European Politics

The _Financial Times_ published an article based on an interview with Jean-Claude Trichet today (the article itself seems to be borked, along with the rest of the FT’s website, but the interview itself, which is more informative in any event, is available “here”:http://www.ecb.int/press/key/date/2008/html/sp081215.en.html ). In the interview, Trichet suggests that large scale deficit spending is a bad idea because of ‘Ricardian effects.’

Consider the Ricardian effects, the level of confidence or the lack of confidence that you observe in the various constituencies of economic agents, particularly at the level of households: they suggest that there are certain situations where if you do not behave properly you might lose more in terms of confidence than what you are supposed to gain through the additional spending.

and

Every nation has its own Ricardian effects and its own assessment of the situation. I do not want to comment on any particular country, because my duty is to look at the continent of 320 million fellow citizens as a whole. But I fully accept that there are differences in the capacity of households in various cultures to accept a deterioration of their situation, and again, the Ricardian channel tells us that one might lose more by loss of confidence than one might gain by additional spending.

Is this plausible? The broad political economy literature on consumer behaviour that I’m aware of would suggest that this argument rests on some fairly heroic assumptions about individual information (and in particular their awareness of the possible long term consequences of government spending – and this leaves aside the claim that for some reason they will systematically _overestimate_ the consequences tomorrow of deficit spending today). As best as I’ve been able to tell from a quick glance at the WWW, the claim that Trichet is making is a controversial one, which lacks solid empirical support. But then, my understanding of macro theory is based on fast-disappearing memories of my BA coursework. So is there any solid empirical basis for the claim that strong Ricardian effects exist and are a real issue for policy makers? Or is this just a theoretical figleaf to cover over the less abstract political-economic reasons (to do with institutional prerogatives, inter-state relations, worries about defection etc) why the European Central Bank really wants to keep controls on national spending? This is not a rhetorical question – I honestly don’t know the answer, and would appreciate information from those who know this literature better than I do.

“Gideon Rachman”:http://blogs.ft.com/rachmanblog/2008/11/will-berlusconi-finish-off-the-g8/ says what I’ve been thinking.

In fact, I would even argue that the G8 was quite well-placed to see off the upstart G20 – were it not for one thing. Next year it will be presided over by that one-man wrecking crew, Silvio Berlusconi, the prime minister of Italy. Berlusconi has a “sense of humour” that makes him a uniquely disastrous chair for international organisations. His presidency of the European Union in 2003 was catastrophic. He caused uproar in the European Parliament by comparing a German politician to a Nazi concentration-camp guard. In an official photo, he made the sign of the cuckold’s horns behind the head of a Spanish minister. He opened a summit designed to discuss the future of Europe by suggesting to his fellow leaders that they discuss women and football instead. Then he turned to the chancellor of Germany, Gerhard Schroeder, and suggested that he should open the discussion since he had been married four times. Amazingly enough, Schroeder did not see the funny side.

Not that any of this is likely to hurt his domestic approval ratings or anything (the public persona he has constructed for himself is quite extraordinary), but it certainly should be interesting to watch from a safe distance.

“Arthur Goldhammer”:http://artgoldhammer.blogspot.com/2008/10/france-inc.html (whose blog on French politics is one of the treasures of the blogosphere).

Sarkozy has announced the creation of a French investment fund with a capital of $200 billion. He is also temporarily suspending the taxe professionnelle. Call it an investment fund or sovereign wealth fund. Call Sarkozy a socialist in wolf’s clothing (as one MEP did the other day). Mock his inconsistency or praise his political versatility. In fact he’s merely doing what leaders of all the advanced industrial countries will be doing shortly, if they are not doing it already: trying to minimize the damage of the recession by turning on massive government investment. This can do a lot of good, especially if it is seen not solely as countercyclical spending but as a chance to do something about decaying infrastructure and make foundational changes with a chance for long-term impact. In France it’s hardly unprecedented for major capital spending to be directed by the state, whether under the Commissariat au Plan, through state-controlled-or-influenced enterprises, or directly by the Ministry of Finance. Sarkozy always danced nimbly between the neoliberal and state-capitalist camps. If the last two decades were the neoliberal decades, the coming two are likely to consecrate the hegemony of state capitalism. Sarkozy has been quicker than most to draw that conclusion and try to get ahead of the tsunami. Let’s see what happens next.

When I suggested a couple of weeks ago that the intellectual hegemony of free market capitalism was under threat, Dan Drezner expressed “polite skepticism”:http://danieldrezner.com/blog/?p=3943.

Is this the beginning of a norm shift in the global economy? It’s tempting to say yes, but I have my doubts. The last time the United States intervened on this scale in its own financial sector was the S&L bailout — and despite that intervention, financial globalization took off. The last time we’ve seen coordinated global interventions like this was the Asian financial crisis of a decade ago — and that intervention reinforced rather than retarded the privilege of private actors in the marketplace. In other words, massive interventions can take place without undercutting the ideological consensus that private actors should control the commanding heights of the economy.

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In July I couldn’t blog about a major episode in the Belgian political crisis – I was on holidays in the Walloon area of Belgium, in a cottage without electricity, and without access to the web. Today there is another sequel in the Belgian political crisis which has now been going on for about 15 months. By now most Belgians are suffering from political depression: they are no longer able to swallow yet another glass of this soap. Yet if anybody out there is still interested (I am, even if also politically slightly depressed), below the fold is a short summary of the last two episodes of the Belgian crisis. Warning: this post requires some knowledge on the Belgian political labyrinth, which I’ve tried to sketch “here”:https://crookedtimber.org/2007/09/19/the-ingredients-of-the-belgian-cocktail/
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So I have a quite different take on the broader geo-politics of the Russia-Georgia conflict than either “Matt Yglesias”:http://yglesias.thinkprogress.org/archives/2008/08/georgia_on_my_mind.php (in “new digs”:http://yglesias.thinkprogress.org/ – update blogroll accordingly) or “Steve Clemons”:http://www.thewashingtonnote.com/archives/2008/08/georgiarussia_c/. Clemons:

much of what we are seeing unfold between Russia and Georgia involves a high quotient of American culpability. When Kosovo declared independence and the US and other European states recognized it — thus sidestepping Russia’s veto in the United Nations Security Council — many of us believed that the price for Russian cooperation in other major global problems just went much higher and that the chance of a clash over Georgia’s breakaway border provinces increased dramatically. By pushing Kosovo the way the US did and aggravating nationalist sensitivities, Russia could in reaction be rationally expected to further integrate and cultivate South Ossetia and Abkhazia under de facto Russian control and pull these provinces that border Russia away from the state of Georgia. At the time, there was word from senior level sources that Russia had asked the US to stretch an independence process for Kosovo over a longer stretch of time — and tie to it some process of independence for the two autonomous Georgia provinces. In exchange, Russia would not veto the creation of a new state of Kosovo at the Security Council. The U.S. rejected Russia’s secret entreaties and instead rushed recognition of Kosovo and said damn the consequences.

Yglesias:

In a broader sense Steve Clemons raises the good point that the government of Russia made it pretty clear that if the United States recognized Kosovo’s unilateral declaration of independence from Serbia over Russian objections that Russia would retaliate by stepping up support for separatists in Abkhazia and South Ossetia. This doesn’t seem to have given any of Georgia’s outspoken friends in the United States any pause. Indeed, strong pro-Georgian views in the U.S. media and foreign policy community correlate heavily with strong pro-Kosovo views. This highlights the fact that the underlying issue here is simply a disposition to take a dim view of Moscow and to favor aggressive policies to roll back Russian influence rather than some kind of deep and sincerely felt desire to help Georgia.

Now I’m not too keen on the ‘brave little Georgia’ crowd myself, but neither of these seems to me to be right. Steve, who’s a realist, doesn’t seem to me to be providing a realist enough take on Russia’s motivations, while Matt seems to be soft-pedalling his liberal internationalism. There are many ways to interpret what’s been happening over the last few days, but one important part of the explanation is an argument over norms, and specifically the relationship between the norms of territorial integrity and self determination, that has been playing out since the end of the Cold War. [click to continue…]

Kevin Drum “links to”:http://www.washingtonmonthly.com/archives/individual/2008_07/014163.php an unusually stupid (by which I mean ‘unusually stupid, even by the standards of the Corner’) post by Byron York on Obama’s Berlin speech.

It’s a small passage from Obama’s Berlin speech, but this formulation, common in some circles, grates on some ears, like mine:

The terrorists of September 11th plotted in Hamburg and trained in Kandahar and Karachi before killing thousands from all over the globe on American soil.

Yes, the victims were from all over the globe — places like Brooklyn, and the Bronx, and Manhattan, and Queens, and Staten Island, and New Jersey — all over. And most were Americans, weren’t they?

I knew when I read this that I’d seen the same sentiment expressed in a speech by Secretary of the Department of Homeland Security, Michael Chertoff. And indeed, Google confirms that “it is so”:http://useu.usmission.gov/Dossiers/Data_Privacy/May1407_Chertoff_EP.asp.

Homeland Security’s Chertoff Addresses European Parliament Committee on Data Transfer, Privacy May 14, 2007

…Today’s terrorists fund their operations internationally. They recruit members, they train, they plan and they carry out attacks by exploiting the gaps in the seams in our international systems. The attack of September 11th was a clear illustration of this. The plot was hatched in Central Asia, the recruits came from Saudi Arabia, the training occurred in Afghanistan, the planning occurred here in Europe, and the attack culminated, of course, in the United States with citizens from many countries including many countries represented here lost in the World Trade Center.

I’m eagerly looking forward to Byron’s follow-up post on the dubious sentiments common among ‘some circles’ of senior Bush officials, Chertoff’s shameful failure to mention that most of those killed were American, und (to use the mots justes) so weiter. Byron?

This “column”:http://www.ft.com/cms/s/0/f24b5eda-45eb-11dd-9009-0000779fd2ac.html from Wolfgang Munchau is a keeper. “Challenged”:http://blogs.ft.com/rachmanblog/2008/06/expulsion-from-europe/ by Gideon Rachman last week to reveal the theory under which he believed that the Irish could be kicked out of the EU for having had the impertinence to vote ‘No’ a couple of weeks ago, Munchau obliges:

My own hunch is that they will try to find a way to enforce the Lisbon treaty without the non-ratifiers. As a first step, they will try to offer the No-sayers a quit-and-rejoin deal. It would be the least divisive option of all, but unfortunately, it may also be one of the least realistic. … … In Ireland’s case it may require a referendum to get out and another one to get back in. … If this is not possible, there are several other options involving varying degrees of involuntary separation. For example, everybody would formally remain inside the EU on the basis of the Nice treaty, but the ratifiers would organise their areas of co-operation outside the EU and its institutions – on foreign policy, immigration, economic governance, maybe even on energy and the environment. … There is, of course, the ultimate threat; not a trial separation, but permanent divorce. The Lisbon ratifiers formally leave the EU, and re-group under a new rival organisation. In reality, this is not so much an option, but the thing you do when you have run out of options, the strategic choice of last resort. Like a nuclear bomb, it is a useful device to be used in an emergency, not something you plan for.

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“This”:http://www.voxeu.org/index.php?q=node/1233 seems to me to be the most interesting analysis I’ve read so far.

A glance at the electoral map suffices to confirm what earlier opinion polls had indicated: the Irish vote divided along class lines in a stark and disturbing fashion. In the most affluent constituencies of Dublin, such as Dun Laoghaire, where even a modest home can cost upwards of €1 million (although that is changing), 60% or more voted for the treaty. In working class areas of the city, it was the no vote which scored in excess of 60%. Brouard and Tiberj (2006) show that precisely the same division between rich and poor, or the skilled and unskilled, can be discerned in the French 2005 vote. …

The argument would be that globalisation generally, and European integration more narrowly, has overwhelmingly favoured skilled workers, at least in affluent countries such as France, Ireland and the Netherlands. Unskilled workers, by contrast, feel under threat from Romanian (or Asian) competition, or immigration from Eastern Europe and further afield. And while those of us who are more fortunate might regret it, it is hardly surprising that — in accordance with Heckscher-Ohlin logic — they vote accordingly. … Unbelievably, given the importance of the vote, there were no exit polls taken which might give us an indication of why those who voted no did so. But I have to say that my bet is that the gap between middle-class and working-class voting patterns has a lot more to do with different interests, real or perceived, than with supposed differences in political sophistication. …

If this interpretation is correct, then the Irish referendum result, in one of the most pro-European members of the Union, should serve as a wake-up call to politicians that if they want to maintain the benefits of open international markets, as I do, they will simply have to take more notice of the concerns of those who are being left behind.

Update: The Eurobarometer report on a flash survey they did immediately post-referendum is available at “Irishelection.com”:http://www.irishelection.com/wordpress/wp-content/uploads/2008/06/fl_245_en.pdf. Thanks to Simon in comments for the pointer.

There’s been a lot of outrage expressed by other Europeans (and by “some members of the Irish elite”:http://splinteredsunrise.wordpress.com/2008/06/14/are-you-listening-jose-manuel-barroso-javier-solana-peter-mandelson-your-boys-took-one-hell-of-a-beating/ )at the Irish vote on Lisbon. Some of this seems fine to me – obviously it is perfectly reasonable to feel annoyed, or even angry, when people vote for what you feel to be the wrong option. Some of the anger, however, seems to me to rest on an unjustified implicit or explicit belief that the Irish were somehow obliged to vote Yes in the referendum. Below the fold, I lay out all the serious reasons I can think of for why you might think the Irish were positively obliged to vote Yes, and why I don’t think that any of them hold (I imagine that there will be vigorous disagreement from many commenters, but reckon that this disagreement will be more useful if the bases of argument are clearer). The emphasis here is on ‘serious’ reasons – I’m not going to get into the “it’s because they don’t like Johnny Foreigner, you know”:https://crookedtimber.org/2008/06/14/irelands-lisbon-vote/#comment-243747 stuff, which doesn’t seem to me to deserve proper attention or rebuttal. [click to continue…]

As many of you likely know already, Ireland has voted down the Lisbon Treaty 53.4% to 46.6%. This was a slightly higher margin than I had anticipated (in a private email, I had laid my money down on a 52-48 split). As I noted in my previous post on the topic, the Yes campaign was tired and soporific. I’m trying to place an op-ed on the issue (if I don’t succeed, I will probably just bung it up on CT), so will have more to say about this later. But for the nonce, let me just note how appalling some of the responses from politicians in “other EU member states”:http://www.ireland.com/newspaper/frontpage/2008/0614/1213369845918.html – not so much ‘the people have spoken, the bastards,’ as a Brechtian ‘let us elect a new people.’ In particular, German parliamentarian Axel Schäfer’s comment that “With all respect for the Irish vote, we cannot allow the huge majority of Europe to be duped by a minority of a minority of a minority,” would have a bit more credibility if, you know, the majority of the majority of the majority had been given a chance to vote on the Treaty themselves.

I’m in Ireland at the moment, reintroducing the two year old to the country of his ancestors, and, more to the point, the delights of Andy Nolan’s sausages (if you’re ever passing through Kilcullen, and you’re not a vegetarian, you owe it to yourself to pick up a few pounds), and McCambridge’s brown-bread. But in between childcare responsibilities, I’ve been trying to piece together the debate over the upcoming referendum on the European Union’s Lisbon Treaty. Ireland is the only country where the public actually gets a vote on this Treaty, and there is a good chance that it will vote No (one recent opinion poll had the No side several points ahead; another had the Yes and No side neck-and-neck). If Ireland votes the Treaty down, it will fail, and nobody is quite sure what will happen next. More discussion of the specifics of the debate under the fold – I also have a more political-sciencey” post”:http://www.themonkeycage.org/2008/06/legitimating_the_eu.html on this over at _The Monkey Cage._
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I am SO over the bloody Internet. First of all, if we didn’t have it, I wouldn’t be on the wrong side of the planet, jetlagged and knackered from getting up at 4am for bloody conference calls, dealing with an email inbox full of shitbombs, and helping to ‘coordinate the DNS and unique identifiers’ all bloody day when I’d much rather be in bed reading a dreary French novel about failed relationships (is there any other kind?).

Secondly, I wouldn’t just have gone onto Facebook and found out at least 2 of my siblings are planning to vote against the Lisbon Treaty, and then gone to the Irish Times to certify that, yes, the zeitgeist has turned on Biffo after 4 short weeks, and the No votes are now in the lead. WTF???

During this week’s guest stint I’ve managed to touch on Palestine-Israel, the New Deal, and Michel Foucault. Steering clear of the real killer tripwires—i.e., sex roles, the Democratic primaries, or emacs/vi—that leaves a final frontier of Internet mischief….

On this day in 1945, only three days after the occupation of their city by French troops, the remaining full professors of the University of Freiburg assembled to elect new officers and to restore the customs under which they had operated before 1933, when their faculty, racially purged by the Nazis, elected as rector the philosopher Martin Heidegger. (All details here come from Hugo Ott; see more at the footnote.)¹

This is not a parable or an analogy. It is a story of one episode in which civil authorities and academic governing bodies reckoned with a disastrous crossover between scholarship and politics.

One of the first orders of business for the reassembled professors was the question of what to do about Nazis among their colleagues. They chartered an internal review committee for the purpose, and tried to keep jurisdiction over this process, without success. City authorities were conducting their own reviews, and they designated Heidegger’s house, among others, as a “Party residence” to be requisitioned for use. The university protested, based on the opinion of legal scholar Franz Böhm (an anti-Nazi dismissed from his post during Hitler’s regime) that for “establishing political guilt” one needed “a proper court of law.”
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