Don´t Look Down

Somewhere between Nik Wallenda’s first step onto a tightrope over Niagara Falls and Greece’s most recent retreat from the brink, it hit me: teetering needlessly on the precipice of disaster wasn’t just the story of the weekend. It’s the story of our days. Cliff dwelling has become the modern way of life. We exist, without always having to, on the edge. Or, rather, on one edge after another, some of our own making, others avoidable if we could just summon maturity, discipline and will. As cliff dwellers we deal with nothing until the last possible minute and act in timid, impermanent ways, growing all too accustomed to indecision and a bit too inured to dread. Although we have alternatives, paths, however strenuous, back to safer ground, we neglect them, casting our lots with chance. Maybe a wave comes and takes us. Maybe not, and we can contrive some pleasure as we watch the sunset. (source: Frank Bruni – NYTimes – 18/06/2012)

On Sunday our gazes were diverted, once again, toward Greece. Its citizens headed anew to the polls, to cast votes that held the possibility of doom for the euro, whose collapse would wreak economic havoc far and wide. Rest of us did what we’d become practiced at. We held our breaths. But did it have to come to that? Greece’s limbo underscores Europe’s inability to determine once and for all how much it’s willing to invest in the future of the euro. The Continent’s leaders make micro adjustments in lieu of a macro commitment or big decision of any kind. The suspense sometimes shifts locus, today Greece, tomorrow Spain or Italy, but doesn’t end. That mirrors the serial uncertainty on the opposite side of Atlantic, where the United States Congress, inept at so very much, excels at catastrophic scenarios and suffixes. It has mastered the -mageddon. “Taxmageddon,” as it’s sometimes called on Capitol Hill, is the new biggie, looming early next year. That’s when, in the absence of Congressional action, supposedly temporary tax cuts passed under George W. Bush and extended by President Obama expire as automatic spending reductions agreed to at end of the debt ceiling showdown (“debtmaggedon”) begin to kick in. The combined force of those developments, according to some projections, would be a $700 billion blow to the economy in 2013 and, as the year progressed, a recession. The current issue of Time magazine not only outlines this doomsday scenario and discusses how kick-the-can lawmakers have “manufactured an irrational cataclysmic event,” but also enshrines “fiscal cliff” as phrase of the week. The Times, for its part, presented “fiscal cliffs notes,” explaining economic growth could slow by 3.6% points next year if Democrats and Republicans can’t reach an agreement that yanks us back from the brink. They probably will. When they finally must. Which is months away. No reason to rush! Certainly not if the pace of progress in this case mimics the movement (or lack thereof) during debtmaggedon, when an intransigent band of the most conservative House Republicans delayed raising the debt ceiling for so long that the nation’s credit rating was docked.

Everything is a standoff, remember the December battle over the payroll tax?, and all is brinkmanship, even budget votes that were once routine. Three times last year the government came close to a shutdown, and once the Federal Aviation Administration was forced to suspend some operations, flightmageddon!, while members of Congress bickered and $400 million in airline taxes was lost. There are lesser -geddons as well, like “loanmageddon,” July 1 point at which rate for federally subsidized student loans will double to 6.8% from 3.4. Wrangling over this began months ago. Wrangling over this continues. Wrangling over this will almost surely produce some kind of extension, no doubt temporary, so wrangling can resume next year. Even littlest -geddons get their sequel. And we get dangerously familiar with feelings of helplessness, with stopgap remedies and with last-minute reprieves, which are enough in some instances, not in others. Right now Colorado is burning, and more than 55,000 acres and more than 180 homes have been decimated by what is being called the worst wildfire in the state’s history. Six of the 10 largest wildfires in Texas’ history happened last year, when State suffered its worst drought since 1950s. Some scientists connect all of that and other extreme weather to climate change. Many of us feel culpable, and many of us fear worse. But, accomplished cliff dwellers that we are, we do more fretting than anything else. Confronted with the prospect of something as life-altering as global warming, we cool our heels. And distract ourselves. ABC got its highest Friday-night ratings in almost five years when more than 13 million viewers tuned in to see if Wallenda could make it from one cliff to another: a man at the mercy of the winds, a metaphor for the taking.


Acerca de ignaciocovelo
Consultor Internacional

5 Responses to Don´t Look Down

  1. Professor Uziel Nogueira says: Definitely, we´re living in an upside down world. It seems — using the popular expression — that the North went South and the South went North. US-Europe live on the edge while China-Brazil prosper and lift up millions from poverty. Last century, the G-7 was called rich men´s club. Today, it become a group of highly indebted crisis-prone countries while BRICS prosper and lead world economic growth. Is this a temporary situation or a trend that eventually will reshape the world in the 21st century? Politics in the North Atlantic area will determine the outcome. Europe and the US face serious economic and political challenges.

    A generation of vigorous young politicians, with a new vision of the future, is urgently needed. The old guard, currently in power, is attempting an impossible task.

    That is, trying to preserve the welfare state on shaky economic fundamentals and demanding light sacrifice from the voters. I´m afraid, living on the edge is the new normal from now on.

  2. Ever since Greece hit the skids, we’ve heard a lot about what’s wrong with everything Greek. Some of the accusations are true, some are false — but all of them are beside the point. Yes, there are big failings in Greece’s economy, its politics and no doubt its society. But those failings aren’t what caused the crisis that is tearing Greece apart, and threatens to spread across Europe. No, the origins of this disaster lie farther north, in Brussels, Frankfurt and Berlin, where officials created a deeply — perhaps fatally — flawed monetary system, then compounded the problems of that system by substituting moralizing for analysis. And the solution to the crisis, if there is one, will have to come from the same places (…..)

  3. Professor Uziel Nogueira says: Prof K says, “So how did Greece get into so much trouble? Blame the euro”. A simple, straightforward answer for a complex event. An explanation favored by simple minded politicians and radio talk shows. True, the common currency was rushed too soon in the EU. Many countries, particularly Greece, were not economically fit to afford the euro. Blaming the euro (i.e., Germany) for the stress in the European Union does not contribute to find a solution for the problem. Prof K gives an answer, even though obliquely, for the solution of Greece and other countries in trouble. Pay the short term costs of leaving the euro but regain control of monetary policy in the medium term. Bring the drachma back. More spending by Germany and higher inflation by the ECB is the WRONG recipe for the debt trap in Greece and elsewhere.The ONLY viable solution for the euro zone’s crisis is a small, compact number of countries with economies fit to afford the common currency.

  4. After their two-day meeting ended on Tuesday, leaders of the Group of 20 top economies managed to say some of the right things. Focusing on the euro-zone debt crisis — clearly, the largest threat to the global economy — they pledged to do more to spur growth, ensure financial stability and support a stronger European fiscal union. The question now is whether these words will ever translate into effective action. If the past two years of the euro crisis is any guide, the likely answer is no. As recession and banking crises have enveloped Greece, Ireland, Portugal, Spain and Italy, the crisis response, led by Germany, has been dominated by a relentless insistence on self-defeating austerity and piecemeal rescue plans. The result has been deeper recession, social unrest and political upheaval in Europe’s weaker economies and increasing mistrust between the strong and weak nations of Europe — precisely the wrong conditions for integrating the banks, budgets and politics of Europe in a way that is needed for the long-term survival of the euro. Will this time be different? (…..)

  5. Professor Uziel Nogueira says: Ms. Merkel will stand her ground on the eurozone situation because she has no better alternative. Germany made a terrible political mistake when it rushed in the common currency in 1999. Some countries (among the current 17) were not economically ready to be part of an integrated currency area. Some of them probably will never be. The currency of one the most competitive and powerful economies in the world, Germany, cannot be the currency of a backward economy such as Greece. The more money Germany trows into the speculative game of the debt crisis, the longer the instability in the euro zone without guarantee of a positive outcome. Eventually, some countries will realize that the euro is not an entitlement, a cost-free path to economic prosperity. From now on, the euro will require economic sacrifices from societies and political systems not prepared to accept hardship.


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