Simon Jenkins: Europe's Terrible Blunder Can Be Rectified. Remember 1931
Simon Jenkins is a British journalist and author.
I write from America, where those who care about Europe ask one question only. What the hell is going on? What is this "euro crisis" that never seems to end? What has happened to Greece, Portugal, Italy, Spain, Holland and now France? Have we all gone insane?
The economist Paul Krugman has one answer. He suggests that Europe is now replicating the 1930s "in ever more faithful detail". Governments, he says, are "committing economic suicide". When every economic tenet cries for treasuries to restore growth, spend, stimulate, inflate and rebuild confidence, they are advocating ever more austerity and balanced budgets, forcing their economies towards recession. They are doing so not because they believe austerity will generate growth. They are doing it because they are imprisoned in a defunct dogma, the propping up of the euro.
Nothing is more eerie than to read accounts of Europe's economy between the world wars, notably the idealistic "Locarnospirit" year of 1925. It was then that the chancellor of the exchequer, Winston Churchill, returned Britain to the gold standard. Wages would be forced down to compete with America, and Europe's prewar economic stability would recover. Keynes pleaded that this was madness. The pound was 10% overvalued against the dollar and the outcome would be "crippled exports, unemployment and strikes".
Churchill was wrong and Keynes was right...
comments powered by Disqus
- Roman Gladiators ate a mostly vegetarian diet and drank a tonic of ashes after training
- Massachusetts is celebrating the 250th anniversary of the wedding of John and Abigail Adams
- King Tut had overbite, club foot because his parents were brother and sister
- Prehistoric humans were far smarter than previously assumed
- Priests race to save manuscripts from jihadists in Iraq
- Niall Ferguson Joins Schwarzman Scholars as Distinguished Visiting Professor in China
- Francis Fukuyama is still bullish on where history is headed, but Americans should worry: republics can decay.
- Highlights of the recent Oral History Association Meeting
- Rick Perlstein response to Sam Tanenhaus's complaint that he's an aggregator
- Thai historian faces charges for daring to challenge a story about a royal king