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War Hero Versus Shooting Star

As Andrew Hammel from the University of Düsseldorf pointed out in his interview with Jörg Wolf recently, most Germans "haven't the faintest idea what John McCain stands for" politically. If you thought you could find out by reading his autobiography, think again. "Faith of My Fathers" could just as well be placed on the bookshelf labeled "military history".

In his so-called "family memoir", John McCain describes in detail wartime adventures of his father and his grandfather. Both were named like himself: John Sidney McCain, and both were four-star admirals in the Navy. John McCain the third (72) succeeded them to military academy and became a bomber pilot. After childhood and youth full of fits of rage and fistfights followed the stereotypical life of a soldier, including fights, romantic escapades, alcohol and gambling.

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High Demand Or Rather An Oil Bubble?

A tip from our reader Don has led us to an article in the London Times. In it, economics columnist Anatole Kaletsky argues that the astronomical oil price is not caused by economic fundamentals like supply and demand,

but rather the product of a typical financial boom-bust cycle, which could be deflated - especially with some help from sensible political action - as quickly as it built up. [...]
In the late stages of financial bubbles, it is quite normal for prices to become completely detached from economic fundamentals. House prices in Florida and Spain kept rising even after property developers built far more homes than they could possibly sell. The same thing happened in credit markets: mortgage securities kept rising even while banks created “special purpose vehicles” to acquire vast “inventories” of bonds for which there were no genuine buyers - and dozens of similar examples can be cited from the bubbles in internet stocks and Japan. Similarly, the International Gold Council reported this week that gold demand for commercial uses and investment fell 17 per cent in January, just as the gold price surged through $1,000 for the first time.
Now consider the situation today in oil markets: the Gulf, according to Mr Rothman, is crammed with supertankers chartered by oil-producing governments to hold the inventories of oil they are pumping but cannot sell. That physical oil is in excess supply at today's prices does not mean that producers are somehow cheating by storing their oil in tankers or keeping it in the ground. All it suggests is that there are few buyers for physical oil cargoes at today's prices, but there are plenty of buyers for pieces of paper linked to the price of oil next month and next year. This situation is exactly analogous to the bubble in credit markets a year ago, where nobody wanted to buy sub-prime mortgage bonds, but there was plenty of demand for “financial derivatives” that allowed investors to bet on the future value of these bonds.

The article quotes a book by George Soros which is available on Amazon.de or Amazon.com.

Britain: Pro-European And Pro-American At Once?

Gordon Brown’s administration, despite its domestic (foremost economic) troubles, has a great foreign policy opportunity, claims Philip Stephens in the Financial Times:

The next year or so offers Britain the best chance in a generation to get its foreign policy right. Whoever wins the White House, the time has come for Britain to rebalance its European and transatlantic relationships. [...]

While Foreign Minister David Miliband insists on the "special relationship" between Britain and the US, he's also been making remarks hinting at a new recognition of Great Britain being part of Europe, says Stephens.

The implication is that a British government will speak from a European perspective in Washington as much as from a US one in Paris or Berlin. Behind this – at least I hope this is what Mr Miliband means – is an understanding that strong ties between London and Washington work in Britain’s interest only in so far as they also reflect wider transatlantic cohesion. [...] What has changed [though] is that a less subservient British relationship with Washington need no longer imply a weakening of broader transatlantic ties. The message for Britain from the Iraq war was that it could not have the best of both worlds – a privileged place in Washington and a leadership role in Europe. But France too learned a tough lesson: it cannot unite Europe against the US. [...] The governments of Europe’s three most powerful nations are now more or less at one. France’s Nicolas Sarkozy has abandoned his predecessors’ anti-Americanism. Angela Merkel has restored Germany’s Atlanticist tilt. [...] What this means is that Mr Brown can be at once pro-European and pro-American.

World War IV: Europe on the Front Line

While Swiss media are reporting Al Qaeda bomb threats during the upcoming EU- soccer championship (taking place in Switzerland and Austria), Eric Grover warns from an Islamic "World War IV" against the West on blogactiv. This entry was cross-posted from blogactiv with permission and without further editing. It does not represent the Atlantic Review's opinion on the matter:

"A resurgent fundamentalist Islam is engaged in a global war against the West and the rest of the infidel world. In World War IV: The Long Struggle Against Islamofascism former Commentary editor in chief Norman Podhoretz calls it WW4.

Republican presidential frontrunner John McCain believes "the transcendent challenge of the 21st century is radical Islamic extremists." Mitt Romney said the “philosophy of radical jihadism says, ‘We want to kill.’” In stark contrast, Democrats, George Bush and many European leaders talk about combating terrorism – a means, disembodied from any animating ideology or purpose. It is as if in WW2 Roosevelt and Churchill had called for waging war against Panzer tanks. UK Home Secretary Jacqui Smith in a positively Orwellian construction now refers to Islamic terrorism as “anti-Islamic activity.”

21st century Europeans and Americans no longer understand men motivated by and willing, indeed eager, to kill and die for their faith.

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100 Million US-Americans Don't Vote

While the American primaries make the headlines on a daily basis even in our Swiss newspapers, more than a hundred million Americans usually don't vote, which means about 40% of eligible voters forego their right to elect who's to become (arguably) the most powerful political leader in the world. Find an interesting "mini-movie" about these missing voters here.

This is what the filmmakers write about themselves:

A year before the presidential elections of 2008 a crew of young European filmmakers goes on a journey all across the country in a little old motorhome to search for America’s missing voters. Who are they? Why don’t they vote? Can a young and fresh presidential candidate as Barack Obama make them vote? How would American politics change if more young people, single women, poor white people, African-Americans and Latino’s would start voting?

"You usually end up with [a] disproportionate number of minorities not voting and more young voters not voting," according to Project Vote, a  not-for profit organization that tries to get more people to vote. Also featured in the movie: Thomas E. Patterson, Harvard professor and author of the book The Vanishing Voter (Amazon.com; Amazon.de). His conclusion is very clear:

If you enlarge[d] the electorate in the US, you'd be pushing it to the left.

Historically, only 10-20 % of all eligible voters take part in the primaries that are occupying so much of our attention at the moment. Oh, and by the way, guess which country besides the US has a very low turn-out on election day? Correct: it's  Switzerland.

Urban Democracy: How the City of Seattle Empowers Its Neighborhoods

Most people try to avoid bureaucracy as best as possible. Others fight the government wherever they can. Too bad, if you ask Jim Diers, a former community organizer who initiated Seattle’s Department of Neighborhoods in 1988 and served as its first director until 2002. “Cities work best when local government and the community are working as partners”, and there are lots of things that communities can do better than government can, he concludes in his book: Neighbor Power. Building Community the Seattle Way.

According to Diers’ approach, governments shouldn’t consider themselves as service-providers for their (passive) customers. Quite to the contrary: Dependency on government money and government planning ruins people’s sense of responsibility for their own neighborhoods. At the same time, an incredible wealth of “social capital” goes unused. In order to build ongoing community engagement, you have to allow citizens to choose what they want to change and then accomplish this change in a collaborative effort.

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The First Big Book On The Credit Crunch

According to the Economist, Charles Morris is the first to really assess the current crisis of the financial market in his book The Trillion Dollar Meltdown:

He describes three trends converging to create the bubble: By 2006 the growing trend towards deregulation had pushed three-quarters of all lending outside the purview of regulators. Securitisation created a serious agency problem, leaving loan originators, who were paid up-front, with no incentive to avoid bad credits and every reason to piggyback inappropriate products onto good ones [...]  Banks and rating agencies were gripped by the pretence that all finance can be calculated by risk-modelling eggheads. It did not help that many investors blindly accepted the rating agencies as a kind of “financial Supreme Court”.

In addition, the "Federal Reserve fuelled the housing boom by sharply cutting the cost of short-term money. Mr Greenspan ignored warnings about subprime excess, while eagerly championing 'new paradigms', from hybrid mortgages to credit derivatives." As for the solution:

He offers a raft of suggestions: originators should retain the riskiest portion of securitised loans; prime brokers should stop lending to hedge funds that fail to disclose their balance sheets; trading of credit derivatives should be brought onto exchanges for the sake of safety, even if this raises costs; and some version of the old Glass-Steagall act, which separated commercial banking and capital-markets activities, should be re-introduced. Ultimately, he argues, after a quarter-century of “market dogmatism” it is time for the regulatory pendulum to swing the other way.