We're No. 2

According to the IMF and the CIA, in 2011 the GDP of the European Union was about $17.5 trillion and the GDP of the United States was about $15.1 trillion.

Time to Blame Helmut Kohl for Europe's Problems?

The German parliament in Berlin.

Recently, former German Chancellor Helmut Kohl took to task current Chancellor Angela Merkel for her handling of the European debt crisis. "She's destroying my Europe," Der Spiegel quotes him as complaining.

 Kohl later disowned some of the comments he'd made and clarified, "It is true that I -- like many people -- am worried about the development in Europe and of the euro. I also see it as urgently necessary that the supposed euro crisis isn't regarded and discussed as a structural crisis of the euro per se, but as what it is: The result of homemade mistakes and challenges for both sides -- Europe and the national states."

The British press in particular likes to display great impatience with the way the fiscally responsible states (led by Germany, but also including smaller northern European nations) have dealt with the – there's no kind way to put it – disastrously fiscally irresponsible states. (One of the more intelligent articles of this type ran in the Financial Times.) The answer seems to be that the responsible states should just take on the burdens created by the irresponsible ones, without forcing the bad apples to rectify the structural problems that led to this disaster in the first place. I think Merkel has been slow and, yes, unimaginative, but she has also been largely correct: She has staked her reputation and political future on saving the eurozone, but she is also dedicated to forcing Greece, Italy, and others to learn to live like adult countries and not like teenagers who've just scored their parents' credit card for the weekend.

But we are still left with the ungenerous conclusion that Kohl himself should shoulder much of the blame. He, with France's then-President Francois Mitterand, cooked up the euro scheme as a way of mollifying European nations (France among them) that were worried about German reunification. It wasn't all a matter of that, because the European Union had been growing and solidifying for years, extending a zone of prosperity and law across a continent that had been destroyed countless times by conflict. So a common currency was a likely development at some point. But it's early introduction was intended to tie Germany closely enough to its neighbors that it theoretically would not go off marauding through the neighborhood again.

As such, it wasn't a bad idea. An unnecessary one, perhaps; there is absolutely zero appetite in Germany for fighting wars. But still, an understandable idea nonetheless.

What is not understandable is how Mitterand and Kohl, two veteran politicians who supposedly learned from the mistakes of the past, could concoct a system that is structurally illogical. Economic union without some sort of political union to enforce it is a recipe for disaster. This disaster, in fact. It could lead to large countries forcing their policies down the throats of smaller countries, which is what Merkel is being accused of doing by trying to get the poor performers to reform their economies and politics to make themselves competitive; or it could lead to poor countries overspending and expecting the rich countries to bail them out, which is the situation that has happened and that Merkel is trying to rectify.

Merkel is trying to clean up the mess that Kohl created.

If the euro was the first price Kohl and Germany paid to get reunification, then Greece, Ireland, and Italy have just presented the official invoice.

A Tragedy for Poland

I'm sure you've seen the headlines by now: The president of Poland, as well as the heads of the country's four military branches and many other of its leaders (but not Prime Minister Tusk), were killed when their plane crashed on approach to the airport near Smolensk, Russia. They were going to attend ceremonies marking the massacre there of 20,000 Polish military offices by Soviet secret police during World War II.

Reports The New York Times:

The crash came as a staggering blow to Poland, wiping out a large swath of the country’s leadership, including the commanders of all four branches of the military, the head of the central bank, the president and many of his top advisors. In the numb hours after the crash, leaders in Warsaw evoked the horror of the massacre at Katyn, which stood for decades as a symbol of Russian domination.

“It is a damned place,” former president Aleksander Kwasniewski told TVN24. “It sends shivers down my spine. First the flower of the Second Polish Republic is murdered in the forests around Smolensk, now the intellectual elite of the Third Polish Republic die in this tragic plane crash when approaching Smolensk airport.”

If you've been following the news for the past week, Poland and Russia recently held a rather moving joint memorial for that massacre, in which Russian President Vladimir Putin made what I thought were some very strong comments about the victims of totalitarian repression. I'm no fan of Putin's, and I've watched with some small alarm the resurgence of the Stalin fan club in his country. But that's why the statement was even more important. For decades after the war, the Soviet Union blamed the massacre on the Nazis before finally admitting it was committed by the Soviets.

One hopes that this can be clearly proven to have been an accident and that conspiracy theories don't proliferate and destroy the budding rapprochement between these two historic enemies.

Best wishes, Poland.

European vs. American Economics: Paul Krugman Gets the Facts

Once again, The New York Times' economist and columnist Paul Krugman provides some clarity amid the illusions. He takes a look at the widely held belief in the United States that Europe's economy is stagnant, decaying, and out of date due to high taxes, high social spending, and all around general Europeanishness.

The reality, Krugman writes, is the opposite. The statistics for productivity, economic growth, and much else are very similar for the two economic blocs. Plus they have actual health care that people can use.

Of course, anyone who follows the news carefully could already have guessed that. Just this week, China officially assumed the mantel of the world's number-one exporter. No surprise there; we've been expecting it to happen any day now for years. But which country did China beat out for the title? Was it conservative powerhouse America? Low-cost India? No, it was Germany, the land of lengthy vacations, clean streets, high wages, and a strong social safety net. Even in the second slot, Germany ain't doing too badly. You know how American car companies are either bleeding money left and right or are welfare wards of the state? Volkswagen reported record sales and is on pace to become the world's top carmaker.

So why do we keep following the same political mantra in this country, like political lemmings headed over the cliff?

Europe Now Richer than America

Who'da thunk the quasi-socialist universal-health-care-ists in Europe could even pull it off, but they are now richer in total assets than the rugged individualists in the United States, according to no less a source than conservative Forbes.

Magazine news: Help! I'm Shrinking!

Like the Wicked Witch in The Wizard of Oz, the magazine industry is getting smaller and smaller.

Okay, that's an exaggeration, but it is shrinking, and I really wanted to get the Wicked Witch thing in there. (Go ahead, click on the link above; it's worth it.)

Anyway, the New York Post's Keith J. Kelly says the magazine industry is becoming like Germany or other advanced Euro economies, whose populations are declining because births and immigration are outnumbered by deaths. (Okay, he didn't use the Europe-as-magazine-industry analogy, I did. But I'm trying to offer something for the people who didn't climb aboard for the Wicked Witch thing.)

The point is, as Kelly writes, "For the first time in memory, the magazine death rate has surpassed the magazine birth rate." He's referring to the vicious slaughterhouse that was the publishing economy of the first quarter of this year, in which the number of magazines that died just slightly outnumbered the new-birth rate.

It's sort of like ...

Nein, Danke

A rather jaw-dropping story from the great German newsweekly Der Speigel. It seems French President Nicolas "Speedy" Sarkozy is getting, well, odder as the weeks go by. He recently met with German Chanceller Angela Merkel and her foreign minister, Frank-Walter Steinmeier (a recent speaker at The Commonwealth Club of California, BTW) and offered nuclear weapons. In Der Spiegel's priceless reporting, "Both the chancellor and her foreign minister were speechless. The idea of possessing nuclear weapons is taboo in Germany. Sarzoky's predecessor Jacques Chirac cautiously brought up the issue 12 years ago, but he quickly realized it was pointless to pursue it."

Sort of a faux pax of Bushish levels, isn't it? As the above quote indicates, the offer itself is not unique; it was made "cautiously" 12 years ago by Chirac. But it strikes me that it's important because it shows Sarkozy doesn't really understand his neighbors – and his most important neighbor, at that.

Put me in the camp that thinks Germany needs to reasses its defense and security needs and procedures, and adapt itself to a new world in which the country's heartfelt revulsion toward the crimes of the Nazi regime have left it admirably restrained. But that restraint has also arguably left it vulnerable to foreign and domestic threats.

But even with that said, Sarkozy seems to display a tone-deafness when trying to figure out how to treat his neighbors. High hopes for Sarkozy's self-defined role as a reformer could be dashed if he doesn't ascend a steep learning curve.