Inspiration Across the Pond

By Steven Hill, March 29, 2010, E!Sharp

Europe is going through another one of its occasional bouts of self-doubt and pessimism. The great historian Arnold Toynbee once wrote, “Countries have characters that are as distinctive as those of human beings.” The collection of countries known as Europe has never hidden its gloom very well.

A chain of events has triggered this latest round of continental handwringing, including a struggling economy and fears of defaults in Greece, Spain and Portugal. These inferiority-inducing mishaps were capped in early February by US President Barack Obama declining an invitation to attend the EU-US summit in Spain in May.

Before that, at December’s Copenhagen summit on global climate change, instead of working hand-in-hand with Europe Obama holed up with Chinese premier Wen Jiabao and, with Europe out of the room, struck a deal.

These two incidents, interpreted by Euro-pessimists as White House snubs, have been cited as proof that Europe is barely relevant on the world stage, still “punching below its weight” even with its Lisbon Treaty ratified.

That is rubbish. What Europe’s latest “doubt bout” reflects is unrealistic expectations – for itself as well for Obama. America under Obama’s leadership is failing to follow the script that Europe had written for it because Europe has misunderstood both America and its president. It is time for a more realistic script.

According to the existing script, after the long ordeal of the George W Bush administration – which, as one British pundit said with characteristic English wit, “acted like a bull that carried around its own china shop” – America supposedly came to its senses. It elected Barack Obama, an ethnic-minority candidate who gave riveting speeches about universal values and, in the European Rorschach test, was crowned as the “good” American leader. Europeans thought finally it had an American leader who was more of an ideological soul mate.

But signs that Obama was not keeping to the script soon appeared.

He unilaterally launched his troop surge in Afghanistan, without consulting European allies, and then pushed Europe to step up its own troop levels in the country. He dragged his feet on re-regulation and redesign of the financial architecture that had collapsed so spectacularly, most of it as a result of the risky, toxic investment scams of US banks and rating agencies. And his proposals to reduce America’s carbon emissions and increase conservation efforts have been underwhelming.

Why is Obama diverging from the script that Europe thought it had written for him? That is an important question, and the answer gives Europe a clue about what it needs to do.

First, despite his inspiring “audacity of hope” rhetoric, Obama is no social democrat – or even a Franklin Roosevelt. He is a pragmatist with some progressive sympathies, but America’s Democrats by and large are to the right of even the conservative parties of Europe.

Second, and partly the cause of Obama’s pragmatism, he needs 60 out of 100 votes in the filibuster-gone-wild US Senate to get any laws passed. This means that the 41 Republican senators (who represent only a third of the nation) can halt everything. In no other major legislature in the world is 60 percent of the vote necessary to pass legislation. America is going through a constitutional crisis that has resulted in a perverse form of minority rule, and as a result it cannot even do right something as basic as healthcare.

Add to that a recent Supreme Court ruling that has opened the spigot on unlimited corporate donations for political campaigns, and you have two severe blows to American democracy. Even Obama cannot deliver because the US political system is too antiquated and backward.

Third, following the shocking loss in January of a senatorial seat in heavily Democratic Massachusetts, Team Obama made an assessment that it needed to focus like a laser on domestic issues and the impending congressional elections in November. The Democrats are deathly afraid of reliving the nightmare of 1994, when the Republicans swept a Democratic majority out of Congress and President Bill Clinton suddenly was handcuffed to a hostile GOP Congress. So there is no time for hobnobbing at European summits.

Fourth, the White House is unquestionably intimidated by the demands that Europe is placing upon it. Europe has made it clear that it wants the US to step up its game. The Copenhagen summit was a good example of the new transatlantic push-pull dynamic. The US is by far the largest per capita carbon emitter in the world, with the average American spewing twice as much carbon as the average European, and more than four times the average Chinese or Indian.

But Obama has been the “foot dragger-in-chief”, coming to Copenhagen pledging to reduce carbon emissions by a paltry 4 percent from 1990 levels. A more or less unified Europe offered 20 percent by 2020, and 30 percent if the US would match it. Even European conservatives such as French President Nicolas Sarkozy and German Chancellor Angela Merkel pushed Obama to do more. But needing 60 votes in the Senate to push through cap-and-trade legislation, it was not possible. So Obama instead turned to the Chinese for a deal. Yet this was a partnership of mediocrity; a conspiracy of mutual underachievers. The failure of Copenhagen was a failure of Obama to deliver, not Europe.

This of course is the exact opposite of the view that “Europe is irrelevant.” Europe, actually, is hyper-relevant. Obama knows he cannot live up to Europe’s expectations, so that makes China an easier partner. A summit with the Europeans would only highlight Obama’s impotence.

Unlike the United States, Europe is hardly an underachiever. Despite its occasional self-doubt and continental disunity, Europe has managed to lead the world when it comes to reducing its ecological footprint (now half that of the US for the same standard of living). That is no small feat considering that the EU also is now the largest, wealthiest trading bloc in the world, producing nearly a third of the global economy – nearly as large as the US and China combined.

Europe actually has more Fortune 500 companies than the US and China put together, and some of the most competitive national economies, according to the World Economic Forum. From 1998 through 2008 (until the global economic collapse), Europe had a higher GDP growth rate per capita than the US, and currently the continent previously known as the “land of high unemployment” has a lower unemployment rate (US 9.7 percent, EU 9.5 percent, Germany 7.5 percent).

Europe today is the largest trading partner of both the United States and China, yet it is not all big corporations pumping up the economy. Europe’s more numerous small businesses provide around two-thirds of its jobs, compared to about half in America.

Just as impressive, Europe’s “social capitalism” has figured out how to harness its economic engine to create a more broadly shared prosperity, including far superior supports for families and individuals to help them stay healthy and productive during a time of rising inequality.

Hardly “welfare” as Americans derogatorily call it, this is more accurately described as “workfare” for the worker bees, including healthcare for all, paid parental leave, paid sick leave, affordable child care, free or nearly free university education, job training, generous vacations and pensions, and supportive senior care.

From cradle to grave, Europe ploughs its money into its people rather than into excessive corporate profits, CEO bonuses or a bloated military. In the US, about the only people who enjoy the full range of European-level supports are those who work for wealthy corporations or the president and members of Congress. What is good for US political and economic elites apparently is not to be enjoyed by their fellow Americans. The drawbridge has been pulled up.

Consequently, 14 percent of Americans live in poverty – about 40 million people – compared to 6 percent in France, 8 percent in Britain, and 5 percent or less in Germany, Sweden and Belgium. Twenty percent of American children live below the poverty line, as do nearly 23 percent of the elderly, the highest figure by far in any industrialised country with the exceptions of Russia and Mexico. The US is ranked 29th in infant mortality (in 1960 it was ranked twelfth) and 37th in healthcare (France is ranked first). The wealthiest 10 percent of Americans now owns 70 percent of the wealth, whereas in Germany the top 10 percent owns 44 percent.

These are not the telltale signs of a leading nation, unless one measures leadership by the size of the US military budget, which unquestionably leads the world – though this has apparently not purchased greater security.

So Europe has much to hold up its head about. More than any other place, it is the leader in figuring out how to harness the dynamic, wealth-creating engine of capitalism so that its prosperity is both broadly shared and ecologically sustainable.

In the United States, there is a saying that goes, “You can only walk as fast as your slowest hiker.” Unfortunately Europe has two foot-draggers in its troop: America and China. It finds itself in the difficult position of trying to coax them both to walk faster. That is not an easy thing to do, and Europe should not beat itself up over its limited success. Europe needs to lower expectations and follow the strategy of Jean Monnet – using small, patient, incremental steps of engagement to get the US and China heading in the right direction.

It is important to recognise that Obama is not who Europe had hoped he would be. The EU needs to write a new script for its relationship with the US, one that is more pragmatic and reality-based.