Ming the Mechanic
The NewsLog of Flemming Funch

Thursday, November 18, 2004day link 

 The New Cold War
picture It is probably inevitable. The dollar is dropping, the euro is stronger than ever. The EU economy is growing. The rest of the world might not want to prop up the US economy forever. More countries are reconsidering using the dollar as their reserve currency. WorldChanging:
The International Monetary Fund might have to move some time in the next four years, according to Clyde Prestowitz, on the November 12, 2004 evening edition of public radio's Marketplace.

The development agency's charter dictates that it be located in the member country with the largest economy, and the IMF HQ has been in Washington, DC for nearly 60 years.

But the current U.S. federal deficit, as well as trade imbalances that have Americans consuming $600 billion more than they save or produce, may cause some international banks to reconsider their investments in the U.S., which could drop us down to second - or maybe further. Says Prestowitz:

We consider ourselves the unchallenged leader, the best ever, but the ground is really shifting beneath our feet...if one of the central banks of China, or Japan, or Korea, Taiwan or Singapore, decides that we're not such a hot investment anymore, the dollar will fall like a rock. In fact, some time in the next four years, the dollar is almost certain to drop by as much as 50% or even more against some key currencies...the E.U. is only a 10% drop away in the dollar's value from being the world's biggest economy, and Asia is on the march.

The U.S. will soon no longer have the highest per capita income or be the biggest market in the world for most products. It will no longer set all the standards. Our technological leadership will diminish.

Think about it. If we don't get our act together, it really won't take much to get those moving trucks rolling.

Some sources say the EU already is the world's biggest economy. I don't know where the numbers are. Anyway, now this nice article from Salon, Welcome to the New Cold War (click Free One Day Pass, if you're not a member).
A specter is haunting America, and it ain't the specter of communism (however much George W. Bush and company might like to describe it that way). Barely a decade after the definitive collapse of the Soviet bloc, the United States finds itself in a new cold war, one being fought simultaneously on economic, political and cultural fronts, and one it is by no means certain to win. The unipolar world of uncontested American hegemony that we were told to expect into the indefinite future has come to an end; it lasted just about long enough for us to scratch our heads and wonder what was happening next.

Yes, "Old Europe," to borrow Donald Rumsfeld's famous quip, is back, and it's looking pretty spry for its age. As Americans are finally beginning to notice, Europeans (or most of them, anyway) have reconstituted themselves into an enormous transnational superstate of 25 nations, 455 million people and an $11 trillion economy. This is, of course, the European Union, and its aims have become much broader and deeper than the stuff you've probably heard about, like allowing citizens to drive from Seville to Sicily without a passport, or to use the same anonymous-looking currency to buy a pint of Guinness in Cork and a glass of ouzo in Crete.

Any studies done recently of quality of life or on personal freedom consistently show a long list of mostly European countries at the top. The US is not in the top ten. That the U.S. is the biggest military power doesn't change that. On the contrary.
If the EU has no intention of confronting America's military supremacy, that, Rifkin and Reid would agree, is actually Europe's ace in the hole. Let the Americans pour endless billions in taxpayer dollars down the Pentagon's money sink, the Europeans reason. As they see it, the key to future peace and prosperity lies elsewhere, in constructing complex webs of social interaction and economic cooperation that will undermine nationalism and fundamentalism of all stripes. While the United States foots the bill for the intractable conflict in Iraq and piles up huge budget and trade deficits, Europe has spent money on other priorities. ...

The U.S. has fallen significantly behind the EU's Western European nations in infant mortality and life expectancy, despite spending more on healthcare per capita than any of them. (While 40 million Americans are uninsured, no one in Europe -- I repeat, not a single person -- lacks some form of healthcare coverage.)

European children are consistently better educated; the United States would rank ninth in the EU in reading, ninth in scientific literacy, and 13th in math. Twenty-two percent of American children grow up in poverty, which means that our country ranks 22nd out of the 23 industrialized nations, ahead of only Mexico and behind all 15 of the pre-2004 EU countries. What's more horrifying: the statistic itself or the fact that no American politician to the right of Dennis Kucinich would ever address it?

Perhaps more surprisingly, European business has not been strangled by the EU welfare state; in fact, quite the opposite is true. Europe has surpassed the United States in several high-tech and financial sectors, including wireless technology, grid computing and the insurance industry. The EU has a higher proportion of small businesses than the U.S., and their success rate is higher.

It is actually puzzling that EU can work so well. Huge bureaucracies everywhere, heavy taxation, and nobody really agrees on very much. The governments have lots of parties and rarely any unified direction. The populace usually isn't very happy with their governments, and complains about their countries a lot of the time. Lots of people in the EU countries aren't very happy with the whole EU thing, and have no great interest in being a super-state together with everybody else. Nobody's very sure what the EU's various bodies are doing.

But as the writer touches on, complex webs of relations and social interactions take place here. It is not so much about a unified direction that everybody's lining up behind. It is not about everybody agreeing. Rather, everybody's talking about everything all the time. Everything is something to have a dialogue about. Everything is to be discussed, and the outcome isn't clear in advance. It depends. And things happen based on those complex webs of relations, not necessarily based on orders from above.

And that's what makes the EU hugely different from the US. In the US things are much more simple. There are different sides that try to win, so they can decide what direction things go in. But there's hardly any public dialogue about anything. There's no culture of talking things over to find the right answers. There isn't much room for constructively having different opinions. You aren't taught to think that way, so only if you make a special effort will you make it there. You're typically for or against things.

People are probably more motivated in the U.S. More inclined to make a concerted effort to do something special, make a mark on the world. Where Europeans often are more cynical and less inclined to leave the fold. Except for in thought. Europeans overall tend to be much better informed about the world and prepared for discussing just about anything. But less inclined to personally and directly do anything about them.

But things don't only get done by personal inititative. Sometimes talk-first-and-act-later might be more effective than act-first-and-don't-think-too-much. A more complex networked inter-dependent society might do better than a simple top-down laissez-faire society.
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