The November 16th issue of The Nation is not only of special interest because of the interview with Mikhail Gorbachev by Katrina vanden Heuvel and Professor Stephen F. Cohen. It includes a revealing analysis of Yugoslav nationalism that led to war after the break-up of the country, and a no less revealing, in-depth article on what the global economic meltdown did to to the tiny Baltic state of Latvia - and why. Toward the end of that article one member of the mostly female new team at the Ministry of Economics, laughs and says: “I want a Latvian Obama.”
There could well be a Latvian Obama. The tragedy, for us, is that the real Obama will never have the Latvian tools with which to make the American economy right. First of all, he doesn’t have anything even remotely resembling a Ministry of Economics - think of that for a minute: a Ministry of Economics! Even if in a large country like ours we would need to break economic matters down into several specialized ministries as is the case in most European countries, the vaunted American presidential system may be why for years China referred to the United States as a “toothless tiger”.
We’re only seeing that now, in the aftermath of the economic meltdown that nearly did in several countries. I had noticed from the beginning of the financial crisis that the countries that were driven to the brink, such as Iceland, were countries that had abandoned stodgier, but safer economic practices to emulate the American way. I cannot recall what the other countries were at the moment, but apparently, Latvia was one of them. As the writer, Kristina Rizga points out, unlike its two Baltic neighbors, Estonia and Lithuania, left opposition parties have not been part of the ruling coalition in Parliament since 1991 (when the Soviet Union was dissolved). She writes: “That has meant that neoliberalism has dominated Latvian politics virtually unchallenged since 1991”
Elsewhere, Rizga quotes Valdis Novikovs, who emigrated to England, then returned. As the cost of labor doubled from 2006 to 1008, he noticed that his countrymen were traveling to Germany and Finland to buy cheaper clothes and furniture. In 1007, Latvia had the second-highest trade deficit in the EU, after Bulgaria.
What’s my point here? The United States cajoled, bribed, pressured the rest of the world into following its economic model of “shock capitalism”. Those that have most successfully limited the damage of the world meltdown are those in the west that are, or in Eastern Europe have managed to partly remain, social democratic after the fall of communism.
President Obama, alas, has no social democratic structures to work with.