This year sounded the death knell for the euro, government stimulus packages and international action on climate change. The year should therefore count as highly successful. Maybe one day, 2011 will rank up there with that other great year of freedom, 1989 -- the year the Berlin Wall came down.
It would be wonderful if the achievements of 2011 could be attributed to the victory of common sense. Unfortunately that's not the case.
All that's happened is that reality has collided with the grand assumptions, delusions and theories of the global intellectual class.
''Neo-liberalism'' was blamed for the first global financial crisis. In 2011, neo-liberalism got its revenge.
The website of The Guardian newspaper in Britain now has a ''live'' blog on the ''euro zone crisis''. It is updated every 20 minutes. Over the next 10 years, the person who runs that blog is going to be very busy indeed.
Decarbonising the economy, more government spending and the euro were projects of the left and centre-left.
All the projects envisaged a massively expanded role for government and for government regulation. They also all had one other thing in common. They were all overwhelmingly supported by the prevailing opinion of academics, experts and the media.
Anyone who doubted the science of climate change was a ''denialist''.
Opponents of the European common currency were ''troglodytes''. And when he was prime minister, Kevin Rudd claimed free-market critics of his stimulus packages believed in an ideology of ''personal greed dressed up as an economic philosophy''.
The euro zone crisis will be the gift that keeps on giving for economics correspondents. Meanwhile, times are not good for climate-change journalists.
Sydney has just had its coldest start to summer in half a century. Canada has pulled out of the Kyoto Protocol.
And at the climate change conference in Durban last week it was agreed that countries would spend the next four years negotiating about how to negotiate a treaty that would start in 2020.
In an era of permanent European crisis, any journalist on the continent wanting to keep their job will have to swap their knowledge of ''COP 17'' (the 17th meeting of the Conferences of the Parties under the United Nations Framework Convention on Climate Change) with an understanding of the ''LIBOR'' (the London interbank offered rate).
The governor of the Bank of England, Mervyn King, famously said in March that he and the world's central bankers bad ''prevented a Great Depression''. Let's hope he didn't speak too soon. Central bank governors enthusiastically supported the twin policies of printing money and government stimulus spending.
Tho days ago, unemployment in Britain reached 8.3 per cent, the highest in 17 years. Youth unemployment is 22 per cent. It wouldn't be the first time King has been wrong. In 1981 he was one of the 364 economists who signed a letter to The Times complaining that Margaret Thatcher's economic policies wouldn't succeed and would be a disaster for the country. The world's central bankers may have prevented a Great Depression. Instead, they may have given us the Long Recession.
In the face of an unemployment rate of 8.6 per cent in the United States, a few brave souls are still willing to argue government spending can save the economy. Paul Krugman in The New York Times is fond of writing that the only problem with President Barack Obama's stimulus packages was they weren't large enough.
Not surprisingly, there's been a backlash; it's not just the Tea Party worried about the size of government.
A survey by Gallup released this week reveals 64 per cent of Americans think the biggest threat to the country is ''big government'', 26 per cent think ''big business'' is the biggest threat, and 8 per cent think ''big labour''. So much for the ''Occupy Wall Street'' movement.
In 1965, 35 per cent feared big government the most, compared with 29 per cent who feared big labour, and 17 per cent who feared big business.
The less said about the euro the better. The euro was never going to work. If there's anything amusing about what's happening to the euro zone it is that the Europeans think they can resolve the problems themselves. Not since Waterloo have the Europeans sorted out a European crisis on their own.
In 1918, 1945 and 1989 it was the United States that decided the course of European history. This time the US might not have the money, the time or the inclination to fix Europe.
ADVERTISEMENT
No comments:
Post a Comment