Five reasons to love the 21st century
You’ve got to love the 21st Century. So many interesting and unexpected twists and turns … Here are just a few from the past few days: 1.) From the Mother of Parliaments, Labour Pains and Something Newish From the country that gave us Marmite and the Austin Healy comes further proof of British innovation via ...
You've got to love the 21st Century. So many interesting and unexpected twists and turns ...
You’ve got to love the 21st Century. So many interesting and unexpected twists and turns …
Here are just a few from the past few days:
1.) From the Mother of Parliaments, Labour Pains and Something Newish
From the country that gave us Marmite and the Austin Healy comes further proof of British innovation via a watershed election that produces the ultimate in 21st Century outcomes. After much chatter about the parts of the election that were copied from the broken U.S. political system, comes the unexpected twist of a result that American voters could only dream of: an election in which all the candidates lose. What better way to express public discontent with politicians? And really, isn’t it much better than the Lib Dem victory so many people hoped for? That would have just been splitting the difference between two parties that weren’t very different in the first place. The hung parliament expresses and institutionalize public disgust in ways only possible in the United States by voting professional wrestlers and stand up comics into office.
2.) And Yet, The British Vote Is the Second Most Important Election in Europe This Week
Gordon Brown squanders 13 years of Labour rule, the Lib Dems challenge the status quo and the Tories get by some measures their best result in almost 80 years and the whole thing is trumped by regional elections in Germany. Why? Because if those elections are seen suggesting a growing sentiment among Germans to further distance themselves from their EU obligations then they raise the likelihood of further unraveling in the Eurozone. Indeed, it may be seen by some as the latest evidence that the EU experiment is failing. And who can blame the Germans for not wanting to pay for extended vacations for Greek government officials with plush compensation packages after all those years the Greeks have soaked the Germans when they came to visit on their own vacations?
3.) Which Would Mean…
There is a wonderful irony hidden in Germany‘s reluctance to bail out its EU cousins. Could it be that the biggest problem Europe faces in the 21st Century is Germany’s inclination to mind its own business? That the greatest German threat is that they actually focus their attentions within their own borders? All of a sudden the 20th Century seems so much longer than just 10 years ago. And although the German parliament voted for the bailout, German politicians will spend weeks interpreting the results of the local elections to see whether they indicate a growing resistance to such initiatives in the future.
4.) But One Continent’s Crisis is Another’s Boon, Part I
Of course, if we were to play out the current European crisis, we see not just problems for Europe but potential benefits for others — benefits that is if you overlook the giant threats to the entire world economy. For example, if Greece is just Bear Sterns and Spain is Lehman Brothers and the U.K. is A.I.G…well, you get my point. Greece is floored by the Ouzo Crisis and the rest of Europe wakes up with a hang-over … or much worse. Markets are jittery. The Eurozone is unwilling or unable to defend itself against those doubts. And the Euro itself continues to weaken for months and months to come. That’s a passel of bad news in the increasingly irrelevant coulda-been capital of Europe, Brussels, and its resident bureaucrats and its lousy for European markets and economic performance but, come on, Europe, don’t just think about yourselves. For example, think about the happy Chinese. The Euro going down means the RMB goes up … and all of a sudden the Chinese currency is automatically "adjusted" for a big chunk of the world economy and the United States loses an ally in its pressuring Beijing. After all, why pressure the Chinese now when they will need their investment flows more than ever.
5.) But One Continent’s Crisis Is Another’s Boon, Part II
While the United States may not like that particular benefit for the Chinese, don’t despair, America. There’s plenty of good news here for everyone. Oh sure, a falling Euro means a rising dollar and that may be bad for our trade balances … but we’ve learned to live quite happily with trade deficits for decades now. Let’s keep our eye on the silver linings. The Euro falls and the dollar rises. Investors, like the Chinese, can no longer so easily make rumblings about a new reserve currency. When it comes to the dollar, the old Thatcher-era Acronym get’s dusted off. TINA: There Is No Alternative. As Europe struggles…even if the U.S. does somewhat as well … the dollar will be seen as the only true safe haven (other than Gold which continues to rise). Investor interest in U.S. securities markets … even U.S. Treasuries … and U.S. real estate markets goes up. And given the correlation between the price of the dollar and the price of oil … and faltering demand in Europe … the price of oil goes down, thus partially blunting the upside pressure on our trade deficit while also taking the air out of inflation’s tires.
Imagine just 12 months ago if someone had told you that the dollar might be heading up right now … and that it might be doing so for quite some time? Imagine if someone had told you that the United States could do everything "wrong" — build huge fiscal deficits, build huge health care related deficits, spend fecklessly, endure a massive financial crisis to corruption, greed and regulatory incompetence, respond with massive deficit-building stimuli, bailout companies left and right-and that at the end of it all markets would "reward" them.
You don’t get to be the head of a country without a little luck being thrown in the mix. (Except in the U.K. where the "winner" of the current "none of the above" referendum is almost certain to face horrific choice, be put in the position of taking much away from his "supporters" and go down in history as a victim of circumstance.) But, Barack Obama clearly has a guardian angel somewhere. He might well someday be seen as having faced a series of crises that actually end up leaving the United States –at least temporarily — strengthened. Actually, it’ll only be temporary…but it could leave us with a little breathing room to get our own house in order.
Unless it ushers in a global depression.
But why think about that? It’s such a last century sort of a downer. This is The Silver Lining Century. So kick back, relax, go long the dollar, don’t worry about your credit cards America and, while you’re at it, keep buying up that vacationland in Siberia. Because as we have discovered, all it takes to make other brewing disasters — like global warming — our friends, is that perfect combination of a good attitude and a willingness to overlook the misfortunes of others.
David Rothkopf is a former editor of Foreign Policy and CEO of The FP Group. Twitter: @djrothkopf
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