'It's the end of the world as we know it,"
sang the popular musical artistes REM many
years ago. And it is. REM has announced that
they're splitting up after almost a third of a
century. But these days who isn't?
The euro zone, the world's first geriatric
boy band, is on the verge of busting apart.
Chimerica (Professor Niall Ferguson's amusing
name for the Chinese-American economic
partnership that started around the same time
REM 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.
The question to ask is: What's holding the
joint up? In the case of the global economy,
the answer is: not much. The developed world's
combined economic growth rate for 2012 is
projected to be under 2% — and that's a
best-case scenario in times that don't warrant
much optimism.
As its own contribution to the end of the
world as we know it, the Obama administration
has just released a document called "Living
Within Our Means And Investing In The Future:
The President's Plan For Economic Growth And
Deficit Reduction."
If you're curious about the first part of the
title — "Living Within Our Means" — Veronique
de Rugy pointed out at National Review that
under this plan debt held by the public will
grow from just over $10 trillion to $17.7
trillion by 2021.
In other words, the president's definition of
"Living Within Our Means" is to burn through
the equivalent of the entire German, French
and British economies in new debt between now
and the end of the decade.
You can try this yourself next time your bank
manager politely suggests you should try
"living within your means": Tell him you've
got an ingenious plan to get your spending
under control by near doubling your present
debt in the course of a mere decade. He's sure
to be impressed.
As for the "Investing In The Future" part of
the president's plan, that means lots more
government, lots more half-billion dollar
payoffs to pseudo-businesses cooked up by
cronies, lots more $4.8 million-per-job
taxpayer subsidies paid for with money
borrowed from our unborn grandchildren.
In a perfect snapshot of this
administration's witless banality, the
president traveled last week to the Brent
Spence Bridge across the Ohio River and
claimed that, despite the fact that the
structure connects the home states of the
Republican House leader and the Republican
Senate leader, the mean-spirited GOP is going
to kill the jobs bill and thus all prospects
for a new bridge between their two states.
The bridge has nothing to do with the jobs
bill. Work on a new bridge is not scheduled to
begin for four years and wouldn't be completed
until 2022 at the earliest. Because in the
republic at twilight you can run up another
$7.5 trillion of new debt in less time than it
takes to put up a bridge. Even as cheap
political showboating the president's photo op
was a pathetic joke, with the laugh on you.
If this is the best America can do, there
won't be a 2022, not for the United States, or
anything that would be recognizable as such.
Like REM says, it's the end of the world as we
know it. And, as their split suggests, they no
longer feel fine. And nor should you.
© Mark Steyn, 2011
