Saturday, October 1, 2011
- Best Euro Crisis Commentary
A while back, I made mention of the fact that where the Euro crisis is concerned, the best scenario in terms of it's financial impact and most likely scenario in terms of the politics of the situation are diametrically opposed. The least distortive would be if Germany left the Euro allowing it to debase according to the needs of the piigs, but the most likely was that Greece is kicked to the curb...followed by Italy...then Ireland....then Portugal, and Spain etc, leaving the euro held by the northern Europeans alone.
Complicating all this is the fact that the European union's political institutions were specifically designed to take political power away from the masses. The resultant byzantine arrangement of bureaucracies and departments make little sense to we simple Americans. Our simple American constitution is a total of 12 pages limiting our government's authority, while while theirs is 300 pages and includes guarantees to every labor union, farming collective, artists guild, fishing fleet, and drover's company who managed to scrape their hats from their brow long enough to hold it out. Frankly, it's a mess.
By far the best 'translation' of these issues that I've seen has come from Andrew Stuttaford over at NRO. I don't know the guy - never even exchanged an email. But rather than giving you one long dry piece about the various political machinations, he's been treating us to a paragraph or two at a time, condensing the work of others. His insomniac posts have made their regularly, detailing the way the process is calcifying. And taken as a whole, I can't imagine a better format to watch the whole thing.
If you go back and reread his posts, it's the literary equivalent of watching a stop motion film run in real time. Even watching the euro rust away makes compelling reading in that format. And it's particularly instructive for we financial guys who are far too practical in our expectations.