An Unavoidable Crisis

http://www.newyorker.com/talk/financial/2011/12/05/111205ta_talk_surowiecki

In this week of James Surowiecki's blog, he focuses on the failing economies of European countries such as Spain and Italy. James feels that the main problem with the economies in these countries is the FEAR of default, rather than the threat of it itself. Because people are afraid the country will default, the interest rates raise and therefore default becomes more possible. Surowiecki feels that this problem can be fixed if the European Central Bank were to simply commit to backstopping Italy and Spain by buying their bonds, and then the interest rates would fall and, therefore, the chances of default would also lower. Surowiecki then goes on to say that the only reason this quick fix isn't happening is because it is a "dramatic move" for the ECB to take since there is idealogical restraints holding the bank up to be a tough power rather than a supportive one. Also the overwhelming fear of inflation, described as a "sweet poison," is also so large that it holds the ECB back from getting involved.

Surowiecki has a very clear position on this problem with his idea for an easy fix to the dire situation in Europe. He mainly shows this by presenting his view fairly early in the 3rd paragraph, then goes on to explain why this plan hasn't happened. Surowiecki states that "The obstacles are ideological and, you might say, psychological," meaning that it is simply the European people's own fear of default holding them back from economic success. Surowiecki says that if the ECB doesn't make a move soon, it will "protect the euro right out of existence."
It is his view that the ECB should help out the countries and this would automatically fix the dire problems they now face.