Opinion

Thinking Global

It’s competitiveness, stupid

Jul 19, 2012 14:35 UTC

America deserves better.

If only this year’s presidential candidates were as focused on global competitiveness as are America’s business leaders, the world’s most important economy and democracy would already have become the “Comeback Kid,” portrayed on this week’s Economist cover as a muscle-bound Uncle Sam.

We are witnessing the most expensive and one of the most negative presidential contests in U.S. history. Thus far it is serving little purpose aside from enriching  the advertising industry.

With global economic growth waning, the euro zone imploding and America approaching a fiscal cliff, President Barack Obama and Governor Mitt Romney remain on the low road of ad hominem attacks that badly serve Americans and the world.

The most crucial question for American centrists, who are likely to decide this November’s elections (and I count myself as a card-carrying member), is whether Obama or Romney can reverse the dangerous signs of eroding U.S. competitiveness and shore up the beginnings of an economic resurgence.

It is a question of historic significance.

Just as the best candidate during the four decades of the Cold War era was the one who most clearly understood how to tap America’s dynamism and stare down a very real Soviet threat (Ronald Reagan fit that bill), today’s most effective president will be the one who can best navigate a similarly extended period that is shaping up to be an era of global competition.

Angela Merkel, Europe’s weary mountaineer

Jul 6, 2012 14:44 UTC

To help illustrate Germany’s historic dilemma as it calculates the risks of rescuing Europe, Ronald Freeman, a London banker friend, conjured up an image of Chancellor Angela Merkel as a weary mountaineer leading a perilous rock climb. Still some distance from safety, Merkel alternates between shouting instructions to those hanging behind her on a taut and fraying rope, and wondering whether to take out her knife and cut loose some of the burden.

What Merkel must calculate, says Freeman, a former European Bank for Reconstruction and Development first vice-president, is how to get everyone to the top of Mt. Europe without imperiling herself. “Until Germany agrees to switch from specific and inadequate bail-outs of over-indebted sovereigns to the unlimited back-up that only the European Central Bank can provide, the crisis will not end,” he says, leaving countries like Greece, Spain and Italy dangling below an ambivalent Germany.

Investors last week applauded Germany’s agreement to provide weaker climbers the equivalent of a temporary ledge to stand upon: access to Europe’s permanent bailout fund to provide capital directly to troubled banks anywhere in the euro area. In return, governments agreed to give banking oversight to European authorities so that they could supervise and potentially dismantle banks.

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