Report from Europe

THE BOGUS ECONOMIST
Letter from Europe
Nov. 11, 2008

Whatever you've read about Europe's reaction to Obama's election, it's probably right. Everyone we've met in Burgundy, Paris, Rome, Genoa, Nice and Cremona have expressed delight at Obama's election and even gone so far as to congratulate my wife and me on having such a great new president!!

Although I accepted the congratultions modestly, I couldn't help feel a lot of the sentiment we received was sheer relief at the prospect of someone who wasn't George W. Bush. Some of our after-congratulations conversation boiled down to "How could you Americans have elected him a second time?" Damned if I knew.

In my typical Bogus Economist fashion, I started to wonder about that question and came up with something pretty simple: If the economy is doing OK and if people aren't being asked to give up much, the voters are inclined to stick with whatever they have, no matter how incompetent. In 2004, thanks in large part to borrowed money, taxpayers were doing fairly well and it took entirely too much effort to investigate where the money was coming from and risk finding the solution to the country's problems involved cuttin back on spending, boosting savings and driving things that didn't need to go from 0-60 in under eight seconds.

At a friend's house in Rome, I happened on a copy of Business Week from 2006. I think it ought to be prescribed reading in every economics class to read and review analysis from two to four year-old business journals. This particular one had an article discussing the weak housing market (compared to a year before) and the main hope for the future which involved continued consumer spending and, consequently, debt. I did not read a word in any of four magazines that day about that other "S" word - savings.

When it comes to America's welfare, almost every expert in consumer finance agrees that without some kind of personal savings account, consumers will be caught with their pants down in the event of any kind of downturn. Guess what? They didn't and they were.

Reluctantly, while reading the old Business Weeks, I came to the conclusion that choosing between what's good for the United States and what's good for big, multinational companies, there isn't even a contest. The idea expressed by Robert McNamara - what's good for General Motors is good for the United States - has been expanded to every major corporation and it's just plain wrong. I don't see any corporate logo anywhere on the American flag, nor do I read much about Exxon or Goldman Sachs in the Constitution.

With a new administration, I suggest the way to regain our position in the world is to present the image of a country, not a pitchman. To act as if the United States was nothing more than the sum of its corporate parts is an insult to the Flag, our veterans, our way of life and, most obviously, our leaders. Maybe one of the reasons our image has gone down the tubes so much in the last four years is that George W. Bush has acted more often as a guy who's looking for buyers than a guy who's looking for backers. We do not need another salesman for corporate America; we need a salesman for the right to call our president a dope whenever we feel like it.

Just as we bought the idea that communism is the opposite of democracy (instead of capitalism), we've been buying the idea that America is a nation founded on the dollar sign. Maybe our next president will remember that, as nations built on the sword will die by the sword, so will a nation built on the buck die by the buck.

That's what I hope to keep hearing from Europe - and, when I get home, from America.

The Bogus Economist (c) 2008