In the ongoing American and British debates on the financial crisis and the best ways to bring the economy out of the woods, two opposite views repeatedly collide – the one represented by those who prioritize deficit reduction, the other by those who argue for recapitalizing the economy. The case of the United Kingdom shows that drastic cuts – if not supported by stimulus packages – instead of tackling the debt may actually inflate it. The American policy record on the other hand, proves that even substantial stimulus packages do not always lead to economic revival. It’s not enough to throw some extra money into the pool – equally important is what these resources actually fund and whether they are accompanied by structural reforms.

British clamps

Moody’s decision to downgrade UK’s rating from AAA to AA1 announced at the end of February was a serious blow to David Cameron’s government as it undermined the whole austerity program Conservatives embarked on precisely to regain the trust of both financial markets and rating agencies. Nonetheless, in a speech delivered on March 7th Prime Minister announced he would keep on the chosen course since – as his famous predecessor once asserted – for this policy “there is no alternative.”

Many British economists do, however, see an alternative, and their number grows as it becomes clear that the spending cuts introduced so far, instead of reducing the debt, have increased it (from 600 billion in 2008 to 1.1 trillion four years later to be precise). How is it possible to cut down on expenses and inflate the debt at the same time? Excessive savings lead to economic contraction, which in turn reduces state revenues and forces the government to continue on borrowing. “What truly is incredible” – argued Martin Wolf in his “Financial Times” column – “is that Mr. Cameron cannot understand that, if an entity that spends close to half of gross domestic product retrenches as the private sector is also retrenching, the decline in overall output may be so large that its finances end up worse than when it started”.

Even The Economist magazine, known for its “favorable neutrality” towards the Conservative Party, criticized the government’s policies and encouraged chancellor George Osborne to dig out some additional funds for infrastructure investments, which could boost the economic growth (compared to 2009 such investments were reduced from £48.5 billion to £28 billion). But where to get the money from?

At least some of the needed sum can be obtained by reducing expenses on civil service. Those – despite all the austerity rhetoric – not only were not diminished but increased in the past decade by £300 billion. However, in case these savings are not sufficient, should the government borrow the missing funds? “Economist’s” editors reply in the positive, but on the condition that these resources are spent on infrastructure – roads, bridges, railways, broadband, etc. – thus contributing to long-term economic growth and improvement of the competitiveness of the British economy. Then, the increase in debt will be offset by rising state revenues, and – thanks to the improving condition of the economy – interest rates should stay at their current low level. As a result, debt service costs will also remain low.

American stimulators

If, however, the money is spent on immediate tax cuts and exemptions, it will simply be wasted. The economy might benefit from such policies in the short run, due to the increase in personal consumption, but as soon as the money is gone, we will go back to square one. This is an argument Jeffrey Sachs makes in yesterday’s New York Times, thus criticizing anti-crisis remedies applied by President Barack Obama’s administration so far. According to Sachs, stimulus packages signed into law first by George W. Bush and then by Obama failed not because they were too small – as for example “The New York Times” columnist, Paul Krugman has long maintained – or too high – as the entire American right seems to believe – but because they have been poorly targeted.

“The original stimulus legislation” – Sachs wrote in another of his articles – “was overwhelmingly of the form of temporary tax cuts and temporary transfer payments, the kind of deficit spending especially likely to have little effect on aggregate demand. Only $88 billion of the $787 billion stimulus-package was in direct purchases of goods and services by the federal government. The rest was temporary transfers and tax cuts.” To make matters worse, in the debt ceiling deal signed by Democrats and Republicans on January 1, many of these cuts became permanent, which will further inflate American national debt. Currently it amounts to 15.5 trillion, which is about 105% of GDP.

According to Krugman – whose views Sachs openly challenged – we should not be particularly worried by these numbers. On the contrary, in order to succeed in reviving the economy, stimulus packages should be enlarged. To introduce any major savings at this stage would throw American economy back into recession, cause economic contraction and decrease government revenues, thus leading to a predicament roughly similar to the one British economy has found itself in. Following the advice of John Maynard Keynes, Krugman argues that the secret of managing the state economy lies in saving the money in times of prosperity, while spending surpluses in the time of crisis, when the economy needs a push.

The trouble is, replies Sachs, that American decision-makers have long spent much more than they should, both in times of economic prosperity under President Bush, and at the time of the current crisis. Besides, once they have decided to stimulate the economy, they chose wrong targets. The same dollar invested well can bring substantial return, but if invested badly, will either bring loses or have no effect at all. According to Sachs Krugman and other “crude Keynesians” – unlike Keynes himself – seem to have forgotten this simple truth. Sachs repeats in the U.S. the same arguments, which in Britain were put forward by The Economist. In his view American economy needs long-term investments in infrastructure (similar to those administered by the Federal Aid Highway Act of 1956 or the moon program launched a few years later), not short-term incentives and benefits. How to get the money for these investments? Part of it can be borrowed. The rest may be obtained by curbing short-term tax-relief programs and finally introducing significant spending cuts, chiefly in the defense budget, which consumes more than $700 billion a year, or in other words more than 20 percent of all the federal resources.

Is it then better to tighten or stimulate the economy in crisis? Challenges faced by the United States and the United Kingdom make it quite clear – the best solution is to do both these things at the same time.

Łukasz Pawłowski is a managing editor at ‘Kultura Liberalna’ and a PhD candidate at the Institute of Sociology, University of Warsaw.

These Jo Freeman photos of the Rally and March Against Keystone XL Pipeline in Washington D.C. on Sunday demonstrate “what is to be done” by the left in Obama’s second term.

It is far from clear what Obama’s decision on the pipeline will be. A decision to go ahead would unarguably produce jobs, though for how long is in dispute. It would also likely lessen U.S. dependence on oil from the Middle East and Venezuela. It would certainly strengthen our relations with our major ally and neighbor, Canada. So the preemptive protest against Obama possible decision to support Keystone is well timed.

The attractive faces in the crowd with their creative signs, some witty, some mass produced, make clear that we face a profound problem, potentially critical of a possible decision, but amplifying the most surprising but also sensible points Obama made in his State of the Union Address:

“We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence.  Or we can choose to believe in the overwhelming judgment of science — and act before it’s too late.”

The President strengthened the significance and attention paid to this protest possible against himself. He certainly knew this would happen. But the interaction between decision and protest increases the likelihood that the U.S. will take its head out of the sand. We will debate the relative merits of Keystone, whether “carbon free, nuclear free” is possible or even desirable. But Obama will push forward at the very least with executive decisions, using an emerging consensus that “Climate Change: It’s Our Obligation.” “It’s time to cut carbon.”

“Mr. President: Forward ON Climate.” He has little choice, given the pressing realities, his stance on them and the public pushing him.

The American president has signed the bill drafted by Democratic and Republican leaders, which allows the United States to avoid “fiscal cliff.” The solution adopted by the Congress does not, however, solve the problem, but only touches some of its elements and postpones dealing with the others for a few weeks. So who won in this dramatic battle, fought late into the first night of the New Year? Choosing the winner depends on one’s point of view, but no matter the viewpoint we take, one thing seems to be certain – the national interest has lost.

Regardless of who we consider to be the main wrongdoer, it is difficult to identify a clear winner. Obama’s spin doctors are striving to present the agreement as a triumph of the administration, since it succeeded in making many Republicans vote in favor of tax increase for the first time in 20 years. For the richest Americans, with annual revenues of more than $ 400,000, the tax rate will rise from 35 percent to 39.6 percent, i.e. to the rates existing under Bill Clinton before George Bush’s cuts. The problem is that President Obama wanted to set up a new tax threshold at $ 250,000 of annual income. That’s a significant difference. The White House hoped the tax increase would bring $ 1.5 trillion over the next decade, but according to the current arrangements the federal government will receive a modest 600 billion. Given the scale of the U.S. debt, it’s not much, and what’s more, this money will only contribute to the U.S. budget, if all the citizens who should pay more actually do. But will they?

The main problem with taxing the rich is that while these are the people who have the most money to share, they also have the most money to find ways to avoid sharing. When a few months ago Mitt Romney (remember him?) revealed his 2011 tax return, it turned out he paid tax rate of 14 percent instead of 35 percent or, to put it in dollars, 1.9 million instead of 4.8 million. If every American taxed at a new rate follows Romney’s example, the increase in state revenue will have virtually no effect on American finances. President Obama used to say that even closing all the loopholes in the U.S. tax system – which ironically enough was something Romney argued for – would not suffice to fix the budget. He is certainly right, but just rising the taxes for the rich, without ensuring they actually pay them, will not do the job either.

When the French president François Hollande announced his will to introduce the 75% tax rate for the richest, it was supposed to affect only a tiny fraction of the French society and only for a “trial period” of two years. Yet the government’s intentions sparked a vehement national debate. Many rich Frenchmen announced they would leave the country, the others – like singers Johnny Hallyday and Charles Aznavour, or actors like Daniel Auteil and Alain Delon – have already left. And even if the American rich do not follow suit in terms of leaving the country, their incomes might do exactly that.

Does the above mean the Republicans won? Hardly. In two months, they will have to persuade the American public that it is necessary cut social benefits for the poor and elderly. Our society is aging, they insist, and soon the government will be unable to meet its obligations. There is some truth in this argument, although it remains a mystery why it is better to cut social benefits rather than military spending at a time when the United States spend more money on defense than the next 10 military powers – such as China, Russia, France, England, Germany and Japan – combined.

So probably in a few weeks, when the night falls over Washington D.C., American legislators will once again sit down to their own version of the game of chicken. When they reach an agreement – because probably some agreement will be reached – in the very morning they will reappear in front of the cameras in wait for appraisals. Some journalist might again express their admiration, yet as was aptly noted by Andy Borowitz in “The New Yorker,” praising Congressmen in this case is like praising an arsonist for putting out his own fire.

In pre-1989 Poland there was a similar joke about the communists in power which said: “The Party solves only those problems, which it has itself created.” There was also another one that comes to mind after congressional negotiations: “In 1945 [the year communists took over the power], Poland was standing on the edge of a precipice. And what happened next? We’ve made a great leap forward”…

*Łukasz Pawłowski is a contributing editor for ‘Kultura Liberalna’ and a PhD candidate at the Institute of Sociology, University of Warsaw.

In Reinventing Political Culture, I argue that there are four components to Barack Obama’s project in reinventing American political culture: (1) the politics of small things, using new media to capture the power of interpersonal political engagement and persuasion, (2) the revival of classical eloquence, (3) the redefinition of American identity and (4) the pursuit of good governance, rejecting across the board condemnations of big government, understanding the importance of the democratic state. I think that there is significant evidence for advances on all four fronts. The most difficult in the context of the Great Recession was the struggle for good governance, but now the full Obama Transformation, responding the Reagan Revolution, is gaining broad public acceptance.

The election was won using precise mobilization techniques. Key fully developed speeches by the President and his supporters, most significantly Bill Clinton, defined the accomplishments of the past for years and the promise of the next four. Obama’s elevation of the Great Seal motto E pluribus unum (in diversity union), defining the special social character and political strength of America, has won the day. And now, the era of blind antipathy to government is over.

The pendulum has finally swung back. The long conservative ascendancy has ended. A new commonsense has emerged. Obama’s reinvention of American political culture is rapidly advancing. The full effects of the 2012 elections are coming into view. The promise of 2008 is being realized. The counterattack of 2010 has been repelled. The evidence is everywhere to be seen, right in front of our eyes, and we should take note that it is adding up. Here is some evidence taken from reading the news of the past couple of days.

It is becoming clear that Obama’s tough stance in the fiscal cliff negotiations is yielding results.  The Republicans now are accepting tax increases. Signs are good that this includes tax rates. A headline in the Times Friday afternoon: “Boehner Doesn’t Rule Out Raising Tax Rates.” A striking shift in economic policy is apparent: tax the rich before benefit cuts for the poor, government support for economic growth. The Republicans are giving ground. The grand bargain to avoid the fiscal cliff will represent a major change in policy, with broad public support.

Boehner is talking tough but is gathering support of his party to enable a deal on President Obama’s terms, the Times reports in another story. The Republicans will support now what Boehner negotiates.

Even Rand Paul is supporting Harry Reid’s proposal in the Senate to increase taxes on the rich, albeit with a professed assurance that this will hurt the economy and in the long run hurt Democrats. Rand’s ideological conviction enables him to politically act. He pretends to know that taxing the rich will ruin the economy and be good in the end for libertarian Republicans such as himself. But note: he is accommodating to the new commonsense as he expresses a conviction that in the long run it will end.

Shockingly, following the same pattern, Ann Coulter, the extreme right wing Fox commentator, scandalized her host Sean Hannity by maintaining that Republicans support Obama’s tax proposals. Rightists are recognizing that the winds are pushing left.

And the far right is moving to the margins. Witness Boehner’s demotion of four Tea Party Republicans from choice committee assignments in the House of Representatives , and Jim DeMint, the Tea Party Senator, choosing exile at the Heritage Foundation, as its president, over completing his term in office, a luxurious exile worth one million dollars a year.

There are also more creative Republican responses. Rising stars in the Republican Party, Paul Ryan and Marco Rubio, gave speeches to a Jack Kemp tribute dinner, which emphasized the need to address the concerns and needs of the less advantage. I think that David Brooks reading of the significance of this is on the mark. There is a new “Republican Glasnost,” an openness to ideas, beyond trickle-down, ideas that could positively affect the life chances of the vast majority of the American citizenry, ideas that recognize positive government roles, that address the concerns of the less privileged.

The age of the attacks on big government is over. The times are truly changing. The New York Times today, under the headline “Obama Trusted on Economy,” reports on a Heartland Monitor Poll, finding broad support for Obama’s economic policies, with little support for  the Reaganesque Republican approach. The age of debate about good government has begun in an America that is becoming more comfortable with and confident of its pluralist identity, with more citizen involvement, and in which eloquence and intelligence matters. The election mattered.

On a more sober note: I don’t think that all is well in the Republic, that we are entering a new era of good feelings, that the President has the answer to all challenging problems. On many issues, the environment, national security, privacy and citizen rights, education and poverty, I think his policies and programs are wanting. I agree with the many leftist criticisms of Obama found on the left. But I think now is the time to push for corrections, with a chance to achieve them. As Obama himself said once, he has to be pushed to do the right thing.

I also think that the ideological polarization of the American public and its leadership is still a very serious problem. I wish the Tea Party were a thing of the past, but I fear it isn’t, and I hope the Occupy Movement will more practically engage in our pressing social problems, but I worry that it may not. It needs to work on speaking American, as Tom Hayden once put it in the 60s, stop dreaming about utopian visions, anarchism and the like, that make no sense to the broad American public, and address the incompleteness of the Obama transformation in ways that the public can understand and support. The emerging commonsense makes this possible. Obama has moved the center left, which has long been his project. The task for leftists is to move it further, engaging their fellow citizens.

At a Sixteenth Arrondissement party soon after I arrived in Paris in late 1984, I was cornered by a tipsy Frenchman who repeatedly exclaimed–in a tone more resigned than angry–“You’ve won! You’ve won.”  This was all he would say, elaborations and explanations apparently being unnecessary.

Once I began to look for them, signs of American triumph were everywhere: Carl Lewis’s Olympics a few months before, Reagan’s enthusiastic re-election a few weeks before, and a sense that personal computers coming from garages in Silicon Valley would displace the tiny Minitel terminals linked to a central network for which the French had instead opted (a prescient model, but ten years before the internet could have made real use of them). After several months in Paris, I realized this handwringing was a daily theme in the Parisian press: the United States had won the economic game.

The idea was everywhere: the news detailed France’s economic crisis and America’s ascendency; top journalists and other members of the intelligentsia analyzed how France had gotten into its sad state; academics wrote books setting the crisis in world-historical context; politicians spun grandiose plans for pulling France out of its malaise. But no one took the schemes of the politicians seriously: the crisis, everyone knew, was there to stay. Thus Le Monde‘s annual report on the economic state of the world in early 1985 had on its cover a tiny boat, its sail in disarray, about to drop from the crest of a wave, and a large ocean liner placidly moving along in the distance. The dinghy flew several European flags, the steamer those of Japan and the United States.

It was not just France: the entire “old world” was implicated. It was just that: old, weary, perhaps exhausted. Many French, if it fit their current political rhetoric, were fond of pointing out that France had done better than most European countries. The French were happy that they were not the Germans, the Swiss, or even the Swedes who had beaten them this time. It was America, which is after all America, and Japan, that fascinating but incomprehensible family corporation on the other side of the world. With conquerors like these, the French launched themselves into the crisis with enthusiasm.

Today, it is the Germans again, and the French are wringing their hands harder than in 1985.The new Gallois report recommends a neoliberal response to data showing that the Germans are gaining a competitive advantage. Even faster than in 1981, a socialist President is sounding less and less socialist, with talk of more flexible labor markets and cutting state spending.

Commentators, especially Americans, make a lot of the fact that 57 percent of France’s GDP goes through the government. The Economist (17 November 2012) editorializes about “a time-bomb at the heart of Europe” and calls for Hollande to reverse “the path his country has been on for the past 30 years.” Sixty years would be more accurate, or perhaps six hundred (since some of the trends may well have begun when the French finally managed to expel the meddlesome English).

Yet, on the other hand, it turns out that the French get a lot for their tax money. I recently had the good fortune to spend two months in Paris, reminding myself why it is so many people’s favorite city. The Metro arrives every two minutes, with announcements you can understand. An entirely new network of bike lanes is being installed. Grand trees line the boulevards, and sickly ones are replaced immediately. The city’s stock of handsome buildings, many of them hundreds of years old, is constantly and expensively renovated (even though part of a good renovation is to make them look as though they have always been just so). Trash is picked up, traffic flow, and bakeries are regulated to produce the world’s best breads and pastries, reasonably priced.

The French take enormous pride in Paris, I reasoned. They pour money into its care in ways that Americans do not care for its political capital, Washington D.C., or its cultural capital, New York. In fact, most Americans detest Washington and New York, and the elites who inhabit them. New York looks good these days because the city has learned to shake down the wealthy who live there. Washington looks like hell.

But I was wrong about French pride being channeled into Paris. When my wife and I took driving trips outside Paris, I was just as impressed. The roads were perfect; signage was clear and helpful. Medieval towns and baroque chateaux that would have been crumbling in most countries were in good repair.

For decades, Americans have labeled France as “socialist.” Most Americans never leave their own country, so they can spin any kind of grim fantasies about the big-spending countries of the Old World. Stereotypes survive brief touristic visits, too. I was unpleasantly seated next to an American couple at a Paris restaurant last winter, only to listen as they acknowledged various virtues to the city, only to dismiss them with the comment, “Well, they’re socialist.” I wasn’t sure what they meant (Sarkozy?), and I didn’t want to ruin my glass of Calvados to find out, but it seemed as though no amount of good living could compensate for some state of slavery implied by socialism. It was fine to come take advantage of all that infrastructure spending, but not to admit its source, taxes.

Even serious commentators have described France’s 35-hour work week as unsustainable, its pensions as too generous, its job protections as sclerotic, its proportion of government spending at 57 percent of GDP as disastrous. What has happened in three decades of worrying?

The French work less than we do and live better. All that government spending, especially on infrastructure, makes the French the most productive work force in the world, measured per hour worked. Working fewer hours undoubtedly makes those hours worked more intense, as well. Perhaps a glass of Calvados at the end of lunch doesn’t hurt.

France has some serious problems, including youth unemployment and a large immigrant minority that is not welcomed. But these are not problems of a large government sector. In fact, who is more likely to solve them: a neoliberal, hands-off state, or a state with extensive social programs and public spending? The means of fixing these problems are there, just waiting for the will.

The French are good at economic crises.  Their national identity and pride do not rest directly on commercial prowess. They are the guardians of Western Culture, including both the Arts and, perhaps even more, the art of living well.  The French are proud of their painters and their musicians, but nothing matches their unshakable confidence in their cuisine and their oenology.  They are proud of Paris for its churches and palaces, but they believe it is the world’s greatest city because of its life and excitement.  France’s proudest achievements are in living well, and this skill is rarely, let’s face it, compatible with dealing well. Hence the French are partly proud of not being good businessmen–like Americans and Arabs–and partly resigned to this fault as a necessary accompaniment to Culture. And culture, in both upper and lower case C, is what distinguishes France from most other advanced industrial nations. But in the end, none of that is innate. It is there because of government policies, and the taxing and spending to back them up.

“All truths – not only the various kinds of rational truth but also factual truth – are opposed to opinion in their mode of asserting validity. Truth carries within itself an element of coercion, and the frequently tyrannical truthtellers may be caused less by a failing of character than by the strain of habitually living under a kind of compulsion.” – Hannah Arendt (Between Past and Future. 1954, p. 243)

During the period immediately before someone leaves one city and moves to another, they seem to liberate themselves and experiment with abandon during that window of freedom, or fearfully adhere to the tired routines of a forgone order. Having witnessed the Eurocrisis unfold over the past two years from a window in Berlin, I recently thought I would have to move elsewhere due to conflict with the archaic hierarchy of a German university. I naturally rebelled and charged heedlessly into the freedom inherent in a contingent situation – refusing to comply with the hierarchy and arbitrary exercise of power so prevalent in the German university. With the comfortable order of my German life on the brink, I attempted to understand my position in German academia, as well as the European position under German hegemony. In so doing, I came to discover that the latter is not a debate between Keynesianism vs. neoliberal austerity, but a particularly virulent condition of wider academic and German culture: the need for truth.

If a traditional German university is a window into German culture as a whole, then the problem of truth becomes immediately apparent. Imagine riding horseback through the patchwork of political entities in medieval Germany, each with an independent lord holding absolute power over a small slice of territory, beholden only to the good grace of a distant and disinterested central authority. While riding through this landscape, the casual observer cannot help but notice that when moving from one lordship to another, the organization of labor and adherence to a unifying conception of community is entirely dictated by the lord. Some territories have jovial lords who interact with their subjects, interested in seeing smiling faces on their townsfolk and full bellies in the peasantry. Others sit aloof in marble palaces patronizing a small circle of followers and sycophants, while browbeating the remainder into perpetual worship and servitude. In each case, the truth is held by the lord, and the lords themselves are at almost constant war with each other, attempting to extend their vision of truth across the land. Because each professor in a German university effectively governs an entire department, with an army of student assistants, research assistants and post-docs, this medieval image illuminates the culture of a traditional German university. Unsurprisingly, the “market” for those lower but rather well-paid positions is brutal and precarious, and switching between lords becomes an exercise in switching between truths.

Extended to the German dominions themselves, certain truths are self-evident among the mainstream, functioning at the federal level. The law is sacred. The state is sacred. The economy is sacred. The currency is sacred. The four mainstream parties, the Conservatives, the Social Democrats, the Liberals and the Greens are surprisingly adept at working togetherafter accepting these truths – at least compared to the polarized American environment. Of course, the Left, emerging from the Communist East and persisting over the years, has been a pariah to the mainstream, while the recent success of the Pirates is just downright baffling. The response to these outsiders is a mixture of aggressive repudiation, particularly towards the Left (You dangerous lunatics want to bring the GDR back!), or sneering contempt (what do these pothead idiots dressed as Pirates want anyway?). In each case, the outsider is considered a threat not only in the traditional understanding of violence and theft, but also because their positions are invalid. Thus, they are simply wrong, false, in error – a threat not simply to order, but to the truth.

Brought to the European level, behind the intractable German position on austerity is not so much an essentialist identity, moralizing about hard work and responsibility, but a feeling of compulsion among the elites driven by “the truth” of the situation. After all, how can a Haushalt spend more than it takes in? What other solution is there but for Portugal, Ireland, Italy, Greece and Spain (“the PIIGS”) to “get their houses in order”? What can open market operations by the European Central Bank (ECB) lead to but inflation? These are truths!

Of course, there is no “German Truth” to which all citizens adhere. The political culture is quite vibrant, diverse and filled with plenty of activists who have been at the forefront of anti-fascism as well as movements similar to Occupy. Nevertheless, there is a tendency, particularly among those in positions of power, to possess a form of aggressive self-assurance that they themselves hold the truth in isolation from all others. Because it is the truth, those in inferior positions must comply. Yet, it is precisely this combination, holding the truth in isolation and expecting others to comply, which generates the result any casual observer would expect: the social isolation of that person. This alienating self-assurance manifests itself not only in the lordships of German academia, but also in the acrimonious conflicts over the Eurocrisis. The two best examples of this are probably the two most important Germans in Europe at the moment: Angela Merkel and Bundesbank president Jens Weidmann – the most powerful council member on the board of the European Central Bank (ECB).

Merkel, a consistent advocate of austerity under the folksy belief that national budgets are just like household budgets – something John Maynard Keynes laboriously tried to discredit – finally got what she deserved this summer: isolation. With the replacement of French President Sarkozy by Socialist François Hollande, Italian Prime Minster Mario Monti quickly formed an alliance against Merkel’s dominance and effectively forced her into isolation. The result was a defeat for Merkel’s beliefs and the further extension of European-level credit to troubled countries.

On the other hand, if Merkel is stubborn in her timeless wisdom, Weidmann is as unyielding as a mathematical equation. Following his interview in Der Spiegel, one wonders if this trained economist would like to see Europe in ruins just to prove true whatever macroeconomic paradigm he functions under. Although quite young and only on the job for little over a year, scarcely a month after Merkel’s defeat, Weidmann was likewise isolated on the board of the ECB. The ECB subsequently plans to move forward with open market operations – exactly what Weidmann wanted to avoid.

In the end, it is clear Europe is moving towards a new order, or, more figuratively, moving from one city to another. If “the truth” of the old order is already forgone, we can only hope that the leaders of the transition liberate themselves from its routines. But, if my personal experience with the German university is any indication, or perhaps also that of Monti and his allies, directly challenging the truth tellers of the old city is the only way to move forward to a new one. We can only hope that such a challenge brings the truth out of isolation and into rational public debate.

Was it a ‘tragedy’ or was it a ‘massacre’? Were the police, shocked by the killing of cops and security guards a few days before, entitled to feel threatened by an advancing column of panga-wielding strikers fortified with traditional medicine to immunise them from bullets? Or were the cops guilty of penning the strikers in, making an unnecessary attempt to disarm them by force, employing unconscionable firepower to block their escape and killing stragglers in cold blood? Who fired the first round of live ammunition?

What we do know is that on August 16^th 34 striking miners were gunned down by police at Lonmin’s Marikana platinum mine in South Africa’s Northwest Province, and that there was at a minimum an unforgivable failure of police crowd control.

With luck, a government-appointed judicial commission will tell us who did what to whom and in what order. In the meantime South Africans nurse their bewilderment.  Theirs is a violent land in which fifty people are slain daily in ‘ordinary’ criminal murder, and strikes are often enforced with deadly brutality, but a special shame attaches to a slaughter by state forces so redolent of apartheid-era massacres.

There are layers to this story. It’s about wage grievances, but also a battle between unions. Black platinum miners have until now been organised by the National Union of Mineworkers, a member of the ANC-aligned Congress of South African Trade Unions. Critics claim that NUM, a stalwart of the anti-apartheid struggle, is now a status quo union. Comfortable as management’s recognised bargaining partner, NUM resists calls for mine nationalisation. The union increasingly represents upwardly mobile above-ground workers rather than the rock drillers who do the most arduous work. The fact that NUM negotiated a better wage deal for the former than for the latter appears to have been a spark for the unrest.

Rock drillers have it hard. Platinum companies have invested little in surrounding communities. Those of its employees who do not wish to live in hostels are given living-out allowances to find their own accommodation nearby, where they are left to the tender care of dysfunctional ANC-led municipalities. Most end up in shack settlements threaded with bumpy roads and open sewers.

Given this, it is little surprise that a breakaway union, the Association of Construction and Mining Union, has found in drillers a ready recruiting pool. Precisely what role AMCU has played in the Marikana strike remains to be determined.

There is a gloomy economic context to this. The country’s crucial mining sector – weighed down by electricity price hikes, falling ore grades, safety concerns, labour unrest and skittishness about nationalisation – failed to ride the recent global commodities boom. Platinum long seemed immune from the industry’s decline. South Africa produces 80% of the world’s platinum, an extremely rare  metal vital in catalytic converters. In 1999 international platinum prices began a long surge that transformed becalmed bushveld mining towns into new conurbations. But recently prices have fallen and platinum companies face financial losses. Successive strikes at platinum mines have made matters worse for the companies, their workers and a middle-income country that still depends on mineral exports for foreign exchange. Job losses loom.

The political ramifications could be equally far reaching. Expelled ANC Youth League leader Julius Malema, an arch critic of President Jacob Zuma and longstanding mine-nationalisation enthusiast, has returned to prominence on the back of mineworkers’ grievances. Zuma’s prospects for being re-elected as ANC leader at the party’s December leadership conference suddenly look shaky, especially with so many of the strikers hailing from the politically crucial Eastern Cape.  The hegemony of NUM, a pro-Zuma union, is under threat. So perhaps is that of Cosatu, a federation willing to challenge the government but viewed by some as guarding a labour aristocracy in a sea of labour casualisation and unemployment. The ANC too is getting nervous: the Marikana strike is just the latest in thousands of incidents of local unrest signalling growing disaffection with the party of national liberation.

I for one do not welcome Malema’s opportunistic intervention or the left’s instant attributions of heroism and villainy. South Africa urgently requires a social-democratic accord, one underwritten by strong trade unions capable of winning decent work and expanding employment in exchange for industrial peace and productivity gains. Nationalisation may work for Norway’s oil industry but the South African state is chronically incapacitated and lacks the fiscal means to meet demands for new mining investment and rising mine wages. The splitting of established unions could weaken organised labour and leave mining in a limbo between institutionalised bargaining and quasi-revolutionary insurrection.

The truth of what happened at Marikana also needs to be objectively established, and its discovery is ill-served by incendiary sloganeering. Blame must be carefully apportioned and justice must be done. Only that will clear the air sufficiently to enable a worthwhile debate about what sort of socio-economic regime South African mining needs.

As I observed in my last post, I think that an OWS focus on debt, as Pamela Brown has been advocated, makes a lot of sense. We discussed this in the Wroclaw seminar. I continue to think about that discussion and how it relates to American electoral politics.

The issue of debt provides a way to keep focus on the frustration of the American Dream as it is part of the experience of many Americans, from the poor to the middle class to even the upper middle class. It is an issue of the concern of the 99%.

Yet, there are many activists in and theorists observing the movement who council against this, such as Jodi Dean. Debt is too individualized a problem. It would be better to focus on an issue of greater common, collective concern (e.g. the environment). The issue of debt is too closely connected to the right wing concern about deficits, and criticism of student debt can too easily become a criticism of higher education.

This presents a serious political problem. There is no broad agreement on debt as the central issue, and no leadership structure or decision making process which can decide on priorities. And of course, there are many other issues of contention. Primary among them, in my judgment, is the question of the relationship between OWS and American electoral politics.

It is here where the activists in OWS, like their new “new social movement” colleagues in Egypt and the Arab world more generally, are not prepared for practical politics. Coordinated strategy is beyond their capacity. One faction’s priority, debt or the reelection of President Obama, is not the concern of another’s, or even a position which it is forthrightly against. There are too many different positions within the movement for it to present a coherent sustained position. People with very different positions were able to join with each other and act politically thanks to the new media, but also thanks to that media, they were not required to work out their differences and priorities. They never developed the means to decide them.

Thus, the secular liberal and socialist activists of Tahrir Square have not played a major role in post Mubarak politics, and thus, OWS is struggling as it approaches its first anniversary of the occupation of Zuccotti Park. It is interesting to note that the serious comments to Brown’s recent article on debt discussed not the issue involved but the means by which the issue has been given priority (the other comments were by anti-OWS readers).  But the story doesn’t end here.  Activists continue their work beyond the glare of the attention of the media mainstream.

The problem of sustaining movements, as they are an outgrowth of the way they have formed, should be noted. Yet, while this all intriguing with interesting theoretical and practical implications, I do not think it is of critical importance. Movements don’t legislate and don’t elect Presidents and parliaments and members of Congress. Rather, they shape the political culture (something which I will reflect on more directly in my next post on new social movements in Russia and Israel). Indeed by helping shape the story people tell themselves about themselves, they lead to legislation and election, and sometimes this takes time. This is where the success of OWS is undeniable.

OWS changed the conversation. Inequality again became an issue of broad public concern in the U.S. and beyond. A simple calculation became a theme infusing discussion around the world: “the 99%”and “the 1%.” In lower Manhattan, a symbolic center of global capitalism, a small group of protesters globally unsettled things. While the speech and action within the movement is important, the way it influences the speech and actions beyond the movement is probably even more important.

This is quite evident in American politics. Under the influence of the Tea Party, the discussion in the midterm elections was about debt and deficits and the Democrats received a shellacking, as Obama put it. For a while Obama and the Democrats were humbled, influenced by the Tea Party movement and its momentum, and by the Republican victory. This changed thanks to OWS.

The President and his party found a new voice, often speaking of “the 99%” directly. There is a steadfastness when it comes to the issue of taxing the rich. Obama himself refused attempts by so called moderate Democrats to bend on the issue (instead of ending the Bush tax cuts for those making $250 thousand and over, ending them only for those making over $1 million), and now the issue of inequality is at the center of his campaign. Obama’s clarity, along with his party’s on the issue, along with the way they are trying to define Mitt Romney, all have an OWS accent.

The challenge for activists in OWS, such as Brown, is to extend and deepen this influence. She, like many others, is working to sustain the impact of OWS. I think she is right about this and about the substance of the matter. Debt is a key issue. For the last twenty years broad segments of the population have managed to keep the illusion of the American Dream alive by going into debt. Now payment is due, and the responsibility requires not only individual action, but concerted public efforts to change the rules of the game. And as the Tea Party is a force for capitalism and individualism run wild, it is important that a social movement works to present a clear alternative.

August 1, 2012 will be marked in American history as Chick-Fil-A Appreciation Day. Typically on such celebratory, capitalist occasions business owners show gratitude to their diners by a discount or a balloon. That Wednesday was topsy-turvy. Dan Cathy’s customers reversed the tradition, showering this Atlanta-based corporate CEO with consumptive love. Lines stretched around the block, a record-breaking scene. It was a bad day for poultry; a good day for cows.

I admire Cathy’s chicken sandwich and waffle fries as much as any fried mercantile repast, even though my patronage is spotty. A business that closes on Sunday so that diners can attend church has made a financial bow to belief. One can hardly imagine Einstein’s Bagels, say, closed on Saturday.

But several weeks ago, Dan Cathy crossed a line. He didn’t change his opinions, but those opinions became newly publicized. Mr. Cathy was quoted as defending traditional marriage – for God’s sake! – suggesting that gay marriage is “inviting God’s judgment on our nation.” I am not in the business of discerning God’s judgment. My concern is more parochial.

After Cathy’s remarks were broadcast, several politicians suggested that there was no place for Chick-Fil-A in their blue-state communities. Rahm Emanuel, no shrinking violet, opined that Cathy’s values were not “Chicago values.” Surely the Daleys would not have forgotten the Catholic Church down the street. Pandering attempts to banish the chain because of politics are clearly unconstitutional, particularly in the absence of evidence that they deny service to any customer.

Citizens properly have the choice to patronize whichever business they wish. Private boycotts for political reasons fall within our rights. The question is not whether such boycotts are legal, but whether they are wise.

I am troubled by choosing consumption based on the boss’s belief. Let us take the case – the case at hand – of “gay marriage.” In the United States today we are equally split on marriage equality. The numbers in support are growing and in five years a new consensus may emerge, but today we are split. We have red states and blue states, and even, as I argued previously, red jobs and blue jobs. But do we need red businesses and blue ones? The same week in which the debate over Chick-Fil-A was bubbling, Jeff Bezos, founder and CEO of Amazon.com, announced that he had contributed $2.5 million in support of a same-sex marriage campaign in the state of Washington. Can one read a Kindle in a Chick-Fil-A?

The deeper issue involves the question of how much should personal politics matter in selecting which businesses to patronize. Do these personal announcements count for much and should they be newsworthy? I do not care what Madonna or Jon Voight or Susan Sarandon thinks about the topics of the day. And I do not care much more about the opinions of Mr. Bezos or Mr. Cathy or Ben’n’Jerry. We each have an obligation to our politics, but I would prefer to select sterling films, toothsome chicken, and tax-free videos. I wish to make my consumer choices on the basis of the products, not on the producer. All of these worthies are welcome to contribute to this site, where it is to be hoped that they will consider deliberately their topic. But the mere fact that they are known should not count for much. A diverse and contentious debate is essential for democracy, but the merest whiff of opinion should be lightly heeded, treated as little more than celebrity gossip, when making consumer choices.

It is not only celebrities and public figures who intrude. So do my Facebook chums. Every day I receive a bundle of snarky little mots that suggest that my friends are persuaded that their friends are of one mind. The messages, and their responses, reveal that we have red networks and blue networks. Few purple worlds exist in the Facebook universe. Let us gather radical, progressive, libertarian, conservative, agnostic, and Chick-Fil-A friends. Just as I treat businesses and films in light of their quality, I try to do the same for my acquaintances. This is not easy and, as I strive myself to avoid quick classification, perhaps I provide some value-added benefit. Just as I eat sprouts, waffle fries, and Chunky Monkey, I try to be a political omnivore.

We are in danger of becoming a nation in which the gaps between those with political differences are deepened and are increasingly stoutly defended. We exclude those whose opinions differ from our own at the cost of diverse sociality and at the cost of congenial debate and perhaps persuasion (us of them or, just maybe, them of us). John Stuart Mill argued that “If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.” An enlightening error is almost as worthy as a good chicken sandwich.

After the dismal employment numbers reported by the Labor Department for May, media attention has begun to focus on the summer job shortage for teenagers. According to one AP article published in news outlets around the globe, “Once a rite of passage to adulthood, summer jobs are disappearing,” which appeared under the heading “US teens now get adult competition for summer jobs.” A central theme has been the job competition from immigrants. Experts are quoted about the severe long-term consequences: lower skills, reduced labor force attachment, and rising inequality.

None of this is wrong, but we need a strong dose of common sense about priorities.  Our labor market crisis – now in its 5^th year – is centered on the inability of vast numbers of adult workers to find full-time jobs that pay living wages. That there is a major summer jobs shortage for teens is real, but it’s importance pales next to the costs of the employment problems of prime-age workers. If there is a teen crisis, it has much more to do with academic preparation and college completion than with the availability of summer jobs.

Yes, the job market for teens is likely to be as bad as last summer – we won’t know exactly how bad until the June and July numbers appear. But we do know that teen employment rates are at an all-time low. The employment rate for 16-19 year olds has collapsed since 2000, with similar huge declines in the early and late 2000s (from 45% to 36.2% between 2000 and 2004, and then from 34.3% to 25.5% between 2007 and 2010). Particularly worrisome is the sharp decline for 18-19 year old black teens: from 31.8% in 2007 to 23% in 2010. If there is any good news in these numbers, it is that between 2010 and 2012 these rates at least didn’t get much worse.

And yes, in the worst jobs collapse since the Great Depression, teenagers will face increasing competition from adults, and some of these will be immigrants. But this is nothing new – decades ago, Katherine Newman’s brilliant case study of Harlem fast food restaurants showed that black teens faced intense competition from adult immigrants. But in a time of job shortage, should we be blaming foreign-born adult workers for taking bad jobs? For the record, foreign-born workers have also seen massive job losses in recent years: between May 2007 and May 2012 the foreign-born employment rate fell from 65.3% to 61.4%, only slightly less in percentage point terms than the native-born decline, which fell from 62.6 to 58.3%.

And finally, yes, it is also true that teenage employment, both during the school year and over the summer, used to be much more common. But this was a legacy from an earlier time, when most lived in rural areas and teenage children were needed for work on the family farm. In our high-tech service economy, more hours per day and weeks per year need to be spent in the classroom and doing homework.

Indeed, most other rich countries require much longer school days and far shorter summer holidays. In the early 2000s, 26% of American 16-19 year olds worked while enrolled in school; this figure was just 2% for French teens. Their school days are much longer. And no, the explanation is not that French kids would have been working like their American counterparts if the jobs were there. In fact, back in the 1960-70s when French unemployment was very low, the employment rate of French teens enrolled in school was also about 2%. “Work” for teens should mean schoolwork, not part-time dead-end jobs paying the minimum wage.

If we’re looking for good indicators of the failure to prepare our teens for a lifetime of productive, satisfying and well-paid work, we should look beyond the summer jobs deficit to our abysmal college graduation rates. The share of young people (25-29) with a college degree rose in the 1990s, but has been flat in the 2000s (at around 30%). While increasing numbers of young people have sought post-secondary degrees, poor academic preparation, the shortage of decent full time jobs for recent graduates, and rapidly rising tuition costs have produced astonishingly low graduation rates. Students entering a four-year college in 2003 had a graduation rate of just 55.5% six years later. Even worse, community colleges offering a two-year Associate’s degree report a three-year graduation rate of just 29.2% for the 2006 entering class. Unfortunately, there is a hardly any payoff to going to college and not finishing. On average, the premium for getting “some college” over a high school degree was $1.85 per hour in 1998, $2.03 in 2000, and $1.92 in 2007.

Rather than bemoan our summer jobs deficit, we should focus on what can be done to increase academic preparation and college completion, while attending to the labor market problems of prime-age workers. Our limited resources for job creation ought to be focused on the needs of heads-of-households, which would help reduce the economic need for teens to supplement family income.  The obvious (though politically unpopular) solution is stimulus spending focused on fixing the country’s rapidly collapsing physical infrastructure, together with the revenue needs of states and local governments, whose layoffs have been contributing to the jobs crisis.

And what should be done for teens? Here’s a modest proposal. Let’s start – in next year’s federal budget – by reallocating the vast bulk of the $20 billion we are spending on agricultural subsidies (which is mostly just a big welfare program for large rich farmers and corporations) to support low income households through expansion of the earned income tax credit, and to support low income teens via substantial tuition vouchers (not loans!) to increase those college graduation rates. Just half of what we spend on rich farmers would provide 2 million $5,000 tuition vouchers. In this economic crisis, the summer jobs deficit is just a sideshow – even for teens.