To the rest of the world, Socialist is not a smear.
Reading about the latest round of McPalin attempts to label Barack Obama a socialist in order to claw back a few polling points, I can only sit here in Paris and chuckle at the inanity of it all.
Sadly, most people in the United States don't even understand what Socialism is or how diverse the different elements have become. Thinking only of Reagan's "Evil Empire' the now-defunct USSR, they do not know that some form of liberal social democracy is actually the type of government chosen by approaching a billion people all over Europe and in other strong democracies.
So, generally speaking, it is not a smear to be called a Socialist anywhere but in the USA.
Second, for all the fear of economic decline the term engenders in ignorant Americans, the EU's liberal social democracies are projected to generate a nominal GDP of over US$17 trillion this year, more than the United States. It is less per capita certainly, but if you've been say, to France, Sweden, Germany, or Norway with their 5 weeks vacation time, better K-12 schools, fine pre-natal-to-grave health care, excellent public transport systems and high-functioning infrastructure; you learn quickly that fewer Europeans than most Americans think would switch with them to live in the US.
Don't believe me.
Speaking of the depredations of unbridled capitalism, a very intelligent man once said:
"I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals."
-- Albert Einstein, "Why Socialism?", Monthly Review: May, New York 1949
So, like calling Obama a Muslim, this too is no insult unless the listener isn't educated enough to understand what they are hearing is not a bad thing at all.
Sadly, most people in the United States don't even understand what Socialism is or how diverse the different elements have become. Thinking only of Reagan's "Evil Empire' the now-defunct USSR, they do not know that some form of liberal social democracy is actually the type of government chosen by approaching a billion people all over Europe and in other strong democracies.
So, generally speaking, it is not a smear to be called a Socialist anywhere but in the USA.
Second, for all the fear of economic decline the term engenders in ignorant Americans, the EU's liberal social democracies are projected to generate a nominal GDP of over US$17 trillion this year, more than the United States. It is less per capita certainly, but if you've been say, to France, Sweden, Germany, or Norway with their 5 weeks vacation time, better K-12 schools, fine pre-natal-to-grave health care, excellent public transport systems and high-functioning infrastructure; you learn quickly that fewer Europeans than most Americans think would switch with them to live in the US.
Don't believe me.
Speaking of the depredations of unbridled capitalism, a very intelligent man once said:
"I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals."
-- Albert Einstein, "Why Socialism?", Monthly Review: May, New York 1949
So, like calling Obama a Muslim, this too is no insult unless the listener isn't educated enough to understand what they are hearing is not a bad thing at all.
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You stay in France and I'll stay in the US. To compare the US's GDP to the entire Eurozone is silly.
The Eurozone is also on the brink. The French are bailing out their banks as well. Fortis also had to be rescued by the government. Germany is also an economic mess right now. Many parts of Euroland are also suffering from the same housing crisis we have here in the US.
The major euro lending institutions have found themselves massively long euros and short dollars. The US Fed's swap lines with the ECB have grown to over $600 billion. The ECB is borrowing from the US Fed to lend to its banks. This represents the same kind of external debt that has brought down currencies since time began. Running up external debt to sustain your currency is highly unlikely to succeed.
The ECB's only exit will be to sell euros and buy USD to cover their net dollar needs. The resulting fall in the currency can spiral into a serious run on the banking system. If the US Fed wasn't lending the ECB incredible sums of money, the Eurozone would be imploding right now
October 27, 2008 9:07 PM | Reply | Permalink
Thanks I will. I divide my time about evenly as I am not the kind who likes the word "or". I'm an "and" kinda guy.
a) Silly? 27 states vs 50 in another. Comparable populations earning one currency. Sorry but I and many others don't agree.
b) the piece wasn't written as a comparative between the two economies. Just to give some perspective on the use of "Socialist" as some mindless pejorative epithet. When in reality most people in the world are smart enough to know the difference between Norway and the former USSR. Just not most Americans.
c) In re: your other claims, did I really just read: "This represents the same kind of external debt that has brought down currencies since time began. Running up external debt to sustain your currency is highly unlikely to succeed."
Please replace "currency(ies)" with "economy(ies)", put that in an envelope marked "George Bush c/o The White House 2000" and send it Back to the Future with Doc Brown? LOL
And do we really want to revisit who caused this WW economic meltdown in the first place? One might wonder why the US Treasury is including Euro-institutions in the recent bailout and opening credit lines using US taxpayers funds?
1. Because they don't want to get sued for the massive fraud perpetrated by the US investment banking industry and their pimps, the credit rating agencies. You can bet purchasers of Triple-A MBS's have plenty of evidence piled up of misrepresentations and would tie what's left of the US banking industry up for years in the WTO, US courts and in national venues. And I'd bet they win.
2. the Asians are also heavily tied into Euro-investments and if those investments start flopping (due to their exposure to America's toxic mortgage sludge) guess who is going to stop funding the United States of Socialism - the Iraq War, the TARP Bailout, the AIG bailout, GM's Bailout, Ethanol subsidies, Cali Bailout, etc, etc, etc.
Where does the Fed get that money to lend the ECB anyway? By mortgaging the next few generations of American taxpayers future. It is common knowledge that if China/Japan stop showing up at the T-Bill table, it's a MARGIN CALL baby.
d) Some other reasons the Eurozone isn't imploding right now is that: most did not foster a housing bubble like the US did, they have muh higher saving rates, little over-leveraging of home equity, realistic interest rates and a non-existent sub-prime market has all kept the housing markets more stable relative to the US (Spain, Ireland and the UK being exceptions).
Lastly, the US economy, tho resilient and capable of absorbing shocks on a wide scale, is in very dire straits and with a negative savings rate, dried up home equity and exploding personal, corporate and national debt - they have no where else to go but deeper in the external debt we both so rightly abhor. [NB: never mind what happens if the infection spreads to the derivatives markets.]
Given the fact that the problems you happily point out are shared in the EU all originated in American economic mismanagement, greed & gluttony: excuse me if the idea of a nationalist USA cheerleading routine is somewhat unseemly - in this born n raised NYer's opinion.
Thanks for your comment.
October 27, 2008 10:23 PM | Reply | Permalink
En dehors de l'ombre de Notre Dame,
Parce que ceci se situe au sud
Et ainsi hors de I'lle, hors du drame,
St Julien-le-Pauvre rest prude....
apropos of nothing but Paris.
Don't mind MCB.
Socialism is just a scare word over here. We have our local religion, American Exceptionalism, that in the Book of Wilson, tell us that socialists are Very Evil People indeed. The Book of Reagan adds that Liberals are very Evil People indeed. and the Apostolic Letters of McCain to the Redneckites state that Liberals are probably Socialists and to be condemned.
You can see how elevated our discourse is over here...
October 27, 2008 9:55 PM | Reply | Permalink
very funny.
or sad actually but you know what I mean.
I particularly like the progression of McPalin's Obama narrative.
We don't know who he is.
Now we know he's inexperienced.
Now he's a terrorist sympathizer
now he's an experienced Socialist.
Now we really know he's a Communist.
And the last one takes the biscuit...
He's going to be like Bush!!
What's next?
He's an Alien sent from Planet Zarkon to steal all the white women?
October 27, 2008 10:31 PM | Reply | Permalink
Eurozone is NOT imploding? Europe isn't also suffering from a housing crisis?
You're going to blame the US investment banks as the reason why so many European banks (or countries like Iceland) are cratering?
October 28, 2008 1:56 PM | Reply | Permalink
With all due respect, not replying and just asking repeated questions is not a debate, and I can't tell if you are arguing with me or yourself here.
A. in your first post you said:
"If the US Fed wasn't lending the ECB incredible sums of money, the Eurozone would be imploding right now" which clearly implies that it is not imploding - correct? Then in the above you say
"Eurozone is NOT Imploding? [sic]
which negative usage aside means 1) you were wrong at the outset or 2) it is imploding - frankly its hard to tell.
B. If you had read my reply, you'd see that I indeed pointed out that some countries are seeing a housing bubble (largely of their own making) burst i.e. the UK, Spain and Ireland. Is that a "crisis" for all of Europe?
Not in my opinion. France, by example, has not experienced as marked declines as California, Florida, Nevada & Arizona which combined have lost about 35% of peak value in comparable population sampling. are European countries experiencing value deterioration and bubble effects? yes. As bad as the US? not yet.
C. Are you denying the roots of this problem originated in the US mortgage and unregulated paper markets? That would put you in a very small minority among economists.
I repeat, subprime lending in Europe is virtually non-existent compared to approximately $1.4 TRILLION in the US 2008. The only exposure to this uniquely US problem for European banks was the false rating of securitized subprime junk paper which was then exported (and multiplied by derivative gambling) worldwide.
You also seem to be woefully short on your facts: 17 US banks have failed with WaMu being the largest in history (passing the Depressions greatest). So far TMK only 4-5 European banks have failed/been acquired.
The EU has just ponied up I think US$1.3T in reserves to handle any more problems (higher than the US TARP), even tho European depository savings levels are higher and personal debt is lower than in the US. That, one hopes, should be enough to head off any further meltdown.
as for your Iceland example - it is grandstanding. It is a tiny country with a US$11B GDP and its problems are unique to a tiny island economy with few options on output.
No doubt Europe is battling many of the same demons but no one with a grasp of the facts would deny that had the subprime mortgage market not exploded in the US, there would not have been the domino effect we are seeing now. Is it the ONLY reason? no.
but it was the precipitating factor.
Will it get worse on both sides of the Atlantic? No doubt.
November 2, 2008 11:04 PM | Reply | Permalink
With all due respect, not replying and just asking repeated questions is not a debate, and I can't tell if you are arguing with me or yourself here.
A. in your first post you said:
"If the US Fed wasn't lending the ECB incredible sums of money, the Eurozone would be imploding right now" which clearly implies that it is not imploding - correct? Then in the above you say
"Eurozone is NOT Imploding? [sic]
which negative usage aside means 1) you were wrong at the outset or 2) it is imploding - frankly its hard to tell.
B. If you had read my reply, you'd see that I indeed pointed out that some countries are seeing a housing bubble (largely of their own making) burst i.e. the UK, Spain and Ireland. Is that a "crisis" for all of Europe?
Not in my opinion. France, by example, has not experienced as marked declines as California, Florida, Nevada & Arizona which combined have lost about 35% of peak value in comparable population sampling. are European countries experiencing value deterioration and bubble effects? yes. As bad as the US? not yet.
C. Are you denying the roots of this problem originated in the US mortgage and unregulated paper markets? That would put you in a very small minority among economists.
I repeat, subprime lending in Europe is virtually non-existent compared to approximately $1.4 TRILLION in the US 2008. The only exposure to this uniquely US problem for European banks was the false rating of securitized subprime junk paper which was then exported (and multiplied by derivative gambling) worldwide.
You also seem to be woefully short on your facts: 17 US banks have failed with WaMu being the largest in history (passing the Depressions greatest). So far TMK only 4-5 European banks have failed/been acquired.
The EU has just ponied up I think US$1.3T in reserves to handle any more problems (higher than the US TARP), even tho European depository savings levels are higher and personal debt is lower than in the US. That, one hopes, should be enough to head off any further meltdown.
as for your Iceland example - it is grandstanding. It is a tiny country with a US$11B GDP and its problems are unique to a tiny island economy with few options on output.
No doubt Europe is battling many of the same demons but no one with a grasp of the facts would deny that had the subprime mortgage market not exploded in the US, there would not have been the domino effect we are seeing now. Is it the ONLY reason? no.
but it was the precipitating factor.
Will it get worse on both sides of the Atlantic before it gets better? No doubt.
November 2, 2008 11:06 PM | Reply | Permalink