‘It’s the end of the world as we know it,” sang the popular musical artistes R.E.M. many years ago. And it is. R.E.M. has announced that they’re splitting up after almost a third of a century. But these days who isn’t? The eurozone, the world’s first geriatric boy band, is on the verge of busting apart. Chimerica (Prof. Niall Ferguson’s amusing name for the Chinese-American economic partnership that started around the same time R.E.M. did) is going the way of Wham!, with Beijing figuring it’s the George Michael of the relationship and that it’s tired of wossname, the other fellow, who gets equal billing but doesn’t really do anything. The deeper problem may be that this is a double act with two wossnames.
Still, it’s the end of the world as we know it. Headline from CNBC: “Global Meltdown: Investors Are Dumping Nearly Everything.” I assumed “Nearly Everything” was the cute name of a bankrupt, worthless, planet-saving green-jobs start-up backed by Obama bundlers and funded with a gazillion dollars of stimulus payback. But apparently it’s “Nearly Everything” in the sense of the entire global economy. Headline from the Daily Telegraph
of London: “David Cameron: Euro Debt ‘Threatens World Stability.’” But, if you’re not in the general vicinity of the world, you should be okay. Headline from the Wall Street Journal
: “World Bank’s Zoellick: World In ‘Danger Zone.’” But, if you’re not in the general vicinity of . . . no, wait, I did that gag with the last headline.
I mentioned in this space a few weeks ago the IMF’s calculation that China will become the planet’s leading economic power by the year 2016. And I added that, if that proves correct, it means the fellow elected next November will be the last president of the United States to preside over the world’s dominant economy. I thought that line might catch on. After all, we’re always told that every election is the most critical consequential watershed election of all time, but this one actually would be: For the first time since Grover Cleveland’s first term, America would be electing a global also-ran. But there’s not a lot of sense of America’s looming date with destiny in these presidential debates. I don’t mean so much from the candidates as from their media interrogators — which is more revealing of where the meter on our political conversation is likely to be during the general election. On Thursday night, there was a question on gays in the military but none on the accelerating European debt crisis. It is certainly important to establish whether a would-be president is sufficiently non-homophobic to authorize a crack team of lesbian paratroopers to rappel into the Chinese treasury, break the safe, and burn all our IOUs. But the curious complacency about the bigger questions is disturbing.
Greece is reported to be within weeks if not days of default. There are two likely outcomes to this scenario: 1) Greece will default. 2) Germany and the Eurocrats will decide that default would be too embarrassing for the EU’s pretentions and will throw whatever sum of money is necessary into the great sucking maw of toxic ouzo to stave it off a while longer.
But Option Two doesn’t alter the underlying reality — that, if words have any meaning, Greece is insolvent, and given its rapidly aging population (100 grandparents have 42 grandchildren) is unlikely to be non-insolvent under any conceivable scenario, no matter how tightly German taxpayers are squeezed to pay for it. By the same measure, so are many other Western nations.
On the other hand, attempting to postpone the Club Med welfare junkies’ rendezvous with self-extinction will destabilize internal German politics (which always adds to the gaiety of nations) and strain to breaking point what’s left of the European banking system. BNP Paribas, formerly Saddam’s favorite banker and Gallicly insouciant about who it climbs into bed with, was reported in recent days to be cruising the flusher sheikhdoms and emirates in search of a new sugar daddy. Delivering French banks into the hands of Islamic imperialists seems a high price to pay for bailing out Athenian deadbeats.