Sunday, May 13, 2012

Lessons From Europe

Tony Burman offers some important insights into the current situation in Europe. He suggests that there are similarities between 1912 and 2012:

No inkling yet of the Great Wars to come or which superpowers will emerge to scar the decades ahead. But there are the first feelings of foreboding that the table for this new century is being set in ways that are out of everyone’s control. In a New Year’s editorial in 1912, The Times of London writes: “The world is at peace, yet all nations feel that the tranquility which they possess is precarious and ill-assured.”

Certainly, the elections in France and Greece have shaken Europe to its foundations:

No one can predict the scale of the aftershocks flowing out of last week’s European elections, but the odds are they will be enormous. The growing public fury at Europe’s savage austerity policies and at its national political leadership was evident in the election of Hollande as France’s first Socialist president in a generation. But it was even more apparent in Greece last Sunday where support for the country’s mainstream parties completely collapsed. The prospect is now real that Greece will leave the Eurozone and delay paying off its international debts, imperiling not only the European Union and the Euro, but the global economy as a whole.

It's clear that austerity has made things worse in Europe. The American economist Jeffrey Sachs has written that what Europe needs is “increased public spending paid for with tax increases rather than deficits, to increase the role of government in education, jobs and banking recapitalization.”

That prescription will make many people unhappy. Certainly Stephen Harper won't buy it. But we should hope that the Europeans do.


The Mound of Sound said...

Since the Reagan/Thatcher/Mulroney era we have pushed the myth of lower taxes and beatified "job creators" refusing to tie them to our societal decline. Across the board the Western nations did well during the period of robust, progressive taxation. That, in no small part, fueled the expansion of the middle class, social mobility and an era of relative stability.

Owen Gray said...

The historical record is pretty clear on this point, Mound. Unfortunately, neither Reagan/Thatcher/Mulroney -- and certainly not Stephen Harper -- were (and are) students of history.

Barbara Tuchman would say they were (and are) simply woodenheaded.