Conservative Principles Now

The EU’s epic folly in appointing arguably the least qualified candidate in Europe to its newly-created post of Foreign Minister, continues to rebound on the struggling organization. The never-elected Cathy Ashton, whose resume boasts no diplomatic experience at all, has appeared before the European Parliament a second time to face questions from its members about her suitability to be Europe’s top diplomat.

When asked about whether the EU should replace France and Britain in a single seat on the United Nations Security Council (UNSC), she embarrassingly admitted she knew nothing about the topic, despite clauses in the EU’s Lisbon Treaty granting the EU rights to speak for its members in the UNSC in certain circumstances. For good measure, she added: “You’ve caught me out.”

When asked about her strident advocacy of unilateral nuclear disarmament in the 1980’s, she boasted that her opinion was formed having never visited Eastern Europe but may have changed later in life. Not exactly inspired thinking from the diplomat representing 27 countries including most of Eastern Europe.

Incredibly, despite owing her appointment exclusively to British Prime Minister Gordon Brown whose government allied with the U.S. to lead Operation Iraqi Freedom, she refused to answer the question of whether or not the war was justified. And her solution for Afghanistan? Make sure the Afghan police force have enough telephones!

Cathy Ashton has achieved the virtual impossible, and is drawing fire from both the left and right in Europe. Even Lisbon Treaty drafter and arch-EU integrationist Elmar Brok said her performance provided, “no reason for enthusiasm.” However, due to the opaque and insensible rules governing EU institutions, the European Parliament has no power to veto individual unsuitable nominees, making the whole process of confirmation nothing more than a three-ring circus.

Cathy Ashton will likely survive and will create a diplomatic service of over 5,000 staffers in the coming months. However, the EU should ask itself whether a person who considers herself incapable of commenting on the biggest foreign policy questions of the day is suitable to lead international relations for 500 million people. Or if the EU really needs this post at all.

Japan’s newly minted finance minister, Naoto Kan, seems an excellent choice to lead Japan on an expedited road to fiscal perdition. For those who argue the best way to deal with the coming financial crisis is to precipitate it quickly, Mr. Kan’s choice should be particularly welcome.

The governments of the industrialized world are almost uniformly embarking on a crash course in sovereign debt calamity. In raw dollar terms, the United States is leading with a budget deficit in 2009 of $1.4 trillion and even more expected for 2010 and thereafter. But for fiscal chutzpah, the Japanese are the clear leader, with a debt-to-GDP ratio over 200 percent and climbing fast.

Finance Minister Kan appears likely to extend Japan’s lead. A political operative with “little, if any experience in fiscal affairs or macroeconomic issues” according to the Financial Times, he is more prone to worry about fiscal stimulus than fiscal restraint.

Many governments of the industrialized world are playing a game of deficit spending chicken, hoping credit markets will continue to underwrite their folly. Japan has been cut some slack because of its prodigious domestic saving, but that slack will soon be taken up and then some by all the government debt.

But Greece has already been put on notice by its creditors. The U.K. appears completely at sea under its lamest of ducks, Prime Minister Gordon Brown. And the United States government operates as though stern words about fiscal discipline can substitute indefinitely for spending restraint. Memo to Washington: the markets are not fooled for long.

For proof, look at Tokyo. The Nikkei closed 2009 near 10,500. It closed 1989 near 39,000. And Japanese investors have it exactly right. Japan’s world-beating debt-to-GDP ratio has yielded an economy which was about the same size in 2009 as it was in 1993. Japan took a two-year sharp and painful recession and, through the miracle of deficit spending, turned a short, sharp recession into a two-decade absolute calamity. Now the rest of the world seems to want to follow suit.

It is especially astounding that the world should be coming out of a near cataclysmic financial disaster predicated on the deadly mixture of bad public policies and private debt, only to charge full speed toward yet another disastrous mix of bad public policies and bad public debt. There is still time to shift course. But the appointment of Mr. Kan is not an omen for hope.

Co-authored by J.D. Foster.