Though the Europeans claim not to have known until 2004, three years after Greece joined the Eurozone, that Greece had cooked its books to meet Eurozone entry requirements, surely the Europeans were not unaware that Greek notions of accounting paperwork were, shall we say, elastic. Moreover, the European industrial powerhouses had much to gain. With Greece able to sell Euro denominated bonds at low interest rates Greece was able to buy, for example, French Fremm frigates, Super Puma helicopters, and Rafale fighter aircraft, and German S-214 submarines, Leopard tanks, and Siemens rolling stock. The profits were real, and immediate, the risks of a sovereign default theoretical, somewhere over the horizon. Whether Greece really needed these and other major purchases was, to the vendors, immaterial. France and Germany happily would have sold their hardware to Miami, if they could. Not everything that Greece bought with borrowed money was a waste, but that's not the point. Greece and the Eurozone authorities had fibbed to each other in a calculated way, with eyes wide open, so it's not at all unreasonable to suppose both are at fault.

Arguably, indeed, the fault accrues much more to Eurozone authorities than to Greece because, politically, the Europeans have long dodged the critical fact that their limited currency union is unworkable. In particular, Europe has dodged the German question: the largest economy in the Eurozone cannot pursue export driven growth and unending balance of payments surpluses without causing extreme harm to weaker Eurozone members. From that perspective Greece is little more than a convenient scapegoat for failed European leadership.

The Europeans are moving from delusion to delusion. The buzz now is that it won't matter if Greece returns to the drachma — other Eurozone members, Germany especially, are tired of the Greeks being Greek. They don't want to make available any additional, large bailouts. And only after Greece accepts the most severe fiscal punishment — having already seen its GDP shrink by 12% since 2008 — thus symbolically submitting to a moral code that glorifies plunder, will previously promised rescue funds become available (and even then the rescue funds are to be divvied up firstly among lenders, leaving the Greek government on a shoestring). So say Europe's elites.

The reality, however, is, if and when Greece leaves the Eurozone the exact same balance of payments crisis will recur immediately with regard to the next weakest member and/or the one most vulnerable to derivative trading in sovereign debt. That could be Portugal, even Italy. The limited structure of the Euro makes such crises and the threat of defaults unavoidable in the long run. We are now in the long run.

The Europeans may well congratulate themselves that they have called the Greek bluff. Instead, the Greeks should call the European bluff, forcing European leaders to either rework the Eurozone into a real fiscal union with transfers from wealthier to poorer members (including a European Central Bank willing and able to back up Euro denominated bonds that are under attack), or else give the project up entirely. In short, the Greeks should say "HELL NO!" to further fiscal austerity.

In any case, looking ahead it'll be all too easy to make fun of Newt or Mitt (or for that matter the other two) but the real problem is less the right wing candidates themselves than their supporters, who deserves their own fair share of ridicule. From the mainstream media — presumably due to its commercial considerations — that ridicule, however, seems strangely unforthcoming.

On Tuesday my regular dentist sent me to an endodontist. But I didn't like the office setup so before the fellow even saw me I got up out of the dental chair and left. I was pretty nice about it, I thought, but I left. So I went online and looked for another endodontist. I got lucky and found a couple guys in my neighborhood who are great. Top rated by the Washingtonian magazine, super educated (one has a Ph.D. in addition to his dental degrees and both are professors), a very modern, cozy office, friendly staff. It doesn't hurt that the big dog is Irish American. Catholic. His partner, who'll actually do the work, is Irish born and raised, and Jewish. After my second consultation today we decided on a course of treatment for next Tuesday: the peccant tooth will be pulled and inspected. If, as is more likely, the tooth is cracked, then I go the normal implant route. If, as is still somewhat possible, the tooth is not cracked, and assuming it comes out cleanly (without, for example, any bone attached), then the endodontist will quickly fix the problem, whatever it might be, seal up the tooth so that it's not getting gunk leaking into it, and whip it back into my mouth. This is, I'm told, a rather cutting-edge technology, one that the dentisty industry doesn't quite approve because it takes money from the mouths of starving implant specialists. But these endodontists have had a high success rate with it. I could've had it done this afternoon but wasn't mentally prepared for the possibility when it was first explained. Next week I'll be fine...

What I'm hoping is that when I throw myself back into the podcast schedule I'll stop having these constant tooth crises. Maybe I'm superstitious but I'm also wondering whether I'll ever have a real vacation??

Oil has not become a higher priority than nuclear proliferation but an American decision to go to war can sometimes have less to do with principles or objective calculations than with the inertial momentum of a vast national security apparatus. Hit the right buttons and war pretty much automatically ensues.

Although Secretary of State James Baker famously rationalized the first Gulf War as being about "jobs, jobs, jobs" the fact is, because of the world market, nothing about Iraq's invasion of Kuwait mattered to the U.S. economically (assuming Saddam Hussein would not have withheld Kuwaiti oil out of spite). If the White House had tried to logically think things through it might have been possible politically to downgrade the crisis into a vexing border dispute. But within government the automatic imperative of war went virtually unquestioned. [2]

To the extent that relevant presidential directives may have been revised between 1990 and today one assumes they must be even more robust. So the same automaticity in principle applies. Moreover, the imperative should be even greater today since in this case closing the Strait of Hormuz would, indeed, raise the world price of oil. [3] To be somewhat cynical another factor should be taken into account as well: Having left Iraq and having started drawing down in Afghanistan the U.S. military needs another expensive war in order to justify its huge budget.

Iran ought to be aware of all this. If the U.S. and Iran had had diplomatic relations during the past thirty odd years, it probably would be. But not having had diplomatic relations Iran evidently has trouble distinguishing between its (so far) successful finessing of the nuclear issue and what is, from Washington's perspective, a brilliant red flashing neon line.

It's worth noting that lots of third world countries make this sort of mistake. They assume that the U.S. knows what it's doing and they therefore ascribe all sorts of intentionality to what are, in reality, relatively random acts. 'The U.S. has not seriously pushed for war regarding nuclear proliferation, therefore the U.S. does not want war for any reason.' If only life were so simple. The Iranians clearly have no idea of the danger they have provoked. The situation thus resembles a classic case of two states slipping accidentally into a war neither wants. But who will explain things to Tehran?

We may yet luck out. Iran may not actually do anything. Iranian officials may pipe down. President Barack Obama may prove a different kind of leader than George H.W. Bush. And unlike 1990, given the many false starts against Iran, a number of entrenched U.S. bureaucratic obstacles to war now exist. Repeated war games, for example, have raised awareness of potential costs, including a catastrophic collapse of the world economy. In 2012 that's no small worry. Nonetheless, if push came to shove the predetermined vital U.S. national security interest would most likely trump objections.

In January, hopefully, I'll interview Ambassador John Limbert for his take on recent events.

(This essay is cross-posted at the Huffington Post.)

[1] Caught by surprise, until about a week to ten days prior the consensus of U.S. intelligence estimates regarding what might happen was little more than a vague guess.

[2] I questioned the rationale for going to war but I was not a senior officer and nobody listened.

[3] Threats of oil supply disruptions also probably will bleed back into the proliferation stalemate, giving hawks new arguments against an Iranian acquisition of nuclear leverage.

The company doesn't have a web site. I don't know how you could find where, exactly, the milk is sold, but if you see it you might want to give it a try.

His mind is still sharp as a tack. Every day, sometimes twice a day, I'd been visiting him in the hospital and reading to him from the Financial Times, the Wall Street Journal and the New York Times. We're having interesting, detailed discussions about the current woes of the Eurozone. Sometimes he speculates in ways that I think might be far-fetched but then I see his ideas reported days later in the Journal; he doesn't think, for example, that anybody really knows what Mario Draghi, the President of the European Central Bank, is going to do... I'm even getting to hear some stories for the first time, like when President Kennedy sent him and two other economic types to visit Julius Nyerere, in 1962, to offer U.S. assistance. Unfortunately, they didn't have authority to approve aid on the spot; unfortunate because while they disapproved most Tanganyikan proposals, taking a select few back to Washington for discussion, immediately upon their heels a Chinese delegation showed up and granted aid for a railroad that Nyerere wanted... JFK was not pleased...

At eighty eight who knows how long my dad will last — all things considered he's doing extremely well — he's a saint of the old school, to be cherished while he's still here.

In reality, however, the European Central Bank will not start acting as a lender of last resort because too many European governments are wedded to austerity theory. Whatever "fixes" are in the works may not turn out to be incremental but they almost certainly won't be on a grand scale. The issuance, for example, of some sort of back-door "Eurobond" guaranteed by all with the option of converting dicey national bonds, like Italy's, at a discount, or a multilateral but lower than Euro treaty level agreement to coordinate fiscal policy among the larger Eurozone members — proposals like these don't do much to prevent the weaker members of the herd from being systematically picked off in the bond market.

Indeed, it's difficult to see how anything less than a great increase in the regulation of capital markets can bring stability.

In the wings, notwithstanding pleading by such luminaries as Poland's Foreign Minister regarding the need for more German leadership, it's astonishing that the question has not arisen about what to do with a Germany that has profited more than any other Eurozone member from a single currency, clearly profited at the expense of other members (shades of zero sum), and, moreover, that wants to dump the cost of "fixes" entirely on other members. This is much more a political than an economic problem. It should be properly recognized as such. If it were, it also would be obvious that it concerns U.S. national security interests. Germany wrecking Europe is not something Washington can afford to ignore.

Yet by having raised "the market" onto a higher pedestal than democracy western governments are singularly ill-equipped to repel an attack by "the market" on democracy. The orthodoxy of our ideas cannot help but lead to a further and deeper crisis.