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Mutual Disappointment

Chancellor Merkel is traveling across America this week. She loves the United States, but she is still having trouble connecting with Barack Obama, writes Spiegel International (HT: David). The media loves to personalize politics. I think at the end of the day the problem is not the personal relationship between Obama and Merkel, but its structural. After long descriptions of the well-known differences in Obama's and Merkel's style of politics, Spiegel comes to the same conclusion in the end:

At the moment, the partners on both sides of the Atlantic are disappointed with each other. Whenever the Americans want something from the Germans, they are guaranteed to be turned down: on prisoners from Guantanamo, on sending significantly more soldiers to Afghanistan and on new economic stimulus programs.

Merkel, on the other hand, was repeatedly appalled last year at how inconsiderate the Americans were of German or European interests. Whenever she spoke to Obama about climate protection, he was only concerned with the consequences for the United States. When the Americans settled on a new strategy for Afghanistan, they didn't ask their allies first. Merkel also suspects that the United States is not interested in reining in the financial industry.

She is forced to look on as America becomes more and more enmeshed in a duel with China. Nothing is done that could impair Washington's position toward China, which is why the United States doesn't want to take on the burdens of a strict climate policy or a more tightly controlled financial market. German interests are of little importance, because Germany has little left to offer the Americans.

Europeans Are "a Pack of Pagan Losers"

"A spectre is haunting Europe-the spectre of Communism." Those were the words of Karl Marx and Friedrich Engels in 1848 and their predictions turned out to be highly accurate, as we all know. Now the spectre of communism is haunting America and the end of the world is near.

The conservative media is scared shitless by this spectre and accuses Obama of turning the land of the free and the home of the brave into Russia/Europe/communism/socialism. For instance, Jonah Goldberg, editor-at-large of National Review Online, writes in Townhall (via No Pasaran): "The recently passed health-care legislation is the cornerstone of the Europeanization of America." Like "Amerikanische Verhältnisse" (American conditions) in Germany, the "Europeanization of America" is an increasingly popular catch phrase for fear mongering ("The Europeanization of America", Atlantica: A Threat to American Freedom, "If It's From Europe, Forget It" and Other Comments on Health Care).

Apparently the US conservative media needs to resort to fear mongering in order to attract an audience and advertisements from big companies. Capitalism is the excuse to exaggerate and insult. Americans live in the harsh reality of a free market economy and are not living the sheltered lives of 7 year old kids as we Europeans do, according to Goldberg:

We can't become Europe unless someone else is willing to become America. Look at it this way. My 7 year-old daughter has a great lifestyle. She has all of her clothes and food bought for her. She goes on great vacations. She has plenty of leisure time. A day doesn't go by where I don't look at her and feel envious at how good she's got it compared to me. But here's the problem: If I decide to live like her, who's going to take my place? Europe is a free-rider. It can only afford to be Europe because we can afford to be America.

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Debt Will be More Manageable with Smart Tax Cuts

Atlantic Review appreciates that two Wall Street Journal contributors respond to our blog post on their article.

George Pieler and Jens Laurson took issue with the French finance minister's claim that German productivity ails Europe's economy. Joerg Wolf agreed with their criticism in Atlantic Review's post Germany as Maya the Bee, but expressed disagreement on the issue of tax cuts, even though that was not a central part of their article.

Jens Laurson and George Pieler have now submitted the following riposte, which we appreciate and are happy to post here:

In commenting on our Wall Street Journal piece ("Not so Faaaaast, Germany"), Joerg Wolf, Editor of the Atlantic Review, disagrees with the following observation: "Germany should cut taxes.  But it should do so for its own good..."

Mr. Wolf makes three points which we should like to examine; hoping to clarify an evident misunderstanding that has arisen.

Mr. Wolf says Germany has been advised to cut taxes "especially of top earners, over the past twenty years.  Such advice is neither helpful nor original and creative."  Well, neither originality nor creativity was our intent, nor is that an argument against the argument. The question is, whether it is good advice. Certainly if it is such oft-repeated advice there must be something to it?  For the record, we think cutting taxes is good-indeed essential-advice. This is partly because Germany has one of the highest top personal tax rates in world (47%). More worryingly, the German state absorbs nearly half the nation's GDP which means an astonishing, if hidden loss of productivity.  This formula has worked for Germany so far, a reflection of popular acceptance of high taxes in exchange for government-guaranteed income security programs.  We don't think that will work so well in the future, though. The German tax cuts over the last two decades Mr. Wolf mentions, in any case far outweighed by the tax increases in the same time, are irrelevant to this discussion.

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Obama Does Not Have International Friends

President Obama thus far has failed to strengthen relationships with historic allies, focusing instead on a fruitless search for improved relations with adversaries, writes Robert Kagan in the Washington Post (via Atlantic Community):

The president who ran against "unilateralism" in the 2008 campaign has worse relations overall with American allies than George W. Bush did in his second term.

Israelis shouldn't feel that they have been singled out. In Britain, people are talking about the end of the "special relationship" with America and worrying that Obama has no great regard for the British, despite their ongoing sacrifices in Afghanistan. In France, President Nicolas Sarkozy has openly criticized Obama for months (and is finally being rewarded with a private dinner, presumably to mend fences). In Eastern and Central Europe, there has been fear since the administration canceled long-planned missile defense installations in Poland and the Czech Republic that the United States may no longer be a reliable guarantor of security. Among top E.U. officials there is consternation that neither the president nor even his Cabinet seems to have time for the European Union's new president, Herman Van Rompuy, who, while less than scintillating, is nevertheless the chosen representative of the post-Lisbon Treaty continent.

Before you dismiss these observation because the author is a neocon, check out the Roger Cohen's NY Times article, which describes Obama's disconnect with traditional allies in much stronger words:

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Germany as Maya the Bee

George Pieler and Jens Laurson take issue with the French finance minister's claim that Germany's productivity is what ails Europe's economy. Writing in the Wall Street Journal they compare Germany with Maya the Bee. (Subscribers only, but you get the full article via Google News.)

Maya was a curious, busy bee, always buzzing from adventure to adventure. Her best friend, Willi, however, was less ambitious and had a more rotund physique. His catch phrase was the elongated, nasal cry: "Maya-don't fly quite so faaaaast."

We were reminded of the Willi character when French Finance Minister Christine Lagarde recently called on Germany to compete a bit less effectively. She argued that Germany's success in exporting goods and its high productivity supposedly puts undue pressure on the other European economies. Ms. Lagarde went so far as to suggest that higher German productivity, in part caused by restrained labor costs, might not be a "sustainable" model for the future.

Laurson and Pieler criticize the "concept of economics as a zero-sum game, i.e. France may only gain at Germany's expense" which "is so woefully outdated that one must wonder how Europe ever got as far is it did, economically. It utterly disregards the fact that competition doesn't weaken but strengthens economies."

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