'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
