American publications such as the New York Times (‘If We Buy American, No One Else Will’) and the Christian Science Monitor (‘Buy American, buy a trade war’) published strongly worded op-eds admonishing Congress for having apparently been persuaded by American steel industry lobbyists to insert the ‘Buy American’ clause into the bill. The Christian Science Monitor piece cites research by the Peterson Institute for International Economics suggesting that, depending on the version of the provision, 1,000 to 9,000 new jobs might be created, but the blocking of U.S. exports by retaliatory measures in other countries could lead to far greater American job losses.  The New York Times article by Dartmouth College economics professor Douglas Irwin points out that American companies such as GE and Caterpillar oppose the provision as it might prevent them winning contracts abroad, further hurting American workers.  Time Magazine’s report ‘As Europe’s Economies Slide, Protectionism is on the Rise’ describes trends toward protectionism in Europe in response to the global economic downturn.  Italian Trade Minister Adolfo Urso is quoted saying that risks stemming from a ‘Buy American’ provision are not only European retaliation against the United States but the possibility that the issue could cause serious divisions within the European Union.

European op-eds and news reports reflect similar anxiety over the ‘Buy American’ clause, warning that it has the real potential to cause a spiral of protectionist legislation that could lengthen the recovery time of the world’s economies.  The Times of London (‘EU warns President Obama to drop protectionist measures’) and The Telegraph (‘Europe and Canada warn U.S. over ‘Buy America’ clause’) both describe strongly worded letters addressed to Senate leaders by EU and Canadian officials warning against ‘entering into a spiral of protectionist measures around the globe that can only hurt economies further.’  The Independent  says that the ‘Buy American’ provisions could ‘trigger a disastrous trade war.’  The Independent is among the few European newspapers to mention that Vice President Joe Biden did not see the provision as a ‘harbinger of protectionism’, though several European reports have mentioned President Barack Obama’s concerns about the provision.  Like the British papers, French daily Le Monde in its report “The United States takes a risk in playing the protectionist card” stresses how detrimental such a provision might be to global trade and that it will possibly harm the ‘carefully cultivated’ popularity of President Obama abroad. The Financial Times website carries a lengthy op-ed blog entry by London School of Economics Professor Willem Buiter, a former chief economist of the European Bank for Reconstruction and Development, who links the wave of protectionist leanings among the G-20 major economies to many economic challenges facing the world and Europe today.  Writing under the headline “‘Yes we can!’ have a global depression if we really continue to work at it…,” Buiter says:

‘The questionable value of the fiscal stimulus is overwhelmed by the unquestionable domestic and global harm caused by the Buy American clause.  If president Obama fails to veto a protectionism-laced bill, it will be clear that we have a wuss in the White House. If such is the case, God help us all.’

The Financial Times, in an analysis (’To Each Their Own’) similar to the one published by Time Magazine, says that Europe will find it hard to implement protectionist policies by the traditional means of raising tariffs, because of EU and WTO commitments. But it warns that other kinds of protectionism, in the guise of “economic nationalism,” are cropping up around Europe, as well as dangerous new forms of financial protectionism.

Many in the German media, as evidenced in these extracts compiled in English by Spiegel Online International, used the occasion for one more round of Bush-bashing. The center-left Suddeutsche Zeitung wrote of Obama: “Someone who inspires so much admiration and loyalty makes things difficult for America’s enemies. The image of the US as bogey man, passionately stoked by many and brutally exploited by terrorists, will not work so easily anymore.”

“America’s weaknesses were not only George W. Bush and his clique, but rather the intellectual position that spread throughout the country: an imperialist megalomania, a power trip, that didn’t leave room for friends. It led the country to lose its attraction for the first time. Obama’s greatest achievement was that he has reactivated this magnetism. Suddenly people across the world are looking benevolently at America, at this positive and dynamic society that allows so much freedom.”

The conservative Die Welt said Europeans were more likely than Americans to hold it against Obama if he turns out not to be a true miracle healer. “The disappointment will in all likelihood be felt abroad, particularly in Europe. That is because Barack Obama will quickly make it clear that he is above all the president of the United States and will represent that country’s interests in a way that may be thoroughly uncomfortable for Europe.”

Center-right Frankfurter Allgemeine Zeitung  commented that the “sobriety” of Obama’s speech “is certainly aimed at dampening the messianic hopes that have been raised by his inauguration. They also mark a break from the ideological polarization that defined much of the Bush presidency.”

The left wing Berliner Zeitung described Obama as embodying “the noble side of the American idea — in contrast to those who governed until Tuesday,” adding that, “Seldom has an inauguration speech been such an unforgiving reckoning with a previous administration.”

“Obama’s speech recalled that of Franklin D. Roosevelt in 1933, when he spoke about the truth about the economic crisis, about challenges and wars. … It is this ability to speak to both history and to his audience of the day that Obama has mastered like no other politician. It was a skill that played no small part in bringing him to the White House. However, the inspiration that comes from his own historic mission will not last forever.”

British newspapers reflected many of the same themes as the German media, but were more inclined to dwell on America’s racial history.  The Guardian’s main report ‘Obama inauguration: Let the remaking of American begin today’ described the crowd as “quite possibly the largest mass of humanity ever to have gathered in one place for a single political moment,” and detected four “ghosts” at the ceremony: Lincoln’s Gettysburg address provided the theme of Obama’s speech – the “new birth of freedom” – and Lincoln’s Emancipation Proclamation and Obama’s inaugural address “were in some ways bookends to the darkest stain on America’s history.” For many in the crowd this was the over-riding reason for the pilgrimage to Washington.

Nobody there could have been oblivious to the echo of the “I have a dream” speech, delivered at the other end of the Mall by the second ghost, Martin Luther King, 45 years previously. “And then there were JFK and FDR. Obama’s call for responsibility and sacrifice recalled both Kennedy in 1961 and Roosevelt’s heartfelt cry in 1933: ‘We now realize as we have never realized before our ¬interdependence on each other.’”

Coverage in the Financial Times was largely adulatory, stressing the “decisive break” that Obama had made with the Bush administration. Like most reporting in the European media, the FT missed the extraordinary amount of conservative philosophy embedded in the speech – ranging from Obama’s endorsement of traditional right-wing values such as hard work and patriotism to his appeal to Americans to remain “faithful to the ideals of our forebears, and true to our founding documents,” a sentiment much more popular on the right than on the left. (The FT described the size of the crowd in the Mall as “biblical,” without explaining which event in the Bible gathered 2 million people in one place.)

In an editorial, the FT called Obama a born leader. “There is no bombast or chauvinism or phony sentiment in Mr. Obama’s oratory. He inspires, yet his appeal is always to the intellect; still he holds an audience of this size spellbound. It was the performance of a born leader.”

It concluded: “Mr. Obama starts with the great goodwill of his country and all the civilized world. He again made clear that he seeks co-operation with other nations. He understands the international dimension of many of the problems he must confront. In many ways his inauguration is a new start not just for the United States but for the world. America’s friends must also seize the moment.”

A commentary in the more conservative London Times, ‘Realistic if not soaring,’ was less ecstatic about Obama’s oratory: “There were few truly memorable pieces of phraseology – no Kennedyesque, or Rooseveltian quotations for the ages. He labored hard to echo the tone and cadence of his biggest campaign performances. And there was more than a hint of a self-conscious echo – distractingly – of the speeches of his hero and fellow Illinoisan, Abraham Lincoln.

The language in particular sounded decidedly 19th century in parts . . . But it wasn’t up to Lincoln’s standards – which perhaps is asking too much. In fact, it may not have been really memorable at all . . .  In fairness it was a speech more obviously measured to the practical immensity of the immediate challenges.”

Mary Dejevsky of the British daily the Independent saw the event as a sort of cleansing for America, suggesting that “if there is one video-clip that could change expectations everywhere, it is that of Mr. Obama swearing the oath of office beneath the Stars and Stripes.”  (She omitted to mention that Obama and Chief Justice John Roberts fumbled the wording of the oath – to the extent that it had to re-taken at a small White House ceremony the following day.)

Unfortunately, Dejevsky’s views of American race relations appear to be stuck somewhere in the 1960s, a perception she shares with many Europeans who are reluctant to abandon their stereotypes of a monolithic, racist “white America.”  As a result, she fails to understand Obama’s election and the nature of the criticism he will encounter when he makes mistakes (hint: it will not be because he is black, but because of his policies.) Thus she writes:

“At this time of high emotion and almost infinite aspiration, however, it is also important to realize what Barack Obama’s arrival in the White House does not say about America.  It does not say that all Americans are equal or even have equal opportunities.  It says that one particular American had the persuasive gifts and the qualifications to compete for the highest office and prevail.  It says that, in the league of white America’s concerns, economic self-interest – to put it crudely, the pocket book – trumped even so visible and deep rooted a consideration as race.  Voters judged Mr. Obama the candidate best equipped to address their anxiety.”

“But this does not mean that America’s complexes about race have been overcome. You can be sure that the moment the new President puts a foot wrong, there will be those who will not hesitate to invoke race. More than a few mis-steps, and there will be mutterings about race and capacity for leadership. The stakes for Mr. Obama are high indeed. What appears now as a giant step forward for equality and racial harmony in America could all too quickly turn into a giant step back.”

Research contributed by Eve Copeland.

But why should such scrutiny be limited to candidates, and not continued after one of them wins? The army of fact-checkers that monitored campaign claims and commercials has vanished with the victory of Barack Obama, as if it were no longer needed. And yet Obama constantly repeats a fallacious claim about the American workforce that is comparable to McCain’s comment about health care.

Twice this month (and many times before), Obama has exaggerated U.S. labor productivity in what seems like a bid to flatter American workers. In his weekly radio address January 3, Obama said that the United States has “the most dedicated and productive workers in the world.” In a speech January 8, he urged Americans: “We should never forget that our workers are still more productive than any on Earth.”

These ringing statements may sound good, but they are not actually correct. And if the U.S. media is not going to call Obama on these claims, perhaps the European media should. According to the Organization for Economic Cooperation and Development (OECD) in Paris, a prime authority on the subject, no fewer than six European countries score higher than the United States on the most common measure of productivity, output per hour worked. They are Luxembourg, Norway, Ireland, Belgium, the Netherlands, and France.

The Conference Board, an international business and economic analysis group, comes to a very similar conclusion, ranking the United States sixth after Luxembourg, Norway, Austria, Belgium and the Netherlands.

Maybe Obama thinks smaller countries don’t count - or perhaps he means that Americans are so “dedicated” that they spend more time at work than people in other countries? Well, not exactly. According to the OECD, the inhabitants of nine European countries (ten if you include Turkey) work more hours per year than Americans. These zealous employees are to be found in the Czech Republic, Finland, Greece, Hungary, Iceland, Italy, Poland, Portugal, and Slovakia.

It would be nice if someone in the media were to follow the advice that the CJR dispensed to the Rocky Mountain News about McCain’s exaggerated claim - “We must add history, context, and analysis, and when something is flat-out wrong, we should say so.”

Oligarchs and Money

‘Don’t Act Surprised’ International Herald Tribune, January 7, 2009 (Edward Chow and Jonathan Elkind)
In their op-ed, Chow of the Center for Strategic and International Studies and Elkind of the Brookings Institution argue that while both Russia and Ukraine are responsible for stabilizing their energy relationship the real blame for troubles can be traced to Ukraine.  They say that Ukrainian officials treat their country’s energy industry as a ‘political trophy’, submerging sound energy policy to personal and ‘business clan’ interests.  The European Union sees Ukrainian politics as a “black hole” that can best be circumvented by building new pipelines bypassing Ukraine, ignoring the possibility that European interests might be better served by promoting sounder energy policies in Kiev.

‘The battle of the oligarchs behind the gas dispute’ Financial Times, January 6, 2009 (Jerome Guillet and John Evans)
Guillet and Evans point out that while Russia has the gas supplies, most of Russia’s export pipelines and storage capacity were built by the Soviet Union in Ukraine. Ukraine relies on gas from Russia to fuel its heavy industry as it has depleted most of own reserves.  The authors argue that Gazprom has long understood that Ukraine would never pay for official gas deliveries; as a result, complicated, opaque deals were made at high political and business levels. Those involved set up the system in a way that allows them to make immense personal profits.  The real blame for the gas cut-offs is infighting amongst the oligarchs in Kiev and Moscow and the real concern should be that the Russian and Ukrainian governments allow this kind of in-fighting to stymie the creation of a needed, stable energy agreement. Further, the article suggest that perhaps Russian Prime Minister Vladimir Putin is not as politically influential as believed, given that these oligarchs have the power to cause such a wide reaching crisis.

‘Analysis: Money at the Root of Russia’s gas war’ Washington Post, January 8, 2009
Focusing on Russia rather than Ukraine, Douglas Birch of the Associated Press argues that the real issue for Russia is money and not political clout.  Given the declining price of energy and the global financial crisis, the value of Russia’s reserves is plummeting and Moscow’s priorities are turning away from ‘reasserting its global influence toward shoring up its shaky economy.’  According to Birch, Russia simply wants Ukraine to pay something closer to the market rate.  He quotes Dmitry Peskov, Prime Minister Vladimir Putin’s spokesman saying ‘We are struggling with the consequences of the world economic crisis, but it does not mean that Russian taxpayers have to sacrifice to keep Ukrainian production alive.’

‘A L’origine du conflit gazier, “contentieux politiques et corruption”‘ Le Monde, January 7, 2009
(Contentious politics and corruption are at the origin of the gas conflict)
Marc-Antoine Eyl-Mazzega of the Center for Research and International Studies argues that traditional commercial conflicts play only a minor role in the gas conflict and that oligarch-related corruption is the prime reason why Russia and Ukraine find it so difficult to negotiate new energy contracts.

Geopolitical Power Play:

‘Mary Dejevsky: Russia does not hold all the cards in a game both sides could lose’ The Independent, January 7, 2009
Mary Dejevsky’s article does point out the purely economic aspects of the crisis. In the end, however, she suggests that while Russia portrays the clash as being about money, it is really about politics. ‘The Kremlin resented and feared the 2005 Orange Revolution.  It sees no reason why Russia should subsidize gas for Ukrainians who have oriented their country towards the West. But this dispute is being treated as one between two commercial companies over payments and price.’ She also notes that Ukraine has the potential ‘to hold the whole EU hostage in pursuit of a bilateral dispute with Russia.’

‘Mr. Putin’s Cold War’ Washington Post, January 8, 2009
The Washington Post suggests that Russia is using the current gas crisis to achieve several foreign policy goals: weakening Ukraine’s ‘pro-western’ government and reasserting itself over countries formerly in its tutelage that are leaning towards NATO. The analysis concludes ‘The real message of this cold week is the same that European governments have repeatedly received – and largely ignored in recent years.  Mr. Putin’s regime plainly intends to use Europe’s dependence on Russian energy to advance an imperialist and anti-Western agenda.’

‘Kremlin’s secret weapon’ LA Times, January 9, 2009
This LA Times report says that on the surface the gas dispute between Russia and Ukraine appears to be a commercial conflict, but that deep down ‘it’s something more menacing – part of what looks like a calculated strategy by Russia to regain influence over countries that were once part of the Soviet empire and to neutralize European opposition.’ Like the Financial Times piece cited in this blog, the LA Times connects Gazprom to Russian foreign policy, but, unlike the Financial Times op-ed, it believes that Putin is calling the shots.

Russia “learns from British Empire”

‘A Capitalist Revolution’ The Guardian, January 7, 2009 (Mark Almond)
While most other articles either focus on the immediate background to the dispute, Oxford University Historian Mark Almond heads off in an idiosyncratic direction in the Guardian, with a piece that accuses the Kremlin of acting like 19th century British imperialists in a new “cold war” against Washington. “Russia’s energy giant, Gazprom, is at the heart of a new cold war pitting the Kremlin against Washington.  In the old cold war, Soviet gas still flowed west at the height of rows between Reagan and Brezhnev – but post-communist Russia is proving less pliant than the ‘evil empire.’”.  Almond argues that Ukraine is a ‘geo-political pawn’ to America and that Washington supports Ukraine in the conflict to limit Russia’s influence.  In addition to suggesting that the United States has a role in the current conflict (despite Washington being very quiet about it), Almond compares Gazprom to British chartered companies in the 19th century and American oil companies in the first half of the of the 20th century. It is not surprising, he says, that Gazprom should behave like this as it makes its way in the market economy.