BusinessWeek has joined the ranks of those in the US who are sulking because of international, particularly European, criticism, concern, laughter, and disbelief about both process and result of the US Presidential election. The magazine’s John Rossant is now beating back in this week’s issue, explaining that – even in today’s Europe – life’s not all beer and skittles.
Quite right.
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In addition to being a valuable opportunity for the western world to revisit important enlightenment concepts like religious tolerance and the importance of secular government, the re-election of President Bush could also lead to a more effective transatlantic division of diplomatic labour in the Middle East outside Iraq, as – possibly – indicated by this weekend’s sort-of-agreement between the EU Troika (UK, France, Germany) and Iran, in which the latter pledged to freeze its uranium enrichment programme until a longterm agreement has been reached (see the Guardian).
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Or as they say in Hungarian, “H?llosztok!”
So it’s done. We have four more years of George W Bush to look forward to. A quick tour of the American blogs shows a few trying to pull some sort of moral victory from this election, but the truth is that they’ve lost everything. Not only has the president finally won the majority denied to him in 2000, but as a reward for his mismanagement and incompetence, Democrats have actually lost seats in both houses of Congress, including losing the Senate Minority Leader. For all that the vote is close, the outcome is a stunning defeat in terms of real access to power. There is no longer a meaningful opposition in the US able to moderate the power of a president who needs no longer worry about reelection.
At best, this means that in 2008 the Republicans will have to run on a deeper quagmire in Iraq, no meaningful victories in the so-called war on terrorism, another huge hike in the American public debt and all the new messes Bush can create. But, let’s be honest. That isn’t going to happen. No one will be called to account. The American electorate, for a number of reasons, simply will not hold this administration to account. They did not do so in 2002, they haven’t this time, and there is no reason to think they will in 2008.
Reaction in the French political scene is muted, but definitely not happy.
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Excerpt from Kevin Drum’s 2003 interview with Paul Krugman.
Train wreck is a way overused metaphor, but we’re headed for some kind of collision, and there are three things that can happen. Just by the arithmetic, you can either have big tax increases, roll back the whole Bush program plus some; or you can sharply cut Medicare and Social Security, because that’s where the money is; or the U.S. just tootles along until we actually have a financial crisis where the marginal buyer of U.S. treasury bills, which is actually the Reserve Bank of China, says, we don’t trust these guys anymore ? and we turn into Argentina. All three of those are clearly impossible, and yet one of them has to happen, so, your choice. Which one?
Well, how about your choice? What’s your best guess?
I think financial crisis, and then how it falls out is 50-50, either New New Deal or back to McKinley, and I think it’s anybody’s guess which one of those it is. It’s crazy stuff, but think about where I am on this. My take on the numbers is no different from Brad DeLong’s, it’s no different from CBO’s now, and we all look at this and we all see this curve that marches steadily upwards and then heads for the sky after the baby boomers start retiring. I don’t know what Brad thinks, I think he’s open-minded [actually, it turns out he’s optimistic that voters will eventually come to their senses and raise taxes on the rich. ?ed.], but the general view is: yes, but this is America, it can’t happen, so something will come up. And I’m just willing to say I don’t see any noncatastrophic solution to this, I don’t see an incremental stepwise resolution. I think something drastic is really going to happen.
How does all this feed in to the current account deficit? Will China keep financing that forever?
They’re financing both the current account deficit, and, as it turns out, directly financing the government deficit. We were running a big current account deficit that accelerated through the late 90s, but there you could say that it was due to the strength of the U.S. economy, it was all this investment demand, technological revolution, and after all, the government was in surplus.
Now, we’re back in twin deficits territory, and there are two related issues, the solvency of the federal government and the solvency of the United States per se, and both of them are now somewhat in question.
Maybe I’m a captive of my own model, but I think that what happens when the world loses faith in the U.S. as a place to invest is that the dollar plunges, but that in itself is not so bad because the lucky thing is our foreign debts are in dollars, so we don’t do an Indonesia or an Argentina. But the federal government’s solvency is a much more critical thing because it needs to keep on borrowing more and more just to pay its bills.
What happens if these foreign countries do stop buying U.S. bonds? Is this a real concern, or a tinfoil hat kind of thing?
Oh, I don’t think China is going to do it to pressure us. You can just barely conceive of a situation where they’re mad at us because we’re keeping them from invading Taiwan or something, but more likely they just start to wonder if this is really a good place to be putting their money.
So what happens is a plunge in the dollar when they decide to stop buying and start cashing in, and a spike in U.S. interest rates. But you might also get in a situation where the interest rates the government has to pay to roll over its debt become so high that you get an accelerating problem, which is what happened in Argentina. What happened was that suddenly no one would buy Argentine debt unless they paid a twenty something percent interest rate, and everybody says, but if they have to roll over their debt at a twenty percent interest rate, there’s no way they can pay that back. So the whole thing grinds to a halt and the cash flow just dries up.
And do you think that’s a serious possibility for the United States?
Yeah, just take the numbers as they now look, and that’s where it heads. And you might say, OK, we can easily handle it. U.S. taxes are 26 percent of GDP in the U.S., in Canada they’re 38 percent of GDP. If you raise U.S. taxes to Canadian levels there’s plenty of money to cope with all of this. But politically we’ve got a deadlock, and it’s hard to imagine that happening.
So you say, but this can’t happen, this is America, and I guess my answer is, is it? Is this the same country that we had in 1970? I think we have a much more polarized political system, a much more polarized social climate. We certainly aren’t the country of Franklin Roosevelt, and we’re probably not the country of Richard Nixon either, so I think we have to take seriously the possibility that things won’t work out this time.
The first European newspaper to endorse George W. Bush ist the German mass paper “Bild”.
“With Bush, we know what to expect. With John Kerry, nobody knows what he stands for, what he stands against, and where he wants to lead America and the world.” So writes Hugo M?ller-Vogg, ex-editor of the more respectable “Frankfurter Allgemeine Zeitung”.
In Germany, this has made the news. It’s not so much the choice of candidate — “Bild” is reliably right wing — but the fact that a newspaper did an endorsement at all. This is not common practice in Germany; in fact, it’s unheard of. Some experts find it amusing, some are concerned. Some think it might be a test run for the German elections in two years.
In this light, I find it amusing that one cannot access the official George W. Bush homepage from outside the US and Canada anymore. Europeans pining for info on the president of the US get this friendly greeting:
Access Denied. You don’t have permission to access “http://www.georgewbush.com/” on this server.
Well. Seems like Dubbya really doesn’t need us Europeans anymore, eh?
We ought not let an anniversary like the 50th birthday of the Centre Europ?en pour la Recherche Nucl?aire go unmentionned. Like many non-EU European institutions, involvement often extends beyond the frontiers of the continent. Besides its 20 European members (Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, The Netherlands, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland and the United Kingdom), it has a number of “Observer” delegations that are able to attend meetings and receive documents (the European Commission, India, Israel, Japan, the Russian Federation, Turkey, UNESCO and the USA) and a long list of other non-members, many non-European, who nonetheless participate substantially in its projects (Algeria, Argentina, Armenia, Australia, Azerbaijan, Belarus, Brazil, Canada, China, Croatia, Cyprus, Estonia, Georgia, Iceland, India, Iran, Ireland, Mexico, Morocco, Pakistan, Peru, Romania, Serbia, Slovenia, South Africa, South Korea, Taiwan and the Ukraine). Funding comes from both members and non-members.
Of course, CERN is also remembered for a minor spin-off of its early investment in computer networking: the Web.
In every relationship, it is said, there’s one who does the running. And certainly in a special relationship. This is at least how many British Parlamentarians must have felt after being told that the US government has asked the British military to redeploy several hundred soldiers from the relatively safe British-led occupation zone in the South closer to Baghdad – to relieve US troops fighting terrorists. However, other reports stipulate the redeployment might be necessary to avoid utter chaos caused by American military staging mutinies right before the Presidential election (see here).
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Germany is reconsidering the deployment of troops in Iraq, should conditions ‘change’. According to the FT, Peter Struck, the German defence minister, departing from previous declared government policy stated in an interview that while ?At present I rule out the deployment of German troops in Iraq. In general, however, there is no one who can predict developments in Iraq in such a way that he could make a such a binding statement [about the future].”
The FT also informs us that Struck welcomed Kerry?s proposal that he would convene an international conference on Iraq including countries that opposed the war if he were to win next month’s election. Now I have already suggested that I think EU leaders would be ill advised to get involved in the US presidential elections (not least because I think any such intervention might well boomerang). I see no harm whatever, however, in indicating that national policies would change under changing circumstances.
No continent is an island, and the EU cannot afford to sit back and watch a disintegration of Iraq. It may seem a long way off, but it could rapidly come to feel like it was a lot nearer.
Perhaps the most significant comments came from an unnamed ‘official’
A senior official said: ?When the situation in Iraq changes, when elections have been held, or there are other developments, then we will make decisions on this basis.? If a democratically-elected Iraqi government were to ask the UN for support, the international community, including Germany, must be in a position to respond, the official added.
Full Disclosure: I am British, I now think the invasion was a mistake, but I think Britain has an absolute obligation to maintain the troop presence. I also think that the debate about who was right and who was wrong is better left for history, since, in the light of what has subsequently happened we now have more pressing concerns. I personally welcome the Kerry proposal, and would also welcome increasing UN and other international involvement. We cannot afford to let this one go wrong.
Addendum: Spain is also reconsidering. Jos? Bono – Spain’s Defence Minister -issued a statement to that effect last week, and then a lightening retraction in the wake of the ensuing controversy. This sort of thing is not unusual in Spain. My reading is that Spanish troops would once more be there, under the right circumstances.
Colin Powell has been making the headlines over the weekend for his seemingly more realistic appraisal of the difficulties facing current US policy in Iraq when compared to the view emmanating from other members of the Bush administration. Again Juan Cole has been offering some informed comment on the topic here.
All of which makes the current consensus view from France and Germany pretty preoccupying in its own way.
“I cannot imagine that there will be any change in our decision not to send troops, whoever becomes president,” Gert Weisskirchen, member of parliament and foreign policy expert for Germany’s ruling Social Democratic Party, said in an interview.
Michel Barnier, the French foreign minister, said last week that France, which has tense relations with interim prime minister Iyad Allawi, had no plans to send troops “either now or later”.
Source: Financial Times