Monday, December 12, 2011

Maybe I do understand the EU

     I've always been hesitant to talk about the European Union (EU) because I feel uncomfortable with my understanding of its essence.  For example, I don't understand the current fracas.  Why should Germany have much to do with the corruption inherit in Greek politics?  Why don't they act like the independent countries as they are—Greece default, and Germany let her default—but treat the Euro as if it is commodity money? So long as they limit the amount of Euros created, and if people have confidence that the volume of Euros will not change significantly in response to a Greek default, is there really much of a problem with the EU and its currency?
If they do this, there is little difference between the Euro and gold money, assuming gold could only be mined by the European Union Central Bank.
I've always thought that I missed something important, because no one utters such a thought, but a recent Wall Street Journal editorial emboldened my views on the EU.

We wish the Germans well in driving a hard bargain in return for writing a big check, but there is a better way. That would be to return to the Euro as it was originally conceived: Countries share a currency but are responsible for their own fiscal policies, including the consequences of default.

The Wall Street Journal. December 10-11, 2011. A14.

What's that? Oh, yes: the sweet sound of self-confirmation.

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