The Empire of the Elite

The most recent election gave me the nagging feeling that I, and most everyone I know, was being played for a fool. The so-called fiscal cliff debate has finally confirmed it for me. I was foolish to believe, against the evidence of my own experience, that our leaders care about us or are even particularly concerned with being our leaders. What we are witnessing right now is the latest round of a great, global game of Empire. The people we think of as our leaders should more properly be viewed as our rulers.

This is not, by the way, an Illuminati-like argument that there is a cabal secretly controlling the world. It is rather to say that the natural state of man is not participatory democracy, but leadership by an elite, and that natural state is reasserting itself. And the elite we have is, all things considered, considerably kinder and gentler than previous versions. But the fact remains that they are ruling us, and their goals are not our goals.

Now, this is a huge topic, and I am at risk of getting lost in it, so I'm going to quickly lay out my thesis and give you a couple of arguments in support of it. My basic theory is this: in the 1800's, the Europeans, and especially the British, created the first global system. People from those countries were the only ones who had a chance to be rulers, but the colonies created opportunity for many people who otherwise would have been trapped by their class to rise. This was one strand of the meritocratic model.

At the same time, the United States was neither ruled or ruler, but a democracy (although a far from perfect one) where people were free to pursue their own goals. This was a second strand of meritocracy. But after World War II, the European empires were destroyed and the US was ascendant, although facing an existential foe in the USSR. The US, then, adopted a modified form of empire: it didn't rule directly, but provided economic goodies and military protection for those who played along. It also allowed the most talented people from other nations to come here and join an elite that would either build wealth here or take their knowledge back home. The meritocracy was thus globalized, but at the same time our exposure to the first strand of meritocracy (which essentially held that the most powerful or talented should administer the world for the greater good) began to modify our own more individualistic conception of success.

The result is ably described in this quote from a 2011 article in The Atlantic Monthly:

[T]he rich of today are also different from the rich of yesterday. Our light-speed, globally connected economy has led to the rise of a new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, worldwide economic competition—and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly. Perhaps most noteworthy, they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home.

The key word in that paragraph, by the way, is competition. Our elite are consumed with getting into a position of global prominence and then beating their fellows in the great game of wealth and power accumulation. They are not, with few exceptions, primarily concerned with building national or local prosperity. They are building a global empire of the elite, and we are its subjects.

The conversation around the fiscal cliff is a clear indicator that our national politicians, and the media and business leaders that surround them, are more concerned with power than outcomes. The entire conversation, from the President on down to David Gregory on Meet the Press this morning, is driven by who gains political advantage from a deal, or lack thereof. Only rarely do you hear anyone even mention the underlying issues of debt and spending that have gotten us to this point, and the conversation almost instantly breaks down over whose numbers are more important, and moments later we are back to looking at who is winning the polls.

The politicians on both sides work for, and want to be part of, the elite. That's why they're willing to raise taxes on income before they'll go after taxes on investment. Because the bankers and hedge fund managers who pay those low taxes on their earnings all went to the same elite schools as the politicians, attend Davos with those politicians, and go to costly fundraisers with (and often for) those politicians. The politicians know these people and care about them in ways they could never know or care about most of their constituents. Now, this isn't to say every politician is this way, but certainly enough are that it distorts our civic life profoundly.

Since this global elite is so focused on money (as a numeric indicator of power, if nothing else) it is not surprising that financiers would be at the heart of the matter. Many made the argument that a global financial system that is so complex and intertwined that the collapse of any large institution could destroy the worldwide economy should be dismantled. I have never heard a coherent argument against this position, I am sure it polls incredibly well around the world, and the banks go on more or less untouched, and they even manage to do things like help Iran launder money in the search for profits.

Again, I'm not saying we're being oppressed or horribly mistreated by these rulers, merely that they are making the decisions they think are best for "the people" without really caring about what the people want, and that they are increasingly adept at extracting wealth from us without giving much of value in return. This elite has managed to avoid a shooting war in and amongst the developed nations for over 70 years, and has, I think, done some good in reducing the impact of extreme poverty. Their record isn't all that bad compared with some other ruling classes we could look at.

It is just good to keep in mind that this global ruling class is ultimately running the show, that it neither feels connected to or much worries about the middle class in the countries it happens to inhabit, and that it feels no compunction about being very well-compensated for its efforts. If nothing else, it will help you make more sense of seemingly manufactured events like the fiscal cliff.

Watching Our Nation Break in Two

NOTE: This is last in a series of four planned posts about how we make decisions as a society, and where our political leadership might be taking us. It is meant to be non-partisan, but my conservative-ness might slip through. In the first post,I discussed the difference between team thinking and crisis thinking, and how we seem to be demonstrating a team mentality while saying we are in a crisis. The second post considered the possibility that things aren't all that bad, but political marketing is making us feel the world is falling apart. The third post looked at whether we are waiting for a crisis we know must come, but is taking its sweet time to get here. This post will consider the possibility that our society is in fact splitting in two.

In 2004, the map you see to the left became a bit of a phenomenon. People fed up with the divisiveness of that presidential election (and particularly those bitter about being on the losing side) half-jokingly suggested breaking the country up into the blue "United States of Canada" and the red "Jesusland". This notion tapped into a deep feeling that we can no longer agree on the direction of the country, and it would be better if we divorced now and formed two ideologically coherent countries.

I haven't heard anyone advocating for the country to split lately, so it would be tempting to laugh off that map as a passing fancy. But the idea that the "other side" is not just wrong, but illegitimate, has if anything gathered steam since 2004. The Birther movement can be seen as a crude way to deny to Obama the legitimacy to even advance an argument. Equally crude, though nicely packaged, is this argument from Ron Rosenbaum that the Republican party is irredeemably and undeniably racist, and thus not a legitimate participant in our national debate. Lest you think I exaggerate:

In a way mainstream media outlets who promote a false equivalency between the two parties by failing to note at the very least the neo-racist supporters of the Republican Party are themselves complicit in the charade that the GOP is a morally legitimate entity. Not that racists don’t vote Democratic, and yes I know the GOP was, was, the party of Lincoln, but that was long ago in another country.

The distance between this statement and saying that anyone who votes for Mitt Romney is a racist is short indeed, and from there it is just a few more steps to an argument that any Republican elected, or any Republican law passed, does not have moral legitimacy.

If all of this is a little too high minded, take a look at your Facebook or Twitter feeds after the next debate. I'm pretty sure you'll see the liberals decrying Romney's desire to leave the poor and vulnerable unprotected to help out his rich cronies, and the conservatives attacking Obama's anti-American, socialist policies that are destroying the country's spirit and shredding the Constitution. 

So what? People disagree about politics, and they aren't always nice about it. At the end of the day, most of these arguments come and go, with no lasting impact on the unity of our nation. Our democracy has lasted almost 250 years by adjusting to the changing beliefs of its people: eventually we find common ground and move on.

There's one exception to this rule, and I think the example is instructive. As I wrote a year ago, in the years before the Civil War we had fewer and fewer common principles to help us reconcile our differences. Eventually, the differences of belief between the Union and the Confederacy were severe enough to provoke first succession, then war. The only way to reconcile these wildly divergent beliefs was for one side to crush the other, and force its beliefs upon the losers.

Is there a current schism anywhere near as severe as that in the time before the Civil War? I took a stab at capturing some of the differences between "Red Culture" (that associated with Jesusland) and "Blue Culture:

Obviously this is an over-simplification, but my point is that in ways big and small these cultures are wildly different, with very few areas of overlap. This does not feel like the description of two strains within one coherent society to me, but two antagonistic societies living side by side. It also feels like there is not much chance of one side convincing the other on any of these issues, as these views are based in deep beliefs and worldviews that are hard to challenge.

My sense is that Blue Culture is the more recent development of the two, one that has its roots in the trauma of the Great Depression and which fully took shape when the Baby Boomers challenged the moral consensus around religion, sexuality and gender roles that existed (somewhat uneasily) before the 1960s. That worldview has always defined itself in opposition to a more patriarchal, conservative America, which they felt left the disadvantaged to fall through the cracks. In the 1980's, conservatives began to push back, reasserting traditional values and worrying that the goals Blue Culture was advancing would sap American individuality and vitality. We now seemed to have reached something of a stalemate.

A few essays ago, I argued in essence that this stalemate was somewhat stable, that neither side would really move us that far from the common ground that we have somehow stumbled upon. But I think the sense of impending crisis, and the limits of deficit spending, will undermine this truce. Conservatives want to cut taxes to give individuals more control of their money. Liberals want to raise spending to extend social services to more people. For a long time, we could take turns from one administration to the next, but we can't paper over our differences this way anymore.

How will this end? I don't believe we have a second civil war in us. My guess is no Californian will want to take up arms to keep Georgia in the Union, or vice versa. And I also don't think we are going to suddenly resolve all of these problems, barring an external crisis that forces us to come together for survival's sake. I see two possibilities: one is that a financial crisis much bigger than the 2008 crash devastates the country, and our irreconcilable differences force a rapid and nasty divorce on us. The alternative (and the one I'm rooting for) is that we realize we're running in place and decide to stop, and we figure out a way to either split up amicably or devolve all but a few functions of the federal government to the state or regional level.

Sadly, I don't see America in its current form lasting my lifetime. That may be tragic, but it doesn't need to be. A country with a single citizenship, a single military, but two different systems of domestic governance, could be a good thing. It would ease most of the contentious debates we suffer through today, and would allow those who don't "fit in" on their side to migrate to the other territory. And it would acknowledge our shared heritage while not lying about how differently our two cultures view the world.

But since the odds of an amicable divorce seem so long, I'll end with a bit of a prayer: please, please let me be wrong.

Won't You Be My President?

My wife has had to put up with my enthusiasm for Chris Christie for a while now: she strongly suspects that he was the reason we bought a house here in New Jersey. I think he is the rare politician who makes his position crystal clear in almost all circumstances, and I think he understands the severity of the financial problems that plague our nation and is prepared to do something about them, even if it is difficult.

I was a bit disappointed when he dismissed the idea of running for President earlier this year, but I respected that he thought he wasn't ready for the job. And at that time, I thought Mitch Daniels would be the best possible Republican candidate. And hey, I'm selfish: I wanted to keep him as my governor, if only to protect me from additional property tax hikes.

Now, of course, there are rumors swirling that Christie is reconsidering his earlier decision. (And it would be a reversal of some very clear statements that he was not running.) On the one hand, this would cut against one of the most appealing aspects of his personality: that you can really believe what he says. On the other hand, I am reminded of a scene in the movie Gladiator:

Emperor Marcus Aurelius (to General Maximus): I want you to become the protector of Rome after I die. I will empower you to one end alone: to give power back to the people of Rome...and end the corruption that has crippled it. Will you accept this great honor that I have offered you?
Maximus: With all my heart, no.
Emperor: Maximus...that is why it must be you.

Now, Chris Christie isn't an action hero. (He doesn't have the physique for it...) But I believe this moment calls for a man who has a sense of duty, a man who doesn't necessarily want the Presidency for reasons of vanity or to wield power, but because he sees a job that must be done and is willing to do it.

I think the financial foundation of this country is crumbling, and I am willing to do what I can to support someone who understands that and will give it his all to fix the problem, especially if that person has a track record of making progress on these types of issues. I'm also looking for a person who can articulate the problem and its solution in a way that might inspire people to support the difficult choices that must be made. Which is why I am so heartened by a speech Christie gave tonight at the Reagan Library, and especially by this quote:

I believe in what this country and its citizens can accomplish if they understand what is being asked of them and how we all will benefit if they meet the challenge.

There is no doubt in my mind that we, as a country and as a people, are up for the challenge. Our democracy is strong; our economy is the world’s largest. Innovation and risk-taking is in our collective DNA. There is no better place for investment. Above all, we have a demonstrated record as a people and a nation of rising up to meet challenges.

Today, the biggest challenge we must meet is the one we present to ourselves. To not become a nation that places entitlement ahead of accomplishment. To not become a country that places comfortable lies ahead of difficult truths. To not become a people that thinks so little of ourselves that we demand no sacrifice from each other. We are a better people than that; and we must demand a better nation than that.

I don't know if a politician like Chris Christie can become our President. But I hope he takes the daunting step of running, so we can find out. Because the candidates we have now, including our current President, are far more likely to perpetuate our problems than to solve them.

The Collapse of Politics

We like to imagine that we are capable of reason, of thoughtful, fact-based decision-making. I in particular flatter myself that I am a logical man. But I think the state of our politics is yet another bit of proof that we are in many ways only semi-rational beings, crippled by our own unexamined first principles and our loyalty towards our intellectual teams.

The latest bit of evidence I have collected for this theory came last Tuesday, when I was able to attend a Q&A given at Google by New York's junior senator, Kirsten Gillibrand. This was not exactly a hostile crowd, and I had the sense the senator was somewhat less guarded than she might have been, say, at a town hall meeting upstate. For example, at one point she said (this is not an exact quote, mind you), I think that if we had 51% women in congress, we wouldn't be in Afghanistan or Iraq, wouldn't be in the economic mess we're in. (This reminded me of an old Robin Williams joke: If there was a female president there'd never be any wars, just every 28 days some severe negotiations.") But the point she was trying to make was that women tend to be much more willing to work for agreement then the men of Congress (try not to imagine that calendar...), who are more dogmatic.

So I spent the rest of her talk trying to listen for a single thing she said that showed the least willingness to find a compromise with Republicans, and didn't come away with a single thing. Not, I don't think, because she wouldn't be willing to compromise, but because she's not even really thinking about trying to solve the same problems that Republicans are.

What are the problems Republicans are interested in solving? Right now, the debt, the encroachment of government into daily life, and the challenges facing small business. What are the problems Democrats are interested in solving? Improved social and economic equality, more investment in government services (infrastructure, education, etc), and protecting entitlement programs. Not only are these a completely different list of challenges, but the solutions each side offers will exacerbate the challenges the other side is trying to solve.

Recently, Texas governor and Republican presidential candidate Rick Perry said his goal is to make Washington as inconsequential in our lives as he can. As columnist Jeff Jacoby pointed out in his recent columns, "To a Democrat steeped in the big-government tradition of the New Deal and the Great Society, there could hardly be a greater heresy." That last word is perfect, as we are not talking about political opinion but fundamental belief. Making Washington inconsequential would violate the first principles Democrats bring to politics, just as the relentless growth of government in the last few years, and the corresponding debt growth, is impossible for many Republicans to square with their beliefs about what kind of country this should be.

Even at 31, I feel to young to say definitively if this clash of first principles is that different than the political battles that came before. Certainly the Sixties must have felt equally tumultuous, although that clash seemed more generational than purely political. The only time in American history that seems comparable are the decades before the Civil War, where it became increasingly clear that our leaders had no common ground to fall back upon. The good news is that we're highly unlikely to pick up arms over current political arguments. But it is not inconceivable that at some point, the two sides of this unending debate might, like an unhappy couple, decide that their differences are irreconcilable, and find a way to end this union.

Me Thinking About Others Thinking About Krugman

I know, in this day and age, writing a post about two posts about a column written a week ago is probably a little silly and self-indulgent. But I had a very similar reaction to the two writers who I am about to quote: I read Paul Krugman's piece on higher education, "Degrees and Dollars", and found myself nodding (a rare sensation for me when reading Krugman) right up until the last paragraph. After noting that society and families invest massive sums in higher education with an increasingly small likelihood of a strong return, he concludes:

So if we want a society of broadly shared prosperity, education isn’t the answer — we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.

WHAT? So society continues to count on old models and fading industries as the path to wealth instead of innovating, and the solution is to dig in our heels, unionize, and demand money and healthcare whether we can afford it or not? Take it away, Walter Russell Mead:

This is blindness so brilliant it would dazzle a bat. If, as Krugman posits, demand for US workers will be falling in both manufacturing and the professions, how exactly will labor unions get higher wages for their members? Factories will be closing in Krugman’s world and law firms will be turning more and more work over to computers or shipping it overseas. Perhaps stronger unions could make it harder for companies to do this for a while, but ultimately facts speak. Stronger unions making tougher wage demands will not exactly persuade American (and foreign) investors to create new jobs in this country — or to slow down their efforts to reduce their US workforce by outsourcing and automation.

The scary part of our present is that what the future economy will look like is increasingly unclear. I am reasonably confident that ad agencies like the one I work at will be around 5-10 more years, but I'm not convinced that the model is sustainable with a fragmented audience that is increasingly savvy at dodging 'promotion'. I don't like the prospect that my career might go through the ringer a decade from now, but it could well happen, and all I can do is be prepared to adapt, and try to cultivate skills (like critical thinking and writing, I hope) that are transferable to new lines of work. And what might we all be doing? I will refer to Reihan Salam for a possible answer:

The most successful and productive digital organizations will never employ large numbers of people, but they will throw off large amounts of money that will be spent on personal services, etc. That’s why we shouldn’t squelch innovation in this space through overregulation and overtaxation, and it’s why we should work on improving the quality of public services and other amenities that will help us attract and retain the footloose workers who create the most wealth.

So maybe we have a future where a smaller number of people are in the 'making stuff' (whether content or physical things) business, and more of us are in the 'making life better' business of providing services. It wouldn't be the first time we made that kind of a shift: more productive agriculture moved many off the land and into cities doing more service-oriented work, and so did mass production that allows a few people to make a lot of identical objects (ask the Luddites.)

We can't stop tomorrow from coming, and if tomorrow casts off a lot of the jobs that lead to middle-class respectability in the 20th century, we are going to have to adapt. That process may be painful, but bankrupting society by denying that reality for as long as possible will just make it worse. Krugman is right that we need to build the society we want, but hopefully we can want something better than borrowing more and more money to prop up a social and economic order whose time has past.

A Healthy Dose of Fear

My good friend Ben blogs over at A Healthy Dose, with some interesting, and often very personal, observations on the interaction between healthcare and culture. He flashes up some interesting stats here, with a link to more here, that imply one of two possible futures:

1) Baby Boomers retire in droves, swamp the government and corporate systems designed to ensure their retirements, and suck up an increasing share of the nation's resources.

2) Baby Boomers 'work until they drop', stay in the labor market a decade or more longer than expected, and lock up positions that otherwise would have been freed up for younger workers. (James K. Gilbraith at Foreign Policy argues that we should lower the retirement age for this reason.)

Our best hope is for a Goldilocks outcome, where enough Boomers keep working to avoid overwhelming the safety net, but enough retire to open positions for the younger unemployed. But it is just as likely that, given the number of Boomers, there will be too many retirees and too many senior workers at the same time.

Unfortunately, while our society has finally woken up to the problem, we don't seem to have the first clue what the solution to our senior citizen boom might be.

The Wall Street Two-Step

I've long harbored the suspicion that our modern financial sector is something of a parasite, sucking wealth out of the American bloodstream. This suspicion intensified when I moved to New York, when I started meeting wealthy people who weren't obviously doing anything valuable to justify their wishes. (I know, a nervy statement coming from someone in advertising.)

But this article, from Tyler Cowen, brought these fuzzy thoughts into sharp relief. Cowen starts with the mission of explaining income inequality, but transitions to focusing on how Wall Street, in his words, "has learned how to game the American (and UK-based) system of state capitalism." How? By "going short on volatility," or by making financial bets that assume what is likely to happen will always happen. Cowen explains it well here:

To understand how this strategy works, consider an example from sports betting. The NBA’s Washington Wizards are a perennially hapless team that rarely gets beyond the first round of the playoffs, if they make the playoffs at all. This year the odds of the Wizards winning the NBA title will likely clock in at longer than a hundred to one. I could, as a gambling strategy, bet against the Wizards and other low-quality teams each year. Most years I would earn a decent profit, and it would feel like I was earning money for virtually nothing. The Los Angeles Lakers or Boston Celtics or some other quality team would win the title again and I would collect some surplus from my bets. For many years I would earn excess returns relative to the market as a whole.

Yet such bets are not wise over the long run. Every now and then a surprise team does win the title and in those years I would lose a huge amount of money. Even the Washington Wizards (under their previous name, the Capital Bullets) won the title in 1977–78 despite compiling a so-so 44–38 record during the regular season, by marching through the playoffs in spectacular fashion. So if you bet against unlikely events, most of the time you will look smart and have the money to validate the appearance. Periodically, however, you will look very bad.

This is essentially the same as Nassim Taleb's Black Swan argument, but Cowen explains why it in fact makes sense to ignore Black Swan possibilities. Taleb argues that there is opportunity betting against the herd (and also that the herd is too stupid to see these risks), but what if the Wall Street herd is actually smart enough to know that the government will have to step in when these unlikely events happen, to 'save the system'?

So far, Cowen is simplifying and clarifying arguments I have come across before, that essentially we are held hostage to Wall Street because it is the lynchpin of the economy. But one could still argue that it in best interests of individuals not to fail, because they will lose money, prestige, and opportunity. That is where Cowen makes his most devastating observation:

Another root cause of growing inequality is that the modern world, by so limiting our downside risk, makes extreme risk-taking all too comfortable and easy. More risk-taking will mean more inequality, sooner or later, because winners always emerge from risk-taking. Yet bankers who take bad risks (provided those risks are legal) simply do not end up with bad outcomes in any absolute sense. They still have millions in the bank, lots of human capital and plenty of social status. We’re not going to bring back torture, trial by ordeal or debtors’ prisons, nor should we. Yet the threat of impoverishment and disgrace no longer looms the way it once did, so we no longer can constrain excess financial risk-taking. It’s too soft and cushy a world.

If, to pick one example, Wall Street traders who lost billions of dollars lost every dollar they had, or spent years in prison, or were exiled to Zimbabwe, individuals would have incentive to resist following the investing herd. But they end up only slightly less rich and successful if they fail than if they succeed. This allure of big money without big risk, as Cowen and others observe, draws smart, driven people away from other fields (creative endeavors, entrepreneurialism, scientific exploration) where success is a prerequisite of financial reward.

The only problem is that this whole no-lose system depends on governments to be able to bail out the banks when the periodic crashes happen. But depending on this will encourage financial firms to take bigger and bigger risks until they overwhelm the government's ability to intervene. Whether what follows is another depression or societal collapse is unclear, but we can be sure it will be ugly.

The End of Greatness

Would Ghengis Khan have conquered most of Asia and a big chunk of Europe if he had been able to vacation in the South of France? Would Tolstoy or Dostoevsky have toiled over thousand page novels if they could have gained fame and fortune from an Oprah's Book Club sticker? Would the leaders of the American Revolution have stuck with their hard path if the UN had existed to intervene and 'talk it out'?

These are, perhaps, stupid questions. At least, on their face, they are unanswerable. But they point to something I think is important: the great reduction of greatness in all walks of life in our modern times. Whatever the realm you choose to inspect, whether statecraft or art or science, we seem to be suffering, in the last 70 years or so, from a distinct absence of greatness. One could argue that we might recognize greatness in some of our contemporaries only once time has passed, but I think we'll find, even decades from now, that this time will be marked by a dearth of the extraordinary. Why? Because the luxuries and temptations of modern society sap the most talented of their will to punish themselves to scale the mountains which they might be capable of ascending.

Society has become so good at recognizing and celebrating talent that it rewards the gifted before their talents have matured. The intelligent, the creative, the visionary: for the most part they are absorbed into the upper levels of privilege before they have had the chance to achieve true greatness. If a talented 20- or 30-something is whisked off to Cannes or Miami or given the funds to afford a lavish lifestyle in the great cities of the world, chances are they are going to be diverted from whatever greatness they still had to achieve.

I can't imagine an easy solution to this problem. We just have to hope that later generations will be better able to resist the lures of a well-developed material culture, and will once again be willing to walk the hard road to high achievement.

The End of 'Europe'

Last summer, my wife and I took a wonderful trip to Greece. The weather was delightful, I saw some amazing archeological sites, we ate some terrific meals...the usual events of a happy vacation. But in the midst of our good time, we had to twice dodge riots occurring mere feet from our hotel in Athens. We didn't think much of it at the time, beyond registering mild amazement that the rioters seemed to feel it was the government's job to provide them with jobs.

But reading now of Greece's increasingly acute financial problems makes me think that the riots, and the attitude that drives them, are central to an understanding of Greece. As the blogger Spengler and his correspondent point out, the country is infused with corruption and graft of epic proportions. Everyone is trying to get on the public payroll, and many of them don't expect to do much work for the privilege. The country finances an unsustainable amount of spending to keep all these connected operators happy.

And how were they able to keep borrowing to this point? Because they're part of the Eurozone, and lenders have assumed that the Frances and Germanies will keep the peripheral nations from going under. And maybe they still will, but their voters seem unenthusiastic about sending their money to help out countries that have already received a huge economic boost by being included in the European economy.

Not long ago, Greece was a poor country. Its inclusion in the European experiment has given its people a taste of a good life they never really earned. Greece has no great industries, and its public sector is far too large, its social benefits far too generous for what it produces. As great as its cultural and natural gifts are, tourism isn't enough to keep it afloat.

When the productive nations of Europe realize that this scenario isn't limited to Greece, and that a pan-European economic system is a drag on their futures, they're going to demand out, or else kick out the parasitic nations at the periphery of the continent. And that, over a longer time horizon, is likely to render large patches of Europe less charming, prosperous and peaceful than they are today. We will miss visiting those places almost as much as their citizens miss the brief burst of prosperity bought on credit.