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Euro Shows One Size Doesn’t Fit All
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When do two diametrically opposed economists, one from the left and one from the right, agree?
Answer: When the subject of the euro comes up.
So it is that Paul Krugman of Princeton and The New York Times and Irwin Stelzer of the Hudson Institute and News Corp. both attacked the euro in the past week. They blamed the euro for the difficulty in bringing meaningful help to the troubled euro zone economies of Europe. And they were right.
Stelzer and other conservative economists had warned of the weakness of the one-size-fits-all nature of the common European currency at the time of its launch in 1999. Liberal economists, more sympathetic to the political dimension of the euro, were prepared to be satisfied with the assurances of fiscal probity from the aspirants to the new currency and endorsed it.
If everyone played by the rules and kept an orderly financial house, the euro would survive its structural weakness, reasoned the fathers of European monetary union. And for 11 years, it appeared that they were right.
The new currency found a lot of favor and hardened against the dollar early on. In some ways the euro was thought to be on its way to being a new reserve currency, supplanting the dollar. Iran and other oil producers with no love for the United States talked about designating the world oil trade in the euro rather than the dollar.
Now disaster, or near disaster. The weakness of a multi-country currency is revealed for all to see.
If Greece, Ireland, Spain, etc. still had their own currencies—the drachma, the punt and the peso—they would be able to deal with their financial crisis by devaluing their currencies, or by letting the markets do it for them. That would make their exports cheaper and their imports more expensive and leave the holders of their bonds intact, if a little poorer.
Likewise when the Irish currency was overheating during the property boom, interest rates could have been raised to cool things off. With a single currency there is no such flexibility, and each country must struggle with draconian internal economic measures that may take years to have an effect.
Why then did most countries of Europe, including this one, jump into a single currency when the potential for problems was known? Call it “The European Dream.”
I am writing this from Bratislava, capital of Slovakia. Here on the Great Hungarian Plain, where armies have crossed and recrossed for thousands of years, from the Romans to Napoleon, to Hitler to Russians, who put down the Hungarian uprising of 1956 and the Prague Spring of 1968, it is easy to understand the evocation, “Never again.”
The first and definitive purpose of integration was to end internecine war in Europe, its curse for more than 2,000 years.
Yet from its inception as a customs union in the 1950s to the 27-nation behemoth it is today, integration has come slowly. People have different cultures, speak different languages and still have not found a common European persona.
Aspiring young politicians still head to their national assemblies rather than the European Parliament, and most people still have difficulty in accepting the dictates of the bureaucrats in Brussels.
So, to the European idealists, a common currency seemed something that would further bind Europe together. Now it appears to be something to be hated rather than embraced.
Yet no country in the common currency can afford to pull out in the current crisis. Krugman rightly points out that this would lead to a run on the banks, ahead of the devaluation that would certainly occur if any troubled country sought to revert to its old currency.
What is missing in the halls of economic philosophy is a way to make a single currency work equally for the weak and the strong. In the present crisis—and it is a severe one—that would be for strong Germany, France and Italy and for weak Greece, Ireland, Spain and Portugal to weather the current storm.
One size has yet to fit all. But one size is what the euro zone has to work with.
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The Virtues and Vices of a Press Secretary
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The stature of some press secretaries grows the longer they are away from the podium in the James S. Brady briefing room at the White House. Others fade quickly. Brady himself is known more for his role in fighting for gun control than he is for his time as Ronald Reagan’s spokesman. His tragic wounding and subsequent disability dwarf whatever he said in his press briefings.
Jerry terHorst, who resigned after only a month in the job because his boss, Gerry Ford, lied to him, was a hero to the press for about as long as he had been press secretary. He ended up working for the Ford Motor Company.
Bill Clinton’s second press secretary, Dee Dee Myers, had a rough ride in the job and a modest career in journalism since then.
Among the revered are Marlin Fitzwater, who served George H.W. Bush; Jody Powell, who was Jimmy Carter’s press secretary and has just died of a heart attack; and Mike McCurry of the Clinton administration. George W. Bush burned through two press secretaries before he tapped the beloved Tony Snow and the admired Dana Perino.
Barack Obama’s press secretary, Robert Gibbs, gets mixed reviews. He said that he talked to Powell and others about the job, but he executes it in his own eccentric way. This has some of the White House press corps up in arms and others giving him a passing grade. It is a classic case of where you sit.
The irritation begins with time-keeping. For Gibbs, but not Obama, nothing seems to go on time. The principal press briefing–the one seen on C-SPAN–is scheduled the night before, and reporters are e-mailed this along with the president’s schedule for the next day. Sometimes, this schedule arrives after 8 p.m., making the planning of the next day difficult.That is only the beginning of the time problem. Invariably, the briefing time slips the next day. Updates delay the beginning of the briefing by one or more hours. But that is not final: Gibbs may make his entrance 20 or more minutes late and without apology.
Then the fault lines within the press corps really open up. They have to do with who gets to ask questions and who is shunned—and this, in turn, has to do with who has assigned seats and sits in the first two rows.
There is ugliness here. Here is class warfare by employment, and here is an unwitting exposure of the White House’s hand.
Clearly, television counts more than print–even dominant print outlets like The New York Times and The Washington Post. Likewise, it is revealed in Gibbs’ world that the Associated Press trounces Reuters and Bloomberg. The foreign press gets very short schrift.
Gibbs’ clear favorites are the television networks and a new crop of correspondents he got to know on the campaign trail. Correspondents like Chuck Todd of NBC are often engaged in a colloquium to which the three dozen or more other correspondents are just spectators.
If you are not one of the favored, you sit in one of the back rows with your hand in the air for favor of recognition to ask a question. It does not happen often.
There is much less criticism of the substance of Gibbs’ answers than there is with his tardiness and favoritism. Gibbs will contentiously argue a point with a reporter, but he also will refreshingly admit when he does not have the answer. Also he does not indulge in dead-end referrals, such as “I refer you to the CIA,” or “I refer you to the vice president’s office.” George W. Bush’s first two press secretaries, Ari Fleischer and Scott McClellan, did this with exasperating frequency. Snow turned away wrath with philosophy and Perino handled heckling press with humor and efficiency.
Unfortunately, Gibbs’ fascination with a small number of TV reporters has carried over to the full-blown press conferences. The chosen few are again the chosen few. The rest of us are right there with the plotted plants: to be seen but not heard.
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A Little Hate Is Good for Fourth Estate
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There must be some nostalgia at CBS News for the good old days, when the network was roundly hated and people at the political extremes longed to see it fail. Now that it is failing (it is a laggard in the ratings), nobody seems to care. Gone are the conservatives, who wanted to buy the network to sanitize it and rout out alleged liberal journalists. Also gone are the political lefties, who believed that CBS was the captive of its advertisers.
In media, to be hated is an affirmation that you are succeeding.
At The Radio & Television Correspondents’ Association annual dinner this week, the happiest people were at the Fox News tables. Roger Ailes, the principal architect of Fox’s huge success as a news network, and his star host, Bill O’Reilly, were beaming—well aware that most people in the room believe that the Fox cable channel has degraded broadcast news.
It is not just CBS that is hurting, but also other traditional media as well—most especially newspapers. Marylanders used to hate The Baltimore Sun. Now they worry that their venerable newspaper is on the ropes, and may be sold to quite the wrong kind of person.
They used to say in newsrooms, “If you aren’t hated, you’re not doing this job right.” Unfortunately, the quality of hatred that most news organizations face is sadly watered down. Generalized attacks on the “liberal media” and the “mainstream media” just don’t pack much of a wallop. They tell us more about the attacker than the attacked.
Happily, two newspapers—maybe two of the three best newspapers in the country—can still agitate those who believe in media conspiracies. These are The New York Times and The Washington Post. The third is The Wall Street Journal, which has never raised the same kind of intense feeling as the other two. Its editorial page is so predictable that even liberals cannot get mad at it. And its news coverage is pretty faultless.
The two big East Coast newspapers can really get the critics going. The New York Times, through a series of terrible blunders, has opened itself up to particularly virulent criticism. The Washington Post, which sells five times as many newspapers as its nearest competitor, The Washington Times, unerringly gets the brickbats. Civil rights groups accuse it of racial insensitivity. And radio talk show hosts like to refer to it as “The Washington Compost.” Even so, the paper has just bagged six Pulitzer prizes. Particularly, it showed the whole world last year that it could still deliver great journalism by revealing the scandalous treatment of veterans at the Walter Reed Army Medical Center.
Both The New York Times and The Washington Post have the resources to do the job right. Although The Times is in a slump, and appears to be in desperate need of an editor who has a vision and a publisher who is competent, it still triumphs on solid, day-to-day coverage of big continuing stories. Its coverage of the subprime mortgage crisis and its on-the-ground reporting out of Iraq are excellent.
Michael Wolff, the media critic of Vanity Fair, is in full pursuit of The New York Times in his May column. Wolff catalogs the humiliations the newspaper has suffered in recent times (including the Jayson Blair fictions, Judith Miller’s partisanship, and the insinuation that John McCain was having an affair with a lobbyist) and speculates on the possibility that the special voting stock, which gives the Sulzberger family control of the paper, may be under attack.
It may be very difficult to change the bylaws of the company, but Wolff thinks that angry shareholders could force the sale issue; or that the Sulzberger family, like the Bancroft family that used to own The Wall Street Journal, can simply be bought off. One way or the other, Wolff sees dissident shareholders changing the corporate structure of the paper.
At the same time, with a similar stock arrangement, the Graham family, greatly assisted by Warren Buffet, is firmly in control of its newspaper.
Yet, neither the Sulzbergers nor the Grahams have had huge financial successes with the properties they inherited. Both have had considerable editorial successes by lavishing resources on the papers. But as publishing ventures, the families have been timid and sometimes foolish. They profited from near monopolies, but mostly failed in diversification. Arthur Ochs Sulzberger, the father of the present publisher of The New York Times, confounded the publishing industry when he bought The Boston Globe. Analysts warned that two newspapers in the same advertising market would hurt more than a different kind of diversification. But the man who got it right in launching a national edition of The New York Times got it very wrong in Boston. The Globe is losing money and is a drain on The New York Times Company.
Katherine Graham, the late publisher of The Washington Post, who is revered in newspaper circles, did some pretty odd things herself. She clung to Newsweek, when it could have been sold profitably; invested in newspapers in New Jersey and Washington state; and nibbled at small publishing ventures in Washington, D.C. It can be argued that it wasn’t until Buffet came onto the scene with his steadying hand—he is a large shareholder and director of the company—that The Post started hedging the risk of newspaper publishing. In particular, it bought Stanley H. Kaplan Educational Centers, which has turned out to be a cash cow and is now more profitable than The Post.
Unlike The New York Times, The Washington Post had a clear idea of what to do with its Web pages, which are now in profit–as is Slate, the online magazine that The Post bought from Microsoft.
Nobody knows the future of newspapers. But we do know that the well-being of a democracy depends on them. Both The New York Times and The Washington Post are still making a profit, though not as much as in years past. And the public still has the energy and good sense to hate them.
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The lost art of debate — and other wordy topics
February 6th, 2012
Guests: Aram Bakshian, author and critic; Atul Singh, Fair Observer
Obama’s strengths and weaknesses; the Internet
January 23rd, 2012
Guests: Tim Farley, Sirius XM Radio; Adam Clayton Powell III, University of Southern California; Wayne Madsen, Wayne Madsen Report
A discussion of Shirley’s book, “December 1941: 31 Days That Saved America and Changed the World”
January 16th, 2012
Guest Craig Shirley, author
World events as the U.S. elections get fully underway
January 9th, 2012
Guests Arnaud de Borchgrave, Center for Strategic and International Studies; Andrei Sitov, Itar-Tass; Al Leeds, The Washington Post
The Joys of Transportation
January 2nd, 2012
Guests Bill Gouse, Transportation Consultant – Originally Broadcast October 16, 2011