Economic Sophisms

Hyperbolic American talking heads like to use the string of words “complete” or “total collapse” when discussing markets. When I hear total collapse, I think Easter Island, or Detroit. The point being that “collapse” invokes feelings of, well, collapse. One goes from a high level of organization and development, and then something happens and suddenly things aren’t so organized. Thus I cringe at the word’s overuse. With this in mind, it seems to me that collapse is not unfitting in the context of Greece.

Lorenzo has a great post which I wish I had written: Not merely a Greek disaster. The post also links to a Daily Mail article with some gloomy pictures of the works which the Euro hath wrought. My working conclusion is now that whatever hormetic effect the Greek economy might have drawn from the “medicine” of austerity, has long since passed into the realm of poison. The real threat now is that is that the 1500 year running Greek braindrain is completed, and the country never able to truly recover.  I usually don’t think much good can come from overseas meddling, but at some point Obama should probably tell the Europeans that they are destroying Greece and make a plan to get the Drachma back.

One funny thing about this whole Euro Debt Crisis episode is that the Utopian machinations of the European social democratic consensus have killed the European welfare state. I can’t drive this point home enough, as I so value irony. France in 1995 wasn’t good enough. No, we must have an unbreakable currency union and to hell with whether or not it works.

By the time this austerity business is over, the only remaining welfare states in Europe may well be Sweden, led by a reasonable, market thinking center right government, and ubercapitalist Switzerland.  (As always, Norway is an oil fueled, super Potemkin village.) Lest I be accused of ideological prejudice, Sweden was kept out of the Euro under the Social Democrats who, looking back, were the ultimate conservatives of the 1990s/2000s.