November 13, 2011
Here’s a curious pattern that I’ve noticed in the news, involving eurozone and world economies during a typical week. I haven’t confirmed it scientifically, but at this point I’m convinced that the European economy requires a jump-start every weekend, and it can’t be too much longer before the machine breaks down completely.
This could contain a vague image of the weekly effect, but the reason I’m bringing it up is to suggest what I think is going on. I believe that global telecommunication has reached a point where news, and now meaningful opinions, can saturate the world in a weekend. This has never, ever been remotely possible before, and it is destroying the system that has dominated the market for a century preceding it. Internet is undermining the predictive capability mathematical models have exhibited when applied to the macro-economy, and the experts’ failure to recognize this has allowed them to mistake the forest for its derivative trees, so to speak. On Friday, desperate bureaucrats try to manufacture optimism before the weekend. By Sunday, the facade has crumbled.
Any Fed chairman or ECB official should be rightly terrified by the horde of twittering E-mericans, but I’m tempted to take the crisis a step further here and declare the entire field of classical socioeconomics obsolete. I would have absolutely no authority in doing this, of course, so instead I would like to suggest an unfortunate reality that is unaffected by any market-vs-government flame war: if there really is a silver fiscal policy for Europe, it will not come from someone who was hired ten years ago, and it will not require price fixing every five days.