[ad_1]
Rough days await Europe given the stresses and popping rivets of its energy system. Households have been warned to expect bills 10 times as high as last winter’s. Factories may be called on to cease operations to keep the lights on and furnaces cranking out warmth for residential consumers.
Europe will be rewarded sooner than it thinks, though, if it keeps its nerve. Leave price signals intact. Help households and businesses with cash grants as necessary to tamp down social eruptions but don’t subsidize consumption directly. Let towering energy prices guide users to conserve and adapt as best they can. Let prices reward producers for doing all they can to goose output and make sure it gets to those who value it most.
The best way to outmaneuver
Vladimir Putin
is by convincing him Europe isn’t going to fold. He will lose money. His gas industry and its customer relations will be destroyed. His few and indispensable friends, the Chinese, with their own teetering economy, won’t tolerate a strategy that doesn’t produce a rapid European surrender and instead drives China’s liquefied natural gas costs out of sight and collapses its European trade.
Mr. Putin will quickly adapt once it’s proven to him Europe’s governing parties can’t knuckle under to Russian blackmail and retain their democratic viability. But it’s also a good time to own up.
In January this column predicted a year of realism on energy and climate, with Europe running into volatile wholesale electricity and gas prices up a shocking 300%. Mr. Putin hadn’t yet invaded Ukraine.
Undiluted corruption drove Germany’s choice to rely excessively on natural gas as a power source, dumping its coal and nuclear plants. The corruption was paraded daily in the form of former Chancellor
Gerhard Schröder
collecting millions on the boards of Gazprom’s Nord Stream pipeline affiliate and Rosneft.
Germany didn’t need to stop patronizing Russian gas, I pointed out four years ago. It only needed to stop, at every step, lending itself to the enhancement of Russia’s energy power. But it was more important at the time to serve up to German voters magical talk of an “energy transition.”
The problem runs deep—a generation-long period in the West in which governments had no serious purpose.
In the U.S. the last gasp of seriousness went out with ObamaCare, which arrived on the wings of an actual idea—combining an individual mandate with a competitive marketplace to improve the allocation and efficiency of healthcare. It degenerated, under Obama cynicism, into an overpriced scheme to provide subsidies to a microtargeted set of Democratic voting blocs.
The
George W. Bush
administration was the last legatee of a generation’s worth of serious thinking, Democrat and Republican, about how to fix an unsustainable entitlement state. All was lost amid the travails in Iraq. The subject isn’t even discussed anymore.
Germany today is lucky. So far, Europe is hanging together and seeking to share the pain of a blunder that is disproportionately Germany’s. That intrinsically weak politician,
Joe Biden,
in a time of inflation, debt and war, can only think of dishing out more taxpayer money to college graduates and
Tesla
buyers.
I’ve said it before: Without a recognized higher purpose, politics devolves into a game of rent-seeking and corporate welfare (wrapped lately in climate-related gift paper).
The phrase I invoked over and over was “sophisticated state failure,” in which every attempt at collective action seems to yield only a succession of boondoggles and economic crises—Iraq, Afghanistan, Solyndra, the Department of Homeland Security, the housing meltdown, Wall Street bailouts, Covid mandates that proved absurdly costly and self-defeating, hundreds of billions in pandemic relief that appear to have been stolen.
Blame the end of the Cold War. Blame the “end of history” when the essence of political life became a perpetual race to satisfy the spending appetites of organized interests with borrowed money.
Blame the internet, “software eats the world” and social media for, in some sense, occupying center stage and crowding out other things.
Blame the media, which has lost sight of its mission amid its scramble for digital survival. Jefferson said a free press was critical to self-government but it can hardly serve this purpose well if it’s competing only to confirm its target audience’s prejudices and fantasies.
If we don’t have elites that seriously try to understand what’s working in our society and what isn’t, and don’t have any accompanying vision, our politics can only throw up a
Donald Trump
from time to time to urge our leadership class to self-rectify. Mr. Putin is in a weak position made to look strong only by a parade of politicians who have forgotten where Western strength comes from and how to tend and nurture it.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
[ad_2]
Source link
(This article is generated through the syndicated feeds, Financetin doesn’t own any part of this article)
