"We are now Europe!" So said Rick Santelli on CNBC yesterday, as he responded to the negative GDP growth announcement for 4th quarter 2012. Santelli is right. We are now having the same silly discussions that go on routinely in Europe. We now think that somehow, someway the central bank can do something that makes it all better. And that somehow, someway, with sovereign debt exploding off into infinity, we can continue to spend and borrow our way to prosperity. It can't be done.
Economists have routinely become apologists for absurd economic policy, both in Europe and in the US. They often advocate raising minimum wages to increase employment. They have been in the forefront of advocacy for Obama policies that have brought the US economic recovery to its knees. Thank goodness for Santelli. He correctly notes that US sovereign debt problems are approaching Greek levels.
There was a time when US capitalism was the envy of the world. That time has passed. We are now simply a European basket case with all of the same problems that Greece, Spain and Italy have and for the same reasons. We are wealthier because of our free market history. But that is past history and we are now in a European present. Obama is succeeding in squeezing capitalism out of the US and the result is a stagnant, increasingly sick, economy on its way to modern day Greece and Spain.
Pretending that there is good news or economic strength in the worst economic recovery since the end of World War II is embarrassing. The facts on the ground are all to clear. The US is losing its pre-eminent position in the world economy and it is losing it at a fast clip. No amount of misleading news reporting by the American media can obscure the obvious fact of the decline of the American economic engine.
Three cheers for Santelli. He has it right.