Ozone treaties, U.S. fiscal irresponsibility, and the Euro: three threads, intertwined

Inside the first section of today’s Washington Post? An article by Juliet Eilperin, who reports that India and China have objected to a proposal for phasing down production of hydrofluorocarbons (HFC’s) that would have started in 2014. Inasmuch as HFC’s not only destroy stratospheric ozone but also are major greenhouse gases – molecule for molecule 1440 times more potent than the much vilified carbon dioxide – capping HFC production would seem to be a no-brainer. The US and 107 other countries see it this way.

On the editorial page of that same issue, an op-ed by Matt Miller entitled Good questions from China in the print edition, and Decadence of the West on-line. Miller begins:

The Chinese official was perplexed. “It seems clear that taxes have to go up as a share of GDP and spending has to go down. When is that going to happen?” We were in a seminar room at the Chinese Executive Leadership Academy in Shanghai. It’s kind of an executive MBA center where rising Communist Party leaders come for training. I was there two weeks ago speaking about the future of capitalism. Since China holds more than $1.1 trillion of U.S. debt, the group was keen to learn when they could expect the United States to get its fiscal house in order.

Fair enough question, isn’t it? Especially from a nation where GDP per capita is $8400/year, lending to a nation where GDP per capita is $48,000 annually. Any of us as individuals borrowing liberally from our much poorer cousins? It’s not happening at the personal level. How can be it sustained internationally?

The cover of this week’s issue of The Economist? It depicts the Euro as a falling meteor, fully aflame. The Euro has been around so long that many of us had forgotten it was and remains an amazing social experiment – can seventeen countries, only relatively loosely allied, get sufficiently on the same page economically and fiscally, so that they can share a single currency? Worked well for two decades, when times were good, but the economic downturn dating back to 2008 has exposed the flaws. Because the Euro seemed to confer the financial soundness of the most conservative nations (read: Germany), it has been possible for several other nations to take advantage of the resulting low interest rates on their bonds to live beyond their means. Greece, Ireland, Spain, and Portugal have done this to varying degree; now Italy’s problems threaten the entire superstructure.

What’s the common thread here? There are several.

First, these events show our mutual failing. Specifically? We are quick to see the smallest fiscal irresponsibility in others, while we slow to see or admit – or worse, we remain blind to – our own shortcomings. Here in the United States, we chastise European leaders for failure to take the stern measures (which carry their associated political risks) needed to shore up their currency. They remind us that our financial-sector excesses of the past decade contributed to their current problems – including housing bubbles and massive unemployment, especially among young people. And while we’re asking them to raise their taxes and their retirement age and reduce their social safety nets they note we’re having difficulty doing the same. The Chinese rebuke us for growing so beholden to them…yet for years their economic policy has stressed exports at the expense of building domestic demand. They’ve addicted foreigners to their inexpensive products by denying their own people the chance to share in the wealth they’ve generated. Europeans and Asians alike decry the repeated failures of the U.S. Congress and executive branch to put our own fiscal house in order. Plenty of finger-pointing, lots of blame-game. Regardless of what people say – this is not a recent phenomenon, or the problem of a few people. Remember that remark in your memory bank somewhere to the effect that we’re quick to see the speck in someone else’s eye while ignoring the two-by-four plank in our own? That goes back 2000 years.

Second, we – all of us – individuals and individual nations, seem reluctant to shoulder responsibility, to model desired behavior. Europeans, Asians, Americans (heck, let’s throw Africans into the mix) are all in a position to take such action unilaterally, to start the ball rolling, to clean up our act. Any one person or country among us could be the first! We know what would happen, don’t we? At a minimum, we’d have the satisfaction and peace of mind that comes from doing that right thing – that comes only from doing the right thing. But there’s even more of an upside. It might well be – in fact, it’s most likely – that if we took the lead, others would follow. Imagine that.

Third – and this brings us back to those environmental responsibilities and the HFC treaty – we’re doing this at precisely the moment in human history when it’s vital that all nations work together to reconcile resource-, environmental-, and hazards issues at all times, and at all places, worldwide. For the 21st century and for seven-to-nine billion people, nothing less will suffice. Our current financial problems that loom so large – trivial compared with this common challenge.

Seem overwhelming? It shouldn’t. Each of us holds it in our power to take small steps. Repeat after me – at a minimum, we’ll know satisfaction and peace of mind. And if we can simply endure, we might look up sometime soon and see others doing the same.

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