Euro Weakness not all bad news, and even an opportunity for U.S.

As a colleague and I were discussing yesterday, to some extent, the world economy is a zero-sum game; and to that extent, the fact that Europe is in the midst of a monetary/fiscal crisis is not all bad news for the U.S. Krugman recently wrote quite seriously about the possible collapse of the euro, whereas less than a year ago various econopundits were speculating that the emerging markets, especially the oil producers with gigantic sovereign funds, were likely to dump the dollar and adopt the euro as the de facto world currency. Maybe not, after all.

Since we as a nation have to much too great an extent abandoned actually producing anything in favor of gambling and living on the Big Credit Card, the fact that everyone worldwide will probably continue to want dollars and dollar-based securities will at least give us room to maneuver. But if we're smart, we'll change our wicked ways, and soon, if we don't want to have to live through a generation of economic decline.

To my mind, this means rethinking the whole paradigm of "globalization" and "free trade," not to some kind of reactionary isolationism, but to a really thought-through policy that high priority on American jobs, American production, American energy independence, and a sane global environmental policy in which America is a leading partner; with opportunities for America's superrich to dominate the world financial system, and American military hegemony (as opposed to rational protection of genuine American security interests)... not priorities at all.