a curious Yankee in Europe's court

At the end of the Q&A session following his talk at the RSA earlier this month, Cambridge University economist Ha-Joon Chang summed up his overall perspective with this:

Two hundred years ago, people thought it was quite all right to buy and sell people, slave trade, you know. A hundred years ago, they put women in prison for asking to vote. Fifty years ago, all the founding fathers of developing nations were hunted by the French and British as terrorists. Twenty years ago, Mrs. Thatcher said that someone who thinks there will be a moderate black rule in Africa lives in cloud cuckoo land. But these things all have happened, no?

So that I follow the Italian Marxist Antonio Gramsci who said that we have to have pessimism of the intellect but optimism of the will. We have to make these changes, no? And the first step in that process is to know what is really going on.

Chang was appearing at RSA to talk about his soon-to-be-published book “23 Things They Don’t Tell You About Capitalism” (Jan 2011). This title, coupled with Chang’s quoting of renown communist thinker Gramsci might suggest that Chang is anti-capitalist. Aware of this, Chang pointedly dispelled the notion early in his RSA talk:

When I say these things some of you may think that I’m anti-capitalist. That would be, actually, wrong. To paraphrase Winston Churchill, I think that capitalism is the worst economic system, except for all the others. I mean, it has a lot of problems but it is, in my view, still the best economic system that humanity has invented.

But the problem is that over the past three decades we have lived under a very particular form of capitalism that is free market capitalism, which has served us very poorly. The point is that there are many different ways in which to run capitalism. I mean, it’s not just American style capitalism that is viable. I mean there are many different forms. The Japanese form, the Chinese form, the Swedish form, the French form, the German form.

But over the last 30 years, we have been told that there’s only one form of capitalism that works and that is Anglo-American style free market capitalism. Over the last three decades, this form of capitalism has produced very disappointing results…

What a breath of fresh air is Chang! To hear the full and informative talk at RSA, go here (32 min).

It came as a welcome boon to my own small blogging campaign to counter the idea propaganda that only economists and financial experts can understand economics to hear Chang say the following:

And in trying to explain these and other things, I do my best to dispel the widespread perception that economics is too complicated for non-economists. You know, I say often in my lectures, but also in the book, that 95 percent of economics is common sense deliberately made complicated, while even the remaining five percent can be explained in its essence, if not in all technical details, if you really try.

So through this book I want to equip my readers with fundamental economic reasoning and some basic but misunderstood facts about capitalism so that they can better exercise what I call active economic citizenship, and demand right courses of action from their policy makers, political representatives and business leaders…

My earlier campaign efforts in this regard are here and here. A recent article by Chang for the Guardian is here (“Getting capitalism right” Sept 16, 2010).

In an earlier post today about a Vanity Fair article about Greece and its ongoing financial morass, I highlighted a question posed by the writer of the piece, Michael Lewis:

Even if it is technically possible for these people [Greeks]to repay their debts, live within their means, and return to good standing inside the European Union, do they have the inner resources to do it?

The last phrase of this question — do they have the inner resources to do it? — won’t stop echoing through my mind. Could it be my (blogger) conscience nudging me to recall something else Lewis said in the Q&A interview with him that accompanies his article? He was answering a question about a rather sizeable ongoing financial mess of another country, the United States.

Specifically, Lewis was asked if he could foresee a scenario in which the US Treasury goes bankrupt.

Excerpt of his reply (that begins with “Yes”):

…It’s not that hard to see us getting to a moment where we are essentially restructuring our debt. I think it is a long way off, but how can it not happen? We are so indulged by our creditors. Even though we have grotesquely mismanaged our financial affairs, people are willing to lend us money on terms that they would not lend on to anybody else in the world. It’s unbelievable to me that the U.S. Treasury can borrow 10-year money at around 2.5 percent.

The Chinese are willing to lend back to us all their surpluses basically for free, and we keep running these deficits. The benefits are just too great to our society for us to turn away…

So that question about having the inner resources to clean up your act is also being posed by Lewis here, more obliquely, about the US and its citizenry.

(Blogger) conscience clean now.

When it comes to figuring out complex things in today’s world, Michael Lewis has proven himself better than most at doing so. Along with this, he has an uncanny sense for the perfect doorway into a narrative, and an eye (and ear) for the telling detail that raises the bar to new highs.

The reading public must agree — most of his ten or so books have made the New York Times bestseller list (see Vanity Fair bio and Wikipedia). And his 2006 book, “The Blind Side,” was made into a hit movie of the same name that earned an Academy Award nomination for Best Picture (2010).

But coming away from reading the more than 11,000 word feature about Greece by Lewis in next month’s Vanity Fair, I was struck by the series of questions he posed — and left unanswered — in the piece’s final paragraph (“Beware of Greeks Bearing Bonds” Oct 1, 2010).

Two, for example:

Will Greece default?…

Even if it is technically possible for these people [Greeks] to repay their debts, live within their means, and return to good standing inside the European Union, do they have the inner resources to do it?

To research the Vanity Fair article, Lewis spent some time in Greece,and interviewed some key figures and government workers in the national financial drama underway there. It makes for interesting reading — the full article is here.

Also interesting is the magazine’s companion Q&A with Lewis about the piece. Here you can read some opinions he has of the possible economic prospects of various other countries in Europe, in particular Germany.

My favorite segment  was a question asking Lewis to compare specific European countries to major baseball teams in the U.S. Of course, unless you’re a baseball fan, the metaphoric word play is illusive (and I can’t be of much help here — the sports world is certainly Greek to me).

One sample, though, was more explicit. His description of Italy — he compared the country to the baseball team The Marlins — is generous and apt, I think. He said:

Even though Italy is in financial trouble right now, like the Marlins are always in financial trouble one way or another, it still somehow feels like a successful place. Italy is this giant wild card; they can win the series at any point.

Italy certainly can do with a good word just about now. And maybe I’m biased, but I do favor such optimism. And I do so hope Lewis is as astute about this as he has been about so many other things. Vediamo.

Se qualcuno preferisce leggere la stampa italiana ma non parla bene la lingua, può approfittare della sezione inglese di qualche giornale italiano.

Per esempio, uno dei più grandi quotidiani italiani è il Corriere della sera. Nel suo sito, nel menù in alto, c’è la categoria “English”. In questa sezione ci sono le traduzioni di una limitata selezione degli articoli del giornale.

Uno dei più recenti è intitolato: “100,000 Sign Manifesto to Ban Shooting as Season Opens” di Margherita De Bac, tradotto da Giles Watson.

Un brano:

ROME – More than 100,000 people have signed up against shooting. On the Sunday that saw the opening of the new season, which will close on 31 January, the signatories of the Manifesto per la coscienza degli animali [manifesto for the awareness of animals] borrowed a phrase from Tolstoy to protest at “an idiotic, cruel practice that offends moral sentiment”.

C’è sempre un link all’articolo originale. Questo stesso brano, in italiano, è:

ROMA – Oltre centomila firme contro la caccia. Nella domenica di apertura delle attività venatorie – che si chiude il 31 gennaio – esprimono la condanna di «un atto stupido, crudele e nocivo al sentimento morale» (parole mutuate da Tolstoj) sottoscrivendo il «Manifesto per la coscienza degli animali».

Questo post è scritto in occasione di “Day of Multilingual Blogging“(Note: Un ringraziamento a mio marito Franco per il suo aiuto gentile con il mio italiano per questo post.)

In news that startled a bit this week, two major names in journalism in the US announced their departure from their star posts in traditional media to sign on to new media.

The New York Times lost economic reporter Peter Goodman. The struggling Newsweek lost political columnist Howard Fineman. Both of these prominent journalists have just joined the staff of one of new media’s most visible success stories, The Huffington Post.

Goodman was interviewed by the Washington Post about his big jump (“Huffington snags N.Y. Times star” Howard Kurtz, Sept 21, 2010). Goodman told Kurtz, “For me it’s a chance to write with a point of view… It’s sort of the age of the columnist. With the dysfunctional political system, old conventional notions of fairness make it hard to tell readers directly what’s going on. This is a chance for me to explore solutions in my economic reporting.”

Goodman went to to express dissatisfaction about a confining aspect of the process of reporting imposed on him by the gray lady Times.

Writing yesterday in reaction to Goodman’s statements, news media expert and journalism instructor Dan Gillmor commented  (“The second great migration to new media” Salon, Sept 22, 2010):

I’m also convinced that a big part of what’s happening is a sound one from a journalistic sense: That is, reporters want to be liberated from the lazy-journalism tyranny of the idiotic notion that there are two equal sides to everything — do a story on the Holocaust, get a quote from a neo-Nazi — and they grasp better than their old-media editors do that human voice is the heart of story-telling.

Gillmor linked to a related post on Goodman and Fineman by Salon co-founder and author Scott Rosenberg. In his post, Rosenberg voiced sympathy with some of the huge, older news organizations (“Journalists follow their voices, vote with their feet” Sept 22, 2010).

Rosenberg particularly noted the “phenomenal-sized audience” of Yahoo News, and the “blue-chip” reputation” of the NY Times.  This constrains them to be more cautious in their ways, he wrote.

Excerpt:

The challenge for their [Times and Yahoo] managers is a subtle one: How to infuse their coverage with the distinctive human voices of journalistic observers who no longer wish to suppress their personal perspectives, while also insuring that the big megaphones they own do not turn into amplifiers of treacherous rumors, personal vendettas, or partisan lies. (Fox News provides a handy negative exemplar here.)

One last glance back at the World Economic Forum panel discussion last week that I wrote a couple of posts about. This time I want to highlight some interesting wordplay there.

The minor verbal tussle sprang from reaction to the title of the panel discussion — “America in the Asian Century.”

First comment came from panel host Steve Clemons who opined that, for various reasons, he prefers to think of it as “America, China, Europe in a really, really messy century.”

Soon after Professor Moon Chung-In from Korea argued, instead, that it will be an “American-Asian century.” And then later, another panel member predicted that it would be, rather, a global century.

This all came back to mind this morning while I was reading yesterday’s Huffington Post blog post by Michael Brenner. He rather acerbically quoted US Secretary of State Hillary Clinton declaring earlier this month that we are at another American moment. (Video below)

Wales journalist Ed Walker has an informative post on his blog about some of the legal issues online journalists now encounter (“Legal challenges facing online journalists” Sept 16, 2010).

Excerpt:

The web is moving quickly and with certain acts dating back to to the last century, you won’t find mention of Facebook in the legal statements. First things first, if you’re unsure about media law…

Read full post here. The comments are also helpful.

At least, and that’s rather exceptional, Nouriel Roubini spreads the gloom around evenhandedly. Writing an op-ed piece this week for Project Syndicate about problems of the Eurozone, he grounds the assessment in a disapproving scowl at most of the world’s biggest economies (“The Eurozone’s Autumn Hangover” Sept 15, 2010):

.. all the factors that will lead to a slowdown of growth in most advanced economies in the second half of 2010 and 2011 are at work in Germany and the rest of the eurozone. Fiscal stimulus is turning into fiscal austerity and a drag on growth. The inventory adjustment that drove most of the GDP growth for a few quarters is complete, and tax policies that stole demand from the future (“cash for clunkers” all over Europe, etc.) have expired…

Roubini’s primary concern seems to be that European leaders have largely postponed having to account for Europe’s economic problems, rather than finding a real resolution for them:

In the periphery, the trillion-dollar bailout package and the non-stressful “stress tests” kicked the can down the road, but the fundamental problems remain: large budget deficits and stocks of public debt that will be hard to reduce sufficiently, given weak governments and public backlash against fiscal austerity and structural reforms; large current-account deficits and private-sector foreign liabilities that will be hard to rollover and service; loss of competitiveness (driven by a decade-long loss of market share in labor-intensive exports to emerging markets, rising unit labor costs, and the strength of the euro until 2008); low potential and actual growth; and massive risks to banks and financial institutions (with the exception of Italy).

You can read the whole essay here.

Continuing the conversation of my post yesterday about the World Economic Forum meeting underway that is exploring the idea of this being an Asian century, I want to pluck out and highight some comments by Taro Kono, a Japanese parliamentarian. They were especially notable.

In his opening remarks, Kono smiled wryly and acknowledged:

We are actually choosing the third prime minister in one year today in Japan.

When host Steve Clemons noted that this brings the number to about six prime ministers in five years, Tono nodded and responded:

We’ve got to stop that to remain a certain power in Asia.

Kono then went on to talk about the political divide that has developed between Japan and the US on some major policies. He said that the US needs to do three things. One is to take care of the deficit, he noted (again with that wry smile as he added that Japan needs to mind its own deficit as well). Two, Kono said, the US needs to show it has common values with Japan.

And, three…

“They have to keep the door open to immigrants…”

As soon as the Q&A session opened, the very first question came from a Russian expert. He opined that he found it a bit rich (paraphrasing) for  someone from Japan to lecture others on open immigration policy, considering that Japan “is one of the most closed countries in terms of immigration policies.” A fair amount of friendly laughter greeted this apt query.

Kono, ever with the wry smile, responded so:

“I don’t see any other alternative for Japan’s future but to open up the country to the immigration. As you say, Japan is the most closed country so far but we’re losing population fast. The society is aging. We cannot sustain our pension system or social security. So we have to open up.

What is the core value of Japan? Japan is a country where people speak the Japanese language, and Japan is a country which has the emperor, and those two are the core values for Japan, and anything else has to change in the 21st century. So we are going to be opening up. Not only to the immigrants but our economy as well.

I  can’t remember ever hearing a politician make such a sweeping admission about the state of his country — Japan is a country where people speak the Japanese language, and Japan is a country which has the emperor and those two are the core values for Japan, and anything else has to change in the 21st century.

One of the most interesting and puzzling findings, for me, of the New Transaltantic Trends survey just released are the widely divergent transatlantic views of Americans and Europeans on the rise of Asia:

EU and U.S. respondents were divided about the role Asia would play in global affairs. Seven-in-ten respondents (71%) in America found it very likely that China will exert strong leadership in the future, while only a third of Europeans (34%) thought the same scenario is very likely.

That’s a gigantic perception gap between the two groups. Why? Haven’t a clue.

Still puzzling over this divide, I came across a video of a panel discussion yesterday at the World Economic Forum meeting now underway in Tianjin, China. Hosted by Steve Clemons, the panel discussion was titled “America in the Asian Century.”  The panel members included public figure heavyweights:

Cui Liru, President, Chinese Institutes of Contemporary International Relations; Thomas L. Friedman, Columnist, The New York Times; Taro Kono, Acting Secretary-General, Liberal Democratic Party (LDP), Japan; Moon Chung-In, Professor of Political Science, Yonsei University, Korea; Charles E. Morrison, President, East-West Centre, USA; and Kurt Tong, Senior Official to Asia-Pacific Economic Cooperation, US Department of State.

Highly recommended watching!  Unless you’re already an expert on the subject, the discussion is illuminating and thought-provoking.

Just a couple of quotes (many to choose from), this first one from Professor Moon Chung-In, of Korea:

We are trapped in a kind of cognitive dissonance between old inertia and new reality. We all know American power is declining, okay, yet we try and recognize America as a continuing power, shaping everything in this part of the world…

And from host Steve Clemons:

One of the challenges for the United States is that to much of the rest of the world, it looks like the General Motors of nations. It’s big, it has a ton of assets, you always hear America has all these bases, this power, this capacity.

But when it comes to where it’s anticipated to be 20 years from now, it looks like GM. China has looked like the Google of countries. In other words, power is based on future expectation, much like the stock market…