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What the Dickens?

Pundits confusingly mimic his best of times, worst of times paradox. But Asia and Europe aren't in such bad shape.

AS usual the universe is going about its business, oblivious so far as we know to the onrushing 21st century. But not the pundits!

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In short order this week:

Always thought-provoking Irving Kristol penned a grim commentary titled "Petrified Europe," forecasting impending entropy as welfare states, unemployment, greens, and low birth rates undermine uniting Europe.

Economist James K. Galbraith opined that Asia's crisis would soon crash upon US shores like one of those many-fingered Hokusai waves - causing a million lost jobs, bank failures, rising interest rates, falling profits, federal deficits, and more.

World stock markets, noted for anticipating the future, boomed on the prospect of a future Asian recovery.

Well, which is it, Dickens? The worst of times, la Kristol and Galbraith? Or the best, as seen in market indexes and confidence polls?

Who's petrified in Europe?

Kristol could be right about coming decades, if trend lines remain static. But that's not probable. German and French publics aren't sitting mute as joblessness stays high and more factories and jobs migrate abroad because of welfare state costs, pricey labor, and green environment laws.

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Few things are certain in economic/ political equations. But Blair realism (smiling, moderated Thatcherism) seems a more potent influence over continental social democrats than reborn socialism. Young Germans and French will likely push for jobs - and for tempering "green" policies to seek cleaner industrial processes, not anti-industry rigidity.

Of course there will be calls for protectionism against Asian and US imports. But those two engines of world growth will demand continued free trade. Global EU firms need such export trade. And eventually Asian firms will resume plans for new plants - and jobs - in Europe.

Drop the Asian scares

No, we haven't seen the last of wrenching adjustments, as austerity hits Asian consumers and jobholders. But even economists who have sounded grim warnings, like Alan Sinai, say privately that they're only talking about a year or two before Asian growth rates recover.

Emotion-driven as stock markets often are, in this case they may see ahead more clearly than some equation-fascinated economists.

Looking ahead, much depends on whether North American and European voters are farsighted enough to resist the siren song of protectionism. Much of the economic, racial, and, yes, ideological gain the world has seen in the past half century stems from international free trade in ideas, goods, services, and people contacts. This is no time to throw away those gains in a bout of static gloom.

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