I think it’s true, as my political science professor brother, Jeff, has been telling me, that world government is about to take a great leap forward. Already the governments of the U.S. and Europe are, out of necessity, groping towards a global financial rules of the road. If bank accounts are guaranteed in Ireland, then they must be guaranteed everywhere, like it or not. It is no longer feasible to have such minimal global governance of the financial system as we have had.
It is not an argument about the lack or excess of regulation and governmental economic interference in the United States. Subprime mortgages and the resulting housing bubble was somewhat more the Democrats’ fault than the Republicans, but that isn’t the problem. The bad mortgages were the trigger, but the global financial system has not collapsed because of a few bad American mortgages, which the U.S. economy could have easily absorbed. The entire global system was/is way over-leveraged. It was a disaster waiting to happen.
If it hadn’t been the bursting of the U.S. housing bubble, which the global financial community bought into, it would have been something else. The big financial brains all over the world embraced a pseudo-scientific mathematical delusion that you could eliminate risk by making it more complicated. They created a system that was fragile and vulnerable. Pull on one thread, and it all comes unraveled. The housing “crisis” was the thread.
This is now a global argument, and, although economic power is the coin of the realm, consensus, and therefore compromise, is being, and shall increasingly be, required of all parties, to a much greater extent than heretofore. Necessity is a mother.
Since the nation-states of Europe have adopted the Euro as a common currency, all else follows. National sovereignty is over in Europe. Political power grows out of the barrel of a gun, but within Europe, which has no guns to speak of, just these cute little toy armies, power grows out of the barrel of the Euro.
So Europe, and the rest of us, the U.S., Great Britain, Japan, China, India, Russia, Saudi Arabia, Iran, Iraq, Brazil, Venezuela, and the lesser (lessor) nations, will now have to hang together economically, or hang separately. This is very big news that has barely begun to be assimilated by world leaders, let alone the world’s citizens. The domain of national economic decisions is shrinking. The domain of the G7 and the IMF is expanding.
Of course I’m aware that this warms the cockles of the heart of the one world cult, and that it all sounds a lot more like Obama than McCain. I don’t like it. I am a big fan of national sovereignty. I am also a big fan of state and local sovereignty. It must be from my SDS days and the worship of “participatory democracy”, for which idealists like myself and Bill Ayers sacrificed so much.
But I don’t see an alternative. We are stuck with a global economy and we might as well get busy administering it. One bright side of the global financial collapse is the attendant collapse of Kyoto-style carbon emissions fascism, but we are about to experience the emergence of many more economic constraints on national sovereignty.