Satan and the G-16: A Sacrilegious Rant and a (Modest?) Proposal

It appears now that the G-20 intend to make their compromise with the devil. That’s pretty much inevitable, since the devil is one of them. When I say the devil, I am of course referring to the nation that invented the automobile (hint, President Obama: not the US). It also happens to be the nation that invented chemical warfare and the Final Solution. (What kind of a rant would this be if I respected Godwin’s Law?) I curse Comrade Gorbachev for countenancing the demolition of the Berlin wall. It is clear now that, despite having repented, with apparent sincerity, of its earlier sins, Germany is fundamentally evil. And right now I’m imagining Angela Merkel with horns and a pitchfork.

The devil, as I said, is one of them. It might be more accurate to say that the devil is four of them. Euroland, which is counted independently as one of the G-20, is entirely under the sway of the forces of darkness. France and Italy sold their souls long ago and have little chance of redemption. If I had my way, the remainder – call them the G-16 – would redeem their own souls and let continental Europe perish in fire and brimstone.

I would have the G-16 agree on a set of fixed exchange rates against the Euro. (And if China wants a cheap Yuan, I say, so be it. Let’s see how long it takes Premier Wen to figure out that he doesn’t have luxury of mistrusting US assets.) With interest rates at or near zero, the alternative to a fixed exchange rate regime among the G-16 is a regime of pointless competitive devaluation – much like the mercantilism of olden time. Nobody wins that way. Fixed exchange rates are the way to go, and while we’re at it, we can solve the “N-th country problem” by making Euroland the N-th country. Making Euroland the N-th country on more than generous terms of exchange. Indeed, let us say more than more than generous terms.

Yes, if the Europeans want a hard currency, let them have it. Let them have a currency so hard it will break their skulls. It’s a policy once known as “beggar thy neighbor,” and our neighbors between the Mediterranean and the North Sea are begging to be beggared.

But Keynes did die for everyone’s sins, and I suggest we hold out an offer of redemption to any European country that will repent and accept John Maynard as its personal savior. Set a (temptingly ungenerous) exchange rate against the Euro for each of the individual European currencies, and agree to collectively continue defending that exchange rate for, say, 7 years, if the sinner will stop worshiping the Golden Calf.

I remember with fondness the French Franc and the Italian Lira. I remember the picturesque bills. I remember (indeed, I have preserved some relics) the varied and beautiful coins. I remember, as recently as 2002, going to a grocery store in Spain, wondering why the prices looked so high, and realizing that the prices were in pesetas rather than euro cents. I remember. I remember the Garden.

Lost. It is lost. Shall not we assert the faith that it may be regained?