Maybe there’s something I’m missing, but it seems to me that before we ponder the geopolitical implications of European leaders asking China to pony up some money for the European Financial Stabilization Fund, can we talk about the economics of it? European countries’ debt is denominated in Euros. Which is to say that various European governments owe various sums of Euros to various parties. The government of China, it’s true, has a tidy stockpile of Euros which it could lend out or hand out to assist with this. But the collective governments of Europe have the power to create an infinite quantity of Euros at any time.

You can imagine the government of Japan being in some situation where it felt it had to ask someone to help it out with some Euros. But Japan can’t run out of Yen. The United States can’t run out of dollars. And Europe can’t run out of Euros. It’s true that individual European states can run out of Euros (like how Chicago could run out of dollars) but if European leaders as a whole collectively want more Euros, the place to get them is the European Central Bank. That’s what central banks are for.

Nothing better illustrates the perverse logic of monetary union without fiscal union than the fact that faced with slow growth, high unemployment, and excess capacity the government of France is announcing new austerity measures to offset worse-than-expected growth.

Start as optimistic as you like about this economic approach. Say it’s worked for Ireland. Austerity and internal devaluation at home leads to an increase in exports and a return to full employment. Good for Ireland. But Ireland is tiny relative to the EU. When domestic Irish demand declines, few other countries notice the hit this entails to their exports. But Spain isn’t tiny. Italy is even less tiny. And France is even less tiny. Spanish austerity hurts Italian and French exports. Italian austerity hurts Spanish and French exports. French austerity hurts Italian and Spanish exports. And the Germans who think they favor this course of action are, of course, also hurt. Their exports don’t just leave the country by magic. So down the drain we go.

If these countries had independent currencies, a very similar “beggar thy neighbor” game would amount to coordinate expansionary monetary policy and have a totally different aggregate impact.

Apparently the famous La Samaritaine department store is now closed, and is slated to re-open in the near future as a mixed-use condo/hotel concept with a small amount of retail:

It very much encapsulates the structural transformation of the urban economy. The big city department store is in many ways a thing of beauty, but it’s also very much a thing of a particular time and place. Then came the era of the suburban big box store. But as Internet shopping increasingly subverts the logic of both the traditional department store and the traditional big box outlet (sorry, Borders) the urban/suburban retail playing field is once again leveled and the kind of choice central city locations that used to house department stores become logical places for residence. The main function of urban retailing becomes food/nightlife/entertainment and certain sets of personal services. Jobs come to the city because people like to live there for the amenities, rather than amenities following people who need to commute to work.

I wanted to agree with Ryan Avent about the nature of the DC-area economy. But more broadly, I think it’s worth pointing out that it’s easy to overestimate the extent to which everyone in the DC area is just busy lobbying. According to the Washington Post’s 2010 “Post 200″ take on the regional economy the largest lobbying firm in the area, Patton Boggs, employs 150 lobbyists. The biggest law firm, Covington & Burling, employs 501 lawyers. By contrast, the University of Maryland, George Mason, George Washington, Georgetown, Howard, and American University combine to employ slightly over 100,000 people. Over 13,000 people in the DC area work at McDonald’s. There are 10,000 working for Safeway, and 8,000 working at Wal-Mart. And Wal-Mart is adding stores.

Which is all mostly to note that different American metropolitan areas tend to have important deep commonalities. Universities, hospitals, and giant retail chains drive employment just about everywhere.

I’ve said this before, but something that strikes me about the “euro” woes every time I travel abroad these days is the extent to which currency union seems like a quaint and outdated concept. Until relatively recently, the ability to use the same coins and little scraps of paper in France as you use in Germany had some very clear convenience advantages. But thanks to ATMs, credit/debit cards, and online banking there’s very little upside. Normal people carry very little cash on them, do most things with cards, and as long as the ATMs in the country you’re in all spit out the correct local currency, everything is fine.

In the modern day, the three-hour time difference between DC and Los Angeles is a bigger deal than the fact that Stockholm, Copenhagen, Hamburg, and Zurich all use different currencies.