like Newsweek. But, I digress…

In this nonetheless excellent article, he concisely chronicles the descent and impending collapse of the EUro-zone banking system and its political repercussions.  Some might take solace in the fact that EUro-banking and welfare systems will collapse ahead of our own, but I don’t. Our economic well-being is very much entwined with Europe’s. One notable benefit that Ferguson does confer upon us is to clearly differentiate between Europe’s impending banking system collapse and our own fiscal and economic crises: these are two very independent phenomena, albeit derived from the same disease (i.e., living way beyond our means). What cannot be denied, however, is that Western civilization is about to confront a very massive economic upheaval that will have dramatic social and political consequences.

Read it for yourselves and let’s discuss.


Be Sociable, Share!

    “Our economic well-being is very much entwined with Europe’s.”
    To your point, the attached link, which required FOIA to access  banks, countries and fishing villages who stepped up to the ‘open window’ policy is astounding and troubling. Between the two links (yours and mine) the only thing the loans did was buy time.
    The Monetary Control Act of 1980 says that a U.S. branch or agency of a foreign bank that maintains reserves at a Fed bank may receive discount-window credit.
    To which I add –It’s time to shutter the windows.

  • Mike Devx

    Book says: What cannot be denied, however, is that Western civilization is about to confront a very massive economic upheaval that will have dramatic social and political consequences.

    Yes, and we’re hardly immune in the declining U.S.A.  I’m becoming resigned to the coming collapse.

    We have increased the national debt by more than one trillion this year.  Republicans are trying to cut 66 billion dollars, and the Democrats are gleefully labelling this “wildly excessive”.

    Do you understand?  We are INCREASING the debt this year alone by one trillion, and we can’t even cut 6% of the INCREASE!   Let alone, actually do any decreasing itself.

    Even cutting 50% of the increase would be too little, too late.  The Republicans aren’t serious, and the Democrats are utterly, totally, gibberingly insane.

    Either the politics make it impossible to cut, making collapse inevitable; or the game is being played by both sides, and even the Republicans are playing us all for fools as the special interests truly do rule Washington D.C. with an iron fist.  They’re *all* in bed with each other in a lustful power orgy?  The only thing that matters is the power game, the competing special interests, and who among them wins… and damn the American people and the country to hell along the way?

    I’m becoming resigned to the inevitable looming collapse.


    Psst…Look up “Danny says” 😉


    If there is resignation in the air, it should be the Lefties. The Pelosi Congress, knowing full well that they were going to bite the dust November 2010, kicked the problem to the current session. The problem is that the Senate still has a Democrat-controlled majority and are using that majority to manipulate the political climate. The current session and budget/non-budget ends automatically September 30th. Current polls blame both parties for failure, in spite of the fact that the Pelosi Congress was the first in history not to have a budget.
    Add to the mixture above, this year will see a very high foreclosure rates, coupled with still high and under employment stats, rising gas and food prices while both parties gear themselves for an election that’s still a year and a half away.
    Oh…did I mention the changing landscape in the ME and the purpose of this discussion, Danny’s article/link and the EUro -union. It’s become very obvious to me, that the current system cannot and will not work. It was suggested on another thread (can’t remember who said it) so, I’ll kinda paraphrase here to say that the idea was to have each individual state collect taxes and pay the Feds. It’s long over due, the Feds are simply incapable of managing the huge sums of money that flow in at one speed and flow out faster than a speeding bullet. I am convinced that the individual states would have to manage money better because they could not look to the Feds for funding diddly squat. I could rant on endlessly particularly since we are still faced with another economic looming boondoggle – Obamacare and the addition of tens of thousands of more federal employees to oversee it and screw us.
    Damn…maybe the Mayans were right about 2012.

  • suek

    >>the idea was to have each individual state collect taxes and pay the Feds>>
    If I understand it correctly – and remember correctly – that’s the situation we had before the 16th (?) amendment (collecting income tax by the Feds).  The problem was that we got involved in a war, and the states weren’t paying into the Fed’s a timely manner.  The Feds needed income, and needed it predictably.  The individual income tax collection by the Feds was supposed to solve that problem.  It should have been a temporary fix – but once the war was over, all that money was still rolling in…what an opportunity!
    There’s a charity … Campaign against birth defects?? … which started out as a Campaign Against Polio.  Polio was “defeated”, but the charity lives on.  The organization was in place.  People had jobs.  Seemed a shame to “waste” all that – so they “repurposed”, so to speak.  Took on a new cause.  I don’t really have a problem with that – donations are voluntary, after all – but when you’re talking about government, there’s a real problem when the authority taxes for a particular purpose, the need for the purpose ends, and then the legislators can’t let those taxes end.  The annual income is _too_ good.  They “repurpose” the funds without a popular vote, the tax continues, and then when they find some other desperate need, they’re back to the taxpayers once again with another “just this once” appeal.  Which never ends.  Inch by inch…or perhaps the embodiment of “Give them an inch and they’ll take a mile”.


    This should fuel the fires for the frustrated and fed up. The US Dept. of Labor wants $60,000 from Maine, some sort of reimbursement, because a mural (pro-union) that was paid for by taxes is no longer on display. The sum of money is obviously not the issue, but the poison ink and stab at Maine is.