Admittedly, I was standing outside a popular restaurant in Tribeca, a magnet for urban hipsters who loitered outside, waiting to be called for their brunch reservation. But a quick scan of the crowd confirmed that we are indeed living in the end of days, because three out of five guys had top knots. Heads shaved close on the sides, the remaining hair bunched into scraggly ping pong balls at the peak. This formerly fringe hairstyle had gone mainstream.
And the next day the stock market crashed.
This may not be a coincidence. Markets are moved by mass psychology, a herd reflex not unlike the impulse that compels the many to follow the few when it comes to fashion trends. Nobody thinks the top knot is going to last, unless you're a samurai living in the Edo Period. It's like bell-bottoms for your head, something even the guys sporting them freely admit will look stupid five years from now, when they look back at their Instagram feeds. It just seemed like a good idea at the time.
In that regard it's exactly like the Euro.
The Euro is a currency that's starting to feel like it made perfect sense at the time, but looking back we can't remember why.
Everyone loved the idea of a unified Europe. After all, a disunited Europe caused most the headaches of the twentieth century. The notion of perennial tensions between France and Germany getting resolved by a shared currency was too seductive to resist. The cold war behind us and a new millennium ahead, can't we all get along?
So with Keynesian glee, a continent defined by its distinct national identities suddenly joined hands and locked arms around a single currency. It was as historic as it was symbolic.
But like the top knots in Tribeca, they didn't think it through. The currency isn't linked to sovereignty, so there's no way to enforce consistent taxation, labor laws or government programs from country to country. It used to be that Europe's various economies were like a water clock of perpetual ebb and flow, each one a check or balance against the other. So if one country passed laws that sent their economy sideways, their currency imploded and their skilled labor moved across borders, the tourists flooded in and exports evened out, until fiscal policy and foolishness found their own equilibrium.
But the Euro holds all to the same standard without holding them to the same standard of behavior. So by default the Euro gets propped up by more economically responsible countries, mostly Germany. (Once again putting Germany at odds with her neighbors, as history repeats itself in a uniquely modern way.)
The Greek drama was a recent echo of the troubles in Ireland a few years ago, not to mention Portugal or Spain. There's a pattern as recognizable as parachute pants, trucker hats and high-low skirts, a collective denial that the fashions (and countries) thrust together don't quite match. And though the Euro has enjoyed a momentary lift amidst renewed global uncertainty and speculation, the collective call is for parity with the dollar, quite a drop from its halcyon days a decade ago.
All this may be the theory of an uninformed layman, but leading economists are clearly divided on the issue. Many insist on the need for a united Eurozone and argue the vision is less of a socialist ideal than a new form of "cooperative capitalism" that will define the world economy this century. Other economists argue that it's a political conceit of our times, a monetary man bun that just needs to be cut off, before everyone starts laughing until they cry.
As for the top knot debate, an insightful friend explained that the illusory appeal of the man bun comes from the fact that only the best-looking dudes took the plunge initially. So their natural appeal distracted friends and dates alike from the worrisome clumps of hair poised precariously on the crown of their heads. In that regard the Euro is even more dependent on the attractiveness of the German and French economies, because without misdirection it's position looks precarious indeed.
But regardless of your politics, and no matter which type of economist you have brunch with next weekend, take a look at the young guys sitting at the table nearest you. Do a head count, then check the market the next day and see what happens.
If you start to see a pattern, you'll know what to do.