Euro-Collapse
By CONRAD BLACK
The admirable Seth Lipsky of the New
York Sun, formerly of the Wall Street Journal and the (English-language) Jewish
Forward, seems to be the first American commentator since Walter Lippmann to
recognize the prescience, in post–World War II matters, of Charles de Gaulle.
He was referring especially to de Gaulle’s recommendation of a restored gold
standard as de Gaulle and his chief economic adviser, Jacques Rueff, feared
what would happen to the world’s currencies if they were valued only in
relation to one another.
Their fear was not misplaced; the
U.S. dollar, euro, and yen are all engaged in wholesale inflation, thinly
disguised by phony calculations of domestic inflation and by relatively stable
relationships between one another, because they are in almost free fall
together, like three mountain climbers all sliding down the face of the peak
and toward a hard landing.
As Ron Paul pointed out to Federal
Reserve chairman Ben Bernanke a few weeks ago, in eight years the U.S. dollar
has lost 85 percent of its value opposite an ounce of gold, and this is not the
roseate picture revealed by official inflation figures.
I am not convinced that a return to
the gold standard is the answer, as gold is an impractical metal and this would
confer undue economic influence on speculators, prospectors, and mining
engineers. My suggestion is for a composite standard: one-third gold, one-third
oil, and one-third a basic consumer-price, essential-spending, basket. Any such
yardstick will reveal the distressing crash of the value of units of currency
and anything producing a fixed yield: It is a tale not only of scandalous
official profligacy and failed stewardship of the value of savings and many
categories of investment, but also of official dissembling, misinformation, and
pusillanimity.
It is of a piece with the great
drive of Presidents Clinton and George W. Bush to swallow the free lunch of
expanded family home ownership (and payoffs to the building trade unions and
residential-real-estate speculators), by ordering and legislating pelagic
immensities of non-commercial (i.e. worthless) residential mortgages.
Charles de Gaulle was born in Lille
in 1890, to the family of a monarchist schoolteacher. De Gaulle was a
Flaubertesque haut bourgeois, as well as an officer of the French army when it
was rivaled only by the German army as the greatest in the world, and was
unrivaled as the most storied army of all. He was imbued with the middle-class
concept of the value of savings, frugality, pay-as-you-go. To him, greatness
and security could never be bought or sustained on the installment plan. And
mere politicians, whom he considered a lesser breed swimming in a sticky fondue
of moral weakness and opportunism, could never be trusted to resist the
temptation to pander, devalue, or seek short-term gain.
De Gaulle’s farsightedness was not
confined to national projections of household economics; he also warned of the
dangers of Euro-integration. He was the chief architect of the Franco-German
friendship treaty of 1963, and — as a veteran of the terrible hecatomb of the
Battle of Verdun and a World War I prisoner of war of the Germans, as well as
the founder of the Free French in World War II — he knew as well as anyone the
horrors of the centuries-long conflict along the Rhine. He also favored a
common market and the end of violent ancient rivalries among the many European
nationalities. But he always saw a homogenized, centralized Europe as a
dangerous fantasy. He believed that a Continental interest, composed of as many
as 20 or 25 languages and cultures, would be only an alphabet gruel, blended
and stirred by faceless bureaucrats from the little countries, and not
representing any real popular interest at all.
He thought that the original Common
Market of France, West Germany, Italy, and Benelux could be used by France,
effectively maneuvering between the U.S. and the USSR, and between Germany and
the Russians, to project and amplify France’s — and, more particularly, his own
— influence. Up to a point, while the U.S. was mired in Vietnam, and before
European Communism became too enfeebled to challenge the West (which de Gaulle
also foresaw), he was correct. But he believed that an unlimitedly accessible
Europe would become an incoherent Tower of Babel, governed by bureaucratic intermeddlers
in the name of feckless politicians, and liable to excessive outside influence,
including from the U.S.
He would never have subscribed to
the romantic fraud that Europe, with its many nationalities standing on each
other’s shoulders, could have resumed its place as the political epicenter of
the world that it had forfeited when it trooped deliriously off to war in the
summer of 1914. But it is the merest speculation to suppose that even de Gaulle
would have foreseen that an over-united Europe would so soon degenerate into a
dyspeptic, demographically dwindling, Islam-raddled lumpen mass of welfare
addicts. From 1965, when he was reelected president of France, to now, the
reproductive rate of native Europeans of traditional stock has declined by about
40 percent, to levels that will lead to an extinction as easily plotted as that
of the American carrier pigeon (which darkened the skies in its numbers in
Audubon’s time, and passed into posterity at the Cincinnati Zoo in 1922). GDP
growth in Europe in the first three post-war decades fell by over 50 percent
over the last three. As Bret Stephens recently pointed out in the Wall Street
Journal: “In 1973, Europeans worked 102 hours for every 100 worked by an
American. By 2004 they worked just 82 hours for every 100 American ones.”
All the proud, confident predictions
of Europe as a world force have mercifully almost ceased. Britain and France
ran out of air-to-ground missiles to fire at Qaddafi after ten days; the
turbines in the aircraft carrier Charles de Gaulle don’t work as well as did
those in the great liner Normandie, which took the Blue Riband in 1935. Britain
is building two aircraft carriers, but is uncertain of having sufficient funds
to put aircraft on them. The last European military gasp was Tony Blair’s
contribution of 20,000 men to the Iraq War.
Even de Gaulle would not necessarily
have foreseen that a united European currency zone would accept insolvent
countries (which had not supported a hard currency for 3,000 years) being
overpaid on entry based on false prospectuses. No one could see that, in 2011,
migrant workers, after twelve weeks of evading police, would enjoy the same
benefits as permanent workers; that artists would, for 70 years, receive a
share in the resale profits on sales of their work; that, if a small enterprise
laid off one of six workers, all six must reapply for work.
The worst nightmares of de Gaulle
and other Euroskeptics have been exceeded. The United States carried the
luxury-goods industries of France and Italy and the engineered-products
industries of Germany on its back for decades, but it will not and cannot do it
anymore. Decline is reversible; more complicated is a death wish as thoroughly
installed in the attitudes and practices of whole peoples as that of most of
Europe.
If Europe cannot spark a demographic
renewal, with a work force comprising fully half the people, flexible labor
markets, tax rates that encourage savings and investment, an end to stealthily
galloping inflation, and a reactivation of the economic and military muscle
that alone confer credibility, it will quietly perish.
The leaders of Britain, Germany,
France, and Italy, however unlikely they may be, should put the hopeless and
dangerously misguided European Commission in trusteeship; put Giscard
d’Estaing’s cynical monstrosity of a constitution to the shredder; send the
dirigiste apparat that regulates everything down to the supermarket display of
bananas and the size of condoms, packing; stop propping up defaulting countries
and support the lending banks instead; and let all member states keep the
common market and cede only as much jurisdiction as they wish.
Not to be forgotten or forgiven
prematurely is the blindness of American policymakers, who, except for Nixon
and Reagan, bought into this Euro-fable. The only cause for political optimism
Obama’s floundering America now has is a glance at how much farther down the
well Europe is.
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