Two Bald Men Fighting Over a Comb

As we blunder towards another credit crisis, with banks losing confidence in each other and increasingly refusing to accept each other's debt, the inability of politicians to act is extraordinary. This morning's headlines might have readrecommends doing something, not clearwhat 'Osborne demands strongly that something is done'. Tomorrow's headline should read 'Geithner insists on urgentEverybody is demanding action from everybody else, but all those who apparently have power have given it away and forgotten how to use what they have leftstill available, free of charge, to any who would wish to use it. But while our politicians find it incapable to think their way around free markets we can expect more blundering and empty performances in the days to come.While Tim Geithner appears to have no thoughtful content to contribute, the intervention Treasury Secretary adds interest and takes hypocrisy to new heights. Geithner's advice will presumably be to cut public spending harder and faster, this coming from a country whose own debt is so out of control that it threatens to incapacitate the political system entirelyThinking back a while we can recall why thewas invented in the first placebecause theEuropeans were tired of the trade advantage enjoyed by controlling the world's tradingcurrency.The Euro was intended to compete with this supremacy and become an alternative reserveand trading currency.The US's intervention is thus more evidence of its presumption in favour of its own interest, no matter what the consequencesBut it was no only the Europeans who had grown tired of producing goods for theand receivingonly arrogant pronouncements in return. The Chinese worked their way into such a massive external trade balance that they could buy up the US and have change. Hence their continuing and repeated calls for a neutral trading currency to replace the dollar and the euro. Meanwhile, the growing economies of Latin America and south-east Asia found ways to facilitate mutual trade without using the dollar. has anything to support its assumption of a right to tell the rest of the world how to behave.If this really is a situation of two bald men fighting over a comb it's fairly clear that the comb, likeeverything else these days, has been made in China, and the Chinese are holding on tight