The Buck Stops Over There
Blaming Europe for the U.S. economy.
Jun 25, 2012, Vol. 17, No. 39 • By IRWIN M. STELZER
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.
Europeans are disinclined to accept American advice for two reasons. First, our deficit exceeds that of the eurozone as a whole, and according to the latest studies by the Congressional Budget Office, we are in danger of incurring so much debt that economic growth will be well-nigh impossible. Hardly a model to which Europe should aspire. When Treasury Secretary Timothy Geithner tried to advise Europeans to step up borrow-and-spend, he was met with scorn. “It’s always much easier to give advice to others than to decide for yourself,” German finance minister Wolfgang Schäuble announced to the press, a thought usually expressed in the privacy of a conference room. Second, our political gridlock makes the slow-moving decision process of the eurocracy seem speedy, and our partisan feuding the acrimonious Germany-versus-everyone-else circus in Europe a lovefest. Obama’s pleas to the Europeans to speed up decision-making are, to put it mildly, lacking in credibility.
On a more personal level, Obama has trouble getting a hearing from his European counterparts, I am told by attendees at various G7, G8, G20, and G-whatever meetings. He stands aloof from them, a man apart in gatherings of politicians who are by instinct flesh-pressers. Reliable informants tell me that his colleagues at these meetings would at times do George W. Bush a favor when he needed one for domestic political purposes—they liked him even if they found some of his policies insufficiently pacific.
Obama enjoys no such advantage. This is the man who couldn’t get the Olympics for his hometown of Chicago, and who was treated with contempt by China, and ignored by other nations at a meeting in Denmark when he sought some progress on global warming to advertise to his green constituents. This is also the man whose partner in a diplomatic reset, Vladimir Putin, said he was too busy to attend the G8 and NATO meetings at which President Obama served as host, and then found time between harassing dissidents to hop over to Beijing for a round of meetings.
The president’s lack of standing with his European counterparts is unfortunate. With Germany so far sticking to its austerity über alles policy, an American voice calling for more emphasis on pro-growth policies would be an important counterweight. Never mind: The Europeans will have to work that out with German chancellor Angela Merkel, and persuade her that hardworking Germans should transfer more of their income and wealth to the rest of Europe—a task made more difficult by French president François Hollande’s decision to roll back one of Nicolas Sarkozy’s reforms and lower the retirement age for many workers from 62 to 60 years, while Germans are expected to remain in the traces until 65-67 years of age.