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America Should Bet on Berlin, Not the Basket Cases

June 19th, 2012 - 6:56 am

Rarely has the establishment been so unified, and misguided, in its ever-more-frantic efforts to promote a Euro bailout. Today’s Daily News Brief from the Council on Foreign Relations writes:

G20 leaders, meeting in Los Cabos, Mexico yesterday, urged European members to jumpstart growth in the beleaguered eurozone (al-Jazeera) by easing austerity measures and allowing the European Central Bank to play a more active role. A draft of the G20′s official statement, to be finalized and published later today, called on members to “take the necessary actions to strengthen global growth, amid increased concern that the eurozone sovereign debt crisis could plunge the global economy back into recession.”

The CFR highlights the following items:

“Since the euro crisis has escalated, the chancellor [Angela Merkel] has been more isolated than ever before. Everyone, from U.S. President Barack Obama to French President François Hollande, British Prime Minister David Cameron to Italian Prime Minister Mario Monti, together with an army of international economists, financial experts and journalists, is demanding that the Germans take on a greater financial burden,” notes Der Spiegel.

“But a eurozone collapse would be a disaster that might define our era. Its prospect must focus the minds of all at the G20 summit on action. Non-Europeans must persuade Europeans that the rules change when the stakes rise. The ECB’s credibility will mean little if there is no longer a common currency,” writes Lawrence Summers for the Financial Times.

“With the global economy again weakening, we need a strong G-20 now more than ever. The leaders of the world should take the opportunity of their meeting in Los Cabos to put aside political incentives and do what is best to ignite the global economy. By setting real membership standards, world leaders could build a better G-20, one capable of facing the challenges ahead,” Alex M. Brill and James K. Glassman for the Wall Street Journal.

“Growth” according to the G-20 and the foreign policy establishment means a massive bailout of bankrupt debtor nations, mainly at the expense of the German and Dutch taxpayers. It sounds sort of reasonable until you look at the numbers: it’s a hoax, a goof, a scam. Spain, the crisis du jour, is a Ponzi scheme, a property market bubble that dwarfs America’s subprime problem.

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