10,000 Spoons when all I needed was a Knife

 Ironically enough, it seems that simply searching for a comparison of EU and US policies actually produces good results. In fact, one particular paper does a great comparison of how each model of governance performed during the economic crisis of 2007. The paper in question, "Good governance in crisis or a good crisis for governance? A comparison of the EU and the US" by Waltraud Schelkle has a bias towards the American principle of good governance but still analyzes both systems on the same base in Macroeconomic theory.

Schelkle begins with a history of how the European Central Bank and the American Federal Reserve gained their modern roles of maintaining economic stability and efficiency over political expedience in the 1970s. This change in role for the Fed in that era comes mainly from the realization that there was a bias for deficit and inflation in capitalist societies.

After this breakthrough for the central banks, a surge of privatization and deregulation of utilities companies swept the 1980s in the US. As a consequence of these successful privatization efforts, delegation of policy making power to independent agencies began to rise in Europe.  Once Schelkle finishes discussing the fiscal policy making power differences between the US and the EU, he makes a clear note that state bailouts of firms is less strictly regulated in the US than the EU. This illustrates one clear difference in the way that the US can respond to an economic crisis compared to the EU.

To summarize the differences in good governance overall, Schelkle provides a table recreated here:

From this table we glean the insight that while both systems differ entirely in their systems of governance they score very similar in their strength.

After a comparison that would take to long to summarize in this blog post, it turns out that the odds were stacked against Europe's policy of good governance. Surprisingly enough, good governance actually strengthened the unity between member states. It also helps to demonstrate the importance of throwing away nationalism in Europe. Amongst all this, we also see that the US policies of good governance were weakened by the crisis instead of strengthened like the EU. Despite the flaws of both systems, it seems that the EU may be more well-equipped to handle future crises.

Let's flip the Eurocoin

Recently, I have been very positive about the European Union and what it can teach us. While a huge portion of its policies and government attitudes are a great model for us in the United States, one topic has been strangely avoided. Like all ignored ideas and viewpoints, it strangely re-entered my mind on the toilet. The topic that plagues and is at the core of the European Union is its common currency and financial policy.

The Euro was conceived by founders of the European Union, back when it was called the Europe project, as a way to tie nations together in such a way that wars between any number of member states would harm all members financially. While this is an admirable goal, as with all plans to change the world the scope started too large and ended up with some arguably major flaws.

Economists George Irving and Alex Izuriata argue that the main problem with the Euro is that:

 "The [E]uro aimed at removing nominal exchange rate fluctuations in a wide freetrade area" and "in consequence, by way of its specific design, it removed three essential policy instruments at once from the domain of national policymaking - exchange rate management, monetary policy and fiscal policy - and it intrinsically weakened labour and welfare policy."

One major flaw with the system that greatly supports their argument is the fact that there is no European Treasury! Instead all policy is made by the European Council, with strict economic guidelines put in place to join the Eurozone. But, what happens when a member is admitted and at a later time begins to fail in its duties? There is not some huge reserve to assist the market, which would normally make bailouts and austerity measures more successful than they have been in Europe. Instead, large amounts of money need to be printed by the bank and immediately  put into circulation in the failing member states. All member states contribute to this process by agreeing to EU policies and joining the Union. However, many member states such as France and the United Kingdom are not always happy with decisions made by the EU but cannot threaten to leave because there are no methods within its Framework to leave. 

While on the topic of fiscal policy, there is a small note from one member state that I'd like to make here. In the UK, public opinion of austerity measures and bailouts suggested by the EU and US is on the decline. In fact, according to the Community Practitioner IMF studies show that for every 1 pound sterling spent on these measures there is a less than 1 pound sterling savings for the nation saved (a fiscal multiplier of less than 1). In contrast the figure jumps to about 3 pounds sterling saved for every 1 pound sterling spent on public healthcare and welfare. Other data reported by nations themselves indicate that their reduced spending on national healthcare increases infection rates for many diseases. 

From these negative aspects of European fiscal policy, there are still lessons that the US can use to improve its methods of governance. Looking into European nations with incredible public healthcare and welfare could provide valuable insight into how to improve fiscal policy within our nation. There are clearly negatives in both our systems, but I hope there is some type of compromise that can resolve these issues and improve the quality of life in our nation.

Great Minds Think Alike

During one particular writing exercise in the course, we were asked to formulate a question and think of three questions more general in scope and three more specific in scope. One of the questions that I thought of that seems to be the most interesting argument to make a paper from is "What could the USA gain from following examples of European Nations?"

Thankfully, one Soren Dosenrode had a similar thought and covered the topic with Canada in mind instead of America. I suspect this is more to do with how close Canada remains to the commonwealth along with the fact that Dosenrode and his peers reside and work in Canada. In his book "The EU and Federalism" part of his series on Federalism, he introduces a nice graphical representation on just what differences lie between the governance style of the EU and Canada. It is reproduced here:

While this is not a comparison between any particular country in Europe and Canada, it still offers some insight into how the EU operates and does so with little obfuscation. Instead of focusing on hierarchy like Canada or the US (especially after the Civil War cemented the hierarchies of US governments as all-important), the EU focuses instead on fostering negotiation and cooperation over competition and hierarchy. As Weiler, quoted by Dosenrode explains: "Trust ties in the EU have been enhanced because member states commit themselves voluntarily to shared norms on a continuously renewed basis."*

Taking the focus off of Canadian politics, since their are major differences between the two systems, I choose to focus on American politics instead. Throughout our nations history there have been periods where the necessity of hierarchy has been demonstrated, especially during the Civil Rights movement. However in the 21st century, negotiation and cooperation between states is becoming an increasingly valuable tool. With issues such as drugs, technology, and education dividing the nation it is becoming more difficult to force the Union to remain united. Perhaps it is time to reconsider how our government functions and to take a deep look at the European Union and its policies to improve our own.

Jumping into the Zone

Since I have strong ties to Europe and the Middle East, much of the nonfiction I read involves these regions. In particular, the Cold War is my favorite period of time to read about due to both its recent occurrence and scope. However, now that the war is over the European Union has begun reaching out to former East Bloc nations. Unfortunately, I don't really know how the EU works on a fundamental level so writing anything about it would be a terrible idea at this point in time. In my search for an explanation I found a good starting point in the following YouTube Video:

While this video does a good job explaining the various aspects of the EU such as the Schengen Zone and Eurozone, it does not explain how the governing bodies of the EU work. It also doesn't explain the relationship the EU and its member States interact. However, this video does provide some explanation of these aspects of the EU:

After watching these two videos, I decided to browse TED talks and attempt to find a video approaching these topics in a different way. I was able to find a talk from former Greek Prime Minister George Papandreou which gave some real-life context into what issues the EU has suffered from, currently suffers from, and will continue to suffer from in his professional opinion. Here is the TED talk in question.

 http://www.ted.com/talks/george_papandreou_imagine_a_european_democracy_without_borders#t-266701

This final video feels like a good starting point in taking a position on whether certain nations should join the Eurozone/European Union in general. Of course, over the course of this research I may decide to go in a different topic in research of modern European issues. Only time will tell.