By Steven Hill, Guardian, September 2, 2011
The US media’s crystal ball gazers have a terrible track record on Europe –- so pay no attention to reports of an imminent fall
The US media has a long history of having fun at Europe’s expense. Recently Time magazine added to a longstanding Europe-bashing tradition with a cover story that blared “The Decline and Fall of Europe”, featuring a young London rioter, dressed in a hoodie and glaring like a Tolkien wraith from the red flames engulfing the cityscape behind him.
But this is not the first time that the US media has declared the end of Europe. In February 2006, CNN’s Fareed Zakaria wrote a column for the Washington Post titled – drum roll please – “The Decline and Fall of Europe”. Not content with predicting Europe’s fall twice, in the early 2000s various pundits in the American media declared the end of Europe. Here’s a small sample of the brassy headlines that appeared in leading media outlets, trumpeting the imminent collapse of Europe: “The End of Europe”; “Europe Isn’t Working”; “Will Europe Ever Work?”; “What’s Wrong with Europe”; “Old Europe Unprepared for New Battles”; “Western Europe Is Cursed”; “Is Europe Dying?”; “The Decline of France”; “Europe’s Long Vacation Is Ending”; “Why America Outpaces Europe”; “Europe Turns Back the Clock”, and many more.
Those sorts of doom and gloom stories, penned by US pundits like the Washington Post’s Robert Samuelson and Steven Pearlstein, and America sympathisers like Niall Ferguson, appeared regularly from 2003 until late 2006, when – surprise, surprise – it was discovered that the European economy was actually surging and had then surpassed the US, becoming the largest economy in the world with more Fortune 500 companies than the United States and China combined.
In fact, an article published in the international version of Newsweek in November 2006 blared the headline “The Great Job Machine: Despite Its Laggard Reputation, Europe Continues to Grow Faster, and Create More Jobs, than America” – yet that story never appeared in Newsweek’s domestic version.
Another article in BusinessWeek, reviewing healthcare systems in the United States, France and the United Kingdom gave the nod to France as having the most efficient and affordable system. But it was never published in the US print edition.
If you listened only to the US media, you’d think Europe has always been in crisis. Gloomy news reports from the early 1990s warned that the German economy, the largest in Europe, was “slumped at the razor’s edge”. There were dire predictions of rising unemployment, crime and taxes to “a level not seen since the Weimar Republic”. Yet by the late 1990s a prospering Germany had become the world’s leading exporter; Germany’s unemployment rate today is a third lower than America’s.
The truth is, just as the American media missed the real story when it came to weapons of mass destruction in Iraq, the housing bubble, corruption of the credit rating agencies and an imminent economic meltdown, the crystal ball gazers in the US media have a terrible track record when it comes to Europe.
Even Paul Krugman likes to pile on, writing a recent essay for the New York Times magazine titled “Can Europe Be Saved?”, and carping that the Germans – one of the few economic bright spots today – “seem to be getting their talking points from the collected speeches of Herbert Hoover”.
What accounts for this kneejerk Europe bashing? Part of it undoubtedly is envy. While Americans foot the bill for being the world’s robo-cop, even as a sixth of the nation has no healthcare and lives below the poverty line, the allegedly ungrateful Europeans plow their resources into taking care of their families and communities. Social capitalism is outshining Wall Street capitalism. Envy becomes anger, and anger explodes into defaming headlines.
Another explanation is nationalism. Americans are a patriotic people, with a strong belief in their own exceptionalism and, as the dominant power in the post second world war era, in their pre-eminence. Americans like to win, even in healthcare, yet US power, while still substantial, is waning. And that breeds resentment.
Finally, it also stems from Americans not knowing their own history. To understand Europe’s present predicament it is instructive to recall the young United States of America in 1789. The 13 former colonies were torn by regional tensions as they began the arduous and conflict-ridden task of trying to form themselves into a union of member states. They were diverse in their histories, religions and other characteristics, much like the different EU member states today. And, of course, some were slave states while other states were starting to voice opposition to slavery – a tension that eventually exploded into a bloody, bitter civil war.
Young America also had no single currency – each state had its own currency, indeed banks had their own scripts that were used like currency. The new nation was plagued by debt to domestic as well as foreign creditors. To meet these challenges head-on, the first secretary of the treasury, Alexander Hamilton, took the lead in designing the beginnings of a modern financial system, including a single currency. Attesting to how controversial his efforts were, two of the most important founders, Thomas Jefferson and James Madison, fiercely opposed Hamilton’s plans.
Americans were so suspicious of central government that President George Washington – who was a military hero and enjoyed god-like stature as the nation’s pre-eminent leader – dared not propose raising funds for a standing army. People were so against federal taxes that the first national tax, which was levied on whisky – chosen as less controversial than other taxes – led to open rebellion in western Pennsylvania, prompting Washington to march troops there to suppress it.
In short, it took approximately 80 years from its founding – as well as a civil war – for America to settle its founding contradictions, cease being a collection of regions and to become one nation. And during that time the US economy suffered at least seven banking and financial panics that make today’s euro difficulties look mild. Yet America persevered, continuing to define its union.
Europe today has many contradictions and tensions, but nothing on the scale of those that bedevilled the young United States of America. Though certainly we see similar echoes playing out in the ongoing evolution of the European Union and the eurozone. Tensions between centralised authority versus member state sovereignty, federalism versus states rights, common currency and transfer unions versus state self-reliance, with a half a billion individuals’ lives swept up in the turmoil.
So when you read the next “Europe is dying” headline, remember that “old Europe” actually is very young. Nearly half of the member states have joined only since 2004, the euro dates only to 2002. Like a young America, Europe is in the process of deciding how united it wants to be. That noisy and conflicted process will probably take decades of trial and error.
But as long as the European appetite for union remains steadfast, and as long as the heart of the enterprise remains beating, Europe will continue to define itself. And perhaps in surprising ways. So fasten your seat belts. And in the meantime, ignore the headlines.