Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

Freddie and Fannie: it's the Anglo Disease

by Jerome a Paris Mon Jul 14th, 2008 at 03:50:19 AM EST


US Treasury rescue for Fannie Mae and Freddie Mac

US TREASURY secretary Hank Paulson is working on plans to inject up to $15 billion (£7.5 billion) of capital into Fannie Mae and Freddie Mac to stem the crisis at America's biggest mortgage firms.

The two companies lost almost half their market value last week as rumours of a government bail-out swept the stock markets, hammering share prices around the world.

Together, the two stockholder-owned, government-sponsored companies own or guarantee almost half of America's $12 trillion home-loan market and are vital to the functioning of the housing market.



Treasury to Issue Statement Supportive of Mortgage Giants

The Treasury is expected later today to make a statement supportive of beleaguered mortgage giants Fannie Mae and Freddie Mac, according to people familiar with the matter.

The exact language couldn't be learned but is expected to be a statement of facts designed to reassure markets, people familiar with the matter said.

The two stockholder-owned, government-sponsored companies, whose operations are vital to the functioning of the U.S. housing market, face a severe crisis of confidence after a week in which their stocks each lost nearly half their value.

Monday's markets will bring a big test of the two companies' financial health when Freddie Mac is due to sell $3 billion of short-term debt. An unsuccessful sale could be a major blow to investor confidence. Treasury officials and other regulators have been calling potential buyers of the debt over the weekend to gauge their interest and urge them to participate, according to people familiar with the matter.

How can I put this (without sounding too obviously schadenfreudlich...)?

Fundamentally, there is no easy solution to today's crisis. It is not a crisis of regulation, or of subprime, or of securitisation, or of inflation.

No, it's much simpler than that.

It's a crisis of greed.

Too much debt was the natural result of too much greed, relentlessly encouraged by 30 years of rightwing policies (read: "I really believe that selfishness is good for others too"), and too much money, similarly made possible by 20 years of rightwing policies (read: "asset price inflation is lovely, only wage inflation is evil").

And it must be said that majorities have bought in, thinking they were part of the winners, and that losers had only what they deserved. Majorities voted for the guys, watched the TV programmes that brainwashed them, and generally behaved in accordance with the same dubiously low standards ("do onto others only what you can get away with")

But wealth capture is not wealth creation, and it cannot be sustained beyond physical limits (the main definition of an economist, these days, seems to be "someone who thinks human 'laws' trump physical ones"). Once all the reserves have been grabbed, there is no longer an easy route to 'growth.'

This is what we're living through today: an unsustainable model of monetary-only growth bumping against physical reality. Guess what: physics win. Every single time. Thus $150 oil, $4 gas, stagnant wages and Will-E-Coyote real estate markets.

Fannie Mae and Freddie Mac are just one of the paths monetary-only growth took, but it's one of the most obvious - and concentrated - ones. It's collapsing under its own weight of funny money backed by dubious assets, and it's bringing down with it the notion that this was not a political choice, as the only entity that might save it is the government.

Governments have a simple task in society: providing security, and its often-underestimated sibling: resiliency. In the pursuit if short term gains, we've been pushing "efficiency" (as a more respectable form of greed) at the expense, precisely, of resiliency, which requires redundancy, long term thinking, and, let's say the word, solidarity. Government is the body that manages the fact that we're in this together, and we're linked to other generations, before and after us.

The Anglo Disease is the label I have been using to describe the current situation, whereby too much debt has made the financial sector dominant, and starved the rest of the economy of oxygen - and not-so-coincidentally transfering massive wealth from the working classes to the very rich: debt, managed by the financial sector, and working under assumptions of ever increasing returns, is both the core tool of very obvious policies and the very instrument to hide these from view; feeding the ideology of selfishness, and hiding (temporarily, but for much longer than even its creators dared hope, I think) the empoverishment of the many, it is both self-sustaining and popular for the masses, is it has become a full scale addiction.

We now need to go cold turkey. It is massively painful, and it requires leaders with integrity and strength to help us get us through.

Display:
J, this is communard talk. I agree - but you don't need me. Or at least you think you don't.

You can't be me, I'm taken
by Sven Triloqvist on Sun Jul 13th, 2008 at 06:31:00 PM EST
European Tribune - Freddie and Fannie: it's the Anglo Disease
How can I put this (without sounding too obviously schadenfreudlich...)?

it's schadenfreudig, not schadenfreudlich! :-)

by Fran on Sun Jul 13th, 2008 at 06:36:54 PM EST
it's schadenfreudig

Rather schadenfroh, I suppose.

Or is this Schwiizertüütsch?

by Humbug (mailklammeraffeschultedivisstrackepunktde) on Mon Jul 14th, 2008 at 05:09:20 AM EST
[ Parent ]
This makes me want to stay home from work tomorrow and watch the news. I'd predict a collapse of FM2's stocks, except how much lower could they go?

I don't think the self-serving chatterers are going to talk their way out of this one.

Should we expect to see a dramatic fall in the US$?

by PIGL (stevec@boreal.gmail@com) on Sun Jul 13th, 2008 at 07:47:45 PM EST
australia is down more than 1%, just opening.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Sun Jul 13th, 2008 at 08:09:20 PM EST
[ Parent ]
Which one is Australia?

Nikkei's up slightly.  The others are down about 1%.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 12:51:20 AM EST
[ Parent ]
FTSE is up. Happy times.

12 month pound vs euro:

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jul 14th, 2008 at 05:28:36 AM EST
[ Parent ]
Yeah, the pound has really been getting hammered.  Y'all may wind up with the only currency more worthless than ours before all's said and done.

I still need to start my "Countdown to Yen-Dollar Parity" series one of these days.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 05:59:49 AM EST
[ Parent ]
We could have joined the Euro. But no - the little Englanders were determined to go it alone at the expense of the greasy feckless foreigners.

Well done us.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jul 14th, 2008 at 06:12:06 AM EST
[ Parent ]
now with this crises?  And if it becomes a matter of discourse, can the UK even meet the economic requirements to join the eurozone?

"Schiller sprach zu Goethe, Steck in dem Arsch die Flöte! Goethe sagte zu Schiller, Mein Arsch ist kein Triller!"
by Jeffersonian Democrat (rzg6f@virginia.edu) on Mon Jul 14th, 2008 at 06:40:11 AM EST
[ Parent ]
looking at that graph we're about .25 away from thinking its a good idea.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jul 14th, 2008 at 06:54:51 AM EST
[ Parent ]
Not going to happen.

It's politics and self-image. Although the mid-level business community is for joining, the angry Daily Mail proles aren't, and the feckless rich aren't. With the Tories practically guaranteed a win in 2010, there's no pressure at all to join - they're certainly not going to propose it because their base would skin them alive.

It's more important to most of the population to cultivate a narcissistic image of specialness than it is to deal with reality. So we're going to sail through 1:1, it's going to be the ECB's fault because of something or other, and we're going to carry on down to the floor - wherever that is.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jul 14th, 2008 at 07:06:43 AM EST
[ Parent ]
It's that little French fucker -- Trichet fault.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 07:16:04 AM EST
[ Parent ]
Yes while those reputable financial giants are capable of skimming half a percent off every transaction with Europe, I'm sure there will be no pressure on their part to join.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jul 14th, 2008 at 08:03:13 AM EST
[ Parent ]
Yes, but the Continentals would have put the Eiffel Tower on your notes and made you start driving on the correct side of the road.  A line must be drawn.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 06:54:18 AM EST
[ Parent ]
Some of them can't even speak English. [shudder]
by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jul 14th, 2008 at 07:00:13 AM EST
[ Parent ]
True, but it's not like they're all Polish plumbers.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 07:14:17 AM EST
[ Parent ]
The problem is that it will take 2 years from the word 'go' for the Pound to join the Euro because it is not even in the exchange-rate mechanism, while I think Denmark can join the Euro immediately if they so wish.

When I went to the LibDem conference last September there was a Very Serious Person™ from The City in the audience at the European Policy session who pointed out that if there were a serious crisis "which the current hiccup isn't" (paraphrased: I felt like slapping the guy to wake him up) then the UK should join the Euro.


When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Wed Jul 16th, 2008 at 04:52:36 AM EST
[ Parent ]
Denmark is in phase 2 of the EMU. Sweden is - I think - in phase I, but the natives will have to correct me on that. Whether that means that we can join immediately (assuming that we fulfill the requirements; which AFAIK we do), I don't know.

But given that we de facto are already in the eurozone (we're mutually pegged so tight to the Bundesbank ECB that the only difference is a trip or two to the local FOREX anyway...) I suspect we could join as soon as we could get the new notes and coins in circulation.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jul 16th, 2008 at 11:48:39 AM EST
[ Parent ]
They've been trying to talk their way out of it for a while now, but it's pointless.  At this point, watching the financial news, I'm inclined to think that anyone who can't see these people for the idiots they are clearly needs to be locked up.  I wonder how they manage to breathe, quite honestly.

Larry Kudlow is my favorite.  The perfect example.  Always wrong.  The opposite of his prediction always occurs.  It must be the cocaine, because no one could be that stupid naturally.  If he told me the sky would be blue tomorrow, I'd almost leave the apartment expecting red.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 12:56:10 AM EST
[ Parent ]
Locked up maybe a little harsh, although in another thread I was offering to feed them to my Dragon. They should not be entrusted with large sums of other peoples money, perhaps.

On the other hand, the wisdom of the ages teaches about fools and their money. Then, too, that great American OT Barnum (or was it WC Fields) said, there's a sucker born every minute. I think these pundits are functionally nothing more than carny barkers.

by PIGL (stevec@boreal.gmail@com) on Mon Jul 14th, 2008 at 07:56:59 AM EST
[ Parent ]
I've been thinking about this "Anglo Disease" thing for a while now.  

I've been trying to be good, spending the summer reading and getting exercise before I return to the cave in August.  

Freiderich List, though much maligned by many economists had it for the most part right.  What List got, and most economists haven't (still), is that the exercise of power over others is everybit a possibility in an "economic" world as it is in a "political" one, so that that the delusion that power exercised in excess by the private sector is somehow morally superior to that by an authoritarian staet is precisely that, a deliusion.  

But by far, the key revelation that I get from List is that of productive power as the compared to money power alone.

Let me be clear, the latter is indicative of the creation of nothing, but the former represents real growth and the creation of real value.

One of the things that amazes me has been the the expansion of the financial sector in the American economy has been accompanied by the destruction of the manufacturing sector.  American economic growth has been predicated on the idea that the financial sector creates something of value. Industrial capital taking the form of mahcines and the like can be called upon to produce vast quantities of goods. Financial capital on the other hand, only reproduces itself and has no value of its own.  One increases the productive powers of the nation, the other does not.

For List, the keystone of any successful national economic strategy was the increase of the productive powers of a nation.  I.e. the ability to manufacture items of value. Financial capital doesn't do this, and in the United States has destroyed a much of the productive power of the nation.

The disturbing question for me is this.

Once we rip out the false value created by the financalization (Migeru correctly pointed out this as the equivalent term to "the Anglo disease" in academic literature. See here.) what remains?

Once you go through and examine the growth sectors of the American economy for the past 2 decades, to what extent did the growth increase the productive powers of the nation?  And to what extent did it drain the supply of capital that could be transformed into productive portions of the economy.  Portions that create actual value.  

My point being that in terms of the productive power of the nation, I think that the US economy is substantially smaller than indicated when you have the financial sector treated as though it were capable fo producing items of value. Put crudely (and in the context I was trying to apply the idea of the "Anglo Disease/Finacalization this spring) while an auto assembly line may be moblized as part of the war fighting machine of a nation, most financial firms are not able to be similiarly converted.

The machinist has greater value in terms of the productive power of the nation than the market analyst.  

So when you look at the productive power of the nation, might it just be the case that in both the United States and Britain, the practice of counting the monetary output of the financial sector as through it were prodcuctive power substantially overstates the amount of economic growth in these countries (and most likely  conceals the collapse of the productive economy in these nations)

The US GDP is roughly 13.8 trillion USD.  (World Bank 2007, same below)

If we change the accounting so that the economic output of the financial sector is not counted as part of the productive power of the nation, then what happens.

Let's say that 66% of the US economy is essentially smoke and mirrors.  Well, then that means that in terms of productive power, the US economy is only a third that indicated by nominal GDP. So in terms of productive power, the US economy is really only about 4.5 trillion USD.

Now let's say that another economy, China, has been much less affected by the distortion of GDP numbers by financialization.  So China's nominal GDP is about 3.3 trillion USD.  

On the other hand, let's say that only something like 10% of the Chinese economy is financial value.  The rest is made up of actual goods and services. So that in terms of productive power, the Chinese economy is 3 trillion USD.

This is substantial, because if we make the comparision in nominal GDP, the Chinese economy is less that 25% that of the US.  But if we compare productive power, then it;s something more like 66%.

In the first case, the economic power of China is inconsequential.  In the latter, it's a serious competitor to the US.

Now, the truth may be that a lot of growth in China is essentially the result of the financial sector as well, so that the productive power of China hasn't been increased.  

The whole things a mess though, becuase the real question is that when the effects of financalization are made transparent, will how will China (and others) respond.  Note that recently the Chinese have started moving their foreign reserves from things like US T-Bills into FDI.  They are purchasing productive assets in the US and in Europe.  

And in exchange, Americans get trinkets.

This is the biggest rip of since the Dutch bought Mahattan.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Jul 13th, 2008 at 08:45:39 PM EST
great comment, MfM.

smoke and mirrors indeed...and to compensate for the yawning emptiness created by a life that is fundamentally parasitic, along come the exaggerated postures of fullness, the endless yacking about freedom of markets, light touch regulation, moral certainty and superiority, and even delusions that their 'god' has blessed them, (and can kick any other god's ass).

all b.s.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sun Jul 13th, 2008 at 09:11:56 PM EST
[ Parent ]
Half agree. In the US the economy has been badly screwed by replacing a regulatory and tax regime intended to serve society at large, by one intended to serve the financial sector and upper management. However, the financial sector does not represent anywhere near two thirds of the US GDP, and it does provide real services. Think of our dear Leader for example - by bringing together those with capital, with those with productive plans, he makes those wind turbines possible.

But Because of the financial industry's position at the choke point of the flow of money, there is always the potential for using that position to just generate money for itself, without providing any useful services. The trick in regulation is to minimise that sort of behaviour as much as possible, while allowing for useful services. That sort of situation also distorts the market by encouraging those who are most talented, most ambitious, and best positioned to enter into that casino world, rather than other fields.

On China I really disagree. The trick over the next couple generations is actually going to be to minimize the importance of material stuff as a factor in the economy, and replace it with services. Low cost disposable stuff is especially bad. I don't agree with those that say that the growth paradigm is unsustainable, but I am convinced we need to change the nature of economic growth. So far China is catering to the opposite impulse.

Hope this makes sense, I'm keeling over from the insanity of making lasagne from scratch on a hot summer day, so if it is completely incoherent, that's what I'll claim to be the reason.

by MarekNYC on Sun Jul 13th, 2008 at 10:47:18 PM EST
[ Parent ]
You make sense.

I do agree that where finance capital is aimed at long term investments that involve the creation of productive power they create real value.

But consider the difference between what our dear leader does (setting up deals that allow wind turbines to be built. And these turbines in turn produce electricity that has real value.  Capital in this case is used to create something that creates an item of value that grants a return to the investor.

On the other hand, consider the case of Enron, where "electricity" was made into a commodity, and the point of the investment of capital wasn't to increase the capacity to produce electricity, but to hold it and sell it for a higher price while adding to value to it.

And when you only have construction of peaking plants and you have growth in demand, and you have reduced regular supply as plants are decommissioned.  Then what was previously a regular commodity manufactured to be put on the market , i.e. electricity, is turned into a store of wealth that increases in cost without adding value.  Basically the same amount of power hits the market, but its cost is dramatically increased so that the reason the amount of money this brings in is higher is not because there is more of the thing, but because the market has been manipulated.

I hope that made sense. I wanted to make this distinction in my earlier comment, but I was rambling on and couldn't figure out how to convey my point.

I don't agree with those that say that the growth paradigm is unsustainable, but I am convinced we need to change the nature of economic growth.

In a US government sponsored publication during the late 1950s, the English economist Roy Harrod asked whether there was a point of economic satiation.

That is whether there was a point at which a society had enough material positions so that further economic output was pointless.  He concluded that if this were the case that new outlets for economic growth would have to occur by created a demand for non-material items and leisure.

As a purely domestic matter, I think that there's a strong argument that there is a point of economic satiation, and that much of what passes for economic activity in the modern world is really a form of conspicous consumption that benefits no one and is incredibly wasteful.

If I can be satisfied with a little house amongst the many others in my neighborhood, my need for shelter is met.  

But what happens when a great mansion rises up next to mine, is that my little house becomes but a shack.  And I, no longer satisfied that I live decently, most build a larger home.  The more unequal the distribution of income in a society, the higher the prevalance of consumption is not aimed at satisfying material needs, but exists as a form of conspicous consumption that aims to convey status to others.

It's horribly wasteful, and responsible tremendous environmental damage. It's much the point of ecological economics, and it's the reason that environmentalist love the thesis itself.  I've always thought that Fred Hirsch was the earliest statement of this idea.  But as I read Veblen, I realize that it's been around for at least a century.

This is all speaking domestically.  In international relations, one of the great sources of wasteful consumption is an arms race.  And while the type of status competition that occurs in domestic society is dreadful, rarely does it allow one player to eliminate the existence of another because there is law and order.  

Not so in international relations. The only law is that that the gun makes, and thus the capacity of a society to ramp up production far beyond any need for domestic consumption matters.  Greatly.  The nation that can make the most guns, and place them in the hands of citizens is the one that makes the law.  And the strong prevail upon the week.

As hegemons go, the United States has been remarkably benign.  Professing a liberal ideology that limited the naked exercise of power even more than it did in the case of Britain.  This isn't to say that bad shit didn't happen, merely that as hegemons go the US was pretty harmless.  

If the mantle of hegemony passes to China, will the order they impose be as benign?

It's the regime in power in Beijing that worries me.  And the absence of a tradition of power being limited by the rule of law.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 12:08:53 AM EST
[ Parent ]
ManfromMiddletown:
Professing a liberal ideology that limited the naked exercise of power even more than it did in the case of Britain.  This isn't to say that bad shit didn't happen, merely that as hegemons go the US was pretty harmless.  

There are many countries which might not agree with that.

It's true that the US hegemony was relatively benign to its own population. True, you were expected to work three jobs, to consume to order, and to buy into the bullshit. But you didn't, except on rare occasions, have people shooting at you. Unless you were black. Or a native.

Elsewhere in the world - not quite so benign. The US has a long history of invasion and genocide from the Native American apocalypse onwards.

Iraq is not a miraculous and unexpected exception - it's entirely consistent with the outline of US foreign policy for more than a century.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jul 14th, 2008 at 06:36:09 AM EST
[ Parent ]
for the most part.

With Europe happy, the "interntional community" was thhus approving.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jul 14th, 2008 at 06:39:55 AM EST
[ Parent ]
It's true that the US hegemony was relatively benign to its own population. True, you were expected to work three jobs, to consume to order, and to buy into the bullshit. But you didn't, except on rare occasions, have people shooting at you. Unless you were black. Or a native.

Ever heard of Ludlow, Homestead, Matewan, or the Battle of the Overpass?  

There was considerable violence by the same business class that was responsible for American expansion overseas at home against largely working class whites.  It didn't have a thing to do with race, but it did have everything to do with keeping people in the position that they were born into. I have a hard time thinking of many instances in 20th century British history in which the military was called upon to put down striking workers.  I can think of many times when governors called out the National Guard to put down strikes in US states.

American hegemony is far more benign that that which Britain imposed on the world.  And will likely be more so than that which any future hegemon imposes.

The Chinese have been able to stir up the type of ill-will and resentment that it took the United States several decades to accrue in Africa less than a decade.

I'm sorry to say this, but what the US has done in the past 50 years pales in comparison to what Europeans did when they were in charge.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 06:56:48 AM EST
[ Parent ]
Was it better than Europe would have done if they'd been in charge for the last 50 years?

I'm sure you find it comforting to think that the US has been uniquely benign but the evidence for that seems scant.

by Colman (colman at eurotrib.com) on Mon Jul 14th, 2008 at 07:02:45 AM EST
[ Parent ]
Ask yourself this.

People get upset about American hegemony.

Is the problem American hegemony?

Or American hegemony?

And honestly, yes I think that the US has done better than if Europe had been in charge, because any situation in which Europe had been in charge would have involved the perpetuation of colonialism.

Does the British record in Kenya or the French record in Algeria really give any reason to believe that European hegemony would have been any better than American hegemony?

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 07:17:13 AM EST
[ Parent ]
The problem is both hegemony in general and American hegemony in particular, since that's the one we've been suffering from.

My point is that you're excusing the horrors of US hegemony by comparing it to an imaginary continuation of European hegemony - though you could argue that, apart from the geographical centre being in Washington rather than London, Paris or Berlin, that the US hegemony was simply a continuation of the European one - it's been pretty much the same people in charge, after all.

by Colman (colman at eurotrib.com) on Mon Jul 14th, 2008 at 07:31:47 AM EST
[ Parent ]
Yes, it's pretty much the same people.

The thing that I'm disagreeing with is the idea that if any other nation where in the position that the US is now that they would behave any differently.  

Which means that the best way to deal with this isn't to make the specific case against the US, but the general case against the behavior in question.  

You shut down the conversation with a lot of the people who can have an impact on that behavior by making this about American hegemony instead of American hegemony.  It's counterproductive.

It's cliche but true. Hate the sin, not the sinner.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 07:45:19 AM EST
[ Parent ]
Does the British record in Kenya or the French record in Algeria really give any reason to believe that European hegemony would have been any better than American hegemony?

Equally bad I would say. If a CIA backed army  is willing to overthrow a democratically elected government, if it votes the wrong way. Then go round shooting and torturing people who might exercise their freedoms in the future, how is that better than colonialism? its really just colonialism with added misdirection.

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jul 14th, 2008 at 07:33:41 AM EST
[ Parent ]
I think it's a pretty silly debate.  It's kind of like the big reparations lawsuit phase people went through back in the '90s.  Yes, I suppose some group might have been nastier to my ancestors than my ancestors were to some other group, but everybody was pretty awful, so does distinguishing by such small degrees really mean anything?

(Ironically, but expectedly, that nastier group was another group of my ancestors, so I'd wind up needing to sue myself in order to collect.)

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 07:22:35 AM EST
[ Parent ]
Being uniquely benign isn't necessary when you set such a low standard as Europe in the 19th cent. Compared to 19th cent. European great powers, the Romans were a shining example of modernity and enlightenment.

Heck, well into the 20th cent. the Brits were doing things in India that would have landed a lot of their PMs in the Hague until they were old and grey and then some if they had been brown people. And let's not even start talking about Belgian Congo or French North Africa (and since I'm Danish, let me also mention the Danish slave trade, that continued well into the latter half of the 19th cent.).

Traditional great powers have never been nice, and I find it hard to believe they ever will be. Our challenge for the 21st cent. is to figure out how to make a non-traditional great power.

As an aside, am I the only one who finds it absurd to attempt to rank the scale of crimes where the dead are counted in millions? Doesn't one reach a point where attempts to figure out who was "the worst bad guy" becomes a meaningless exercise in finger-pointing?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 07:25:44 AM EST
[ Parent ]
Traditional great powers have never been nice, and I find it hard to believe they ever will be. Our challenge for the 21st cent. is to figure out how to make a non-traditional great power.

Agree, which is why I think that bitching about hegemony is really pointless.

Hegemony brings order to an otherwise anarchic system.  Which means you get rules.

I like living in a society with law and order, because it means that I don't have to worry about someone stabbing me when I go for a walk. (... as much, I did get hauled out of bed by the police on my last birthday because there was a hostage situation at the neighbors and I had to evacuate)

It's much preferable to live in a world in which there are rules, and in order for there to be rules there has to be the power to enforce them.  It's important in this case that the rules apply to all, so that you have rule of law, not of men. (I'm certain that given the chance women are equally capable of genocide, etc...)

Now of course you can have order without freedom, like the security that you et in  an authoritarian state.

Or you can have order in which everyone has input into how the rules are made, but there's a basic agreement about what the basis rules are.

That's why I think that in the end there has to be an effort to coallesce around that set of values that can form the constitutional basis of a new world order.  

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 07:39:58 AM EST
[ Parent ]
Now of course you can have order without freedom, like the security that you et in  an authoritarian state.

Or under the hegemonies you've been talking about. But we shouldn't bitch, because at least there's order.
by Colman (colman at eurotrib.com) on Mon Jul 14th, 2008 at 07:43:11 AM EST
[ Parent ]
As bad as the renditions and Guantanamo are.

Is it worse to live in a world in which a few hundred people are tortured, to death or otherwise?

Or one in which the lack of order means that there are major power wars which lead to the death of tens of millions?

What's tragic about the renditions isn't so much that they are evil, as that they are utterly fucking pointless. They serve no purpose.  They don't make the world safer, but they do erode the idea that there are rules that apply to everybody and which are not to be broken.

Which means that when the US (or for that matter any of the European states wrapped up in the whole rendition affair) goes to condemn Sudan for Dafur, the whole issue of renditions gets thrown back at them.  Same thing with China.  That the scale of the Guatanamo is a mere fraction of what you have in Darfur or China doesn't matter, because it's taken as an absolute principal, a law.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 07:54:08 AM EST
[ Parent ]
The war in Iraq has already killed on the wrong side of a million people. Granted, that's one or two orders of magnitude less than WWI, but a million here and a million there...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 08:16:26 AM EST
[ Parent ]
And the sanctions and bombing before killed about a million more, but those are always counted  as victims of Saddam.

that's one or two orders of magnitude less than WWI, but a million here and a million there...

but if you take into account the size of the populations involved, I'm sure its probably significant.

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jul 14th, 2008 at 08:22:24 AM EST
[ Parent ]
And how many were killed in the Congo in the conflict that lasted from the late 90s to the start of this decade?

If a US military strike against the government of the countries that intervened could have stopped the escalation of the killing, would it have been justified because it would have saved lives?

Or condemned as American aggression against poor African states?

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 08:24:34 AM EST
[ Parent ]
That's a very  large If.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jul 14th, 2008 at 08:29:34 AM EST
[ Parent ]
If you want to promote democracy, you can start by yanking the rug out under the Saudi royal family. And start leaning on Mubarak and Olmert. And pull the CIA out of Colombia (along with whatever other goons you have running around there).

Claims that any military intervention is supposed to promote democracy and human rights are going to ring hollow - extremely hollow - if there's still so much lower-hanging fruit around in the democracy promotion department. It'd look much like shooting a burglar and claiming that you did it because you're "concerned about your safety" - when you haven't even bothered to install a lock on your door in the first place. Not credible.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 08:47:46 AM EST
[ Parent ]
The notion that any large scale military intervention is to promote freedom and democracy for others is in itself delusional.  After all it wouldn't take much to depose that goon Mugabe, but no one is going to bother.  Nations go to war with other nations when their own perceived vital national interests are at stake.  The US is not going to put its own troops in harms way just to get rid of some tinpot dictator if there is nothing in it for them.  The problem for the US is that it has outsourced the definition of its "vital national interests" to a small coterie of corporate interests.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jul 14th, 2008 at 08:59:17 AM EST
[ Parent ]
Did the US intervention in Iraq stop the escalation of some killing spree? I don't get the comparison.

And I don't agree with the counterfactual either. A few air strikes here and there are not going to stop a few million people ready to kill each other with machetes and most foreign combatants in Congo came from neighbouring countries, on foot (so to speak).

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Wed Jul 16th, 2008 at 05:00:09 AM EST
[ Parent ]
As bad as the renditions and Guantanamo are.
Is it worse to live in a world in which a few hundred people are tortured, to death or otherwise?

Or one in which the lack of order means that there are major power wars which lead to the death of tens of millions?


Are those my only two choices? Seems like, in a slow motion manner, both are happening anyway.

The tragedy of the renditions is that they are evil and they are pointless and that they are being committed for years by a country founded on principles that explicitly don't allow such actions - not cooincidentally because some ancient monarchy was doing such things and 250 years ago we thought that it was time for the world to grow up...that the world is able to grow up.

I don't buy the mere fraction part either. Sure, what is going on in the camp of one island is perhaps 500 people, but there are a lot of places that the Red Cross has been kept out of, and my money is on the bet that says there is still a lot more that we don't know about. Not that this mitigates whatever specifics you are talking about in China or Darfur. Just that the whole 50, or even last 20 year, US involvement Iraq and Iran is millions of people dead. And like VietNam, which was also millions of people dead, you can't really put your finger on a real reason why.

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Mon Jul 14th, 2008 at 09:03:08 AM EST
[ Parent ]
What's tragic about the renditions isn't so much that they are evil, as that they are utterly fucking pointless. They serve no purpose.  They don't make the world safer, but they do erode the idea that there are rules that apply to everybody and which are not to be broken.

No, what's tragic about fucking renditions is that individuals are being tortured, broken and killed. (Are you arguing that it's ok to be evil so long as you'll benefit from it? Is being evil to make the world "safer" - by which you seem to  mean make the US safer - alright?) That the US is publicly endorsing torture and a  gross disregard for both the law and basic human decency is a further collection of tragic acts of evil on top of the original one.
by Colman (colman at eurotrib.com) on Mon Jul 14th, 2008 at 09:10:23 AM EST
[ Parent ]
Amen.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 09:12:43 AM EST
[ Parent ]
Well said

No excuse  for torture, not ever, no matter the situation, no matter the number of lives it will supposedly save, its flat out wrong, 100% wrong in any and all circumstances.

Obamas first action should be the arrest of his predecessor and his henchmen, and if it turns out that they have presidential pardons that stop any legal action, then  get the ICC charter ratified and hand the mob over to the Hague

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jul 14th, 2008 at 09:25:40 AM EST
[ Parent ]
Yup, and if you believe you need to torture in order to save those lives then you still go to jail for an extended period, even if on the off chance that it works: surely it's worth it. A noble sacrifice in the service of others that any true Jack-what's-his-name wannabe should be glad to make.
by Colman (colman at eurotrib.com) on Mon Jul 14th, 2008 at 09:33:13 AM EST
[ Parent ]
Is it worse to live in a world in which a few hundred people are tortured, to death or otherwise?

Or one in which the lack of order means that there are major power wars which lead to the death of tens of millions?

Are you saying rendering or torturing a few hundred people is going to stop a hegemonic war on its tracks?

Are you saying that the actual rendering and torturing that took place was to prevent the death of tens of millions and not alongside the unleashing of a war that has killed millions and risks escalating to tens of millions if we're not careful, and in addition to the gutting of the international system which is now weakened to the point that if a war to kill tens of millions were imminent it could do nothing to prevent it?

The problem with "realists" is that they live in a Platonic universe of ticking bomb scenarios and world wars averted by targeted torture and assassination.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Wed Jul 16th, 2008 at 05:04:43 AM EST
[ Parent ]
The problem with "realists" is that they live in a Platonic universe of ticking bomb scenarios and world wars averted by targeted torture and assassination.

 Some background reading How anyone can say they are a realist and yet support the ticking bomb scenario makes my mind boggle.

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Wed Jul 16th, 2008 at 06:06:26 AM EST
[ Parent ]
Right now, it's American hegemony that's killing people - lots and lots of people. Hegemony is a more general problem.

It's not as if we don't bitch about the European contributions to the body count as well, but everyone always only complains about the insults to their own nation.

by Colman (colman at eurotrib.com) on Mon Jul 14th, 2008 at 07:56:15 AM EST
[ Parent ]
You do realize that the average American on the street can do little to nothing about this.  After all, all the major candidates are basically in agreement carrying a big stick and bashing other nations with it.

Obama isn't going to take US forces out of Iraq, and to be honest the likely result of a US withdrawal in Iraq is an Iraqi genocide in which the Sunnis and Kurds are knocked off.  I don't think that we're talking about something on the order of the Holocaust, but matching Rwanda or Bosnia? Sure.

So if it's the body count that matters, which one is better?

If another 100,000 die because of the occupation, but 2 million will die in the event of a genocide in the event of American withdrawal, which is morally superior?

We can't change the past, we can change the future.

And in the future, I think that it's important that the world community be listened to when there's a push for war.  So that if the thing goes to shit it's everybody's fault, and not just placed on America's shoulders.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 08:12:55 AM EST
[ Parent ]
ManfromMiddletown:
Obama isn't going to take US forces out of Iraq, and to be honest the likely result of a US withdrawal in Iraq is an Iraqi genocide in which the Sunnis and Kurds are knocked off.  I don't think that we're talking about something on the order of the Holocaust, but matching Rwanda or Bosnia? Sure.

My recipe for Iraq? Declare a firm date of pullout of all troops. Give this date with enough time for all of the power factions in Iraq to pre-negotiate their relationships after the end of the occupation. Apologize to the Iraqi's, say you are very, very sorry about the state of their country. Give the option to any Iraqi who wishes to immigrate to coalition-of-the-willing countries, in case the should feel they've had enough and don't want to stick around for the occupation aftermath and possible genocides. Those people leaving should be granted immediate permanent residence in the receiving country. That way, those that stay in Iraq to try to resolve the conflict amongst the different groups will at least have made the choice to do so.

Then leave. And let the chips fall where they may. And promise not to do it again.

by someone (s0me1smail(a)gmail(d)com) on Mon Jul 14th, 2008 at 09:17:00 AM EST
[ Parent ]
Which is basically what's going to happen.  The deadline on having the troops out, for now, is May 20, 2010.  Obama's not going to have much choice on staying or going anyway.  His op-ed in the NYT this morning suggests he's clearly, despite the best efforts of McCain and the AP to convince us otherwise, looking to get out.

The only issue will be hammering out the details of what to do with Iraqis who want to get out, too.

MfM's assumptions are a little silly here.  The idea that the Sunnis outside of Iraq are going to sit around while the Shi'ia slaughter the Iraqi Sunnis is ridiculous.

I'm also not a big believer that the Shi'ia are going to set about trying to kill all the Sunnis and Kurds the moment we turn our backs.  I don't follow how our soldiers would prevent this either.

I'm skeptical, too, as these excuses for staying are the excuses provided by the Very Serious People who supported the war and want to stay in order to prop up their imaginary honor.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 09:45:01 AM EST
[ Parent ]
Which is basically what's going to happen.

Except of course the part about letting iraqis emigrate to coalition countries. I do not have the numbers but recently it was reported that the swedish town of Södertälje has accepted more refugees from Iraq then the entire US. And I bet there are towns in Syria that is housing more refugees then Sweden in total.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Jul 15th, 2008 at 10:12:34 AM EST
[ Parent ]
True, but that's a reflection of the current president not wanting to make it seem as though incredible numbers of Iraqis are fleeing to America for safety.  It'd kind of damage his whole "The surge is working" argument.  I think you'll find Obama more open to it (assuming, of course, that he wins).

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Jul 15th, 2008 at 06:35:25 PM EST
[ Parent ]
Call me cynical, but I have a hard time imagining that. Not only would it set precedents that I think the US might rather want to not set, it would also be attacked - fiercely - by his domestic opposition. I don't think that anyone in Washington thinks a million or five Iraqis are worth the political capital required to treat them decently.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jul 16th, 2008 at 03:59:37 AM EST
[ Parent ]
And in the future, I think that it's important that the world community be listened to when there's a push for war.  So that if the thing goes to shit it's everybody's fault, and not just placed on America's shoulders.

No, excuse me, what's important is for America and its leaders to understand that we go to war in self-defense should it become absolutely necessary (and as the last resort), not to go looking for these God-damned ponies just because these neocon pieces of shit decides that our troops should be used to promote their magical thinking.

It's on America's shoulders, because those of us who opposed this stupid fucking war weren't fucking listened to.  The global community wasn't listened to, because the global community wasn't going to go in regardless of what fairy tale the psychos told it.  Whose shoulders should it be on?  The French?  The Germans?  They had the brains to stay out, so why the fuck would it be on their shoulders?

You're right, we can only change the future, but I, for one, am not done talking about the past, because I and others were right all along, and it's time the people who got it right were listened to in this country instead of the people all-too-willing to send other people's kids to die for nothing.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Jul 15th, 2008 at 08:57:23 AM EST
[ Parent ]
I'm afraid this isn't the way America, whose economic edifice pivots on projection of military power, works.

It's a militaristic society through and through, anyone who lives here and observes the absolute reverence of all things military by the vast majority of americans can see this. And that reverence permeates everything. We gaze in wide wonder at how the so-called 4th estate toed the line so easily in the run-up to the Iraq war, but really, it's this way with every war. Americans absolutely love their wars.

As long as they win them, they don't cost too much money and someone else's kids get killed.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Jul 15th, 2008 at 03:10:16 PM EST
[ Parent ]
About body counts...

You can't just compare collections of people by size - people are people, not beans to be counted.

Example: is it better to kill a hostage taker and a hostage to free another hostage, or to let the hostage taker kill the hostages and then kill the hostage taker?

Will you take responsibility for the choice to kill a hostage? Will you pull the trigger? How will you face the family of the hostage you killed in order to reduce the hostage death count by half?

If you're going to get the rap either way from the family of the dead hostages, better to not have blood on your hands on top of that, to be honest.

You're welcome to scale the problem from 1:2 to any ratio of dead hostages you like.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Wed Jul 16th, 2008 at 05:18:57 AM EST
[ Parent ]
I don't think it's pointless to critique the ruling hegemons. Not because we can (necessarily) claim a moral high ground, but because we need to remind ourselves of the pitfalls of power that we'll want to avoid when we build a more perfect union. Unless, of course, our only ambition is to replace the American death squads currently running around in the third world with European death squads. (And, in a more political context, because we need to take the ever-present glorification of post-Reagan USA down a notch if we want to cure our body politic of neoliberalism.)

I just get a little irked whenever I see people claiming that Europe has special moral high ground and that if just Europe would have been in charge of the world we wouldn't have acted like assholes. Chances are that, given the opportunity, Europeans would be just as likely to throw a small third-world country against the wall and beat the snot out of it as Americans. Which is why a lot of our work in building a better EU will have to go towards making sure the EU never gets the opportunity to throw small third world countries up against the wall...

Soft power instead of hard power. It's not the only foreign policy question that matters, but it comes pretty close.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 07:51:16 AM EST
[ Parent ]
Shouldn't the focus be on taking down the ideas that lead to the Iraq war, instead of assigning blame for how it happened?

As you point out its the ideas that matter, not the people who hold them.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 08:18:26 AM EST
[ Parent ]
Shouldn't the focus be on taking down the ideas that lead to the Iraq war, instead of assigning blame for how it happened?

And how does one do that without holding the perpetrators accountable?  The people who hold these idiotic ideas do matter, and they need to be discredited every time the opportunity presents itself.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 08:28:50 AM EST
[ Parent ]
On the European side of the Pond, the idea that led to the Iraq war was mostly blind Atlanticism and cowardly collaboration with the current hegemonic power. Unfortunately, breaking that idea kinda requires making blind Atlanticism politically untenable, which requires a much less rosy image of the US in the general population.

The drive to place responsibility for the way Iraq blew up in our faces on the US is just as much about incriminating our domestic Quislings and making it harder for them to say "the international community" when in reality they mean "our sugar-daddy in Washington." That's more than a little rough on the Americans who are exposed to it. And it's going to feel mightily unfair to those Americans who explicitly voted against King George the Lesser. But if we don't drive the point home that the US is not, at the moment, a source of freedom and democracy, our Quislings can keep pissing European lives and political capital away. And that's simply not acceptable.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 08:29:50 AM EST
[ Parent ]
Not to mention helping kill lots and lots of people.
by Colman (colman at eurotrib.com) on Mon Jul 14th, 2008 at 08:31:41 AM EST
[ Parent ]
It is missing the point. Both European and US colonialism have been a disaster for some countries.

In a Panglossian way though, in context, that's not so surprising. What's made Euro-civilisation different is an explicit ideal of abstract equality and dignity. The ideal has been trampled on so many times it's ridiculous, but it's still there as a kind of final appeal to civilisation which at least some people believe in at least some of the time, and which progressives - bless their keyboards - would like to see more of.

Genocide, exploitation and empire seem to be the natural human state of things, and while it's easy to be horrified by colonialism, there are plenty of cultures which have had colonialism and slavery without feeling any obligation to be horrified at all.

We're not special because we're unusually civilised - in reality, we really aren't. But we are special because we have occasional, all-too-fleeting moments when we dream that we could be better. And that's almost unique in history.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jul 14th, 2008 at 07:46:56 AM EST
[ Parent ]
But so does the US notion of civilisation. In no small part this is why such words as "freedom" had to be thoroughly debased in US discourse. Various versions of Maoism has also espoused similar ideals, at least officially.

One of the biggest diseases on the US body politic - right up there with neoliberal economics - is American Exceptionalism. If we want to make a more perfect union for Europe, we'll have to step on European Exceptionalism so hard it dies. Otherwise, give it a couple of decades and we'll be the ones cluelessly wondering why "they" hate us.

And as long as we have people like Tory Bliar saying that he's proud of the British Empire (yes, he has actually said that. Gag me), I don't think we should be shouting our mouths off too badly about how much better than the US we inherently are.

Our political culture is at the moment a lot more civilised than the political culture across the Pond, so we have a much better starting point for creating a non-traditional great power that doesn't behave like a petulant five-year-old with superpowers. But a large part of the reason that we have a better starting point than the US is precisely the fact that we have not been hegemons for the past fifty or so years.

And whether we'll succeed in turning our current advantage into more permanently civilised behaviour remains to be seen. So our bragging rights are somewhat limited at this point.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 08:03:27 AM EST
[ Parent ]
I'd guess that TBG is including the US in Euro-cvilisation.
by Colman (colman at eurotrib.com) on Mon Jul 14th, 2008 at 08:08:46 AM EST
[ Parent ]
Point taken.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 08:12:28 AM EST
[ Parent ]
Yep.

I know it's fashionable to get the guilt on. And it's not as if there isn't plenty to feel guilty about.

Even so - inherent dignity and inherent human rights are both unique concepts, and key cultural drivers.

Exceptionalism is SOP for empires. It's what empires do. But the idea that something better might be possible isn't quite so common - no matter how unlikely it's looking at the moment.

If there's a way to rehabilitate Euro-culture politically, it's to move that concept back to the centre and make it an anchor of integrity around which everything else revolves.

We've had so much to be cynical about politically for such a long time it's hard to imagine how that might be possible. But the alternative is likely to be worse, so it may not be such a bad thing to aim for.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jul 14th, 2008 at 08:15:30 AM EST
[ Parent ]
I'm no expert with empirical data, but I think that the EU countries have learned some of the hard lessons of colonialism and don't want to repeat them. Not that it is unanimous, but perhaps the French people (as an example) wouldn't allow what happened in Algeria again after the war. This population would have let it go. And my feeling is that this is true for majorities of the populations all over the continent.

So, perhaps I am wrong, or perhaps it is time to stop throwing that era into the argument as some mitigation for the US' actions. Sure, it has to be watched out for, and the lessons taught for future generations...just saying.

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Mon Jul 14th, 2008 at 08:55:19 AM EST
[ Parent ]
Proposals like "Colonialism had some good sides" are being rehashed nowadays. Very annoying.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Mon Jul 14th, 2008 at 10:28:18 AM EST
[ Parent ]
If we want to make a more perfect union for Europe, we'll have to step on European Exceptionalism so hard it dies.

Completely agree. And we can start by not copying the US vocabulary. "A more perfect Union"?
by generic on Mon Jul 14th, 2008 at 01:09:47 PM EST
[ Parent ]
What is really sad about the manner in which American hegemony has developed is that the USA was born out of a mass fleeing from oppression and many of its founding ideals were built around the notion that America would not, like its European neighbours, become engaged in imperial entanglements.

Thus even today, many, perhaps most, Americans completely deny that America is engaged in empire building at all - despite the presence of US troops in more than 100 "sovereign" nations.  America has practiced a new form of neo-colonialism which involves indirect corporate hegemony and covert rather than overt military actions in many cases.  Even Iraq was to help Iraqis enjoy the fruits of democracy!

It is the indirect/covert/ideological model of US neo-colonialism which is particularly corrosive as it can seemingly co-exist side by side with all the laudable claims to virtue contained in the Declaration of Independence.  In some ways the old European model of colonialism which involved direct military/poltical rule was more obvious and more honest - and easier to oppose/resist.

"Global corporations" are almost beyond all governance.  Military contractors are not subject to the usual military disciplines.  And most American's would be genuinely appalled if they knew the full extent of what the CIA et al routinely engages in.

The sadness is not the the US is worse than (say) Nazi Germany or the Stalinist Soviet Union.  Of course it is not.  The sadness is that such noble ideals have become so debased - which is also why we have to be careful how the EU develops if it ever does become a "harder" world power.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jul 14th, 2008 at 08:27:31 AM EST
[ Parent ]
What is really sad about the manner in which American hegemony has developed is that the USA was born out of a mass fleeing from oppression and many of its founding ideals were built around the notion that America would not, like its European neighbours, become engaged in imperial entanglements.

Maybe, of maybe not.

Wikipedia: Revision and replacement of the Articles of Confederation

Rakove (1988) identifies several factors that explain the collapse of the Confederation. The lack of compulsory direct taxation power was objectionable to those wanting a strong centralized state or expecting to benefit from such power. It could not collect customs after the war because tariffs were vetoed by Rhode Island. Rakove concludes that their failure to implement national measures "stemmed not from a heady sense of independence but rather from the enormous difficulties that all the states encountered in collecting taxes, mustering men, and gathering supplies from a war-weary populace."[13] The second group of factors Rakove identified derived from the substantive nature of the problems the Continental Congress confronted after 1783, especially the inability to create a strong foreign policy. Finally, the Confederation's lack of coercive power reduced the likelihood for profit to be made by political means, thus potential rulers were uninspired to seek power.


When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2008 at 04:34:43 AM EST
[ Parent ]
tbg, kudos!
you have succinctly and elegantly summed up all my highest aspirations for the EU, and the world.

you should be writing inspirational speeches for some big cheese...

this whole debate is stellar, btw, raising the ET bar once again.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Jul 14th, 2008 at 11:11:48 AM EST
[ Parent ]
When you look at the US manufacturing sector, it has never done better, in terms of output and value of output (and these days, export volumes).

Where it has gone down is in the number of people it employs, and in its share of the overall GDP. Both of these are to some extent linked to the fact that tasks that used to be internalised (and counted as "industrial" jobs) have been externalised (outsourced) to companies counted in the service sector, even if fundamentally they do the same thing.

Finance makes sense only if it helps an underlying activity happen more effectively or makes it happen because it allows the requisite capital to be available at the right time and the right conditions (ideally cheaper). A decent part of finance does do that.

The problem is when finance becomes the driver, and making short term profits, including by playing with underlying cash-flows, predominates over other company goals (such as maintaining quality, keeping an innovation edge, thinking about the long term well being of the workers) - and worse, when such thinking begins to dominate societal habits.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jul 14th, 2008 at 05:05:51 AM EST
[ Parent ]
How much of that output is manufactured elsewhere but counted as domestic product?

When Apple sells me a laptop, the profit is added to the US balance sheet, but the laptop itself is manufactured in China.

US-only manufacturing seems to be limited to aerospace (creaky), automotive (largely at death's door), IT hardware (aggressively outsourced), and military (heavily subsidised).

Pharma/bio, agribusiness and chemical seem to be reasonably healthy, and there's a nascent green sector. But I don't think you can take the national summary statistics at face value - the overall picture may not be quite as healthy.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Jul 14th, 2008 at 05:20:50 AM EST
[ Parent ]
How much of that output is manufactured elsewhere but counted as domestic product?

When Apple sells me a laptop, the profit is added to the US balance sheet, but the laptop itself is manufactured in China.

The bits produced in China are counted as China's in domestic product.  They'd be counted as American in national product.

Some of the other tech companies do produce here.  I think (could be wrong) Apple is actually a little odd as tech companies go, with all, or almost all, of its production in China.  Dell's got stuff in Appalachia.  Intel's got stuff in the Southwest.

Obviously that's simplifying things too much, since they're manufacturing computers in America with RAM from Taiwan, processors from Phoenix, etc.

And obviously the jobs in Cupertino doing the development are valuable ones.  There's a good contribution to GDP from that.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 06:15:12 AM EST
[ Parent ]
Drew J Jones:
I think (could be wrong) Apple is actually a little odd as tech companies go, with all, or almost all, of its production in China.

Apart from a couple of the major US manufacturers, its pretty much that the apples are coming from the same factories as the pcs nowadays, since the transfer over to Intel chips.

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jul 14th, 2008 at 07:06:06 AM EST
[ Parent ]
Well, yes, and that connects with my point about the components.  I just mean the "Throw all the shit in the tower and send it to the warehouse" phase.

Most importantly, the Reality Distortion Field is still American-made, so I think we're alright for now.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 07:30:35 AM EST
[ Parent ]
the Reality Distortion Field is still American-made

The importance of this is not to be underestimated!  That is how all of this financialization and hollowing out of the economy can be out in the open and yet have only a few actually see it.  IT IS CLOAKED IN PLAIN SIGHT, by, as it is otherwise know as, the "PR Tanks" and their paradigm--the source of the Reality Distortion Field.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 15th, 2008 at 12:39:54 AM EST
[ Parent ]
Erm, no, you're thinking of the right-wing noise machine.  The Reality Distortion Field is a different thing:

In essence, RDF is the idea that Steve Jobs is able to convince people to believe almost anything with a mix of charm, charisma, bluster, exaggeration, and marketing. RDF is said to distort an audience's sense of proportion or scale. Small advances are applauded as breakthroughs. Interesting developments become turning points, or huge leaps forward. Those who use the term RDF contend that it is not an example of outright deception but more a case warping the powers of judgment. The term "audience" may refer to an individual whose attitudes Steve is intending to affect.

Often the term is used as a derogatory remark to criticize Apple's products and the effect they have on the space-time continuum.



Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Jul 15th, 2008 at 06:58:58 AM EST
[ Parent ]
Ok,ok.  Not being Apple fan since the Apple II, etc....  But it is a great name and better describes what the RW PR Tanks do than the term "Noise Machine," even though the RW "Noise Machine" is able to achieve very impressive Sound Pressure Levels.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 15th, 2008 at 08:09:05 AM EST
[ Parent ]
One of the things that really gets me is this belief that simple currency arbitrage is sufficient to provoke an immediate economic stimulus that will result in the recovery and expansion of the manufacturing sector.

So now that the dollar is falling, US firms are supposed to be able to take the price reduction and turn it around and sell in the European market.

And let's take the example of something like small engine production.  Engines are heavy, and expensive to ship.  

There used to be an entire industrial sector that dealt with the production of these types of products.

But now any firm wishing to take advantage of currency arbitrage is hampered, because the minor advantage of labor and other inputs being less expensive is overcome by the fact that you have to call into existence a whole slew of industrial capacity that was wiped out of existence when all the factories where shipped overseas.

Industrial productivity that took decades to develop was destroyed in a little more than a decade.

And an American firm wanting to build a new engine factory to replace imports from the European Union faces high capital costs in the form of not only making the factory itself, but the added cost of importing the machine tools needed to produce the machines that make engines.  It's difficult to just go out on the street and find someone with the experience needed to do this kind of work.

Economists (of the American pundit variety) are often under the impression that there is little in the way of human capital found in the modern American factory.

They really think that you can take a guy off the street, and put them to work making precision machinery.  American companies have tried to do this in Mexico.  I have relatives who are auto engineers, and when the company decided to outsource a portion of US production to Mexico, the went from  1/100 defect rate, to a 1 in 5 defect rate.  The literally had vehicles come off the line that simply wouldn't run, and were forced to have engineers go through and figure out where the problem was before they could sell the vehicle.

There is a high degree of skill involved in labor in the manufacturing sector, and arguably the advantages of skilled labor overcome the low cost of cheap labor.

Much of that has been destroyed.

I would not be the least bit surprised if a closer examination of the manufacturing figures for the US showed that if you take final assembly out of the picture that what you see is a lot worse.

Its one thing for a billion dollars of economic activity to represent the ability to make the engine, the transmission, and all the other inputs that go into a car, and then assemble them.  Then for that same number to represent a much larger number of final assembled vehicles, but only being able to occur with imports of the various inputs.  In the first case its much easier to retool to meet rapid changes in the market.  In the second, not so much.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Jul 14th, 2008 at 06:43:26 AM EST
[ Parent ]
This is a question of "industrial base" which is largely neglected by mainstream economists. In order to do certain things, you need certain other production around you...
by Metatone (metatone [a|t] gmail (dot) com) on Mon Jul 14th, 2008 at 08:01:19 AM EST
[ Parent ]
Economists seem to think that a lemonade stall is a good model for an industrial firm.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2008 at 04:40:09 AM EST
[ Parent ]
Rightwing economist Greg Mankiw has a column in Sunday's NY Times:

What if the Candidates Pandered to Economists?

It shows that no lessons have been learned by the pundit sector so far.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Sun Jul 13th, 2008 at 10:20:46 PM EST
Perhaps free trade is right-wing, but what else of those points was right-wing?  Maybe the farm subsidies, but I'm a little sick of subsidizing ethanol because of its placement in the primary process.  But taxing energy?  Ending the Drug War?  Opposing the effort to scapegoat speculators as oil prices rise?  This is pretty commonsense stuff.

Raising the retirement is fine by me.  People live longer.  I'd rather see the cap on payroll taxes lifted.  But this works.  Make the fuckers work longer.  That'll be a partial payment for how they've fucked people my age with all the debt that's been run up in the last 30 years.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 12:20:06 AM EST
[ Parent ]
I agree that raising the retirement age may be good policy, but a sentiment of competition between generations is not really helpful. People past 55 do tend to become less productive. Raising labour market participation requires a broad set of adjustments.
by nanne (zwaerdenmaecker@gmail.com) on Mon Jul 14th, 2008 at 03:55:00 AM EST
[ Parent ]
I agree that such a sentiment is not helpful, but I also think it's the case that people of a certain age have voted in ways that have produced a citizenry that doesn't believe in paying for the services it receives, instead living in fantasies which I'd wager a typical child could see through (supply-side economics, the idea of Iraq financing its own reconstruction, etc).  People need to have skin in the game.

I'm okay with raising the retirement age.  I don't feel strongly about it one way or another.  I think lifting the payroll cap -- or, better yet, throwing out the current structure and replacing it with a new set of brackets -- is the better policy, if only because I think a push for a much more progressive tax code is absolutely necessary.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 04:13:09 AM EST
[ Parent ]
As if it wasn't punishment enough living through the age of tricky dick, ronnie raygun and the bushettes, Whip Inflation Now, The VietNam War, the atrocities in Nicaragua, (and throughout South and Central America), supporting the atrocities of the Shah, Pinochet, Saddam and Israel. All that Cold War non-sense. The embarrassing stance that still exists in Cuba and what list wouldn't be complete without mentioning [Your Favorite Here].

I have worked hard, I have kept people employed and insured, I have had years where I didn't have to worry and years where next month's rent wasn't secure (jeez, only 16 day left for the next one...). At some point, re-selling things on eBay is all that I am going to be able to do. I figured I could go to 67.5 and get the highest Social Security payment before retiring. So, how long do you want me to work? You want to send me computer keyboards to clean for my chowder, or maybe I could adjust the voltage and clean the spokes on your electric bicycle sir?

I know that setting an age seems like it is an arbitrary number. But I would like to relax at some point. Therefore, I like the idea of lifting the payroll cap. And as silly as it sounds, I like the idea of having a hole in the scheme, as I have heard it talked about. I remember when it was a nice reward to get over that boundary for a month or two and make a little extra. Then, when I get to the 200k point, let it kick back in again. But let me retire while I can still pedal up the hill to enjoy the sites.

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Mon Jul 14th, 2008 at 07:57:52 AM EST
[ Parent ]
You're joking, right?  America's not going cold turkey.  It's not even going.  America doesn't take its medicine.  It borrows and spends.  It's the Depressed Teenage Girl of the global economy, and rest assured: Daddy's credit card isn't even warm yet.

Phonie and Frauddie, along with the whole system, will be bailed out with my future kids' tax dollars and reduction in my income through inflation.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 12:12:05 AM EST
It's not going to have much choice in the matter, in this case. Leverage is disappearing, as banks fight for their lifes, and thus debt is no longer being provided, rather the opposite.

The crunch is happening.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jul 14th, 2008 at 04:55:24 AM EST
[ Parent ]
I know.  I'm just saying: America will bullshit until it no longer has a choice.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 05:56:55 AM EST
[ Parent ]
We now need to go cold turkey. It is massively painful, and it requires leaders with integrity and strength to help us get us through.
(My bold)

And of course we have such leaders in great abundance in the USA.  Not to the same extent as in the UK, France, Germany, Italy and Spain, I suspect, but I will defer to the sensibilities of Europeans here. Snark,snark,snark!

The only upside to the timing of this financial debacle is that it inherently discredits the authors of these pernicious policies prior to the election.  This is fortunate, as their opponents seem to be afraid to try.

The downside it that, so far, it seems to not have facilitated ANY real discussion of the root causes, such as Jerome has laid out above. Worse, with the terms of discussion shifted so far right, as they are, with the main stream media cowed or captured by the right wing think tank PR machine, and with almost all politicians appearing to fear saying anything cogent about the problem it is difficult to see a path forward.

This is not and will not be just an American problem.  The storm is hitting London just now. I hadn't thought it could be much worse than in the US, but, in relative terms, could it be worse in the City?  Paulson seemed to think so while in London recently.  JakeS has shown similar problems in Denmark.  Even the man on the street in Riyadh is complaining about inflation.

It has been said that the times bring forth the men.  I don't see them, at least in the public sphere.  Let us hope they appear soon.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 14th, 2008 at 12:21:30 AM EST
I'm not so sure about that:


 the timing of this financial debacle is that it inherently discredits the authors of these pernicious policies prior to the election.

They're still arguing that there was not enough "reform", and that taxes must be lowered, and that government is too intrusive, and that markets needs to be let to solve the problems - ie they are pushing the blame away.

And the discourse blaming them is not loud enough.


This is not and will not be just an American problem.  The storm is hitting London just now. I hadn't thought it could be much worse than in the US, but, in relative terms, could it be worse in the City?

Oh yes, part of the choice for "Anglo" Disease is that it will be worst in London, which has essentially become a mono-industry.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jul 14th, 2008 at 04:57:52 AM EST
[ Parent ]
inherently discredits the authors

In the sense that the party in power during a debacle always gets substantial blame from the general public, whether they had anything to do with it or not.  Brad DeLong's  characterization of Grover Norquist's general approach is apt and that sort of response from RW PR Tanks is to be expected.  Deploring their tactics just makes them laugh.

And the discourse blaming them is not loud enough.

More like inaudible. One has to know where to find such discourse and then don noise canceling headphones in order to hear said discourse.  This has been my concern for a while.  An ET "Think Tank" or institute would be a start.  But there is a need for several and for ones that focus primarily on the US.  

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 14th, 2008 at 11:01:27 AM EST
[ Parent ]
UK, France, Germany, Italy and Spain

You forgot Poland...

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Mon Jul 14th, 2008 at 05:07:26 AM EST
[ Parent ]
Recc'd because I haven't heard a "You forgot Poland" joke in too long.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 05:53:58 AM EST
[ Parent ]
Where's the joke in that? These guys have (too damn many) seats in our Parliament.

It may be funny for you, though, in the same way that Rick Santorum is funny for Europeans :-P

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 05:59:43 AM EST
[ Parent ]
You didn't see the first debate between Bush and Kerry in 2004.  Kerry basically said that our coalition in Iraq was a joke -- a few thousand Brits and an Aussie Jeep-driver.  Bush angrily protested, "Well, you forgot Poland!"

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 06:21:50 AM EST
[ Parent ]
No, I didn't follow that campaign except through a couple of editorial cartoonists. I guess I really couldn't be bothered - I don't have a vote in that show anyway, and I'd be really, seriously surprised if anyone short of Vlad the Impaler could have topped Bush/Cheney for sheer nastiness.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 06:48:25 AM EST
[ Parent ]
You missed a great show that night.  It was the one glorious moment of the campaign.  Five minutes into the debate, Junior was reduced to saying, "It's hard work," over and over and over again in reference to Iraq.  And Kerry, for the first and only time, didn't seem completely useless.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 06:58:23 AM EST
[ Parent ]
The joke was accidental.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2008 at 04:43:48 AM EST
[ Parent ]
Oh, yes. Sorry.  How could I forget with Mr. Tusk.  A lot of the rest I really was afraid to characterize. I didn't want to include anyone who didn't really belong and wondered about Spain.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 14th, 2008 at 10:32:18 AM EST
[ Parent ]
MarketWatch | Treasury, Fed move to rescue Fannie and Freddie

The White House and the Federal Reserve moved Sunday to prevent Fannie Mae and Freddie Mac from failing. In a statement, Treasury Secretary Henry Paulson said the global reach of Fannie [s:FNM] and Freddie necessitated unprecedented action. The Treasury has asked Congres to increase the existing line of credit to Fannie and Freddie. In addition, Treasury asked Congress for the power to buy the two companies stock.

In a separate vote, the Fed board of governors voted to open its discount window lending facility to Fannie and Freddie. In return, Paulson asked Congress to give the Fed a formal role to work with the new GSE regulator on capital standards for Fannie and Freddie.



Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 01:14:34 AM EST
I'm going to guess financials rise a bit today.

you are the media you consume.

by MillMan (millguy at gmail) on Mon Jul 14th, 2008 at 02:33:54 AM EST
[ Parent ]
Maybe.  Seems to be a mixed bag overseas, although a bit more down than up.  Nothing enormous.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 02:59:13 AM EST
[ Parent ]
but I expect that markets are going to want to actually test the support mechanisms in the near future, and this will scare everybody again, as the amounts at play will appear for what they are: enormous.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Jul 14th, 2008 at 04:59:42 AM EST
[ Parent ]
Stocks Fall Back After Early Gains on Rescue Plan - NYTimes.com
Shares in New York could not hold onto most of their early gains on Monday, initially moving higher on Washington's plan to shore up the mortgage giants Fannie Mae and Freddie Mac. But shares fell back as the morning went on.

In the first hour, the Dow Jones industrial average was up about 0.49 percent. That gain had eroded by noon, and the Dow was down about 0.23 percent. The Standard & Poor's 500-stock index was essentially flat, while the Nasdaq was down slightly.

Freddie Mac shares were down about 1 percent, while Fannie Mae shares were up about 1.6 percent.



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Mon Jul 14th, 2008 at 12:45:28 PM EST
[ Parent ]
Well, at least Ben won't need to drop any dollars for UBS.  A vice president of their US operations has famously stated that all of this recent "whining" about the economy is just evidence of a "mental recession." I am pointing this out to my Congressional delegation members including Sen. Mark Prior, Sen. Blanch Lincoln and Rep. Marion Berry.

We should be confident that Dr. Phil Gramm's mental abilities alone will adequately shield UBS.  Isn't that why they hired him?

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 14th, 2008 at 11:32:27 AM EST
[ Parent ]
As a note, the Swiss regulators have made it clear that their guarantee for depositors in the big Swiss banks is capped at a publicly disclosed number 54 billion francs, IIRC), so that the US investment bankers of these mighty banks (UBS and Credit Suisse) don't think they'll be bailed out by the Swiss government if they take their bank down with their shenanigans.

The Swiss regulators do know about systemic risk a bit.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jul 14th, 2008 at 02:54:44 PM EST
[ Parent ]
Would that American taxpayers had any clue of the hook we are being hung on.  The morrow will be sucked out of our bones before this is done.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 14th, 2008 at 07:32:47 PM EST
[ Parent ]
Government is the body that manages the fact that we're in this together, and we're linked to other generations, before and after us.

Good line.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jul 14th, 2008 at 03:01:32 AM EST
Agreed.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 03:20:29 AM EST
[ Parent ]
To underline your point about 'the majorities buying in', see these two graphs from Gallup (copied from Matthew Yglesias):

The people of the USA are starting to see reality, in a way, but are still somewhat deluded about their role in it. What most self-identified 'haves' have most is debt.

by nanne (zwaerdenmaecker@gmail.com) on Mon Jul 14th, 2008 at 03:27:01 AM EST
How can someone be a "Neither" in a choice between being a "Have" and a "Have-Not"?  That's kind of awkward.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 03:50:05 AM EST
[ Parent ]
Don't know. I guess people are hesitant to implicitly call themselves losers of the economic process, because they see (or cling to) a prospect of near-term betterment. Goes for me as a student.
by nanne (zwaerdenmaecker@gmail.com) on Mon Jul 14th, 2008 at 03:58:41 AM EST
[ Parent ]
You are a "have hope"?

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jul 14th, 2008 at 06:33:26 AM EST
[ Parent ]
Have hope, will travel.
by nanne (zwaerdenmaecker@gmail.com) on Mon Jul 14th, 2008 at 08:28:12 AM EST
[ Parent ]
Maybe people compare themselves implicitly to the worst case scenario: I for one, would consider myself as "have", because I've got a job, I'm earning more than the average (but less than 40k€ a year), have a car, can go on holidays as I Like (or almost), am in good health...even if I'm not a home-owner myself.

So I'm definitely a "have". Shame I'm not American. :D

by Xavier in Paris on Tue Jul 15th, 2008 at 10:39:28 AM EST
[ Parent ]
Did people wonder why the government did not turn to Fannie/Freddie Mae/Macs to ease last year's suprime troubles? I remember political excuses, but now it is clear that they just can't find a healthy financial institution nowadays.

And now comes this:

Analysts say more U.S. banks will fail - International Herald Tribune

As home prices continue to decline and loan defaults mount, U.S. regulators are bracing for dozens of American banks to fail over the next year.

But after a large mortgage lender in California collapsed late Friday, Wall Street analysts began posing two crucial questions: Just how many banks might falter? And, more urgently, which one could be next?

[The] troubles are growing so rapidly at some small and midsize banks that as many as 150 out of the 7,500 banks nationwide could fail over the next 12 to 18 months, analysts say. Other lenders are likely to shut branches or seek mergers.

Many investors are on edge after federal regulators seized the California lender, IndyMac Bank, one of the nation's largest savings and loans, last week. With $32 billion in assets, IndyMac, a spinoff of the Countrywide Financial Corporation, was the biggest American lender to fail in more than two decades.

The following assurance becomes very typical:

The nation's banks are in far less danger than they were in the late 1980s and early 1990s, when more than 1,000 federally insured institutions went under during the savings-and-loan crisis. The debacle, the greatest collapse of American financial institutions since the Depression, prompted a government bailout that cost taxpayers about $125 billion.

Who many knew of that much failure in the Capital land? And how the commentators know how "far less danger" is there now? I noticed reporters eagerly noticing parallels with the "slowdown of year 2000"; that is sadly funny.

by das monde on Mon Jul 14th, 2008 at 05:05:58 AM EST

Time for comrade Paulson to pull the plug on the Fannie and Freddie charade

There are many forms of socialism.  The version practiced in the US is the most deceitful one I know.  An honest, courageous socialist government would say: this is a worthwhile social purpose (financing home ownership, helping my friends on Wall Street); therefore I am going to subsidize it; and here are the additional taxes (or cuts in other public spending) to finance it.

Instead the dishonest, spineless socialist policy makers in successive Democratic and Republican admininstrations have systematically tried to hide both the subsidies and size and distribution of the incremental fiscal burden associated with the provision of these subsidies, behind an endless array of opaque arrangements and institutions.  Off-balance-sheet vehicles and off-budget financing were the bread and butter of the US federal government long before they became popular in Wall Street and the City of London.

The abuse of the Fed as a quasi-fiscal agent of the federal government in the rescue of Bear Stearns is without precedent, and quite possibly without legal justification.  The creation of the Delaware SPV that houses $30 billion worth of the most toxic waste from the Bear Stearns balance sheet (with only $1 billion of JP Morgan money standing between the tax payer and the likely losses on the $29 billion  committed by the Fed to fund the SPV on a non-recourse basis) is the clearest example of quasi-fiscal obfuscation I have come across in an advanced industrial country. The decision by the Fed to `invite' the primary dealers and their clearers to collude in the (over) pricing of illiquid collateral offered by the primary dealers to the Fed at the newly created TSLF and PDCF (by the Fed accepting the pricing/valuation by the clearers of the illiquid collateral)  is another example of the abuse of the Fed as a vehicle for channeling taxpayer-financed subsidies to the primary dealers. This form of socialism for the rich is therefore well-established.

(...)

So let's call a spade a bloody shovel: nationalise Freddie Mac and Fannie May.  They should never have been privatised in the first place.  Cost the exercise.  Increase taxes or cut other public spending to finance the exercise.  But stop pretending. Stop lying about the financial viability of institutions designed to hand out subsidies to favoured constituencies.  These GSEs were designed to make losses.  They are expected to make losses.  If they don't make losses they are not serving their political purpose.

So I call on Secretary Paulson, Chairman Bernanke and Director Lockhart to drop the market-friendly fig-leaf. Be a socialist and proud of it.  Come out of the red closet. The Soviet Union may have collapsed, but the cause of socialism is alive and well in the USA.  Granted, the US version of socialism is imperfect thus far.  The federal authorities have mainly intervened to socialise the losses in the financial sector while allowing the profits to continue to be drained off into selected private pockets.  But that is bound to be an oversight. It surely cannot be the intention of such committed Marxists to target taxpayer-funded largesse solely at the very rich and at a few favoured, electorally sensitive constituencies.  Fannie and Freddie are, or will be, safe in the hands of comrades Paulson, Bernanke and Lockhart.

Ouch.

Not sure if this is only in his blog or also in the print version of the FT.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jul 14th, 2008 at 06:30:13 AM EST
In the same vein:


There Was a Class War. The Rich Won It.

What happens if there's a class war and only one side bothers to show up and fight it? That's what happened over the last thirty years. There was a class war, and the rich won. Period. It's over, they kicked our knees out from under us, put on their steel toed boots and spent the last thirty years telling us that they were going to trickle on us and we're going to like it and beg for more.

Seems like hyperbole? It's just the numbers. The top left shows the manufacturing wage earner's hourly wages. Not "family income" which includes both of you going to work, but hourly wages. The only reason it's goods producing is they go back longer, but other charts show the same pattern.

So, if you're an ordinary slob, you haven't had a raise in over 30 years. In fact, your real wage peaked over 30 years ago and it's never recovered.

This would be ok if the US hadn't been getting richer, getting more productive, ever since then, but I'm sure you won't be surprised to hear that, well, actually, productivity and whatnot has kept going up. Yet somehow wages didn't.

And he sees the Anglo disease too:


Damon Silvers, whom we can thank for the wages and productivity chart, thinks it has a lot to do with a hostile anti-union environment and with the simultaneous decline of progressive taxation. I'd say he's got a big part of the picture though not all. The key part that he has right is simply that deliberate government policy meant an end to wage increases. Those deliberate government policies benefited the rich greatly, and the people in Washington and New York who made most of the decisions were very close to the people who benefited the most.

The main problem was this: real consumption of stuff that requires energy, specifically oil, could not be allowed to increase faster than the combination of oil supply increases and efficiency increases (we now produce twice the real GDP/barrel of oil we did in the 70s). If it did, not only do you get real widespread inflation, but you risk losing control over the price of oil.

We are now, of course, seeing what happens when you lose control over the price of oil.

The second big problem was that the oilarchies who were getting a lot of money with the new, higher price of oil, were not consumer societies and the money they were gaining was not being spread around. Rather it was pooling in the hands of a few nobles, chiefs and robbers and those folks needed something to spend that money on. Despite what some might think, trashing hotel rooms, doing blow and buying hookers can only use up a small amount of money, at least when you're really really stinking rich.

In short, rich oilarchs were sitting on a pile of money and they wanted to buy things with it. Western things. Western... companies. There were two obvious ways to deal with that. You could put on some form of ownership controls, whether formal or informal, or you could make your rich rich enough to compete with their rich by inflating the value of the paper assets that they were competing over. In Europe they mostly chose to just say "no, you can't buy that." American elites were smarter though, they realized that this was a chance to become stinking rich.  If our rich people were rich enough, they could bid up the price of companies and assets so the oilarchs couldn't snap them up.

So they made themselves rich. They reduced taxation on themselves in a number of ways, they broke union power, they got rid of old New Deal laws that had stopped speculation from getting too bubblicious and they went on a bubble spree - shoving money into various different asset classes, driving them into the stratosphere, taking the profits and then letting the taxpayer eat the loss. They took as much public infrastructure private as they could and they did so for cents on the dollar. They imported manufactured goods from the east to keep goods inflation down and they exported jobs to low cost domiciles to keep wage push inflation down.

They also ran, in most periods, very tight dollar policies, so that there were fewer dollars around than the rest of the world needed. Needing dollars badly, people had to sell to the US cheap. And since everyone from outside the US wanted in on whatever the bubble of the day was, they kept giving the US real stuff (oil, goods) for pieces of paper. Those pieces of paper represented something real, at the end of the day: they represented the future. But the future always seems a long way off until suddenly it's today.



In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Jul 14th, 2008 at 06:38:23 AM EST
[ Parent ]
They also ran, in most periods, very tight dollar policies, so that there were fewer dollars around than the rest of the world needed. Needing dollars badly, people had to sell to the US cheap. And since everyone from outside the US wanted in on whatever the bubble of the day was, they kept giving the US real stuff (oil, goods) for pieces of paper.

So, what changed? If a basic part of the strategy was to keep an overvalued dollar, then why did the strategy change or become unviable over the last ten years? Did the current bunch of US oligarchs get too greedy? Too incompetent? Did they simply run out of bubbles? Did the rise of the € mean that people didn't want $ as much as before, and this caught them by surprise?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 14th, 2008 at 07:08:12 AM EST
[ Parent ]
So, what changed? If a basic part of the strategy was to keep an overvalued dollar, then why did the strategy change or become unviable over the last ten years?
An overvalued currency requires two things: a strong economy and political commitment to a strong currency.

When the economy is no longer strong but you keep your currency overvalued bad things happen eventually.

The strategy probably "became unviable" (read: the US economy got gutted) due to financialisation and deindustrialisation (as discussed elsewhere on this thread). It probably ceased to be viable by the time of the dot-com crash, and has the dollar has been kept on life support for 8 years, and is now dying.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2008 at 04:54:42 AM EST
[ Parent ]
So keeping an overvalued currency while raping your industrial base is (yet another) way to spend your children's money?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jul 17th, 2008 at 04:58:49 AM EST
[ Parent ]
the dollar has been kept on life support for 8 years, and is now dying.

...and taking sterling with it, looks like.

it's hard to imagine how we'd weather all this yurp if we still all had separate currencies, it's going to be bad enough anyway, but if the lira were still having to try and stand in this hurricane....shudder

it's really making me appreciate the wisdom of having consolidated currencies, how long before the uk gets the memo?

if this keeps up, the people will be begging for a referendum to say 'yes' to, so they can get back on the bus, no matter what poison the Daily euro-hate Mail peddles.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Jul 17th, 2008 at 05:35:52 AM EST
[ Parent ]
that Chpt. 11 type of banckruptcy and nationalization were perhaps the solution, but my question is, as I don't understand the dynamics but surfing the econ blogs this weekend, I gather that nationalization will really tank the dollar ... as in obliterate it.

Is that true and valid theory/likely to happen or more neo-lib propaganda?

If so, is that the only solution better than what is happening now?

"Schiller sprach zu Goethe, Steck in dem Arsch die Flöte! Goethe sagte zu Schiller, Mein Arsch ist kein Triller!"

by Jeffersonian Democrat (rzg6f@virginia.edu) on Mon Jul 14th, 2008 at 06:43:45 AM EST
[ Parent ]
I'm not sure why it'd tank the dollar, so I'll assume neolib propaganda for the moment.  Any argument behind the claim that it would do so?

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Jul 14th, 2008 at 06:51:31 AM EST
[ Parent ]
or new dollars injecting capital in FMs and cause Standard and Poor to lower the US Treasury credit rating, which in turn could cause a massive international dump of T-Bills resulting in the Argentina Peso worth more than the dollar.

I think I got that right with the correct terms, I am still trying to learn all these economic terms and dynamics with a crash course and steep learning curve ... so I could have that all wrong, it's just my understanding at the moment

"Schiller sprach zu Goethe, Steck in dem Arsch die Flöte! Goethe sagte zu Schiller, Mein Arsch ist kein Triller!"

by Jeffersonian Democrat (rzg6f@virginia.edu) on Mon Jul 14th, 2008 at 07:13:46 AM EST
[ Parent ]
So let's call a spade a bloody shovel: nationalise Freddie Mac and Fannie May.  They should never have been privatised in the first place.
A fine example of the government's creative accounting. From Wikipedia:
In 1968, to remove the activity of Fannie Mae from the annual balance sheet of the federal budget, it was converted into a private corporation.[8] Fannie Mae ceased to be the guarantor of government-issued mortgages, and that responsibility was transferred to the new Government National Mortgage Association (Ginnie Mae).
(my emphasis)

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2008 at 04:48:09 AM EST
[ Parent ]
clueless to know really what needs to be done on this, and therefore, there will be no leadership in the correct direction anytime soon.

So, between bouts of rightful schadenfreude, maybe we should consider how best to make ourselves immune to US cycles in future.  

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Mon Jul 14th, 2008 at 12:36:15 PM EST
This:  InBev to buy Anheuser-Busch for $52B

Belgian brewer InBev has announced it will buy its U.S. rival Anheuser-Busch for $52 billion to create the world's largest brewer.

Isn't the way to immunize the EU from US economic cycles.

From a US perspective this is a Good Thing as Euro-Law requires the extension of EU mandated employee policies to all employees, off-shore or not.  A little RW experience with Social Democracy might go some way to countering the barrage of Right-Wing propaganda.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon Jul 14th, 2008 at 01:47:05 PM EST
[ Parent ]
Actually, beer in the US is a good investment given that alcoholic beverages, especially of the macro-brew type like AB, tend to be a good counter-cyclical.

But there are very few other counter-cyclicals.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Mon Jul 14th, 2008 at 01:55:05 PM EST
[ Parent ]
After McCains comment about the importing of cigarettes into Iran, perhaps this is an evil European plan to kill off the US through Cirrhosis  of the liver.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Mon Jul 14th, 2008 at 02:00:17 PM EST
[ Parent ]
Makers of generic versions of brand name consumer goods?
by MarekNYC on Mon Jul 14th, 2008 at 02:04:04 PM EST
[ Parent ]
That's a good example as well. A lot of these are privately held, though of course not all.

And increasingly, outside of agro-alimentary, these are not made in USA.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Mon Jul 14th, 2008 at 02:09:02 PM EST
[ Parent ]
Would that be a beer counter cyclical, or a round takeover?

Seriously, though, this is an example of European companies buying real companies which make real things - not "financialised assets".

The Anglo disease has not just gutted British industry, but American industry as well.  The cheaper dollar is now making this possible.  Beer is 95% water, and so it doesn't pay to brew it too far away from the consumer - especial with transport costs soaring.  So if you want to have a volume presence in major markets, you have build or buy breweries there - or engage in subcontracting arrangements.  

Guinness brews Budweiser and Carlsberg in Ireland for the Irish market for that reason - and has numerous fully owned and contract breweries in other parts of the world where it has volume sales.

Perhaps when the Chinese take over Coca cola US consumers will realise what is going on.  Dollar devaluation, combined with the credit crunch, and the undervaluing by the markets of real companies making real things has turned the US industrial scene into the bargain basement of the developed world.


"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Jul 14th, 2008 at 08:43:10 PM EST
[ Parent ]
real companies making real things has turned the US industrial scene into the bargain basement of the developed world.

You along with some other people here are reading too much oversimplified MSM. The US is the world's #3 exporter - but it's mostly high value items in industries that employ a small number of highly paid workers and a medium number of average paid workers. Everyone else is stuck in poor paying service jobs that barely afford a middle class lifestyle, and soon won't do that at all.

If this country had an aggressively egalitarian redistributionist policy, instead of the reverse, the "gutting" (transfer of jobs to other countries) of US industry would hardly be an issue. The main problem confronting American culture would be figuring out what to do with all our free time when we've been taught to believe that hard work gets us into heaven.

you are the media you consume.

by MillMan (millguy at gmail) on Tue Jul 15th, 2008 at 02:15:52 AM EST
[ Parent ]
Au contraire - the gutting of productive industry isn't exactly a main theme of the Anglo-American MSM - which is much more focused on "high value" branded, technological, intellectual, financial, and service products.  The industrial production component of the "value chain" of such products is often small, relatively invisible, and often off shored.

MillMan:

The US is the world's #3 exporter

Being ranked behind Germany and China isn't exactly a great statistic for a country as large and wealthy as the US - especially when you consider its near hegemony in areas like military, aerospace, software, and "world" branded products which command prices/margins well above the (often much smaller) competition.

Increasingly American soft power (as exercised through global corporations) requires the exercise of covert or overt American hard power (military presence/political manipulation) to maintain its dominance.  A focus on short term gain rather than on longer term R&D, product quality, innovation and collaboration with local enterprises is undermining the US effort.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jul 15th, 2008 at 06:19:49 AM EST
[ Parent ]
Au contraire - the gutting of productive industry isn't exactly a main theme of the Anglo-American MSM - which is much more focused on "high value" branded, technological, intellectual, financial, and service products.

It was a constant theme throughout the 90's - the primary era in which offshoring was occurring. It is still common today, moreso as race/immigration baiting with the rise of fox news and shock journalism. What didn't and doesn't get questioned is the institutional basis for what is happening.

Being ranked behind Germany and China isn't exactly a great statistic for a country as large and wealthy as the US

I often bring this point up because many people say that the US produces nothing, likely meaning very little, in which case the export rating would be far lower.

you are the media you consume.

by MillMan (millguy at gmail) on Tue Jul 15th, 2008 at 12:50:05 PM EST
[ Parent ]
Take away easily pirated intellectual property and the US doesn't really have much outside of military and related (civilian aerospace).

It's amazing that for all the US' dependance on multilateral bodies (esp. trade) for its economic well-being that it is so bi- and uni-lateral in its own disposition.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Jul 15th, 2008 at 03:14:14 PM EST
[ Parent ]
Prior to Bush 43 there was more of an emphasis on coordination with our allies, both by Dems and Repubs.  Reagan is the closest to W when it comes to disregard for the sensibilities of allies.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 15th, 2008 at 04:05:59 PM EST
[ Parent ]
I dunno, seems to me LBJ wasn't the greatest at coordinating.

Nixon either. Or Carter, for that matter.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Tue Jul 15th, 2008 at 04:08:03 PM EST
[ Parent ]
Well, "more of an emphasis," especially with Bush 41 and Clinton.  And it was a different world prior to 1988.  I  am not saying any of them were great at consultation, although Bush 41 was able to build an impressive coalition and get lots of monetary assistance in addition to military assistance for Iraq I, once he figured out how to market it domestically.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 15th, 2008 at 04:16:26 PM EST
[ Parent ]
Perhaps when the Chinese take over Coca cola US consumers will realise what is go

Maybe the Chinese are different, but hardly anybody seemed to notice 10 years ago when the British took over Burger King (it's now back in American hands again).

by gk (gk (gk quattro due due sette @gmail.com)) on Tue Jul 15th, 2008 at 03:25:22 AM EST
[ Parent ]
Burger King was just a part of a larger transaction and wasn't really why the deal went through.  GUDV (now Diageo) did a shit job of running it and offloaded it at fire-sale prices soon after.  I don't think Anglo-American transactions create quite the same political waves in any case.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jul 15th, 2008 at 05:57:55 AM EST
[ Parent ]
There's a really great football blog called Kissing Suzy Kolber that did a pretty funny response to InBev's takeover.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Jul 15th, 2008 at 07:00:47 AM EST
[ Parent ]
it was worth it for the link to the  Keep Budweiser American campaign website

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Tue Jul 15th, 2008 at 07:08:15 AM EST
[ Parent ]


Display:
Go to: [ European Tribune Homepage : Top of page : Top of comments ]