My brilliant post below got no comments, so back to politics and economics, here are three interesting items from today:
Although China complains about QE2, they are still lapping up our Treasuries. I think it’s funny when we ask China to manage their own currency in our interests rather than theirs, and it’s just as funny when they do it to us, except that since Bernanke’s policy happens to be insane he should for once listen to the foreigners. They are complaining because they can’t do any better, but in this case our policy really is hurting both our economy and everyone else’s (the point is the damage to our economy is deferred and politicians always try keep the party going until the next election).
Victor Davis Hanson gives the best argument I have seen yet for how Obama could be reelected. Even if he follows VDH’s advice he will be an underdog, but if he doesn’t he has no chance at all. I disagree with what VDH says about the Kosovo war, but that’s a topic for another post.
The horrible truth starts to dawn on Europe’s leaders
It seemed obvious to me from the start that the EU project was doomed because monetary union without political union was bound to lead to a currency crack-up eventually. How could the European leaders not see this? I think they did see this but were counting on the political centralization that would occur to become irreversible before the crack-up: the creation of the Euro was always intended to serve political rather than economic goals. But even that mistaken assumption was apparent to me at the time, and seemed obviously wrong then too. I still don’t understand how they could have made such an elementary mistake, nor how the governments of most of the EU countries let them get away with it without allowing the voters in their countries a chance to decide. In America the parties are out of touch with economic reality too, but for the main parties in the EU countries to cede so much of their own countries’ sovereignty and freedoms to foreigners is a traitorous abdication that could not happen in America.