Gentle readers,
we have moved the complete afoe installation to another host over the weekend. As updating nameservers can take up to 72 hours, some readers might experience accessibility problems until Wednesday morning.
As you’re reading this, you’re lucky and not among them.
While we at Afoe may be suffering from intermittent service interruptions, the EU seems to have arrived at what is being described as a ‘fair and share’ agreement with the Chinese over the trapped clothing products.
Which may well be described as a made to measure, just in time, solution, since while Tony Blair is waxing lyrical about the ‘moral responsibility’ of removing protectionist barriers like the CAP, UK CBI (Industry) head Sir Digby Jones, who is currently with Blair in Beijing, is fuming:
“I’m furious” he told the Times “We’re not protectionist in Britain. We understand you offshore the production of low-value goods and that by doing so you’re creating incomes for people who can buy our high-value goods.”
For Sir Digby the blockade of 75m garments, under emergency quotas negotiatied in June by Peter Mandelson, the EU trade commissioner, is a symptom of “protectionist, hypocritical Europe”, and had given the Chinese the “moral high ground”.
Well try explaining that to Peter Mandelson. (Hat tip to China Herald).
The German election campaign is cranking up to as close to a throbbing wave of intensity as you are likely to find in modern Germany. Very soon, Chancellor Gerhard Schr�der is going to take on the CDU’s Angela Merkel in a televised debate. Merkel has always had to do it tough in the CDU, as I’ve remarked on before, because she isn’t really the kind of person who fits the traditional shape of the post-war German conservative movement. Last time around, she was party leader but was ditched as Spitzenkandidat (a German term which compromises between a quasi-US presidential candidacy and the reality of a Westminster-style constitution) in favour of the hard-right Bavarian, Edmund Stoiber. This time, though, the polls are running heavily in her favour, after she spent the intervening period selectively eliminating the men (and they were) who did her in the first time around.
This is where it gets interesting. Last week, she was moved to give a speech in which she said a very remarkable thing. Apparently, Germany needs to retrieve the spirit of the Gr�nderzeit. This word is usually translated into English as the Founders’ Generation, which doesn’t sound terribly interesting or controversial. The point is, though, which generation, and what did they found? When you speak of the Gr�nderzeit in Germany, or Austria, you mean the 1870s and the foundation of united Germany. For some reason the Austrians use it too, perhaps stretching the definition to include the 1867 Austro-Hungarian Compromise or Ausgleich. It’s not an especially controversial word, but then, that is in part because it’s most often used to describe architecture.
Outside Germany, though, you might be forgiven for thinking this pretty eyebrow-raising. In the Anglosphere, it is fairly conventional wisdom to hold that the Wilhelmine empire was a fatal aberration in Germany’s historic development, the point at which the Germans swung off the Whiggish tracks into the future onto that infamous Sonderweg that in the end led to world war, Weimar, Hitler, more war, Auschwitz, and partition. And that foundation, after all, took place by means of conquering northern France. The proclamation of the empire took place at Versailles.
(So far, so clich�d.)
The Left would never in a million years have said such a thing. Gr�nderzeit? The time of Bismarck’s Antisocialist Laws? The foundation of the three-class voting system? Surely the injustices that began the SPD’s historic struggle. Why she did, though, is part of a very important point about identity, history and German politics.
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Gentle readers,
due to ongoing heavy server engineering there is an increased possibilty that afoe will not be accessible for a limited amount of time on Sunday, September 4, 2005.
We are so used to reading analysts reports of how intelligently Al-qaeda avails itself of the news media to advance its cause that perhaps we are becoming numb to some underlying realities. Maybe a big part of the supposed Al-qaeda success comes from shooting-yourself-in-the-foot blunders from people on our own side (obviously those responsible for the ‘disinformation’ in the Jean Charles de Menezes case immediately spring to mind here), and the Al-qaeda in-house material may in fact damage more than assist their cause (I somehow doubt that video-grabs of people getting beheaded, or having their throat slit as was the case with poor Daniel Pearl, are exactly vote winners for them). And this latest example may be a classic case. By releasing the video showing Mohammed Sidique Khan explaining his reasoning (or lack of it) they have in one foul swoop killed-off all the crazy conspiracy theories (like the ones that put it all down to Blair and British security), settled the issue (yes, they were suicide bombers) and forced the UK muslim community to come out of denial (where they were still in it) and face up to what is actually going on in their midst. Well good for them!
As Edward suggests below, the macroeconomic effects of Katrina are just now becoming known, much less felt or sorted out.
One item that will be much more widely reported is that in addition to all of the petrochemical industry located there, New Orleans was the linchpin of the Port of South Louisiana. The port is the largest in the United States by tonnage, and the fifth largest in the world. Only Rotterdam, Singapore, Shanghai and Hong Kong are larger.
Stratfor reports, “Fifteen percent of all US exports by value go through the port. Nearly half of the exports go to Europe.” Anything from Montana to Ohio that’s sent to the world in bulk passes down the Mississippi River and past New Orleans. Virtually all of it is loaded onto oceangoing vessels at the PoSL. The port is expected to be closed for at least three months. This is a significant disruption in world trade.
The refinery outage is a serious issue. Even if they were not damaged by the storm, their staffs are probably scattered throughout the region, and not all will have survived. The refineries are also built to be run continuously and brought offline rather slowly. The rapid shutdown and long-term power outage may have done more damage than the storm itself. And they were all running flat-out before the storm to meet high demand.
The big question is consumer spending and demand. If gas prices take enough household income to cause cutbacks in other areas, what will that mean for the American economy? How sharp a drop in growth should we expect? And can the global economy run without the great engine of American consumer demand?
We may be about to find out.
Apart from the human tragedy dimension, the events which are unfolding in and around New Orleans will have an economic impact which in a globalised world can ripple through each and every economy. Fears that gasoline shortages could produce a recession in the US are going the rounds. James Hamilton of Econbrowser probably has the best coverage (here and here) while Dave Altig at MacroBlog is following the debate around the blogs (here, and here). Personally I’m taking a this is serious but lets keep calm view.
As Econbrowser argues the real problem is not with crude prices as such, but with the more short term issue of gasoline prices at the pump. The big problem is that the US has a large strategic crude reserve, but no gasoline reserve, while we, here in Europe, do have large stocks of gasoline. So it was a welcome surprise to open the FT in my browser this morning and read this report:
“European countries were on Thursday preparing to release emergency stockpiles of petrol as the US confirmed that some refineries hit by Hurricane Katrina would remain shut for several months. Earlier US officials had estimated the closures at only one to two weeks…..
Germany has assured the IEA that it would release stocks if asked to participate if needed. Germany holds the largest number of barrels of petrol in public storage. These extra barrels could hit the markets within one or two days. France, Spain and Italy also have large emergency gasoline reserves.”
And now AP has just reported that Germany is about to send supplies, while earlier Reuters had a similar story from Spain.
While EU foreign ministers are tucked nicely away in Newport (my paternal grandmother was born there) for their ?Gymnich? summit at which trying to get Turkey accession negotiations off the ground on October 3 will be one of the top priorities, and while MEPs pass the buck to the Commission and the Council on the thorny problem of Turkey’s interpretation of a customs agreement, back in Turkey itself best selling author Orhan Pamuk has been charged by a public prosecutor for “denigrating” the nation in comments about Turkish history which appeared in a Swiss newspaper several few months ago. And what did the comments refer to: the Armenian genocide, about which, of course, Turkey is still in denial. Randy McDonald has the story:
“Myself, I’m on the record as believing that the Turkish refusal to recognize the Armenian genocide is rooted in Turkish insecurities dating back to the dissolution of the Ottoman Empire, when it seemed quite possible that Turks might lose a viable homeland. This is understandable even if it’s still repellent; this can be worked around.”
“The prosecution of Pamuk, however, is, besides being a crime in itself, a spectacular mistake. A country that prosecutes one of its most famous writers because he agreed with the historical consensus that, yes, there was an Armenian genocide really doesn’t strike me as the sort of country capable of living up to the requirements of European Union membership. I very much doubt that a European electorate already predisposed to reject the idea of Turkish membership in the EU will be more generous than me. Tell me, please, how exactly “Turkish identity” is compromised by the recognition that a previous Turkish state committed genocide? Denial’s one possible explanation, but it’s not a sufficient explanation.”
“For the time being, all I’ll say is that Turkey’s recognition of the Armenian genocide in some form should be a prerequisite for Turkish membership in the European Union. I wish Pamuk well in his upcoming court case–hopefully that will change something in his homeland.”
Let me just second Randy here: recognition of the Armenian genocide should be a prerequisite.
Today is our second anniversary.
While I was setting up a live sparring match between George W Bush and Tim Worstall over at New Economist I realised that George made his original provocative remarks on a show called Good Morning America. This put me back in mind of an old Steve Goodman song (Arloe Guthrie or Willy Nelson version, it’s the same to me), called City of New Orleans which has been going the rounds in my head over the last 24 hours. So, since I’m helpless to do very much for those poor folks stuck in all that water, here’s at least a little tribute.
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