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Leaders in America’s top 3 European Allies face Crisis
- Britain: Teresa May tries to manage a Brexit vote motivated by anti-immigration
- France: Emmanuel Macron faces rioting in the streets over a carbon tax
- Germany: Angela Merkel has to step down as leader amid backlash over middle east immigration
Get the entire film at https://www.createspace.com/204551. This clip from a 1 hour PBS television documentary I made called ” How Hitler Lost the War.” The film takes a unique point of view. Rather than talking about who won the war, my colleagues and I explored what Hitler did that helped lose Germany the war. Although it happened so long ago, it is still a frightening story. Some of the interviews I conducted in this segment were fascinating to me and I hope they are to you as well.
That crashing sound you heard in world markets last week wasn’t just a correction. It was the sound of the end of an age.
During the long era of relatively stable international relations that succeeded the Cold War, markets enjoyed an environment uniquely conducive to economic growth.
.. The results were extraordinary. Between 1990 and 2017, world-wide gross domestic product rose from $23.4 trillion to $80.1 trillion, the value of world trade grew even faster, more than a billion people escaped poverty, and infant-mortality rates decreased by more than 50%. The number of people with telephone service grew roughly 10-fold.
This hiatus from history was, by most measures of human flourishing, a glorious era. Now it has come to an end, or at least a pause, and the world is beginning to see what that means.
.. the basic elements of economic globalization appeared firmly in place.
- Russia, the most obvious challenger to the geopolitical order, was an insignificant and diminishing player economically.
- And China, notwithstanding its rapid economic growth and its anxiety about American military power, was unlikely to challenge the economic basis of its own success. Geopolitics might have been back, but that wasn’t an issue for markets.
That complacency was misplaced. The return of geopolitics means the basic framework for economic policy has changed. In periods of great-power rivalry, national leaders must often put geopolitical goals ahead of economic ones. Bismarck’s Germany could have saved money buying armaments from Britain, but building a domestic arms industry was worth the cost. If the U.S. is in a serious strategic competition with China, an American president might well be willing to sacrifice some economic growth to banish China from important supply chains.
,, by invoking “national security,” the Trump administration has found a legal basis, with roots in the Cold War and even earlier, to assert sweeping powers over the nation’s commerce. It has upended a generation of U.S. trade policy in a dramatically short period of time.
.. The new era of geopolitics is unlikely to be an era of small government.
.. The Trump administration is
- reversing some of the regulatory excesses of the Obama era, and
- the president’s judicial appointees are prepared to rein in the administrative state.
.. A recalibration of the U.S.-China relationship was likely inevitable as the world’s oldest civilization became an economic superpower.
Hillary Clinton, who as secretary of state clashed with Mr. Obama over the need for a tougher approach to China, would not be a popular figure in Beijing if she had won the 2016 election.
In Europe, experts attribute the spike to an acute shortage of workers in countries like Germany, but there are many other theories.
.. Economists there offered numerous theories to explain the phenomenon. The decline of unions has taken away employees’ bargaining power, some said. Globalization, outsourcing, and the easy flow of money and information across borders have also forced workers in wealthy countries to compete with those in poorer ones.
.. Another suggestion is that the rise of companies like Apple, Google and Amazon as industry behemoths has concentrated power in fewer companies and squelched competition. And the so-called sharing economy, exemplified by Uber or Airbnb, has made many people into freelancers with few benefits.
.. In one much-discussed paper presented at Sintra, Uta Schönberg, a professor at University College London, compared data from Germany and France and came to the conclusion that low wage growth and rising inequality were a result of diminished bargaining power by workers.
Flat wage growth in Germany during the last two decades coincided with reforms that allowed companies to opt out of collective bargaining agreements, weakening union power.
In France, where union agreements applied to whole industries and were binding for companies, wages continued to climb and inequality was less pronounced.
.. But France paid a price. While unemployment fell below 4 percent in Germany, it remains above 9 percent in France. The implication is that companies may not hire as much if they are locked into union wage contracts.
.. This hidden reserve of workers is bigger than economists thought, Mr. Talavera said. But in Europe it appears to have finally been exhausted. “That is one of the reasons you haven’t seen wage growth picking up substantially,” he said.