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Dead Armadillo Award Goes to Adam Posen
Share / Recommend - Comment - Print - Tuesday, Mar 25 2008, 9:44AM
"Radical centrists" and dead armadillos have a lot in common. They are sometimes whacked in the middle of the road. In fact, my friend and New America Foundation co-founder Michael Lind originally proposed that New America choose a mascot of an "armadillo with a yellow stripe across it."
But there are a few others in DC who cling to the principled middle on occasion, but the perks for doing so are few. We need a new award for such non-ideological bravery.
My friend Adam Posen, Deputy Director of the Peterson Institute for International Economics, wins The Washington Note's new "Dead Armadillo Award" for alienating people on both sides of the Atlantic simultaneously with remarks he offered to the Financial Times.
Posen riffs on America's systemic economic health while at the same time snarling at Europe's economic stewardship.
From the FT today:
Other participants said Europe's greatest economic needs were to improve its university system and the efficiency of its fragmented financial markets.Adam Posen, deputy director of the US-based Peterson Institute for International Economics, said it was "scary" that productivity in Europe was so much lower than in the US - especially given the latter economy's manifest structural weaknesses.
"We have to accept that Europe is actually a very sick economy. If America is beating you on productivity there is something very wrong with you," he said.
Mr Posen argued that Europe's financial services sector had not yet reaped the full benefits of the creation of the single market, meaning capital was still being wasted. "Why are all these resources being squandered? The answer is that your financial system is lousy. The return on that money is not high enough," he said.
Europeans shouldn't get all in a dither. Posen isn't always right and like this blogger plays the contrarian frequently.
Recently, Adam Posen told me that he thought that the subprime loan crisis would have a negligible economic impact and would blow over soon -- though he said he was increasingly lonely among those who believe that.
-- Steve Clemons
Reader Comments (8) - post a comment
I would argue that Europe's financial markets are a good deal more efficient than those in the U.S. To cite just a couple of examples: the new Prospectus Directive provides for EU-wide prospectus standards. There is more flexibility in choice of accounting standards (i.e., you don't have to reconcile to U.S. GAAP). There is biannual reporting, not quarterly reporting.
Posen is being disingenuous. Countries like France have less total productivity because their workers work less. But their productivity per hour is higher than US workers.
http://www.economist.com/daily/chartgallery/displaystory.cfm?story_id=9612033
When French workers do work they are more productive. And they get more vacation and healthcare benefits than their US counterparts. And so, French workers probably lead a better life than their US counterparts.
Posen obviously doesn't care about people. He thinks they should work (and work and work) for the economy while Europeans think that the economy should work for them. Americans need to take back their economy.
Has to be said. "Don't get out much do you Adam?". In what world are US living standards so much higher than Europe, and those in the UK better than the rest of Europe. Only if you have no sense of taste and plan on dying young is the answer. Why is there net migration out of Britain to the rest of the EU despite a huge influx of East European workers who are not able to go to the rest of the EU yet. Being well of in the US or UK is great but unfortunately we are back with the median/mean problem in societies were the distribution is far from normal (statisically speaking). The average American or Brit is certainly well of but a huge slice of that is Bill Gate/Roman Abramovich. I doubt the median Anglo-saxon fairs so well.
Your friend got the idea from Jim Hightower, who wrote a book entitled, "There's Nothing in the Middle of the Road but Yellow Stripes and Dead Armadillos."
Hightower is man who originated the description of George Bush (41) as a man who was born on third base, but thought he hit a triple.
Vadranor:
Are you sure that it was Hightower who said that? I have heard that it was Ann Richards. Of course, Pearl Jam used that in there song about GWB called Bu$hleaguer. Yes, the song title actually had the dollar sign in place of the "S".
The quip about Bush made by Ann Richards was that he was born with a silver spoon in his mouth.
I meant to type silver foot in his mouth.
Mr Posen certainly has a point on the fragmented financial services sector of Europe. A good deal of improvement can be made there. But he is also preaching to the converted, the EU is already focused on improving that sector. Especially after the chaotic acquisition of Antonveneta by ABN Amro a couple of years back. But it can certainly receive more attention.
His concern about European productivity is strange however. As noted before the north western part of Europe has an extremely respectable production rate if measured per hour. It says nothing about the quality of their economy if a society decides that more free time has a greater value then additional work hours. Neither do they need the extra production as their national and their private citizens budgets are quite in order. They borrow less and safe more on the whole.
If he is pointing to the eastern part of Europe he is making a ridiculous point. Of course eastern Europe has bad productivity numbers, communism with it's utterly horrible production standards isn't even a generation away for them! But the majority of those countries have shown impressive improvements in their numbers non the less. It's actually an unparalleled story of the EU being successful in its objectives.
There should be some concern about the southern economies, but they also have major "manifest structural weaknesses" and unlike the manifest structural weaknesses of the USA these actually effect productivity. Mr Posen never mentions that the USA's economy's manifest structural weaknesses have little to nothing to do with productivity.
It's a clever rhetorical trick to make it sound like Europe's economy as worse then it is. The USA productivity isn't mired by "manifest structural weaknesses" more then Europe is. Other parts of The USA economy might be, but it's clearly misleading to use unrelated weaknesses as a justification in a direct comparison.
You were right to distance yourself a bit from these comments by him. They don't seem to be his best.
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