America in the Round
America has overdone things over B.P. and Lockerbie, whatever its anger at events in the Gulf of Mexico or over the bombing of the Pan Am flight. Americans see themselves as innocent in both disasters, but the rest of the world does not see so clear cut a picture. On top of this, the Afghan war is going badly, the Karzai government is both corrupt and dysfunctional and all of NATO now seeks a way out. Iraq is unstable and may yet erupt when the U.S. leaves.
On the other side of the coin the U.S has re-capitalised its banks, stabilised its financial system and passed the greatest reforming legislation of the banking sector since the great depression. Goldman Sachs has been charged with fraud and paid a spectacular fine, before announcing profits down by over 80%. President Obama has made it clear that the U.S can no longer borrow to buy cheap overseas goods from Asia until crippled by debt, so that emerging economies end up with all the cash.
Europe meanwhile has settled for announcing that almost all its banks have passed quite meaningless stress tests which are so feeble that they do not allow for a major economic downturn or a national default, let alone both. The Eurozone has staganated, weighed down by excessive sovereign debt and a banking system in which nobody has complete confidence. Without German exports Eurozone figures would look a lot worse. Without a Federal policy or executive to manage the economies of those in, what is in effect, a federal currency, nobody knows what is coming round the corner, or what to do when it hoves into view.
Although The U.S was the epicentre of the great financial collapse, it has been timely and resolute in setting its house in order. There is some divergence with Europe over fiscal policy, but it is way ahead at creating a sound financial base. The U.K has a foot in both camps but we are outside the Euro. This is a blessing. Osborne and Cable need to sort out the banks now, so as to build on the excellent new economic mangement role of the Bank of England announced in the Budget.
Meanwhile this all shows that in the huge U.S. economy, which is made up of the varying economies of fifty states, there is sufficient federal authority and national will to act when crisis demands. This was Lincoln’s vision. America was one nation, not a multitude. He resolved the issue by war. Europe has had all the wars already. It now has to rise to the challenge of what the Eurozone is and and how and by what authority it will be led. It may find it has more to learn from America than it is fashionable to admit.