I’ve got a brief piece in today’s Der Standard, everybody’s favorite pink Austrian newspaper. It begins:
Die USA haben im 20. Jahrhundert zwei große wirtschaftspolitische Kurswechsel erlebt —Franklin Roosevelts New Deal und die Reagan-Revolution in den Achtzigerjahren. Die Ankunft von Barack Obama im Weißen Haus in Zeiten des Finanzkollapses und einer tiefen Rezession erscheint wie eine weitere große Wende. Am stärksten werden sich das Sozialwesen und die Haltung der USA gegenüber dem Rest der Welt ändern. Read more.
And in case you’d rather read it in English, here’s the text I sent to my friend and Der Standard‘s managing editor Eric Frey to translate (I thought about trying to write it in German myself, but that might have taken me two or three days):
The United States went through two economic regime changes in the 20th century—Franklin Roosevelt’s New Deal in the 1930s, and the Reagan Revolution in the 1980s. The arrival of Barack Obama in the White House amid financial collapse and severe recession has the feel of another sea change in U.S. economic policy. Two of the areas most likely due for transformation are the welfare state and the international stance of the U.S.
The U.S. built a generous system of health care and pensions in the 1940s and 1950s, but did it through corporations, not the government. That safety net is now tattered, with its biggest provider, General Motors, on government life support. So a new approach to managing medical and retirement risks, with government playing a more central role (if perhaps still not as central as in most of Western Europe), is likely to be one defining element of this new economic era in the U.S.
Another may be international cooperation. Fixing financial regulation will be an early Obama priority, and just as high finance crosses borders its regulation will have to as well. Similar considerations will factor into environmental and perhaps labor regulation. After World War II, the U.S. embraced international institutions, but from a position of dominance. A re-embrace now would be a very different sort of endeavor—and would amount to a big change in how the world works.