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Barack Obama doesn’t have George W. Bush to kick around anymore. At least not credibly. Sure, he will continue to argue that he inherited such a mess that his own policies can only be regarded as a smashing success. But it’s been four years since the patient was turned over to the new president for treatment, and the economy’s stubborn failure to recover its robustness tells us something about the efficacy of the Obama medicine. Which makes it increasingly difficult for him to continue to play the blame-GWB game. So Obama has found a new cause of falling growth and stubbornly high unemployment: Europe.
Now, no one can argue that our European friends are paragons. They have fiddled while Athens burned; done too little too late to save Spain’s financial system; forced an exodus of talent such as Ireland hasn’t seen since the potato famine (I exaggerate); replaced democratically elected governments in Greece and Italy with “technocrats”; issued a plethora of communiqués that amused but did not calm the markets; and adopted policies that have driven deficits up by stifling growth.
Plenty of stuff to warrant a presidential j’accuse. Except for two things:
The American pot is ill-placed to call the European kettle black, and the president’s lack of personal support from his colleagues at the G7, G20, and other meetings makes him a less-than-ideal policy salesman. More important, the president’s attempt to set Europe up as the new fall guy for his failed policies—besides Bush, other alibis have included supply chain interruptions due to Japan’s tsunami—seems, shall we say, lacking in empirical support.
JUST finish The Read
and if you are not convinced Obama is whack…
The President and his team have been blaming “European headwinds” for some of the U.S. economy’s woes. But the truth is that the policies pursued by Washington and Athens are frighteningly similar—and the outcomes are not good for either country. Both countries are in need of comprehensive fiscal reforms, yet their leaders have avoided the tough decisions in favor of bailouts and political posturing.
* Why is it in such a state? The authors of the Index point to “decades of overspending, a lack of structural reform progress, and endemic corruption,” noting that Greece’s “lack of competitiveness and fading business confidence are serious impediments to economic revival. Adjustments in market conditions have been stifled or delayed by public unions.”
* Going into the G20 summit today and tomorrow in Mexico, President Obama “has called on European leaders to recapitalize weak banks and to focus on economic growth and not just budget austerity,” reports Reuters. Basically, he has been urging European governments to spend more now, even as their borrowing costs and debt far exceed sustainable levels. One wonders how countries that have limited or no access to credit markets because of their dire fiscal situations are supposed to borrow the money for all this additional spending. There is only one substantive difference between Obama’s policies for Europe and his domestic policy, where he has urged expanding government jobs as a solution to U.S. unemployment: The U.S. government can still borrow to finance its deficits, because we’re only partway down the road the Greeks have already traveled.
The overspending, overtaxing, over-borrowing and over-regulating approach does not work for Europe anymore than it works for America
America is responsible for its own economic problems, regardless of the winds sweeping across the Atlantic.