January can be a tricky month: a time for new resolutions, budgets, plans, and agendas. This year, instead of waiting for clients to report on new business strategies, I wait for grades. I spent a lot less this holiday season than expected – maybe because I didn’t get myself an iPad for Christmas. Like any student, my goals for controlling my money supply rank high in my daily life. But my money management concerns are miniscule when compared with the ongoing debate over whether and how to set legislated rules that instruct the monetary authorities to maintain a stable price level.

Consider the concern over the bailout of another European national bank this week fresh off the heels of the Irish and Greek bailout. Bloomberg reported that the European Central Bank’s (ECB) financing to Portuguese banks rose in December to 40.899 billion euros ($53.5 billion) up from 37.935 billion euros in November. Worries that government-funding costs are becoming unsustainable are growing. The next question is whether the ECB should cut off its financial support for Portugal and allow the International Monetary Fund and European Financial Stabilization Facility to take over.

One more bank in trouble has led to troubling forecasts. Talk that Spain may be next led to Nobel- winning economist Christopher Pissarides stating, “[t]he European Union doesn’t have the resources to rescue Spain if it ‘collapses,’ an event that could lead to the end of the euro.”

Pissarides is not alone in thinking that we are in dire times. On January 7, 2011, Jean-Claude Trichet, President of the ECB, delivered a speech, entitled “Economic and Monetary Union: What we have achieved and what we must do next.” In his speech, President Trichet strongly cautioned that “[m]onetary policy responsibility cannot substitute for government irresponsibility.” President Trichet also called for a rally of Europe’s leaders to make some “tough and courageous decisions” in 2011. President Trichet asked for a “quantum leap” in economic governance, and argued for a new surveillance framework built on “three principles – one of independence, transparency, and consistency of words and deeds.”

By Friday, January 14, 2010, fears abated after Japan and China pledged to buy bonds issued by Europe’s financial-aid funds; successful Portuguese, Spanish and Italian bond auctions appear to have brought back a sense of optimism. But, the structural and managerial issues from rising government debt levels continue to pose problems for policy makers and politicians alike.

An American and European discussion on monetary policy evidences very different strategies and goals. Each government faces its own unique challenges, yet all governments do remain dependant on one another, and must come together to balance their economic techniques. Last month, the Peterson Institute for International Economics offered an interview with Nicolas Véron on the “Dangerous Dysfunction of Europe” and he provided an intelligent assessment of the American and European economic and political perspectives: “I wouldn’t say that there are necessarily fundamental differences of philosophy between the United States and Europe, but they’re addressing problems [that] have ceased
being broadly comparable. So they are on different tracks in terms of policy thinking because their minds are concentrated on different things. And this is, of course, an environment [that] can easily be conducive to mutual misunderstanding and finger-pointing.”

Ultimately, I am inclined to believe that developed countries seeking to solve the current economic instability must come together and participate in consistent dialogue. Many lawyers, economic analysts, investors also continue to point out how misguided certain policies are towards accountability, correction and stability. Perhaps because beneath that surface lies an inescapable reality: many policies are about politics and not legislative rules.

I can relate to this. When I finished my one-year legal apprenticeship in Canada, one of my professors sent me a book titled “The House of God” by Samuel Shem. It’s required reading for many graduating medical students. Think House with a bit of Catch-22. The book follows a young doctor and five fellow interns in a one-year teaching hospital. It reveals how inglorious, frustrating, painful and tragic the journey towards becoming a good doctor can be for a young student. The key ends up being self- sustainment. In a small note, my professor wrote: “It’s a book every law student should read too.” The young doctor wakes up every day feeling a mix of contempt, confusion, and ends up worrying that the year left him more bitter than when he started. The competition is relentless; the days become lost in one long year. I won’t spoil it for those about to hit up a bookstore, but here is the advice he received the day after he left the hospital (for good): “Your whole life has been a growing from the outside, mastering the challenges that others set for you ... this year’s been a latency trip: during your internship, with all of you scared and brutalized, the caring in your bunch of guys sustained you.” Eventually, the layers of bitterness will peel off.

As frustrating as trying to understand their different backgrounds and priorities can be, one day these scared and bitter kids became fantastic surgeons. A big part of the book was that every day is going to be a new one. Plus with every read, I always think that one of us can be the next great policy maker of the year, and I know these days will all be worth it.