Transatlantic Media

Nelson D. Schwartz of the New York Times uses an example from the sorry history of the British motor industry to warn that auto bailouts, currently a hot topic in the United States, may not necessarily bring about the desired results. As a parallel with General Motors, Ford and Chrysler, Schwartz describes the once-mighty British Leyland as a faltering auto giant “whose brands were synonymous with the open road,” with hundreds of thousands of unionized workers and powerful political backers. After pleading for a virtual blank check from the government, British Leyland went through £11 billion of inflation-adjusted British taxpayer money, or $16.5 billion, in the 1970s and 1980s before going out of business. All that is left of the company now are memories of cars like the Triumph, and a painful lesson in the limited effectiveness of bailouts.

A British Lesson Auto Bailouts

November 17, 2008, The New York Times

The New York Times’ Stephen Castle reports from Brussels that on Wednesday November 12, the European Union has mostly done away with rules that banned ‘extra knobbly or oddly shaped produce’ from grocery stores.  The previous report that we cited on the matter concluded that Mariann Fischer Boel, the Danish European Commissioner for Agriculture faced ‘an uphill and probably losing battle’ to simplify the regulations.  The New York Times report quotes a now triumphant Boel who says:

 ‘This marks a new dawn for the curvy cucumber and the knobbly carrot.’

The regulations were scrapped for 26 different types of fruits and vegetables, but left ten other types including apples, peaches, pears and strawberries regulated.  While the article mostly seems to suggest that the regulations were absurd, it does note that 16 countries were against dropping the regulations – implying that doing so would lead to ever more complicated national standards for vegetables which could hinder EU wide trade.  Harmonizing trade regulations throughout member states is a primary goal of the EU.

Further Reading:

‘Reprieve for curvy cucumbers and crooked carrots as EU bends rules’ November 12, 2008, The Times of London

‘The Cucumber Laws that Drove a Nation Bananas’ November, 16, 2008 The Nation, United Arab Emirates

In the past week, the New York Times and the Financial Times have run stories suggesting that the United States ought to look toward the Swedish bank bail out plan of the early 1990s.  Both articles suggest that the crisis in Sweden is comparable to the crisis roiling American financial markets, but fail to make their case convincingly.  In the United States the complex network of subprime mortgages and securitized packages of bad loans is much more far-reaching than the fall-out from the Swedish crisis.

While it is interesting to recall the successful steps that Sweden took to deal with its crisis, it’s not clear that the serve as a viable model for the United States.

‘Stopping a Financial Crisis, the Swedish Way’, The New York Times,’ September 23, 2008

‘Swedish model points the way’, The Financial Times, September 22, 2008

The media in the two top Western financial centers, London and New York, differed in emphasis in their reporting of Sunday’s dramatic turmoil on Wall Street - including the bankruptcy of Lehman Brothers - with the British media tending to highlight the human side, while their American counterparts stressed the enormity of the blow to the U.S. and global financial systems.

London

British newspapers paid particular attention to the sorry plight of the employees of Lehman Brothers and other faltering financial organizations, including two pieces in the Guardian.
‘Wall Street jobs cull begins as Lehman rescue bid fails’ The Guardian, September 15, 2008

‘Wall Street crisis: Lehman staff tell their stories: Lehman Brothers employees on both sides of the Atlantic describe their shock, anger and sadness at the collapse of the bank’ The Guardian, September 15, 2008

‘Shock and tears as staff sent home’ Times of London’, September 15, 2008

‘Meltdown Monday: Stock markets tumble and thousands lose jobs’ The Telegraph, September 15, 2008’
‘Shocked Lehman staff told to “move on”’, Financial Times, September 15, 2008

The Telegraph ran a human interest piece on how U.S. Treasury Hank Paulson had risen from farm-boy to the pinnacles of international finance while keeping his heart in the agricultural Mid-West. The piece included the following comment:

‘A comparison was recently drawn in the Telegraph between the ordinary Americans being saved in the Freddie-Fannie bail-out and the po-faced couple standing in front of their clapboard homestead of Grant Wood’s painting American Gothic. Actually, the analogy could be taken further. See Mr. Paulson, particularly when he’s wearing his glasses and looking especially solemn, and one is certainly reminded of Wood’s pitchfork-clutching farmer. The farmer would probably approve of the financier.’

The Times, in assessing the spreading impact of the financial upheaval, managed to find an Australian strategist who imaginatively compared the crisis to Lord Voldemort, the evil character in the Harry Potter novels who keeps returning from the dead.

‘Analysis: ‘Black Monday’ threatens London’, Times of London, September 15, 2008

As might be expected, the Financial Times devoted extensive coverage to the crisis and its global repercussions, including the following:

‘Kill or cure for Wall Street malaise’ Financial Times, September 16

‘Dragon of moral hazard is going to take some impaling’ Financial Times, September 17

New York/Washington

The most interesting feature of U.S. reporting was the Washington Post’s decision to lead its print edition with no fewer than three single-column stories under a large headline that simply announced “Massive Shifts on Wall Street.” This clearly reflected the changed priorities of the Post’s new Executive Editor, Marcus Brauchli, a former senior editor at the Wall Street Journal, who had only been a few days in his job. Under his predecessor, Len Downie, the Post tended to play down economic and financial stories, often relegating important developments to the business pages. The three headlines from that print edition are linked below.

‘Troubled Bank to File for Bankruptcy’, Washington Post, September 15

‘A New Architecture for the Financial World’, Washington Post, September 15

‘Weekend Merger Struck with Bank of America’ Washington, Post September 15
The New York Times did well with an interesting reaction piece from Europe, pointing that while Europeans often display schadenfreude at bad news from America, they found little cause for joy in the latest developments, because the Wall Street crisis so clearly threatened European prosperity as well.

‘In Europe, Concern on the Faces of Investors’ The New York Times, September 15, 2008

The Wall Street Journal echoed the concerns of British newspapers about the fate of Lehman Brothers’ employees, with a strong emphasis on human interest.

’25,000 People Worry About Their Futures’ Wall Street Journal, September 15, 2008

But the WSJ also took a broader look at the serious financial implications of the crisis with a report that began “The American financial system was shaken to its core on Sunday”

‘Lehman Files for Bankruptcy, Merrill Sold, AIG Seeks Cash’ Wall Street Journal, September 16, 2008

The financial crisis ousted reports on the devastating Hurricane Ike from the top headlines in most major American papers, except, understandably, in Texas, where Ike wrought the most havoc.

While some Americans questioned whether Republican Vice Presidential candidate Sarah Palin could hold high office and simultaneously look after five children, an article in the New York Times, ‘Wage Gaps for Women Frustrating Germany’ examined the difficulties faced by German women who want both a family and a high-flying career. The article blamed sexist attitudes and a general tendency for women to be passed over for promotion once they have children – and often choose flexible, part time hours, partly as a result of inadequate public child care facilities.

The article could have made its case more strongly by pointing out that the most powerful woman in Germany, Chancellor Angela Merkel, has no children. On the other hand, the article also fails to mention that Ursula von der Leyen, the well-known minister for family affairs, has managed to succeed in politics despite having seven children – two more than Mrs. Palin.

The article reports that German women complain both at lack of promotion and at gender inequality in wages, although it does not go into the issue of whether German women are paid less than men for exactly the same work.

Although Germany offers some of most generous maternity (and paternity) leave in Europe, the lack of child care seems to be a major reason why German career women are reluctant to have children. Minister von der Leyen has introduced plans to finance private child care and make more places available in kindergartens.

That, however, is unlikely to be enough to alter a deep-seated German cultural belief that women ought to stay home and have children, rather than seek professional success – a phenomenon to which the article might have paid greater attention, particularly as it reflects a view also expressed by some American critics of Mrs. Palin.

Transatlantic media coverage immediately after of the collapse of the World Trade Organization’s Doha Round of trade talks in Geneva July 29 provided a wide range of different perspectives on the same story.  Commentators blamed the failure variously on the United States, India, or China, or a combination of some or all of them, with occasional tangential swipes at the European Union and Brazil.

United States Media Coverage

Washington Post: ‘Trade Talks Crumble in Feud Over Farm Aid’, July 30, 2008

The Washington Post reported that whereas American and European officials were prepared to make big concessions, the talks fell apart after India and China insisted on keeping the right to protect their farmers and accused the United States and other rich nations of exaggerating the generosity of their offers. India’s chief negotiator, it said, “may have played the biggest role in undoing the talks.” The Post said the talks “at times took on a highly charged, personal tone that immediately cast the negotiations as a power struggle between the developed and developing worlds.

“Within 24 hours of landing in Geneva nine days ago, Brazil’s foreign minister, Celso Amorim, infuriated First World negotiators, comparing their efforts to hype their proposed trade concessions to Nazi propaganda.  His comments drew sharp reprimands, particularly from Washington’s top negotiator, U.S. Trade Ambassador Susan C. Schwab, the daughter of Jewish Holocaust survivors.”

The article conceded that Brazil ultimately was more flexible than India and China, but still lumped it in with the hold outs.

The New York Times: ‘After 7 Years, Talks on Trade Collapse’

The New York Times report was among the few to observe that the failure of the negotiations “delivers a blow to the credibility of the World Trade Organization.” It also noted a strategic power shift among the countries at the table, pointing out that India and China have become aware of their economic power and are finally asserting themselves.

European Media Coverage

The Guardian: ‘Tariffs: WTO talks collapse after India and China clash with America over farm products’

The Guardian blamed the collapse of the talks on disagreements between India, China and the United States. It quoted remarks by U.S. Trade Ambassador Susan Schwab that sounded pushy and condescending:

“[Schwab thought] it was ‘unconscionable’ that developing countries were insisting on shielding their farmers…’in the face of the food price crisis, its ironic that the debate came down to how much and how fast could nations raise their barriers to imports of food.’ She [Schwab] suggested that if India and China had got their way ‘we could have come out with an outcome that rolled the global trading system back three years, or five years, or 30 years: 30 years of progress.”

The report said Schwab “has come under fierce political pressure from Capitol Hill to secure fresh markets for America’s rust belt manufacturers.”

It added, however, that EU Trade Commissioner Peter Mandelson “had also come under intense political pressure over promised reforms to Europe’s lavish common agricultural policy.”

The Guardian recalled that French President Nicolas Sarkozy had demanded an urgent meeting with Mandelson in the middle of the negotiations, a summons that Mandelson politely declined, and that Sarkozy had tried to rally other countries, including Italy and Greece, to reject the deal as it stood. Thus while the headline fingered the United States, the report seemed to suggest that Europe would also have had trouble accepting the outcome.

The Scotsman: ‘US Clashes With New Giants’

Like the Guardian, the Scottish daily The Scotsman laid most of the blame on the United States for clashing with India. The Scotsman, however, was one of the few to point out that Brazil and India had been allies in the past during these trade rounds and that their split at this meeting was remarkable.

The Times of London: ‘Why the Doha Round of Talks Finally Died’

The Times laid the blame unequivocally on India. Almost all of its report focused on Kamal Nath, the Indian Trade Minister, who ‘was gritting his teeth, doing his best to justify a wrecking operation that has earned him brickbats from all round. He has brought to an end a seven-year struggle for a global trade agreement that would open boarders and reduce subsidies and he knows it.’

The report said India disagreed not only with the United States but also with ‘a host of developing nations in Latin America, including Brazil, Uruguay and Argentina,’ as well as other countries such as Thailand.

“The trade row finally destroyed the fiction beloved by development charities and poverty lobbyists that we live in a world divided between North and South, or rich and poor. Instead, we live on a globe of powerful and conflicting interest groups - Asian peasants versus Latin American farm laborers, for example.”

FT.Com-Financial Times: ‘Negotiators sift the debris for signs of hope’

The FT stressed the importance of an agreement for many of the countries involved, including Brazil. Nevertheless, while noting that WTO chief Pascal Lamy did not view the failure as final, the FT argued that Western countries were unlikely to offer similar concessions again soon. It blamed the collapse squarely on disagreements between India and the United States, with some meddling by China.

Der Standard: Greetings from the New World Order
In Austria, a commentary in Austria’s biggest daily publication Der Standard struck a similar note to the New York Times, calling attention to the global power shift that has occurred since the start of the Doha round in 2001.  According to commentator Michael Moravec:

‘The reason the negotiations of a world-wide trade agreement failed spectacularly is easily explained: When the discussions began seven years ago in Doha, when the goals and basic conditions were specified, the world looked very different: China, India, and Brazil still belonged to the community of developing countries and the US and the European Union set the tone.  If an agreement was reached between Europe and the United States, the remainder would be a child’s game in comparison, one thought at the time.  Now, the negotiations failed because of India and China.’

A surly New York waiter seeks to promote his forthcoming book, “Waiter Rant,” by accusing the British of failing to leave proper tips in a blog run by the British daily, the Guardian. John Murray fingers a retired couple from Leeds in Yorkshire, whom he describes as “wonderful people” and “polite and well mannered.” He then berates them for leaving a “horrible tip” of $7 on a bill of $73.23, which the couple almost certainly viewed as extremely generous, given the difference between British and American tipping habits. Murray claims that even British waiters in the United States ‘cringe’ when they hear English accents, which invariably presage “bad tips.” In a bid to sugar the pill, Murray adds:

“Trust me, I don’t like being right about this. I love Great Britain. It’s the home of the Magna Carta, William Shakespeare, Winston Churchill, James Bond, Page 3 Girls and [TV chef] Gordon Ramsay. Your “sceptred isle” heroically stood alone against the darkness of fascism, gave us the Beatles, and took Madonna off our hands. I love the UK and hope to visit that ancient and majestic country one day.”

He then concludes:

“But if I get another bad tip from a British person - I’ll nuke the country from space.”

An outpouring of comments on the blog run heavily against the waiter, and the American system that obliges waiters to rely on tips, not salaries, for a living. Murray has probably lost more British readers than he has gained for his book, due to be released August 7. It will be interesting to see how he promotes his opus if it is ever published in French.

Earlier this year a dramatic accident at an illegal street race in a Washington DC suburb killed eight people and sent five others to hospital. The reaction of local law enforcement? A crackdown on illegal street racing. In the Polish city of Lodz, police have taken precisely the opposite approach. They have co-opted illegal races, making them monthly public spectacles. The New York Times reports on the phenomenon it a recent article “Where Racing is Fast and Police Aren’t Furious.”

In a report July 8, the Washington Post took on the easy target of EU food regulations, ridiculing rules such those defining the bend in Class 1 cucumbers, the size of onions, and the ripeness of peaches. Such seemingly absurd regulations are frequently derided in the media, especially in Britain, but supported by a majority of EU governments, which want consumers to know what they are buying. Mariann Fischer Boel, a sensible Dane who is European Commissioner for Agriculture, wants to reduce regulations on fruit and vegetable marketing standards from 34 to ten, but faces an uphill and probably losing battle.

The story’s dateline, Paris, once again betrays the legendary unwillingness of American journalists to report on EU matters from Brussels, the EU headquarters, which is just 1 hour 22 minutes north of Paris by train.

There is no doubt that many EU regulations could be simplified. Indeed the current Commission President, José Manuel Barroso of Portugal, has frequently promised to do so. One problem is that the demand for regulations, for example making vegetables easier to package, often comes from businesses in the member states, which put pressure on their governments which in turn put pressure on the Commission.

The Washington Post report, ‘Europe Debates Perfection It Demands of Its Produce,’ concedes that some consumers, including an American expatriate who was interviewed, find the produce classifications useful for buying. But it adds:

…for others, the efforts to regulate produce have simply gone too far.

Let’s consider the onion for a moment, and the E.U.’s “Regulation (EEC) No 2213/83 of 28 July 1983 laying down quality standards for onions and witloof chicory.” You would think that the 10 pages of standards and the 19 amendments and corrections made in the 25 years since the regulation’s enactment would leave little doubt about the required size, shape and color of an onion, and the amount of peeling, bruising, staining, cracking, root tufting and sprouting that is permissible. You would be wrong.

In January 2007, the Dutch Ministry of Agriculture issued a report in which it took 29 pages to explain “quality standards for onions,” complete with 43 photographs.

In the interests of fairness, one might note that the story contains an element of the pot calling the kettle black. Anyone who tries to navigate the thousands of regulations covering the marketing and labeling of food in the United States will quickly find themselves ensnared in a similar jungle.

Charitable Americans cooking home-made jelly for the church bake sale might think twice if they were aware of the following:

“The law requires jelly to be 45 parts by weight juice to 55 parts by weight sugar. To determine the weight of the single strength juice when using a concentrate:
I. Check the Brix (% sugar) or soluble solids (using the refractometer) of the fruit juice or concentrate. For instance: apple concentrate (three-fold) at 40o Brix.
II. Multiply the percent solids by the weight of the ingredients and divide by 100. For instance 100 lbs apple concentrate at 40% solids.
(100 x 40) /100 = 4000/100 = 40
III. Subtract any added sugar solids for a sweetened or capped concentrate or juice.
IV. Multiply by the factor in Table 1
40 x 7.5 = 300
This means your 100 lbs. of 40o Brix apple concentrate was equal to 300 lbs. of single strength juice. Added sugar solids may be no higher ratio than 55/45 or 1.22 times the weight of the single strength juice:
In this case we have the equivalent of 300 lbs. of single strength juice.
300 x 1.22 = 366 lbs. of sugar solids may be added
The advantage of not diluting the concentrate to single strength is that cooking time may be regulated by judicious addition of water. The above combination would be only about 61% solids and the excess water must be “cooked off” until 65% solids is reached. The sugar ingredient may be added as a syrup and its water can be taken into account in the formulation.”

This is a game that U.S. bureaucrats can play just as well as the famous Eurocrats of Brussels.

This post was written by Reginald Dale, Transatlantic Media Network Director

Steven Erlanger, one of the New York Times’ best foreign affairs writers, filed a delightful report June 30 from a French village in Provence, Collobrieres (population 1600), which has reintroduced the French franc, alongside the euro, in order to boost business. The mayor is quoted as saying, “We lost something with the franc; we lost an identity. We moved very quickly into Europe, maybe too quickly.”

Erlanger comments: ‘Along with mostly visa-free travel; the introduction of the Euro in 2002 was heralded as a great step in building a united Europe. But printed with abstract images of bridges and buildings and with no portraits of anyone, living or dead, euro bills are as faceless as the Eurocrats who run the new Europe.’

The writer uses the microcosm of the village to portray a small group of Europeans, who, like many others, feel out of touch with the European Union’s institutions in Brussels and ignorant of EU initiatives. A number of villagers sympathize with the Irish for voting No to the Lisbon Treaty, reforming the Union’s institutions, in a June 12 referendum. Their attitudes suggest that many EU citizens would have voted against the treaty if given a chance - Ireland is the only one of the 27 member countries to submit the treaty to a popular vote.

‘A French Village Revives the Franc, Hopes it Will Return the Favor‘ The New York Times, June 30, 2008