Posted on 01/04/2004 6:14:56 PM PST by Ronly Bonly Jones
Power shift in Europe, deadlock in US
By Anatole Kaletsky, The Times
January 05, 2004
Starting in Europe, German Chancellor Gerhard Schroder may well lose his job. Because of the soaring euro, the German economy is certain to remain very weak even as the rest of the world recovers.
Meanwhile, Schroder's Social Democrats will face defeat in no fewer than 13 regional and local elections this year – and in Germany's postwar history, leaders have usually changed as a result of internal party putsches, not general elections.
French President Jacques Chirac will remain in office, but severe losses in municipal elections followed by the sacking of the Government of Prime Minister Jean-Pierre Raffarin will damage his credibility this year.
Because of their willingness openly to defy the weakening Franco-German axis, Prime Minister Silvio Berlusconi in Italy, heir apparent to the prime ministership in Spain, Mariano Rajoy, and Poland's Prime Minister Leszek Miller could become the most influential European Union leaders in 2004.
In Russia, nobody will be surprised by the landslide re-election of President Vladimir Putin, who will become a virtual dictator with a communist-style monopoly of power. The surprise will be that despite the decline of democracy, the Russian economy will continue to function quite well, buoyed by the insatiable demand for gas and oil, especially from the booming economies of China and the rest of Asia. In Central Europe, by contrast, there could be serious political and economic problems in the 10 countries joining the EU in May. Since most of the benefits of EU membership have already flowed to these countries during the pre-accession period, the actual process of joining will bring few tangible benefits to offset the dramatic increase in regulation and the general disillusionment at the second-class citizenship that the Eastern Europeans will continue to suffer for many years. In Britain the economy will stay in good shape, with modestly higher interest rates the only small cloud on the business horizon. Yet the political situation is widely believed to be bleak for Prime Minister Tony Blair.
His Government is said to be in serious trouble – exhausted, unpopular, ideologically divided and riven by personal jealousies. In my view, this is quite wrong. The year ahead will see a dramatic comeback for Blair and his Government.
Blair, we should never forget, is now exactly halfway through a five-year parliament. This is the point when all governments suffer from exhaustion, unpopularity, ideological division and personal jealousy. By the standards of past mid-term crises, 2003 was an annus mirabilis, not horribilis, for Blair.
Despite Iraq and higher taxes, meddlesome regulation and gridlocked transport, failing schools and street crime, feuding with Chancellor Gordon Brown and all the other things so obviously wrong with Britain today, Blair remains the most popular prime minister in the history of modern opinion polling.
As politics moves into its normal pre-election upswing, the Government's underlying popularity should become evident in 2004. The cyclical turning point may come as early as this month, with the publication of the Hutton inquiry.
The report is certain to exonerate Blair from any personal wrongdoing in the death of British weapons scientist David Kelly, otherwise Lord Hutton would surely have called him back for a round of cross-examination.
And once the Prime Minister is cleared, the rest of the report will be of zero interest to the general public, even if it does make some trenchant comments about the conduct of government and results, as it should, in the resignation of such minor players as Defence Secretary Geoff Hoon and BBC board of governors chairman Gavyn Davies.
The Blair revival will gather momentum with the vote on university fees. Once Labour dissidents realise that they have absolutely no chance of unseating Blair, they will doubtless rally round some compromise proposal which will save face for everyone.
If so, with the economic recovery in full swing, all European issues shelved and the Brown-Blair feud suspended until the next parliament, the Government will look thoroughly revived by the middle of 2004.
Finally, what about the year's most important political event, the US presidential election?
A month ago, I would have had no trouble making a controversial prediction. Most pundits believed that George W. Bush would win by a landslide; I was convinced he would lose. The US economic recovery, although it was clearly under way, was already too late to give the President much of a boost. More importantly, Bush was starting to be blamed for mismanaging the occupation of Iraq, while neglecting the infinitely more important war against terrorism.
It also seemed that American voters were starting to see the Bush administration's combination of bellicosity and paranoia as a cynical attempt to distract attention from its blunders and abuses: in geopolitics, reflex obedience to Israel and Saudi Arabia; in economics, protectionism, budget deficits and tax cuts for the rich; in environmental policy, reckless indifference to climate change; in health, the Medicare reforms that added hundreds of billions of dollars to subsidies for drug companies and wealthy retirees, while leaving 20 million Americans uninsured.
It now seems that I may have been engaging in wishful thinking. [No s--t! - RBJ] The capture of Saddam Hussein in mid-December has boosted Bush's standing and persuaded many Americans that the situation in Iraq is coming under control, which it probably is. The President now has a breathing space between the instant gratification of the military victory and the long-term stabilisation of Iraq.
With the US economy also broadly neutral – by November consumer confidence and unemployment will still be considerably worse than in 2000 – the outcome will therefore hinge again on vague feelings of personal sympathy and ideological affiliation. Bush is likely to be weaker in such a contest than he was four years ago, but so will the Democratic challenger, who by definition will be almost unknown.
The upshot is that the US election now looks again like a dead heat. This is reflected in the polls. In October and November, voters said by a margin of 50 to 44 that they would prefer not to see Bush re-elected. By late December, the answers to this crucial generic question had shifted to 46-46.
Everything will therefore depend on unpredictable events in the next 11 months and on the candidate the Democrats choose. If the Democrats can unite around a centrist candidate – for example General Wesley Clark – they may well win. If they nominate Howard Dean, Bush will probably survive but only by the narrowest of margins.
In either case, the man elected US president this year will receive a poisoned chalice. With the budget exploding, inflation accelerating and money haemorrhaging in Iraq, US taxes will have to rise sharply. But pledges of "read my lips, no new taxes" will dominate the election campaign. When Bush reneges and raises taxes, he will split his party and become a lame duck. If a Democrat tries to raise taxes, the Republican Congress will respond with scorched-earth sabotage.
The 2004 presidential election will be a good one to lose, which leads to my last and firmest prediction: one intelligent American secretly praying for a Bush victory will be Senator Hillary Clinton.
| Rank | Location | Receipts | Donors/Avg | Freepers/Avg | Monthlies | |||
|---|---|---|---|---|---|---|---|---|
| 19 | Wisconsin | 221.00 |
5 |
44.20 |
245 |
0.90 |
173.00 |
11 |
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The Franco-German "alliance" appears to be founded upon the idea that the parasitical French will have their way with the productive workers of Germany.
We'll see how long the French hold out this time.
Showing his bias there. "Due to Iraq" might be a realistic assessment. Further bias shown by the characterization of the U.S. presidential election as a "dead heat" at this time. I can't imagine to what poll he is referring.
I'm not sure a the Dow over 10,000 and a Q3 GDP increase of 8.2% count as "broadly neutral." Perhaps this gent is predicting a downturn? Or perhaps he's just a little (gasp!) behind the times?
And they have the nerve to call us "Crusaders" and "cowboys."
Seems like Bush is starting to get the budget under control, I think the explosion is over.
Inflation is still no where to be found.
This guy is having a pipe dream.
When Bush reneges and raises taxes, he will split his party and become a lame duck.
It might surprise this guy to know that no matter what Bush does he will someday become a lame duck!
Imagine his surprise when Bush comes around with his 4th round of tax cuts, and then his 5th and then his 6th ect ect.
There is no need to raise taxes when the same problem can be tackled simply by reining in on government spending.
Strange world when a strong currency is seen as an economic disaster. The strong Euro means that the Germans will be able to trade intrinsically worthless paper money for a cornucopia of goods on the world market, and get rich.
In the neo-mercantilist view, this is terrible. You're supposed to want to trade away a cornucopia of your own goods for somebody else's intrinsically worthless paper money, and get poor.
Hey, guys, that was a different President Bush.
When Q4 numbers come out at the end of the month, I can see the headlines now:
Economic Growth in the US is Cut Nearly in Half in Q4 2003 to 5%; Recession Imminent
A previous poster picked up on this but I could not help but laugh at his observation that When Bush reneges and raises taxes, he will split his party and become a lame duck.
Perhaps the gentleman is unfamiliar with the U.S. Constitution's limitation on presidential terms, or he may be and is just plain dumb.
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