France and The Netherlands lost their President and Prime Minister in the last thirty hours and Iceland’s ex-Prime Minister was by a judge found guilty of catastrophic economic stupidity but not imprisoned and a feeling is growing in Europe that the punishment of the poor for the reckless folly of greedy men earning, and still earning, two thousand dollars an hour, has got to stop, and I agree.
A way to fix it is risk-free and well-precedented, and it is this.
The idea is for each country to have two currencies, the Euro, which is exportable, and another, which stays at home. Like the rouble in the Soviet Union, the latter will buy groceries and locally made clothing and pay rents and mortgages, and the Euro buy importable luxury goods like cars and cameras and fancy shoes.
Let the local currency have the same name as a former currency — the mark, the dranchma, the punt — and have the same design and be deemed to be worth an eighth or a ninth of the Euro. This value will then vary, in the old way, as demand and circumstances change.
Nothing then is required than the willingness of the European governments to play this new game, in the same way as the banks that got us into this trouble played the old games of pork belly futures and overvalued unpaid mortgages and AAA ratings for Lehman’s and Goldman Sachs, and so on.
And that’s it, really. People will continue to want to eat and live under a roof and pay cheap rents and not work as prostitutes and will seize the opportunity to do so if it is offered.
Any other proposed solution — which always involves the sackings of millions of people — exacerbates the problems. People who do not work do not pay taxes and the debt gets bigger and bigger.
It’s not as if it hasn’t worked before. Tourists to Bali in the 1970s payed in bahts the equivalent of fourteen dollars a week for a week’s food and lodging. The Balinese sculptors sold their works of art for what dollars they could get. A single sculpture might pay for a family’s upkeep for two months. And so it went.
It is easy to see how this would work in Greece and Spain and Ireland, where tourists would like to come and live cheaply for a month or two.
This is the proposal anyway.