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Is it still too early to assess the justifiability of the Iraq war? Can we at least draw some provisional conclusions? There's been a respectful waiting period among Bush's loyal opposition in Congress, chastened perhaps by the overwhelming popular support for this war in the US. But — amid the continued failure to find weapons of mass destruction in Iraq — the right questions are beginning to be asked, not just by mainstream politicians, but by the mainstream media.
It would have been better if these institutions had raised these issues before the war, rather than after. For, while questions were being asked by some, they were not being asked by those who hold the most influence over public opinion in the US. Politicians, part herder and part herd, saw the cost of asking them rise too high once the snowballing war effort had reached a critical mass of popular support. The media, meanwhile, was stared down by an administration that was able to put its case in the starkest possible termsThere is media, and then there is Fox News, which started with the premise that the war is justified, and the truth be damned. That's a text-book definition of propaganda.: "Iraq is dangerous to you. We can tell. Don't you trust us?" Most Americans answered "yes, we trust you," because the implications of not being able to trust the government on this matter were unpalatable to them. I certainly was willing to give Colin Powell the benefit of the doubt when he convincingly brought the administration's case to the Security Council.
The pact became: The US government has incontrovertible but classified proof of ongoing biological and chemical weapons programsLet's just not mention the forgeries that sustained the claims of a nuclear weapons program. and will furnish us retroactively with the evidence, as soon as it is able to secure the ground for inspectors. For the record, then, the pertinent questions now are: Was this case for war with Iraq overstated? If so, by whom — the CIA? Or the White House? Through incompetence, or by designYou can expect a parallel debate in the UK.?
And a bonus question we will have fun with in the blogosphere — those bloggers who claimed all the credit and influence for goading a country to war, will they also clamor for a share of the blame if there is blame due? Yes Andrew Sullivan, I am thinking of you. You were among the first and most vociferous in favor of bringing war to Iraq, and now you are setting the stage for claiming you were duped. On May 16, 2003, you wrote:
How to explain the lack of WMDs in Iraq? Were we lied to? Is our intelligence flawed? Were the weapons destroyed? [...] [T]he bottom line of Lacey's argument is that our intelligence caused Bush and Blair to commit extraordinary errors in front of the entire world. Where is the accountability for that?
But surely there is a special accountability for those who did the persuading, as opposed to those who were merely persuaded? From the very beginning, you pounced on each and every hint that the State Department might be wavering in its commitment to war. You pushed every story that maximized Iraq's danger to others, and ridiculed those stories that minimized the danger. Media outlets that did question the justness of this war, like the BBC, you demonized. That is not a sophist being duped. That is an ideologue being biased.
Several commentators have pointed out that we can already conclude there was an overstated case for war. There simply were no nuclear, biological or chemical weapons (NBCs) primed for use in battle, nor large-scale ongoing NBC weapons programs, as promised by the US — these would have been impossible to miss. The question becomes: by how much was the case overstated? To answer that definitively, we will need several more months. But day after day it becomes more plausible that Saddam Hussein never restarted prohibited weapons production after the inspectors left in 1998, and that the NBCs he possessed from previous forays in the 80s degraded rapidly, as apparently these weapons do.
So far, the questions asked (by the New York Times, Andrew Sullivan, Democrat politicians and others) have hinted that the mistakes occurred at the intelligence gathering stage. But an extremely interesting piece by the well-sourced Josh Marshall in his Talking Points Memo now lays the blame at the door of the White House. Nut graf:
The story, again and again over the last eighteen months, has been of the intelligence bureaucracy generating estimates of Iraq's capacities that are pretty much in line with what we're now finding. Again and again, though, the political leaders sent them back to come up with better answers.
Combine this with the stunning (to me) ABC News report a month ago of a Bush administration source "leaking" that accusations involving Iraq and WMDs were a mere pretext for war, and you can make the case that the decision to go to war was not made reluctantly, from a critical appraisal of available intelligence, but out of ideological conviction that necessitated some shoehorning of reality.
What do I now think happened? Wolfowitz and his neocon pals had a window of opportunity after 9/11 to sell their pre-existing action plan to the White House. Their idea: to rid the world of threats to US interests through unilateral, pre-emptive wars, starting with Iraq. There were competing strategiesPowell favored multilateral action; others favored containment coupled to policies to alleviate the root causes of international terrorism, but the neocons won out through a concerted campaign that played to a president who by his own admittance doesn't have the first clue about international affairs, and hence who is unable to appreciate such subtleties as just war theory"The principles of the justice of war are commonly held to be: having just cause, being declared by a proper authority, possessing right intention, having a reasonable chance of success, and the end being proportional to the means used.".
Whereas most objections to the US-led war have revolved around there being a lack of right intention on the part of the US (the war is about oil, about lashing back, about Jewish world domination, about imperialism), we have here a better criticism of the war, one that does not require a global conspiracy; the US may even have had the right intent in wanting to get rid of Saddam HusseinThomas Aquinas on right intention: "True religion looks upon as peaceful those wars that are waged not for motives of aggrandizement, or cruelty, but with the object of securing peace, of punishing evil-doers, and of uplifting the good.", but lacked a sufficiently just cause. Whether through wishful thinking or deliberate intent, a just cause was fabricated through exaggeration and paranoid induction from relatively inane intelligence information.
Because the question of evidence was always going to be a hurdle to cross after the flush of victory, I tend towards an explanation of this process that involves disastrous delegation: A president out of his depth buys the neocon agenda, makes his wishes known, and yes-men scramble to provide rationales. These in turn get re-appropriated by the President, who now utters them as truths. This process has happened at least once, when Bush accused Iraq of being in the final stages of manufacturing nuclear weapons, citing documents the White House now acknowledges were forgeries.
If this is what happened, and Iraq is found empty of NBCs, many people in the intelligence community and at the State Department will have to ask themselves whether they are willing to fall on their swords to protect the President from charges of gross incompetence. Don't count on it.
21:07 CET: I thought I might blog the EuroVision song contest (ESC) in semi-real time. It's starting just now in Riga, Latvia, and it is already descending into pre-scripted multilingual hell. A sure sign of the interest Swedes are showing the festival is how the other Swedish TV channels have capitulated for the night. Populist Channel 5, whose demographic is a natural match for ESC, is showing Waterworld.
21:15 CET: The Icelandic and Austrians have just performed, and I have to say that the Swedish entry is beginning to look very promising all of a sudden.
21:39 CET: Stockholm is now at its best. Three weeks ago, the trees were still bare, but today the parks and gardens were bursting with green. Perhaps the timing with the ESC was on purpose, but Stockholm had a festival of outdoor music today, with most public places given over to performances of some kind, some so close together you could listen to two at once. There were marching bands, choirs, folk singers, jazz bands, rock groups; even the Hare Krishnas went for a chant around the block.
21:46 CET: The weather for it was perfect, and Stockholmers were out in force. There were perhaps even more performers than audience members, which led to an interesting (to me) question: What is the root cause of this Swedish love for performing? Foreigners at the very least are aware of ABBA, that summit of the Swedish pop pyramid, but there is so much more lurking beneath them. There is an exhibitionist streak in Sweden: They invented the first reality television show, for example. Survivor is the US adaptation of Robinson. Caroline from Vesalius College helped to produce the very first Robinson, while Anna's Magnus is in Malaysia as we speak keeping score for Robinson 2003.
Then there is the obsession with Swedish Big Brother. But the most popular show here is undoubtedly Fame Factory, where aspiring singer songwriters and boy/girl band wannabees compete on TV for household ubiquity (in Sweden)The German group just actually sang "Let's get happy and let's be gay" with absolutely no notion of any double entendre.. In the US, you will know this concept as American Idol. But it's been going strong here for years.
21:50 CET: Tatu is playing. The Russian lesbian duo has been blogged here before. They are the Russian entry for the ESC (I thought only amateurs were allowed, but what do I know?). A popular paper here today blared "Shlager favoriter vill visa brˆsten" (ESC favorites want to bare their breasts [at the festival]) and apparently the Swedish TV had a crisis meeting in order to decide what to do in case they did. The world is safe -- They've just finished and they did not.
22:04 CET: Time to articulate a pet peeve: All pretence of these perfomances being live has been dropped. There are no bands, the singers mouth the words; the only thing plausibly authentic is the choreography. Then why does everyone insist on holding a microphone? Are they a performer's security blanket? Or are we meant to engage in the willing suspension of disbeliefPerhaps I am wrong -- the Norwegian has just belted out some fantastic false notes.?
22:26 CET: Back to ferreting out the roots of Sweden's penchant for the performance: I think there is a clue in the ease with which the US adopts Swedish pop-cultural ideas (and vice versa). Both societies have a devout religious tradition, one in which the church plays/played a central social role. Seeing the older generation perform in Stockholm today, unselfconsciously, it seemed to me that the church performance would be a natural breeding ground for Sweden's tradition of talent. In the US, of course, many singers graduate from church performances.
That's my theory. Eurof, what's yours?
22:34 CET: The Belgians are coming! The Belgians are coming! And their song so far is excellent, but why is it sung in Sami (Lap)? Or is it Native American? Ooh, and bagpipes too. And an accordion. So multinational. Actually, I suspect the only way the Flemish and the French managed to agree on a group was to have the lyrics be completely unintelligible. But clearly this is much too good to be here. I fully expect them to be completely unappreciatedUPDATE: It's Celtic, apparently, but sung by real Belgians..
22:46 CET: Sweden's Fame (of Fame Factory) just did their act, and I have to say, they can more than hold their among tonight's competition, though as I write this they are sounding awfully similar to the Slovenian act, which is going last. Perhaps that would be a better way to hold future ESCs: Just like those car races where all the cars are the same and the only difference is the driving talent, perhaps everybody could all sing the same song. They all sound similar enough, really.
22:53 CET: I just tried to vote for the Belgians from Sweden, and I was told I should try again later. Favorites besides Belgium: UK, Sweden, Romania, Slovenia, Ireland. Worst: Austria and Germany. By a mile. But also Turkey; what were they thinking, ululating in English? Didn't work for me.
23:00 CET: Successfully voted for the Belgians. It's the first time I've voted for anything, I think. Certainly not ever in a Belgian general election. The only time I lived there during an election I was in Luxembourg absailing for the weekend.
21:13 CET: Oh, no, it seems like they no longer announce "nul points!" This was my favorite part -- the squirming and the public humiliation of the losers. To answer your question Eurof, there has definitely been favoritism, but since the voting is by the public, it is interesting to see changing attitudes over time: For example, the Turks just gave the Greeks 4 points, which they are SO undeserving of.
23:20 CET: Wow, Belgium is in the running. I don't know if I can handle this. And our natural allies have yet to vote. And the Bosnians want to vote twice. I love how this is a little microcosm for Europe. Much more effective than the euro for building a civilizational identity. And much more inclusive, with 26 countries being allowed to playHere are all the songs for you to listen to and make up your own mind, in case you missed the show..
23:31 CET: Belgium is fading, and still has to vote. But the big embarrassment is the Latvians not managing to get a single point yet, together with the British. They weren't that bad, were they? Or is this payback for euroscepticism?
23:41 CET: If Belgium doesn't win, it would be truly wonderful for Turkey to win. They need to be in the EU as soon as possible, and if the ESC is one thing, it is a popularity contest that eurocrats would do well to listen to. Russia's Tatu should not win: too much chance of an organized fan base calling in and skewing the results.
23:42 CET: Belgium in the lead again. But they have yet to vote. Typical scenario for the Belgians: losing by giving the Turks the lead when they vote. Watch for it.
23:53 CET: Belgium voting. They've built up enough of a lead to widthstand giving 12 points to the Turks and still be ahead. It will depend an small differences in scores from the Estonians, Slovenians, Romania and Sweden. Belgium just gave 12 points to Turkey. How galant of us!
23:59 CET: And nul points to the Belgians from the Swedes. My vote was clearly wasted. It's all up to the Slovenians now. The Belgians have a 5 point lead. I really would not be used to us winning...
00:05 CET: And Turkey wins!! Belgium second. Russia third. The Slovenians gave the Belgians only 3 points. Definitely the best possible political result. Though I still think the Belgian song was the best. I might even consider listening to it again on a normal day. I obviously missed something with the Turkish song.
In the final analysis, Belgium may well have lost the contest as a direct result of the general elections held there last weekend. The main shocker was the gains made by the anti-immigrant Flemish nationalist party, which got nearly 20% of the overall vote (and much, much higher tallies in Antwerp). Giving Turkey 12 points was a way for Belgians to atone for this political embarrassment, and a way to show solidarity with our many Turkish immigrants. It may have cost us the win by a few points.
The Swedish blogging community is still in its infancy, yes, but a made-for-blog event is looming: The September 14 referendum on joining EMU. Can the Swedish blog rise to the occasion, and in doing so carve out a space for itself in the Swedish mediasphere?
It depends. Certainly, nothing is expected of them/usI have no idea if I qualify. I think globally but cannot help but blog locally, right?
Two excellent geek blogs that transcend the genre: Tesugen.com and mymarkup.net [Swedish, mainly about blogging].. If we keep to our geek blogs and personal journals, there is nothing to be ashamed of. But it would be a pity to forgo an opportunity to shape the debate in ways only blogs can.
Blogs can shine in part because of what they are not. They are not academic treatises, they are not fact-checked or edited, they are not immutable; instead, they are snapshots of the process of opinions forming. They are places where we can try on ideas for size, invite feedback, and move on. It takes courage to be an exhibitionist with one's ideas and beliefs, but Pardon my massive breach of trust in foisting this tortured clichÈ on you...the unexamined life is not worth blogging. Also, it helps to have visitors who are as opinionated as you are. And to have a thick skin.
There is an element of the Hegelian thesis, antithesis, synthesis in the ideal blog. But stress any one element too much and the effort fails. In the Gulf War, for example, I think blogging failed through a surfeit of opinion at the expense of dialogue. Both sides hovered at their respective ideological watering holes, mutually offended by each other's existence (and secretly loving it). Perhaps both sides were prisoner to a Darwinian conception of their purpose: In their quest for the survival of the fittest idea, ideological front lines were shored up to such an extent there was no more movement possible. It was an intellectual WWI.
In Sweden, if blogs err, they err in their eagerness to build consensus without first clearly defining differences. Afraid of offending anybody, they do not engage in dialogue either. Regarding EMU, it might be considered polite for the two sides to argue past each other, but it certainly does not do the democratic process any favors. Blogs can and should be in people's faces and stepping on toes, brash and candid, making noise, homing in on sloppy thinking and keeping both sides honest.
So when it comes to making up your mind for the referendum, blog it.When you post, don't forget to ping valblog.nu/EMU, which will hopefully become a clearing house for Swedish EMU blog posts. Let your post be a thesis of your views on the matter now. Hope for an antithesis to pop up from among your comments or on readers' own blogs, and let a future post keep something from both. Rinse & repeat until September 14.
A comment by Charles Kenny on a post of mine last year has stuck with me:
One possible measure for innovation per capita (many flaws) is patent applications filed by residents per year. In the US its 141,342 as compared to 8,599 for Sweden. Works out at 1/2,000 people in the US, compared to 1/1,000 in Sweden. Suggests you're right... [That Sweden is more innovative than the US.] Again, if you look at Science and Technical Journal Articles published in 2000 — 166,829 for US, compared to 8,219 for Sweden — or royalty and license fee receipts (36.5bn compared to 1.4bn) Sweden comes out ahead on per capita terms. Yay ray socialists.
I have to quote Charles Kenny as my sole authority here because I have looked for but not found this information myself on the public web. But he is a World Banker, so either he has special access to internal databases, or he made it all up, in which case this blog will have to go through soul searching not unlike that at the New York Times, and I'll have to hold a meeting with myself and ask myself some hard questions ("Why did you promote Charles Kenny from sometime comment-leaver on your personal blog to editor on MemeFirst, despite his atrocious dress sense? Didn't alarm bells go off when he started "blogging" from Kabul, but never produced the receipts?").
Since that post, I've entertained a number of theories as to why Sweden is so innovative, but I came across a new one recently, again in the interview of Joe Stiglitz by the Wall Street Journal:
WSJ: Is the European approach [which focuses more on the role of government in the economy and the existence of a welfare state] a viable alternative?MR. STIGLITZ: Countries like Sweden never bought into the American style. It hasn't abandoned its welfare system [where medical care and social security are considered the responsibility of the government] and yet it's still very strong. The New Economy has penetrated Sweden to a great degree, but the country has weathered the downturn much better than the U.S. It promoted the New Economy in a more stable way, having a strong welfare state that allowed people to take a risk [on investing in technology start-ups and other New Economy companies and offering a huge safety net if things faltered].
It's a really interesting notion, and it might go a long way to explaining why the received wisdom that lower taxes lead to higher GDP growth is not backed up by statistics.
Here are my own two homespun explanations for Sweden's exceptional innovation record. They might be completely bogus, so I will rely on sophistry to make them appeal:
Progressive regulations: Sweden is the world's avant-garde for stringent regulations concerning pollution abatement, public health, natural resource management, safety codes, and the like. These are costly, and you might expect these costs to dampen growth. But Swedish businesses, forced to develop technologies to cope with these regulations, soon find themselves selling their innovations to Europe and the US, who tend to adopt similar regulations with a lag. First mover advantage by government decree, if you like.
Mercy taxing: In Sweden's notorious high tax environment, so-so business ideas don't survive. The companies that do make it have to be very efficient at what they do. The miracle happens when these companies then leave the nest that is Sweden and expand into low-tax countries, like the US. Look at Ikea. Look at H&M. Imagine the profits they reap in the US if they manage to be profitable back home. This is my "If it doesn't kill you it will make you stronger" theory of economic development.
<irony>To conclude, Sweden should increase welfare spending, ban fossil fuels and raise taxes.</irony>
It sounds like a dotcom business plan from the summer of 1997: "Let's make a vanity publishing website, where people pay us to post their content. $13 for a single rant, $40 a month for unlimited rants. Then we give them a small portion of the money back in prizes: $450 for the month's most popular post, $450 for our favorite post, and $5,500 to a 'writer of the year'."
I've been baffled by Sourze [Swedish] ever since Anna showed it to me after I explained blogging to her. "Oh, you mean like Sourze?" she said. No, not like Sourze. I have no idea how this site continues to function in the age of blogs. Sourze's motto: "Everyone has something to tell. Tell it."Sourze posts usually don't make it past 200 reads, well below most blogs' stats. And why should we trust the opinions of people who have been snookered into paying for their thoughts? Figure out the free blog already, get it listed on weblogs.se and sweblogs.com, and you will be guaranteed a sympathetic Swedish readershipGoogling Sourze, I find I'm not the only one questioning their business model..
I finally figured out tonight what it was that Sourze reminded me of: the $100,000 Porsche you could win at Dubai airport by buying one of a thousand $1,000 lottery tickets. You'd think that if you can afford a ticket at such odds, you'd probably already own the car, but evidently enough people have more money than sense.
Perhaps Sourze still exists because blogging has yet to reach a critical mass in Sweden. Its 9 million inhabitants boast some 170 self-reported weblogs, compared to 2148 self-reported blogs for a similar population in New York City.New York is a special case, granted. People who move there tend to come out as bloggers at an alarming rate. Unlike in New York, mentioning blogging in a casual conversation here still draws blank stares. The blogging meme likely needs another year before it perks the ears of mainstream Swedish media. But when it does, it will be a beautiful thing; A Swedish diplomat friend was complaining today that writing reports for the foreign ministry was such a damn formal affair. Why can't they be more direct, more opinionated, more immediate, more inviting to dialogue, more like blogs? Why not indeed?
I'm debating whether I should translate this post into very bad Swedish, pay my $13, and post it on Sourze, as my small contribution to the coming Swedish blogging revolution...
So far there is nothing to worry about. With every passing day, Swedes are less and less likely to be choosing EMU when they vote in a referendum on September 14. Earlier this month, a Gallup poll [Swedish] pinned the yes-vote at 31%, down from 35% a month earlier, while the no-vote grew to 46% from 40%Less than a year ago [Swedish], support for joining EMU stood at 56%, with 41% against..
With only a short summer left for campaigning, it's time to panic if you're a Swedish politician in favor of joining EMU. Obligingly, Prime Minister Persson and the leaders of other pro-EMU parties last week decided to ramp up the yes-campaign immediately [Swedish], and to coordinate their canvassing. Their big hope: winning over the sizable percentage of undecided voters.
The main problem for the yes side is that its arguments are just not compelling enough. To their credit, they have mainly pushed the supposed economic benefits of eurofication to the fore Benefits: no more transaction costs, price transparency, no more exchange rate uncertainties. Downsides: read on.rather than dragging out the old bugbear of political marginalization. I think this is because the debate has become remarkably depoliticized. A decade ago, there were heated argument about the merits or otherwise of an "ever-closer union." Today, the question is, "Which currency regime makes more sense for Sweden?" and the answer to that does not depend on whether you know the words to the Internationale, but on whether Sweden is A similar level-headedness is prevailing in the UK, where EMU membership depends on the passing of 5 tests that involve purely economic considerations. Quite an improvement from the days of "Up Yours, Delors!" (Well, maybe not.)an optimal currency area [PDF].
It's hardly something to storm the barricades over. Clearly, people vote with their pocketbooks, not their passports. The Quebecois and the Puerto Ricans never seem to manage to secede. In Europe, separatist movements only gain clout in regions that stand to gain financially: It's the rich Catalans, Flemish and Northern Italians who would shed their poorer cousinsEven New Yorkers are not immune to the impulse..
In any case, the marginalization bugbear has no bite. Demanding currency union as a prerequisite for political union would only make sense if politicians still controlled monetary policy. Thankfully, in modern economies, independent central banks now control interest rates, lest governments are led into temptation. The grand vision of a single European currency has appeal in its simplicity, but lacks the adaptability to serve the interests of those countries not at the core of euroland. Instead, Europe should have as many or as few currencies as is economically sound. This should have no bearing on political projects going forth, some of which I am in favor of, and others that I am notThe CAP, for example, really stinks..
But the likes of Delors and Giscard d'Estaing see currency union as a tool for building a common identity. This strategy worked during the unification of Italy, the creation of Belgium, and most recently, with German reunification. There's no denying that over time, a common currency can help with nation building. The euro is clearly a political project. But at what price?
Several regions could really use a weaker currency than what they have now. Quick economics recap: Currencies are an efficient way to compensate for fluctuations in productivity between regions over time. Wages do so only partially — they tend to only go up. If there are variations in productivity within a currency area, then the state needs to shore up the less productive region with infrastructure works and other fund injections, or else people leave for the jobs of the more productive regions, if there is labor mobility.In the US, West Virginia comes to mind, as do Sicily and Wallonia in the EU. For the comparatively unproductive West Virginians, the US dollar is overvalued, so their "exports" to other states are uncompetitive. With no recourse to a depreciating currency, West Virginians have coped by moving the hell away from there. In Wallonia the story is slightly different; the workforce is not nearly as mobile as in the US, so Walloons stay put, relying instead on the European Commission's program for "social and economic cohesion." Even so, this program only chips away at the problem; Wallonia could really use a cheaper currencyFor Europe's traditional basket case currencies — Greece, Italy, Portugal — the exchange-rate mechanism that led to EMU was a godsend, letting them dismantle their disgraced central banks, which allowed them to control inflation. Different story..
Sweden has the opposite problem. Its economy has been more successful than the eurozone's over the past 3 years, in part because the central bank has been able to fine-tune the response to exogenous shocks. Had Sweden joined the euro at its inception, it would have been subject to sub-optimal interest rates, which would have led its economy to grow slower than it has, by a margin greater than the savings from abolishing transaction costsHere [PDF] is a great overview of how Sweden has managed outside the EMU so far.. These transaction costs, by the way, are getting smaller all the time, while ever more efficient hedging strategies are neutralizing exchange rate volatility risks.
There is a further fiscal constraint imposed on EMU members and aspirants that Sweden could do well without: the misconceived Stability and Growth Pact, which has been plaguing France and Germany. Joe Stiglitz explains in this Wall Street Journal article:
WSJ: Europe thought it could weather the downturn in the U.S., which turned out not to be the case. Do you think Europe's economic and monetary union made Europe better or worse off in coping with the slowdown? You don't think Europe's economic and monetary union, EMU, is working well?MR. STIGLITZ: A lot of people focused at the time [it was constructed] at the risk to the periphery — that Portugal could be in recession while everything else in the region was going fine — and then not having the flexibility to react to that. Policy would be set with a focus on Germany and France, and so much the worse for Portugal. As it turns out, it's Germany and France that are having the problems. Also, it was set up at a time when the main problem was inflation. But, of course, inflation isn't the problem today; unemployment is. France has made it very clear that it wants the Stability and Growth Pact redefined so it can have a more expansionary fiscal policy, and I think that is perfectly correct. As it is, Europe has adopted a regime that is pro-cyclical, which flies in the face of what it should be doing. [It should be anti-cyclical. So when the economy is going well, you don't want your government spending more, pushing the economy faster. Similarly, when a recession hits, the worst thing would be cutting government spending, which would worsen things.]
But why are Sweden's big business leaders for joining EMU, while small business organizations and trade unions are not? Because the costs and benefits of joining are not distributed equally. Sweden's multinationals export far more than medium and smaller businesses, so they stand to gain more from abolishing transaction costs completely. But it is the economy as a whole that stands to suffer if Sweden is constrained by a maladjusted monetary (and even fiscal) policy.
So the eurozone is not the optimal currency area for Sweden. Nˆro in Swedish, n¯ro in Danish (the ¯ deftly reminding us it isn't the euro). "Oro" was briefly considered — it means gold in Spanish and anxiety in Swedish: a fortuitous juxtaposition.Instead, I propose the Nordic euro, or neuro. The neuro will comprise Sweden, Finland (as soon as it leaves the euro), Denmark, Norway and the UK at its core. Iceland is free to join, as are the Baltic trio when they feel their economies are mature enoughAnd if it really tries, Russia can join by 2025, the 300th anniversary of the death of Peter the Great..
Like the euro, the neuro is made up of countries with which Sweden trades. In fact, of Sweden's five largest export markets only one uses the euro; three are neurozone: Germany (10.6% of total exports), USA (10.3%), Norway (8.8%), the UK (7.5%), and Denmark (6.5%). Finland (6.3%) comes next. One of the arguments made by the pro-EMU side is that joining a currency union encourages growth in trade between its members, leading to more synchronized economies. To the extent that this argument is true for the euro, it applies equally to the neuro.
In addition, neuro economies are much more similar to each other than to all those Mediterranean economies the euro took on board; no strikes interrupting tourism in the neurozone, nor olive crop failures. Instead, neuro economies revolve around high-tech knowledge-based industries,One possible exception: the oil industry in Norway so they react to exogenous shocks in much the same way. Linguistically, the neurozone is very compatible: all speak fluent English, while the core speaks a Swedish/Danish/Norwegian that is mutually intelligible. This has led to much higher levels of labor mobility among neuro countries than among euro countries. In short, The neuro passes all the tests for an optimal currency area. The euro does not.
EMU makes sense for the Benelux, France and Germany. The other countries should get out while they can. Perhaps the Mediterranean basin can start its own currency union. May I propose the mirÛ?
Anna Lekvall is having her first "real" photo exhibit, as part of a group show with fellow classmates from Kulturama. Needless to say, the photo they chose to headline the show is hers. Aren't we proud? I helped them design the poster:
If you're in town, drop by for the opening on May 16. It'll be a lot of fun.
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Francesca, my sister, got married to Nazz in London on April 12, 2003. Here is proof. |