I remember one summer visiting Cleveland, Ohio on the shores of Lake Erie. This is a city with more than its fair share of problems as heavy industry hit the skids in the US. Wondering around there was reminders of a mighty prosperous society forged from steel and railways. Today, there are attractions like the Rock and Roll Hall of Fame and a some turn of the century buildings open to the public. When I was there the centre of the city was taken over by the US Marines on a recruiting drive. The central square looked like a film set for a super hero movie.
Getting to the point, one of the buildings I visited was the Federal Reserve Bank of Cleveland. A glorious fortified building of style and elegance from 1923. Closing my eyes, I could imagine gangsters with violin cases standing just across the street. Today, in the building are museum exhibits that take visitors through the history of the US Federal Reserve. Until that point I had no idea that attempts to unify the currency in the US had failed and been restarted so many times. The birth of the US currency was a roller-coaster ride of mammoth proportions. In fact, the US currency area was plagued with financial crises until the New Deal came along.
Why am I telling you this story? Its because I’m fed-up with the constant assertion coming from doomsday merchants of fear saying that the Euro is a failure. British media rarely if ever challenge this bland assertion. Sure there has been immense challenges and almost disastrous moments. True that some smaller Euro countries had to be rescued when a world recession hit but that’s the role of a central bank.
Now, having read the history of the US experience I’d say we are well on the road to success in Europe – in the long term. Europeans did not copy the US. European learned from what has gone before. Building for the long-term does secure the best future.
John Vincent 