Europe

On a cold, grey Moscow winter day exactly 20 years ago, the red hammer and sickle Soviet flag was lowered at the Kremlin for the last time. The Soviet Union had died. The world's second most powerful state had crumbled under the weight of a bankrupt ideology, bankrupt finances and courageous self-determination movements across Eastern Europe. The Communist behemoth, once seen as the most dangerous foe of the western world, fell with a whimper.

For the past several years, Italy under Prime Minister Silvio Berlusconi resembled a political comic opera, with a larger-than-life character of ravenous appetites and tragic hubris. But the recent "political death" of Mr Berlusconi represents only the end of Act One. Two more acts remain, and this drama could turn from comedy to tragedy quickly.

It seems a hard time to be confident about the state of the country – or the state of the planet. We are still facing the aftershocks of the worst recession since the great depression and a significant risk of dipping back into it. Europe's economy looks increasingly old and enfeebled compared with the virile young tigers of Asia. Terrorism strikes fear at home while war drags on in Afghanistan and violence is used against protesters in Syria and elsewhere. And the condition of the global environment appears fragile at best.

The first book to complicate the reputation of George Kennan came out in 1967. It was 600 pages long, and the cover would show a forlorn young man staring right at you. The tale was of an awkward boy from the Midwest who never quite fits in. He gains knowledge in the Foreign Service and becomes the United States' wisest Soviet analyst. Then, for a brief -- but crucial -- moment, he serves as the head of the State Department's Policy Planning Staff under President Harry Truman, helping remake the world after World War II.

It’s hard to describe, let alone explain, my melancholic reaction to the movie Tinker Tailor Soldier Spy after watching it in a sold-out theater on Saturday. Sure, the film, adapted from the classic Cold War novel by John Le Carré, captures the dread of 1970s London and the wearying ambivalence of Cold War intelligence wars. But I wasn’t expecting to emerge from the theater feeling a sense of loss.

For the last four years, Russia was ruled according to a careful choreography: President Dmitry Medvedev was the face of a variously tough-talking and reformist agenda that included the erection of Skolkovo, a richly financed version of Silicon Valley, and cordiality with the United States. Meanwhile, actual power was wielded by Prime Minister Vladimir Putin, whose will was enacted while he traveled the country exhibiting his physique and off-beat sporting abilities.

On December 13, 2011 the Asset Building Program hosted Professor Sheldon Garon, author of Beyond Our Means: Why America Spends While the World Saves. While economists often claim people save according to universally rational calculations — saving the most in their middle years as they plan for retirement and saving the least in welfare states — there are substantial differences in savings rates across high income countries. For example, Europeans save at relatively high rates despite generous welfare programs, while Americans save little, despite weaker social safety nets. The assumption that generous social benefits will provide a disincentive to save doesn’t hold up.

On December 13^th, the Asset Building Program is pleased to welcome author and professor Sheldon Garon to speak about his new book, Beyond Our Means: Why America Spends While the World Saves. You can join us in person at 4:00 p.m. on the 13^th or online for the live webcast (registration is not required for the online webcast).

The mood at this year’s Valdai Club meeting was gloomy, which was inevitable since it took place against a background of the stagnation in Russia and the United States and the crisis in Europe. In Russia, both state and society appear to lack the capacity for internal regeneration. If this is so, then Russia can still continue fairly successfully along its present path as long as energy prices remain high, but it will not build up the kind of new economy that will be able to replace energy as a source of wealth in the long term.

After days of drama-filled meetings, in late October eurozone leaders announced the latest “comprehensive” rescue plan. Although it was an improvement over earlier efforts, this package, too, came up short in that it failed to calm the markets and offer the eurozone a path back to economic growth. And without growth, there will be many more months of crisis.