N79969: While I do not agree with many of GWB's economic policies, I find your post to be full of wild exaggeration and hyperbole. First of all, the economic policy of the United States has not radically changed under GWB. The US is not pursuing mercantilism or anything else '19th century.' I won't address your first point about our policy towards the UN because it frankly makes little economic sense. Rather it sounds like you are simply venting your dislike for our President.
It´s not that simple.
"The fall of an economic superpower" is not just brought about by a failure of its economy, even if that´s the ultimate indicator
of its demise.
In this case, the Bush administration has very publicly made it their ultimate goal to "free the USA from undue foreign influence" by ripping to shreds every supra-national agreement, treaty or organisation that might compel the USA to active cooperation with others - in the delusional conviction that such cooperation would somehow diminish their own power through foreign influence, rather than supporting them through a global consensus in which their voice was respected and welcome.
Now the real world is beginning to turn out as a rather bleak and unfriendly place with the global public in strong opposition towards a US government whose blatant disregard for any kind of legitimacy and democratic due process has been evident both domestically and internationally.
The error is in taking all the good and essential things for granted, even when actively undermining their very basis at the same time.
It´s not just a matter of dislike
, although some economic decisions are indeed influenced that way, and their combined weight can
matter. It´s a matter of losing confidence
in the ability and/or the will of a government to contribute to a sound and constructive framework for both political and economic progress.
When you´re damaging this confidence, you´re in for a rough ride. And that´s what we´re seeing right now; Both on the economic/fiscal and on the political level.
N79969: I will take the dynamism of the US economy to the 'stable' (stagnant is a better word) economy of Europe any day.
With the loads and the investment we´re taking on right now, it´s not too shabby. Even if there´s still considerable room for improvement. And the structural problems are
being tackled. Just keep your image of Europe up to date, please.
N79969: You guys can have 'stability' if that what you call chronic unemployment.
The levels aren´t really that far off, especially when held to the same standards (which the official numbers are not
). And I don´t think that introducing the class of the "working poor" to the European side would be that big an improvement. There are substantial problems on both
sides of the pond.
N79969: The US still draws talent from around the world and not just from Asia. We draw a lot of the best and brightest from Europe as well. Perhaps our latest and best known poach in recent years is Linus Torvalds who created the Linux OS.
Yes, of course. But in the long run, that won´t be enough. You can´t permanently
rely on an influx of human capital - just like the problems the negative trade balance is running into right now. At some point, you just need to stand on your own feet.
N79969: Most successful entrepeneurs in the US fail several times before getting it right. I think this process is stymied in Europe because there is a limit at how many times you can fail. Germany is (was?) particularly notorious for its bankruptcy laws.
I must admit I don´t know the current state of that matter over here in detail. But deregulation in many areas is happening as we speak, even if not as precipitously as elsewhere. We´ll probably never get exactly to the US situation. And I consider that A Good Thing in many respects.
N79969: The EU chose to adopt the Growth and Stability Pact. The US has not adopted anything like it. I don't know if the Pact is anything more than a necessary evil. It limits fiscal discretion even in times of recession. That makes for sub-optimal economic policy at the country-level. I don't know if I would describe the fiscal health of European countries as exemplary either.
Just in comparison to the current US administration...
The stability pact lays the groundwork for the stability of the €uro. It is under debate whether it may be a little too rigid for a global situation as difficult as it is now; But I still fully agree with the principle of fiscal discipline and the goal of massive debt reduction (even though european debt levels are still almost ridiculously
low compared to the american one).
N79969: I am glad the dollar is declining. That should make our exports cheaper for now. That could be a valuable stimulus for the slow economy.
The trouble is that it also exacerbates the trade deficit: The capital influx to pay for it just isn´t there any more. We´ll see how it´ll play out and which side of the coin will ultimately outweigh the other.
N79969: I am not too worried about capital flight. It is really not a problem for the US right now.
It may be getting there... Especially with the mid-east countries increasingly shifting their imports towards Europe (not entirely
unconnected to the political situation), the temptation is growing to link the oil price to the €uro instead of the US $, which could potentially create a whole new world of problems for the US economy. Combined with the worldwide shifting of assets towards the €uro that´s ongoing anyway (just due to its introduction as a new major currency, but partially also in order to take advantage of the existing dynamic), things are getting more complicated by the hour.
Under normal political circumstances, all the participating powers would closely cooperate to limit the impact of such a dynamic; But under the new "war rules" imposed from Washington, several of those controlling mechanisms have been unhinged.
And that is why the political level is
important in my opinion. I have no desire for a Europe that dominates a decrepit America (and I don´t think it´ll quite come to that) any more than the other way around. What we need is renewed cooperation
across the pond(s).
I don´t claim to know for sure that the dangers described above will outweigh the stabilizing factors; But simply disregarding
the warning signs in the kind of hubris we´ve witnessed through the past two years ("We´re so
fantastic - what in the world could possibly
stop us!?") is just begging
for an answer that can´t be welcome.