By BRET STEPHENS The Wall Street Journal, July 9, 2012: When is an economic crisis more than just an economic crisis? When is it also a political crisis? And when is it something else altogether: social, demographic, institutional, moral, intellectual—in short, civilizational?
The euro zone's troubles shouldn't be difficult to understand: Pair overspending governments with over-regulated economies and sooner or later the Continent was bound to lose the confidence of the markets.
Normally, such a crisis could be resolved by slashing corporate and marginal tax rates and red tape in order to encourage investment, enterprise and risk-taking. Instead, European policy makers have pursued every conceivable fix, from serial bailouts to a banking union, in order to circumvent having to address the core problems. As a result, the crisis continues to worsen: In Spain, for instance, bank-deposit flight has only gathered pace since last month's $125 billion bank bailout. ...