Drive anywhere along the coasts of Spain and you see new half-built housing that will never be finished and is already in ruins. Years of disastrous decision-making have gone into making what was bound to be a bubble that must burst. So Spain has to be bailed out with $100 billion just to tide it over for the time being. After only a few hours, the markets realized that this sum is about 10 percent of Spanish GDP, it expands the country’s national debt by an even higher percentage, and Spanish taxpayers are in no position to repay the sum. It’s a classic example of making a bad case worse.
Cyprus is next in line to be bailed out and can wait only a matter of days for the money. The Greeks have a general election coming, also in a matter of days, that will decide whether they get more money. Italy’s up next. Nominally the EU Commissioner for economic affairs is responsible for dealing with all this, and his name is Olli Rehn, a Finn. He’s happy that Spain gets the money on more favorable terms than Ireland, thus setting one country against the other. Furthermore he advocates a single banking and financial authority for all EU countries. The resulting loss of control of their budgets is for these countries really an irrevocable loss of national sovereignty. Insurrection is the likely response to anything of that kind. Rehn is out of his depth in this crisis, but nevertheless with a gift for making a bad case worse.
Negotiation with Iran over its nuclear program is another masterly example of making a bad case worse. For Iran, the issue is inextricably entwined with considerations of honor. To accede to any Western demands would bring shame, and the ayatollahs are therefore bound to resist. Threats on the part of President Obama and his officials are evidently mere posturings and leave them looking ridiculous. As for Syria, Hillary Clinton and William Hague make a point of declaring at intervals that Bashar Assad must go while simultaneously promising to take no steps that might actually bring about his downfall. This open invitation to Assad and his Russian allies to do their worst with impunity is a sure-fire way to turn civil war into regional war.
The name of Count Oxenstierna probably rings no bell, but this 17th-century Swedish statesman did make an observation to his son that applies very exactly to most things happening these days: “Do you not know, my son, with what little wisdom the world is governed?”