US Politics

Wise Words.

Those of you, my gentle readers, who are frequent visitors will certainly have realised that the issue of the seeming “transatlantic rift” has received considerable attention in this blog. Now I just received an email from a very knowledgeable American friend telling me about his understanding thereof. And he comes up with a very good one-phrase summary of the issue, which I decided to share with you –

“I think the most accurate “truism” about transatlantic relations is that for Americans 9/11 changed the world, but for Europeans 9/11 changed America.”

Of course, the sentence contains a lot to argue with. But none the less, I think it does capture the current transatlantic climate as accurate as it is possible for a single sentence. Wise Words.

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Economics, US Politics

Understanding The Bush Economic Stimulus Package. W’s getting scared.

I don’t know if I am understanding the package correctly. Most of those throwing their opinions in the ring certainly know American politics a lot better than I do.

Their predominant interpretation of the package is that it is not actually intended to stimulate the US economiy but to get Bush reelected in 2004 – that’s why he is handing out even more cash benefits to wealthy Americans not likely to increase their marginal consumption. The Economist tells us that

“[i]t certainly lays Mr Bush open to the familiar charge that he is favouring the better-off. One study has shown that the average annual benefit for people earning less than $10,000 a year would be $6, while that for those with million-dollar-plus incomes would be more than $45,000. Conventional economics suggests that the richer people are, the less propensity they have to spend each additional dollar of income. America might have a long-term need to boost savings rates, but that will not help stimulate the economy.”

Also check these two links [ 1 , 2 ] to Berkeley economics professor Brad DeLong’s blog, if you want.

It is probably right that Bush had his reelection prospects in mind when designing the tax-cut [ ok, he did not do it himself ;-) ]. But I believe, the package’s design also reveals something else: His team is already getting scared. They’re not too sure they’ll be able to supervise the already announced tax-breaks in 2006 to 2010. So he’s delivering to his constituency now as the promised tax-cuts could be repealed later on. Timing is the keyword here. W clearly remembers the fate of his dad back in 1991. He lost the Presidency to Clinton in 1992 because of the post Desert Storm economic slump. As another Iraq war does seem to become increasingly unavoidable from his team’s hawkish perspective, the US administration realises that it could cost W the presidency in 2004 should the possible war’s timing be unfortunate. If things go “well” (again, from a hawkish perspective), it could be over this summer and economic consequences could be bearable. This is the scenario most strategic planners in financial institutions apparently believe to be the most probable.

However, Murphy’s law looms large over all armed operations and things could very well turn out differently. And there are enough military people in W’s administration to remember good old Murphy. That’s why I think this tax break shows the Bush administration is starting to believe their man could lose in 2004. The big question will be – to whom?

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compulsory reading, German Politics, US Politics, USA

Another Tale of Mars and Venus: The two Americas.

The Carnegie Endowment’s Robert Kagan’s quip that Americans are from Mars and Europeans from Venus – citing the famous “Practical Guide for Improving Communication and Getting What You Want in Your Relationships” to describe why American and Europe seem to be drifting apart in value terms has quickly become a household argument in published opinion. And for a reason: Last year’s US foreign policy as well as the European reaction has provided plenty of opportunity to interprete the US-European couple’s relationship as one in which one wants to make love and the other one war. Right or wrong, there seems to be a growing lack of understanding for the other one’s position on both sides of the pond.

In September last year, I already linked some documents providing some scientific context regarding the seemingly growing transatlantic rift. This week, the Economist provides us with the results of three recent studies – and tells Europe to think about American diversity. The article includes a very interesting diagram plotting some country’s relative positions in a multivariate value-space.

And in this diagram,

“America’s position is odd … On the quality-of-life axis, it is like Europe … But now look at America’s position on the traditional-secular axis. It is far more traditional than any west European country except Ireland. It is more traditional than any place at all in central or Eastern Europe”.

The reason for this strange position is, according to the economist, is,

“…to generalise wildly, that [the] average is made up of two Americas: one that is almost as secular as Europe (and tends to vote Democratic), and one that is more traditionalist than the average (and tends to vote Republican).”

I guess, a lot of people suspected this kind of division all along. But it’s always good to get some figures to back up the argument. And there’s one more thing that is strikingin this study – that all of Europe is indeed clustered in the same corner. It is hard to avoid the conclusion that there is something to the argument of common European values.

I will close with a brief note to my British friends: Have a loook at the British position on the value plot – you seem indeed to be a part of Europe – socially, you’re not even a bit of an “awkward partner”. Great news, no?

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US Politics

Is Middle Earth ruled by the Bush administration?

Wired’s Noah Schachtman is rightly concerned with the Bush administration’s proposal to create a Total Information Awareness System (TIA) and can’t help to draw the conclusion that recent attempts of the US administration

“… to peer into the lives of Americans were more than a little similar to the exploits of Middle Earth’s would-be rulers.”

Hmm, maybe the world should pay more attention to W’s wedding ring or the gold on Condi’s fingers…

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Economics, US Politics

More about the 19% of millionaires mentioned below

(Link) I don’t know what kind of organisation the group “citizen’s for tax justice” are. So I would not rely too much on the information – but in case they are reporting correct figures for the averge US income (and the ranges seem not implausible – note: not GDP/capita but income per working person) on this website that I found today, then it would be even more astonishing that 19% of Americans believe they are in the top 1% income range and another 20% believe they will be there at some point.

According to the figures reported on the page, the average income for the top 1% of tax payers in the USA in 2001 was 1,028,000 USD. Thus given the usual outliers, I think the top 1% will start somewhere between 400,000 and 500,000 USD, as the avergae top 5% income is 204,000 USD. The general average is 56,500 USD – again, according to this source.

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US Politics

Still in love! Bush caught nibbling Schroeder’s earlobe!

bu_schroePrague. 21/11/02. In what must be regarded as a striking revelation given recent public rows, the two world leaders weren’t ashamed to demonstrate their feelings toward each other publicly during yesterday’s NATO summit in Praque. The only remaining question is what George W whispered in Gerhard’s ear. I suppose it was something like “And they all believed we were actually fighting. We should do that more often! See ya later…”

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German Politics, US Politics

See? Again stuck in the middle.

Dimplomacy is a difficult art of communication. History is full of examples of unskilled German diplomacy. Looking at Europe’s history I sometimes think Germany should join France and let the Quai d’Orsay handle things for us… As for examples, here’s one more:

While the US administration is still sulking following Gerhard Schroeder’s campaign promise that Germany would not participate in a military action against Iraq (note: apart from all the stuff the pacifist public won’t be able to see and possibly more after the Weapon inspectors will have been thrown out early next year and Germany will be the chair of the UN Security Council from Febuary 2003 on when the war resolution will likely be voted on.), Osama bin Laden (or what/whoever is threatening the Western World and Russia using this name) is threatening Germany for its cooperation with the US.

So after praising the terrorist attacks on civilians in Tunisia, Karachi, Bali and Moscow he asks – “What are your governments intentions in allying themselves against the Muslims with this bunch of criminals in the White House? Don’t your governments know that these criminals in the White House are the biggest slaughterers of these times? [..] I’m explicitly naming Great Britain, France, Italy, Canada, Germany and Australia.” (retranslated from German – source). Stuck in the middle.

OK, I know that the recent row with the US administration was not about cooperation in the war against terror but about different approaches in strategic foreign policy. I also know that being on Osama’s list is a consequence of Germany (now) being an integral part of the west and not a consequence of any specific kind of anti-terrorist cooperation. The list therefore is also a confirmation that the main German policy goal since WW2, integration in the west, has been successful.

So we’re possibly good at structure. But definitely bad at diplomacy ;-).

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Economics, US Politics

Un-f***ing-believable

Brad Delong quotes a very interesting paragraph in his Blog. It goes as follows:

DAVID BROOKS, ATLANTIC MONTHLY – During the most recent presidential election a Time magazine-CNN poll asked voters whether they were in the top 1 percent of income earners. Nineteen percent reported that they were, and another 20 percent said that they expected to be there one day

If correct, this number shows a) that Americans are ignorant to a scary extent about their relative economic situation as well as about the absolute levels and distribution of income and wealth in their society; and b) that material affluence (or the social standing associated with a high income) and “winning” have become important the US to an extent people either choose to lie about their relative financial statusnot to they choose not to know about not being part of the top 1%.

I think comparing these percetual numbers with the real income distribution will lead to intreresting insights regarding the “rational” political behavior of those electing and those elected. Likewise international comparisons would be interesting – in this country everybody tries to calculate himself poorer than factually correct.

Very interesting. Clearly more thinking is needed in this respect.

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German Politics, Germany, Iraq, Political Theory, US Politics, USA

A deeper rift? Some context…

Firstly, a noteworthy article by Robert Kagan concerning the fundamental policy-style differences between Europe and the US, published in May in the Washington Post.

Secondly, The Economist’s analysis of these differences. Thirdly, a paper called “Mutual Perceptions” by Peter Rudolf of the German Institute for Foreign and Strategic Policy (Stiftung Wissenschaft und Politik (SWP), Berlin), presented at a conference of the American Institute for Contemporary German Studies on Sept. 10, 2002.

Some key quotes from the latter :

“The American and the European publics, including the German public are also not so far apart in their view of the world. They do not live on different planets, the one on Mars, the other on Venus, as Robert Kagan`s now famous dictum says. Looking at the collective preferences on both sides of the Atlantic, we are no way drifting apart. In their majority, Americans and Europeans do share a positive view of international institutions, Americans are more multilateral than unilateral oriented; Europeans, even Germans, are by far less opposed to the use of military force, although they are inclined to support it for humanitarian purpose and for upholding international law. Although the use of military means for combating terrorism finds support among a majority of people across Europe, the preferred measures to combat terrorism lie – to a greater extent than among Americans – in the economic realm: in helping poor countries to develop their economies. Thus, Americans and Germans do not live on different planets but those neoconservatives do, those – to quote former President Carter – “belligerent and divisive voices” now seemingly dominant in Washington, those whose vision of America`s role in the world implies a basic strategic reorientation of American foreign policy. Using the dramatically increased perception of vulnerability to asymmetric threats and instrumentalizing the “war on terror” as the legitimizing principle, the hegemonic – or better: the imperial – wing of the conservative foreign policy elite effectively dominated the political discourse and left its imprint on a series of decisions..” (p. 2)

“Should the neoconservatives succeed in turning the United States into a crusader state waging so-called preventive wars, German-American relations will head to further estrangement. If the current debate on Iraq is indicative of things to come, the expectation of American neoconservatives that their European allies will in the end jump on the bandwagon might be disappointed, at least in the German case. In their despise of their irrelevant amoral European allies and in their overconfidence in American hard power resources, they simply ignore the value dimension of the current transatlantic conflicts. It is a conflict about different visions of world order.” (p. 6)

Lastly, for those who can read German, another SWP study – “Preventive war as solution? The USA and Iraq.” For those who don’t read German, the footnotes are a remarkable collection of mostly English language documents concerning the intra-US-administrative discussion as well as the international one. I’ll probably post some key references later.

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