Politics of the EU: “Vanity and Venality”

Summary: Today Britain votes on the same choice Americans face in November — choosing between a bad choice endorsed by ruling elites, and a leap into a probably worse unknown. Here’s a brilliant analysis of Europe by Susan Watson (from 2013, still the best brief I’ve seen about the EU’s politics). It reminds us why so many Brits want to leave the EU — and the role of the US government in its mismanaged crisis. Much of it reads as if written yesterday, showing how little reform the crisis has produced. No matter what the result today, the EU still serves its people poorly as its elites gather political power (reversing centuries of democratization) — and further crises lie in its future.

Flag of the European Union

Vanity and Venality

by Susan Watkins
London Review of Books
29 August 2013
Posted with her generous permission.

Books reviewed

All quiet on the euro front? Seen from Berlin, it looks as though the continent is now under control at last, after the macro-financial warfare of the last 3 years. A new authority, the Troika, is policing the countries that got themselves into trouble; governments are constitutionally bound to the principles of good housekeeping. Further measures will be needed for the banks – but all in good time. The euro has survived; order has been restored. The new status quo is already a significant achievement.

Seen from the besieged parliaments of Athens and Madrid, from the shuttered shops and boarded-up homes in Lisbon and Dublin, the single currency has turned into a monetary choke-lead …Why has the crisis taken such a severe form in Europe?

Part of the answer lies in the flawed construction of the European Union itself. Though Americans have been hard hit by the great recession, the US political system has not been shaken. In contrast to most European incumbents, Obama sailed through his re-election. Only in isolated pockets like Detroit has elected government been replaced by technocrats.

In Europe, private and public debt levels were generally lower before the financial crisis struck. But the polity of the European Union is a makeshift, designed in the 1950s to foster an industrial association embracing two large countries, France and Germany, with a population of about fifty million each, and their three small neighbours. It was then expanded, piecemeal fashion, to incorporate nearly 30 states, two-thirds of which adopted a shared currency at the height of the globalisation boom – a project aimed in part at preventing a significantly larger, reunified Germany from dominating the rest.

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Much of what we love about America was true only for a moment

Summary: Campaign 2016 has sparked hopes of political reform in America, restoring aspects of America that we’ve lost. But our image of American history is false, because much of what we love existed only for two generations (from the New Deal to the 1970s). Understanding this makes real reform possible. Jefferson Cowie’s new book is essential reading for Campaign 2016!


Much of what we esteem about America comes from the 1930s through the 1970s. Civil rights, high social mobility, falling inequality, a large middle class, strong social cohesion — all of these erupted into an American history of often violent oppression to maintain the stark division of social classes (for example, see the long history of violence against unions).

Forgetting the long struggle that produced this series of revolutions after 1932, we believe that our America is the true America — and so stopped struggling, after which it slipped away. Jefferson Cowie explains this in his new book “The Great Exception: The New Deal and the Limits of American Politics” . From the publisher …

“The New Deal: where does it fit in the big picture of American history? What does it mean for us today? What happened to the economic equality it once engendered?

“Jefferson Cowie tackles the big questions in The Great Exception. Beginning in the Great Depression and through to the 1970s, he argues, the United States built a uniquely equitable period that contrasts with the deeper historical patterns of American political practice, economic structure, and cultural outlook.

“During those exceptional decades, which Cowie situates in the long arc of American history, the government used its considerable resources on behalf of working Americans in ways that it had not before and has not since. The crises of the Depression and World War II forced realignments of American politics and class relations, but these changes were less a permanent triumph of the welfare state than the product of a temporary cessation of enduring tensions involving race, immigration, culture, class, and individualism.

“Against this backdrop, Cowie shows how any renewed American battle for collective economic rights needs to build on an understanding of how the New Deal was won — and how it ultimately succumbed to contrasting patterns ingrained in U.S. history.

“As positive as the era of Roosevelt was in creating a more equitable society, Cowie suggests that the New Deal may necessarily belong more to the past than the future of American politics. Anyone interested in the politics of inequality in U.S. history will be interested in coming to terms with The Great Exception.”

Jefferson Cowie briefly explains this story in this excerpt from…

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ECRI looks at our Great Monetary Experiment: It’s Too Big to Fail

Summary: The Economic Cycle Research Institute (ECRI), who correctly predicted the slow recovery, explains the slow growth in which the US and Japanese economies are mired, and the fantastic monetary experiment waged by central banks to prevent them slumping into recessions.

Appreciate the wonders of our time.

"Machinery of the Stars" by alexiuss

Machinery of the Stars” by alexiuss at DeviantArt.

The recovery since 2008 has been difficult for predictions, both by bulls and bears. The bulls have repeatedly predicted accelerated growth and rising inflation. But the bears too-often predicted a recession (boldness is often expensive for forecasters). In September 2011 the ECRI staff predicted a recession in 2012. They repeated that call in the following months, and in November 2012 said the recession had began in July.

A few of us correctly predicted continued slow growth — no boom, no recession (e.g., see this from August 2013) — and our similarity to Japan (see this of mine from September 2014).

On balance the bears have more accurately seen the big picture than the bulls. Paul Krugman, Larry Summers, and the ECRI (me, too) saw this secular stagnation (see this from November 2013). And growth has been slow. Over the past 10 years (Q1 2006 to Q1 2016) real growth in gross domestic income (GDI) has been 2.3%/year. More importantly, growth in GDP per capita has been only 1.2%/year. As for the future, the Fed expects even slower long-term growth in real GDP — only 2%.

So we should listen to the ERCI’s perspective on the US economy, the Fed’s efforts to stimulate it, and the global economic context. The West is running one of the greatest economic experiments in history, with high stakes.

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Three things to know about asteroids, certain death from the sky (eventually)

Summary: Asteroid Day approaches (mark June 30 on your calendar), reminding us about the risk of death from the sky from asteroids and comets — one of the largest of the many shockwaves looming in our future. Here are the three things to know about this danger. This is a follow-up to Asteroid Day: reminding us of the threat, pushing us out into space.

“Find all asteroid threats to human populations and know what to do about them.”
— NASA’s Grand Challenge Statement, 18 June 2013.

Deep Impact

(1)  Earth is a target for objects from space

U.S. Government sensors recorded at least 556 meteors entering the atmosphere (fireballs, technically bolides) from 1994-2013. See the map below; the dots represent the meteor’s optical radiant energy measured by the sensor. As a rough conversion between that and the total energy: the smallest dot on the map represents 1 billion Joules (1 GJ) of optical radiant energy, the equivalent of ~5 tons of TNT. The dots for 100, 10,000 and 1,000,000 GJ convert to 300 tons, 18,000 tons and one million tons. The Hiroshima blast was equivalent to 15,000 tons.

The largest in this record was a 20 meter asteroid near Chelyabins in central Russia on 15 February 2013 (details here), an explosion equivalent to 440- 500 kilotons of TNT. The NASA note puts these in a long-term context …

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Asteroid Day: reminding us of the threat, pushing us out into space

Summary: Asteroid Day approaches (mark June 30 on your calendar). To prepare, here are descriptions in film and literature of doom from the sky by comets and asteroids.  Tomorrow’s post shows what we are doing in the real world to prepare.

“The dinosaurs became extinct because they didn’t have a space program. And if we become extinct because we don’t have a space program, it’ll serve us right!”
— Science fiction author Larry Niven, as quoted by Arthur C. Clarke.

First, an optimistic scenario:
a disaster pushes us out into space.

From Arthur C. Clarke’s
……..Rendezvous with Rama.

“Sooner or later, it was bound to happen. …In those days, there was nothing that men could do to protect themselves against the last random shots in the cosmic bombardment that had once scarred the face of the Moon. The meteorites of 1908 and 1947 had struck uninhabited wilderness; but by the end of the 21st century, there was no region left on Earth that could be safely used for celestial target practice.

“The human race had spread from pole to pole. And so, inevitably — At 09.46 GMT on the morning of 11 September, in the exceptionally beautiful summer of the year 2077, most of the inhabitants of Europe saw a dazzling fireball appear in the eastern sky. Within seconds it was brighter than the sun, and as it moved across the heavens – at first in utter silence – it left behind it a churning column of dust and smoke.

“Somewhere above Austria it began to disintegrate, producing a series of concussions so violent that more than a million people had their hearing permanently damaged. They were the lucky ones.

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