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  • On Transatlantic Myths

    Posted by Ralf Goergens on June 6th, 2007 (All posts by )

    Link via Atlantic Review:

    William Drozdiak writes in his article ‘4 Myths About America-Bashing in Europe’ among other things:

    With the collapse of the Soviet Union and the end of the Cold War, Europe supposedly lost its relevance. Not true. In fact, Europe and the United States still act as the twin turbines of the global economy, accounting for 60 percent of all trade and investment flows.

    Americans invested five times as much money in Germany last year as they did in China, and U.S. firms in total have poured four times as much money into tiny Belgium as they have into India. Europe provides three-quarters of all foreign investment in the United States, creating millions of American jobs.

     

    22 Responses to “On Transatlantic Myths”

    1. david foster Says:

      “Americans invested five times as much money in Germany last year as they did in China”…I wonder how this number is calculated. If I buy a bond from BMW and the proceeds are spent on building factories in South Carolina and in Mexico, does this count as investment in Germany? I suspect the answer is “yes.”

      The number is interesting either way, but the meaning is very different depending on whether investment is tracked based on HQ location or on the location where the money is actually deployed.

    2. jimbino Says:

      Wow! Great article. I would like to comment, however, on another misconceptions common among Amerikans: that all foreigners are dying to come to the USSA.

      Sure, the young German in the Socialist Paradise of Germany would do well to get the hell out to a place where his skills are appreciated and where he only has half is wealth and income stolen to support the breeders and the indolent. I left there for those very reasons in 1975. The life here is half German anyway and you can order almost all the same beer, though you might miss the gorgeous and savvy women and the excellent public transportation.

      That can’t be said for the Brazilian, for example. There is no way that a Brazilian will favor life in the USSA over that in Brazil, nor would I. The Brazilian considers the USSA nothing more than a money pot, and his saudades will force him to return, or dream about it forever. For him, the USSA is a Fascist Paradise, full of cops checking into your drug and sex life, families scattered to kingdom come, and no cachaça. I wish I, an Amerikan citizen, could exchange my residence rights here with a Brazilian! In a heartbeat!

    3. Shannon Love Says:

      During his time at the White House, Ronald Reagan was mocked in Europe as a mediocre actor ignorant of world politics; today, he is regarded as a visionary who foreshadowed the fall of communism with his 1986 speech in Berlin that urged Soviet leader Mikhail Gorbachev to “tear down this wall.” And George H.W. Bush, once branded as a Reagan lackey whose primary job was to attend B-list head-of-state funerals, is now lauded for his skillful management of the peaceful reunification of Germany and the dissolution of the Soviet empire.

      In other words, Europeans hate Republican Presidents in the here-and-now and try to frustrate their efforts but after time has passed and they discover that the Republican Presidents were right in the first place, Europeans forgive them for daring to disagree. I guess this bodes well for the future reputation of Bush 43. If we succeed in Iraq, Europeans will eventually forgive him for daring to fight for democracy.

      I think American’s view of Europe comes mainly from the very articulate and visible classes who are strongly anti-American. People do tend to assume that the loudest voice in a crowd represents the opinions of the crowd.

      Americans invested five times as much money in Germany last year as they did in China…

      I have no doubt this is true. For one thing, China still has a piss-ant sized economy in my opinion. There simply isn’t enough economic activity to absorb that much investment.

      I think China and Asia in general hold greater mind share in American and elsewhere because it it plain that Asia is where people invest to make it big. Europe is a safe place to put money but Asia is where the payoff will come from. Yes, you can put a dollar into Germany and get two back but if you put a dollar in Asia then you might get back ten (or lose it all.) Either way, the excitement and buzz are for Asia.

      Europe just doesn’t feel-like the future. For example, all the top computer manufactures in Europe are American or Asian companies. European computer companies died out in the late-90’s. Why couldn’t European’s compete in this new market on their home turf?

      If I had capital to invest, especially the high risk capital that really drive growth and innovation, I don’t think it would even occur to me to invest it Europe. I don’t think my outlook is that unusual.

    4. david foster Says:

      This post may be relevant here…I discuss a missed opportunity to develop the early semiconductor industry in Europe, and a current “innovation” initiative which is likely to have a negative effect on its stated goal.

      Leaving a Trillion on the Table

    5. Mrs. Davis Says:

      I wish I, an Amerikan citizen, could exchange my residence rights here with a Brazilian! In a heartbeat!

      One of the, apparently few, things that is good about America is that you can leave at any time without needing permission. Try it. Please. That you don’t only indicates how hollow all your words are.

    6. jimbino Says:

      Mrs Davis needs to know that Amerikans are not that welcome everywhere! Because of our restrictive visa and immigration policy, Brazil, playing tit-for-tat as is its general policy, won’t grant visas to Amerikans that easily. As a tourist, you can stay for 6 months, max. You could get a Retirement Visa, but only if you have a monthly pension or social security income exceeding $2000, which few Amerikans have.

      As it is, I do leave every year, and enjoy every minute of it! Unfortunately, though the USSA taxes my income everywhere in the world, it provides me no medicare of any kind outside its borders. Amerikans are sad captives of a corrupt system. I hope things change when Bin Laden takes over.

    7. Jonathan Says:

      Yes, terrible place, the USA. That’s why so many of us try to escape on rafts.

    8. Lex Says:

      The article is interesting. I think it is too smiley-faced. The Europeans do not like us. Which is fine. They trade with us, which is all we need them to do. Increasingly, we don’t like them either, so we are even. Whether foreigners like America in any sentimental way should not be a big issue. I remember Prof. Mearsheimer back in 1983 during a lecture saying that Americans have a deluded view that they are the good guys in the world and that foreigners think we are the good guys. However, as he put it, when you go outside the USA you find that foreigners consider the Americans to be “very hardball players” who do what is good for the USA, and don’t have any particular sentiment about the USA being the good guys. I think that was correct then, and is correct now, and I see no reason to worry about that. The problem now is not that we are not liked, since it is better to be feared than loved. The problem is that we are not respected and we are not feared.

    9. Tokyo Tower Says:

      I don’t mean to wander off too far from the topic, but as a Brazilian, I cannot resist leaving some comments on Mr. Jimbino’s statements.

      It would be enlightening if Mr. Jimbino could inform us on what lot of Brazilians he has been interacting with. Living abroad for almost ten years now, the expat experience has made clear to me that what we Brazilians feel wanting most in our home country is the very seriousness with which Americans regard their institutions, providing to them a degree of transparency and accountability that Latin American countries can only dream of. I would like to see any American president trying to get away with the follies and scandals his Brazilian counterpart is currently facing. If there is something all foreigners ought to admire in America is how prompt Americans are to take action towards ensuring their rights, how practical they are in this pursuit, and how politically refined they have become in the process. Meanwhile, Latin American citizens face perplexed while ever-intrusive governments takes from them the few political rights they have remaining.

      While trying to sound flattering, Mr. Jimbino only manages to show how prejudiced his views are towards Brazilians: only interested in money and drinking, careless about the societies that surround them, whether abroad or at home. The description fails to describe me and any other expat Brazilian I have ever encountered. Although we do miss Brazil, we are also humble and realistic enough to accept how much lagging ground Brazilians need to cover to achieve the benefits the societies we live in have been able to attain.

      Maybe some Europeans (and even some Americans) may also take some benefit from this humility and objectivity.

    10. Shannon Love Says:

      Lex,

      I think there is always resentment toward the big dog, especially, by local elites. The local elites like to claim themselves as the source of all things good and to blame someone else for all things bad. It’s just human nature.

      I think you saw the same kind feelings in American Deep South towards the more productive North during the post-Civil War to circa 1970. The south always felt that economically it was the tail on the northern dog and had little control over its own destiny. Southern state leaders really played that up routinely. In truth, most of the South’s problems were self-inflicted (such as archaic and protectionist banking laws and a general lack of entrepreneurial culture. ) When the south and the southwest became the dynamic regions of the country, that resentment went away but now I think that you see it cropping up in the Northeast.

      I think Americans do see ourselves as the good guys because we define ourselves as a people solely on the basis of our political ideology. A European can choose from the entire range of political beliefs without threatening their national identity. If they wish to be fashionably cynical about their own country they can do so without any risk to their identities. Americans do not have that luxury. We have to believe in certain ideals and believe that certain outcomes are worth fighting for or we lose our identity as a people.

    11. Shannon Love Says:

      Tokyo Tower,

      I wouldn’t be so hard on Brazilian culture. For everything there is a tradeoff. The deeply personal culture of Brazil gives it create charm and a warmth that many people find very attractive and comfortable but that same personal culture makes it very hard for modern, impersonal, large scale institutions to function. Most of the worlds lesser developed region suffer this problem to some extent. They never receive the efficiency boost that modern institutions grant.

      You can see the same dichotomy internal to the US. The culture of the American Deep South was traditionally far more personal than that of the Northeast but it suffered from a lack of development as a result. Louisiana and New Orleans in particular were famous for their deeply personal and traditional political and social systems and when faced with major crises their institutions failed.

      Its hard to leave the warm personal behind and enter a cold world of impersonal laws and rules. It took what we now call the developed world centuries to accomplish that task. We shouldn’t be surprised it will take others decades.

    12. YogSothoth Says:

      I don’t think there’s any question that brazil is an absolute mecca of enlightenment. Surely, in its distant past, the great Satan, America practiced slavery but obviously, tolerant brazil would never behave so barbarically. Only the immoral Americans would shelter a known war criminal until his peaceful death of natural causes (in exceedingly sharp contrast to how his victims died) but brazil would never stoop so low.

    13. Lexington Green Says:

      People vote with their feet. I am sure there is a lot to like about Brazil, and I know there are things not to like about the good old USA. But most people prefer to come here rather than go there. I hope, down the road, that Brazil becomes such an attractive country that people want to go there just as much as people want to come here. It has not happened yet.

    14. Ralf Goergens Says:

      David:

      “Americans invested five times as much money in Germany last year as they did in China”…I wonder how this number is calculated. If I buy a bond from BMW and the proceeds are spent on building factories in South Carolina and in Mexico, does this count as investment in Germany? I suspect the answer is “yes.”

      It calculated based on location, i.e, investments in Germany. Even if some investments were counted as being insted in Germany, although they had been invested in German holdings abroad, this would be compensated by the same error occurring in respect to China, for Chisese firms now have substantial holdings abroad. The factor five still applies either way, as far as investmenst in Germany vis-a-vis those in China are concerned; other wise you would have to assume that the measurement has a margin of error of 500%.

      Jimbino,

      no offence, but those are some fairly bizzare claims you are makiong there.

      Shannon

      Europe just doesn’t feel-like the future. For example, all the top computer manufactures in Europe are American or Asian companies. European computer companies died out in the late-90’s. Why couldn’t European’s compete in this new market on their home turf?

      If I had capital to invest, especially the high risk capital that really drive growth and innovation, I don’t think it would even occur to me to invest it Europe. I don’t think my outlook is that unusual.

      Europe largely missed the oprtunities offered by the semiconductor and general computer markets, and protests prevented many potential successes in the biotech markets, but Europe isn’t lagging in nanotech and other, futher high growth markets. Your description of the problems is based on past behaviour, but it says nothing about present, let alone future behaviousr and performance, which are shaping up to be quite different. Return on investments in Europe also have frequently exceeded those in the US.

    15. Methinks Says:

      Jimbino,

      I find it hysterical that you deride America while claiming to have immigrated here from Germany. I too am an immigrant and as a fellow immigrant, I say to you: If things are so bad for you here in fascist America, leave. I for one, don’t give a red hot rat’s ass whether Americans are welcome anywhere at all. Sure, Americans could be less self-hating and more educated about the world around them, but given the red-neck drivel I’ve endured from Europeans, the same could be said for them. The only way for Americans to be more “welcome” is for them to subjugate themselves to the will of others so that they don’t feel so inferior. Anyone who thinks America is “fascist” doesn’t own a dictionary.

      Also, you may want to learn to spell “America” and “USA”.

    16. Ralf Goergens Says:

      David,

      This post may be relevant here…I discuss a missed opportunity to develop the early semiconductor industry in Europe, and a current “innovation” initiative which is likely to have a negative effect on its stated goal.

      JUst as with Shannon, it’s more about past rather than future behaviour.

    17. Methinks Says:

      Lex,

      That has been my experience. I too don’t see a problem with that. Neither the French nor the Germans are prancing around the world looking for love either. However, if we back off every war that becomes tough, we will be neither respected nor feared.

      America has allowed Europe way too much leeway in bullying it around. If Europe were stronger than America, it would have never allowed America to behave toward it as Europe is behaving toward America now.

      However, personally, I get along fine with Europeans even before they know that I’m not originally American. Dealing with people as individuals is very different.

    18. david foster Says:

      “more about past rather than future behaviour”…hope so, Ralph. However, the “Creating an Innovative Europe” document is unfortunately contemporary.

    19. Ralf Goergens Says:

      “more about past rather than future behaviour”…hope so, Ralph. However, the “Creating an Innovative Europe” document is unfortunately contemporary.”

      Well, it’s an EU initiative, nobody forces private business to sigh up to it, and I don’t think that they can provide that powerful bad incentives to have much of an impact.

    20. Clive Bartley Says:

      Foreign investment in Germany is largely in government bonds. China doesn’t borrow from foreigners. Investments in China are in industrial infrastructure and production, so not really comparable to the cash flow through the Bundesbank…

    21. Lex Says:

      “Dealing with people as individuals is very different.”

      True, thank God.

    22. Ralf Goergens Says:

      Clive:

      Foreign investment in Germany is largely in government bonds. China doesn’t borrow from foreigners. Investments in China are in industrial infrastructure and production, so not really comparable to the cash flow through the Bundesbank…

      Actually, foreigners invest in Germany because the workforce is well educated and trained, and you can easily reach most of the rest of Europe from here. Those factors have little to do with bonds, Foreign investors are by now also much more after German private equity rather than government bonds.