GREED IS NOT A CULTURE:

The End Of Europe: A Civilization Built On Sand (Jerry Bowyer, Jun. 22 2011, Forbes)

The one unifying force the Eurozone might have had was mutual financial and economic interest. That was the original point of economic Nobelist Robert Mundell’s original dream: free trade and sound currency. But that’s not how things worked out.

The member states of the Eurozone cheated: most of them lied about their level of indebtedness, and as a consequence the Eurozone has already broken its constitutional pledge not to engage in bailouts. Much of the bailout money is coming through the European Central Bank, which has weakened the euro relative to gold, Dr. Mundell’s favorite measure of currency value.

So, the Mundellian model of a new Europe, the only model that had a chance in the current environment, was abandoned in favor of a bloated uber-welfare state. The savers of Northern Europe do not have a mutual economic interest in bailouts with the insolvent peoples of the south. Their elites might, but the people don’t.

Elite interest will probably hold this duct-tape empire together through the current crisis. The euro will likely survive its pre-test. But in the end, demographic suicide, moral hazard, stagnation, inflation and most of all the sheer lack of unifying forces, will likely end this utopian experiment in human perfectibility. Europe is a civilization built on sand, and just because they’ll probably survive the current storms on the periphery does not mean that they’ll survive the hurricane headed towards the heart of the kingdom.

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