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by inoljt

The Biggest Threat to President Barack Obama’s Re-election Chances

10:34 pm in Uncategorized by inoljt

Almost everybody agrees that President Barack Obama’s re-election chances depend almost exclusively on one thing: the state of the American economy. If, for instance, unemployment is below 7% by November 2012, Mr. Obama could very well win a Reagan-style blow-out. If, on the other hand, unemployment is still in double-digits by November 2012, Mr. Obama may as well kiss his re-election chances goodbye.

The second scenario would probably occur in the event of another recession. The greatest danger, therefore, to the president’s re-election chances would be something that would hurt the economy badly enough to knock it back into recession.

What could cause such an event?

There are a number of possibilities, ranging from the very unlikely to the frighteningly possible. The latter – “the frighteningly possible” – actually has occupied the front pages of newspapers for almost a year. This is the continuing European debt crisis, which started with Greece, moved to Ireland, defeated Portugal, and is currently searching for its next victim *cough* Spain *cough*.

The worst case scenario would involve a country such as Italy – the world’s seventh largest economy – going bankrupt, or a collapse of the euro (and with it, the European Union). Such scenarios are far-fetched, but quite within the realm of possible. They are what many analysts spend hours worrying about every day.

A bankruptcy of a major European country, such as Spain or Italy, would do major damage to the United States. As Paul Krugman writes:

Nor can the rest of the world look on smugly at Europe’s woes. Taken as a whole, the European Union, not the United States, is the world’s largest economy; the European Union is fully coequal with America in the running of the global trading system; Europe is the world’s most important source of foreign aid; and Europe is, whatever some Americans may think, a crucial partner in the fight against terrorism. A troubled Europe is bad for everyone else.

Indeed, the United States has already experienced the consequences of Europe’s debt troubles, minor as they may seem compared to the worst-case scenario. It is no coincidence that job growth, after increasing steadily in the spring of 2010, stalled right as Greece’s budget woes hit the front pages that summer.

The most troubling thing about all this, for Mr. Obama, is how little control he has over this event. It is Germany, not America, which holds the fate of the European Union in its hands; German decisions – or, more specifically, the decisions of German Chancellor Angela Merkel – will either save or destroy the European Union. Mr. Obama can successfully influence Germany; indeed, his behind-the-scenes lobbying was one factor behind the trillion-dollar European bail-out fund. But ultimately the fate of Europe, and with it the American economy, may lie in Germany’s hands.

And whither goes the American economy, so goes Mr. Obama’s re-election chances. In the end the president may lose re-election because of events thousands of miles away, over which he has precious little control, which seemingly have nothing to do with American politics.


by inoljt

An Unmentioned Cause Behind America’s Economic Woes

2:25 pm in Uncategorized by inoljt

America’s economy is in a bad way. The economic recovery has turned out to be disturbingly weak, and joblessness rates are still actually rising. Investment is down, Americans are depressed and angry, and there are even worries about a double-dip recession.

There has not been much analysis of the causes behind today’s economic stagnation. Most experts talk about how weak recoveries generally follow financial crises. Politically, Republicans blame Democrats, and Democrats are generally too busy trying to fix the problem than to think about what caused it.

Yet there is indeed something that did badly damage the recovery – an event very few nowadays link to America’s economic woes. This event was much like the 2008 financial crisis (indeed, it actually was another financial crisis). It dominated newspaper headlines, threatened to severely weaken several economically mighty countries, and in the end required international intervention to the tune of one trillion dollars.

On the surface, the European sovereign debt crisis – and more specifically, the bankruptcy of Greece – might have little to do with the United States. Greece, after all, is quite far away from America. Yet, as 2008 showed, the fall-out from a financial crisis goes wide and far; if Europe was hurt by America’s financial crisis, it stands to reason that America was hurt by Europe’s financial crisis.

Moreover, both crises had much in common. Panic hit the market and risk spread wildly, from the original contagion to even the safest strongholds. In the United States, banks went bankrupt; in Europe, countries went bankrupt. For both crises, the “fix” cost hundreds of billions of dollars.

There is another, more ominous analogy. The Great Depression, it is commonly held, started with the collapse of the American stock market. What really made it “Great,” however, was a series of bank failures that followed. These started in Austria. If the 2008 financial crisis was Black Tuesday, then the Greek crisis holds a disturbing parallel with the chain of bank failures that started in Europe.

Fortunately, the European Union was able to put a halt to the Greek crisis – unlike what happened during the Great Depression. Due to the lessons learned from that era, unemployment is less than half what it was during the Great Depression’s peak (which is, unfortunately, still quite high).

Nevertheless, the fact that the European debt crisis was halted probably did not it from inflicting the harm it had already done. Much as the 2008 financial crisis raised unemployment to jump to 10%, fall-out from the European financial crisis seems to be keeping it at that number. It is interesting that almost nobody, whether in politics or economics, seems to be publicizing this fact.


by inoljt

Explaining the Swiss Minaret Vote

4:27 pm in Uncategorized by inoljt

By: Inoljt,

Switzerland’s landslide vote to ban Muslim minarets surprised many pundits and commentators, more familiar with the nation’s image as a bastion of tolerance and European enlightenment.

These results, in fact, are not so surprising. They derive from the peculiar structure of Swiss democracy, which effectively creates a voter base less diverse than the general public. These voters are generally predisposed to support such initiatives as the minaret vote.

I am specifically talking about Swiss citizenship. Becoming a Swiss citizen implies that one has become part of the Swiss people, and the Swiss have a very strict definitions of what this means. Since – of course – only citizens may vote, this strictness directly impacts the Swiss electorate.

While Switzerland may have an image as a tolerant place, its naturalization policy is one of the least tolerant in the Western world. Achieving citizenship can be nearly impossible. Some communities routinely reject applicants connected in any manner to Africa or the Balkans, even if have they lived in Switzerland their whole lives. Many applicants must appear before a local citizenship committee, which asks deep-probing questions such as whether the applicant “can imagine marrying a Swiss boy,” or if said applicant likes Swiss music.

As a result, 21.9% of the Swiss population is foreign – one of the highest rates in the world. An aspiring immigrant may move to Switzerland, but neither he, nor his children, nor even his grandchildren will be guaranteed citizenship. Nearly 90% of Swiss Muslims face this situation, foreigners in a land some have lived their entire lives in.

Because Swiss immigrants are denied citizenship, they naturally cannot vote: only the Swiss people can. It is no wonder then, that Switzerland’s selectively chosen electorate regularly passes initiatives like the minaret law. Or that the anti-immigrant Swiss People’s Party won the most seats in the 2007 federal elections.

This is not to say that the Swiss people are particularly intolerant or bigoted. It is a naturally human tendency to be suspicious of outsiders. Nativist sentiments exist throughout the world, whether in English disdain for Eastern Europeans, Japanese dislike of white gaijins, Muslim discrimination against black Africans, or Russian pogroms against Jews.

The problem is that, by restricting citizenship (and therefore the ballot) to only certain groups, Switzerland’s peculiar system encourages this inherently human flaw. Switzerland is not the only country with xenophobic sentiment; many Americans, for example despise Spanish-speaking Latinos. But in the United States, these Latinos (or their children) can vote; in Switzerland 90% of Muslims can’t vote, because they are denied citizenship. That is why the Swiss People’s Party can run an ad like this:
The Swiss People’s Party won that referendum. Republicans, on the other hand, wish to appeal to the Latino electorate; very few would dare do such a thing.

If Switzerland is to prevent more minaret initiatives from passing, it should make naturalization easier – at the very least, for example, it could grant citizenship to third-generation citizens. In doing so, Switzerland can follow America’s lead, a country whose naturalization policy is among the most progressive in the world. America is also the world’s superpower. That is not a coincidence.