EU-DIGEST

Redoing Globalization - by Sherle R. Schwenninger

The great financial bubble of the Clinton-Bush years has ended in tears--in home foreclosures, bank failures and what promises to be the most severe global economic recession since the Great Depression. As President-elect Obama puts together his economic recovery program, he needs to understand that the economic crisis is the result not just of unscrupulous mortgage lenders and unregulated investment bankers on Wall Street but of the globalization of finance and trade that key members of his economic team set in motion when they were in the Clinton administration. The uncomfortable truth is that the current system of global commerce and transnational finance is inherently prone to crisis and is incompatible with Obama's goal of rebuilding the American middle class. Any sustainable recovery on the domestic front, therefore, will depend on his success in getting other countries to agree to fundamental changes in that global system.

Globalization is not necessarily bad if properly regulated among similar economies. But the globalization of the Clinton-Bush era not only lacked safeguards for labor but rested on two mutually reinforcing, flawed models of growth: debt-financed consumption in the United States and other Anglo-Saxon economies and over saving and under consumption in the production-oriented export economies of Asia. Not surprisingly, the global integration of these radically different economies produced an unhealthy pattern of growth characterized by asset bubbles and large global trade imbalances, with the United States running large deficits and China and Japan running large surpluses.

Labels: Global Economy, Globalization

Greek unrest spreading in Europe

Six days of unrest in Greece is now spreading over to other European countries raising concerns that there is more violence to come. One of the main worries appears to be that the clashes could be a trigger for opponents of globalization, disaffected youth and others who are irate at the continent's economic turmoil and rising unemployment, AP reported. Because of the unrest in Athens, demonstrators in Spain, Denmark and Italy smashed shop windows, threw bottles at police and attacked banks and over in France, cars were set on fire on Thursday outside the Greek consulate in Bordeaux, where protesters scribbled graffiti about a looming 'insurrection'. The internet played a role in the protests with Greek website protesters updating each other on the locations of clashes and confirming that there had been sympathy protests in nearly 20 countries with more demonstrations planned for Friday in Italy, France and Germany.

Labels: EU, Globalization, Greece

Labels: EU, Globalization

US 'casino' mentality blamed for planet's meltdown - "but should it?"

Astounded by the U.S. government's failure to resolve the financial crisis threatening the foundations of the global free market, fingers of blame are pointing at America from around the planet. Latin American leaders say the U.S. must quickly fix the financial crisis it created before the rest of the world's hard-won economic gains are lost.In Europe, where some blame a phenomenon of "casino capitalism" that has become deeply engrained from New York to London to Moscow, there is more of a sense of shared responsibility.

But Europeans also blame the U.S. government for letting things get out of hand. Amid harsh criticism is a growing consensus that stricter financial regulation is needed to prevent unfettered capitalism from destroying economies around the globe."They spent the last three decades saying we needed to do our chores. They didn't," a grim-faced Brazilian President Luiz Inacio Lula da Silva said Tuesday. Even staunch U.S. allies like Colombian President Alvaro Uribe blasted the world's most powerful country for egging on uncontrolled financial speculation that he compared to a wild horse with no reins. "The whole world has financed the United States, and I believe that they have a reciprocal debt with the planet," he said.

Labels: Casino, Globalization, US Economy

Reverse Henry-Fordism-"There are no sellers without buyers"- by Ernest Partridge

That's the first law of practical economics. Everyone knows this to be true, whether or not one has ever taken a course in Economics. Everyone except, apparently, a few Ph.D economists who seem to forget this rule when they are hired by the Heritage Foundation, the American Enterprise Institute, etc., from which they migrate, back and forth, between offices in Republican/conservative administrations and these right-wing think tanks.

For these worthies, the "first law" is replaced by the dogmas of deregulation, "trickle-down" and market fundamentalism: impoverish the masses, throw money at the rich who will then invest it, and then "the invisible hand" of the unregulated free market will bring forth a cornucopia of goods and services. Never mind that there will be few if any buyers for these consumer goodies. Henry Ford saw the fallacy of such a policy when he raised the wages of his workers. His competitors in the auto industry were aghast. "Why did you do that?," they asked. Ford is said to have replied, "If I don't pay them more, who will buy my cars?"

Labels: Economics, EU, Globalization, US

'The Second World' - Empires and Influence in the New Global Order' - by Parag Khanna

Khanna's study is noteworthy, primarily for his analysis of 'the second world': some 100 transitional countries, such as Brazil, Ukraine, and Iran, that do not qualify either as rich advanced industrial states or as least developed nations. By Khanna's account, 'the race to win the second world is on.'"

The decline in US influence is something structural, that is, it has more to do with globalization and the rise of other powers such as China and the coalescence of the EU and others than it does with the Bush administration/war in Iraq, which certainly has accelerated things though. And indeed, strong-arming even allies to support a war that was not in their interest will have the kind of micro-repercussions that will hurt the US diplomatic stature in the long run, I have no doubt about that."

Labels: Global Order, Globalization, US

Waving Goodbye to Hegemony - by PARAG KHANNA

Turn on the TV today, and you could be forgiven for thinking it’s 1999. Democrats and Republicans are bickering about where and how to intervene, whether to do it alone or with allies and what kind of world America should lead. Democrats believe they can hit a reset button, and Republicans believe muscular moralism is the way to go. It’s as if the first decade of the 21st century didn’t happen — and almost as if history itself doesn’t happen. But the distribution of power in the world has fundamentally altered over the two presidential terms of George W. Bush, both because of his policies and, more significant, despite them. Maybe the best way to understand how quickly history happens is to look just a bit ahead.

In Europe’s capital, Brussels, technocrats, strategists and legislators increasingly see their role as being the global balancer between America and China. Jorgo Chatzimarkakis, a German member of the European Parliament, calls it “European patriotism.” The Europeans play both sides, and if they do it well, they profit handsomely. It’s a trend that will outlast both President Nicolas Sarkozy of France, the self-described “friend of America,” and Chancellor Angela Merkel of Germany, regardless of her visiting the Crawford ranch. It may comfort American conservatives to point out that Europe still lacks a common army; the only problem is that it doesn’t really need one. Europeans use intelligence and the police to apprehend radical Islamists, social policy to try to integrate restive Muslim populations and economic strength to incorporate the former Soviet Union and gradually subdue Russia. Each year European investment in Turkey grows as well, binding it closer to the E.U. even if it never becomes a member. And each year a new pipeline route opens transporting oil and gas from Libya, Algeria or Azerbaijan to Europe. What other superpower grows by an average of one country per year, with others waiting in line and begging to join?

Labels: Globalization, Political, US

EU and the challenges of globalization - by Jose Manuel Barroso

"Europe’s unique strength is its capacity to combine unity with diversity.
I think it is important to stress that. Why? Because there is still a perception, particularly in the UK, that Jean Monnet's gradualist approach to European integration – effectively 'neofunctionalism', for anyone taking notes! – is inexorably leading towards a centralised superstate.
Nothing could be further from the truth. Let's look more closely at what Jean Monnet actually said. Reflecting on his ideas to pool coal and steel resources – the raw materials of war – that launched the integration process, he said: ‘Europe will not be conjured up in a stroke, nor by an overall design. It will be attained by concrete achievements generating an active community of interest."

Labels: EU, Globalization