Well, like all things, Obama wants to handle this in smoky backrooms, out of sight, much like all the budgetary brinksmanship we've seen over the past year... and with the thousands of pages of unread legislative bills passed, as we've seen the past few years. So he's doing and saying little publicly, but rather sending Tax Cheat Timmy over to speak quietly in a few fora abroad, but keeping this all ahide pretty much. He's bought and paid for by Wall Street, so that's the natural course for him, in the current environment. So there really isn't much to attack him on publicly, not that the prime stiffs running for the R nomination would do so, as I'd say they'd like to keep this as quiet as Obama wants it kept. They want to tap into some of Obama's Wall Street buddies' cash, afterall.
I don't know why people expect the US to do anything to help the EU. The debt is in euros which the ECB has a monopoly on creating. He could point out the situation is an example of why we need transparency on big banks accounting. He could also try to fill the Federal Reserve's vacant seats.
The Federal Reserve should stop sending dollars to European banks and make it clear that Uncle Sam is not Santa Claus anymore(There's talk of the Fed getting ready to aim a "big bazooka" of dollars at the crisis... seriously.). If the Europeans are ever going to clean up their act, it's going to be because they're forced to by unfortunate circumstances such as this. Putting it off for another 10-20 years will only increase the proportions of a disaster that is inevitable if nothing is done to change the way they do business. The same goes for us...
As we speak, Merkel's commitment to the Euro hangs by a thread, seems like the only thing that would really pull her back from the ledge now is the PIGS rescinding enough sovereignty to convince Merkel that sticking with the Euro is the lesser of two evils. For a variety of reasons, including: being the head of a government, even a crappy southern European government, is a pretty good gig, and: fear of leaving the Euro is outweighed by more immediate fear of rock-throwing youth outside Parliament, those PIGS are calling Ms. Merkel's bluff, daring her to bail.In the status quo, the Euro therefore has to collapse, probably sooner rather than later. That would seem to be very bad for the global economy, very bad for America, and if it happens soon enough, very bad for Obama's re-election prospects.It would seem, then, to behoove an American President to wield the big stick that comes with leading the globe's only superpower in pressuring those PIGS to agree to Merkel's terms. Behooves the President personally, the country he leads, indeed the world. Why hasn't the actual President used his bully pulpit in this manner?
(continued)One plausible explanation is that he is an anti-imperialist Kenyan socialist usurper. Cue the left-wing knowing laughter. But think about it: being an anti-imperialist socialist usurper would explain Obama's apparent unwillingness to pressure poor little PIGS to do what's necessary to keep the developed world afloat, yes? Perhaps more so than ever before, Obama's silence is abetting those memes.I don't think he's a socialist usurper...I think he's just weak. I think Obama uses terms like American exceptionalism with typical liberal guilt, he says it cause he has to but in his mind it is associated with a bunch of folks he disdains who might be found at a Toby Keith Jamboree. It may not occur to him that American exceptionalism gives him the right - indeed, the obligation - to step up and assert his country's interests when a collection of stupid, little countries are threatening to take the global economy down the drain. That Papandreiou was more afraid of those rock-throwing youth than Obama is a telling data point about Obama's failure to wield the power of the Oval Office.(By the way, this is a good moment to reflect on one of the proudest liberal moments in Obama's Presidency: when, unlike those shoot-from-the-hip bully Republicans who make things worse by interfering, Obama sat back and watched the Arab Spring from the sidelines, for the strategic reason that he didn't want to seem to be involved.Perhaps a better explanation is that he had no idea what to do?)
I agree with Mercer. I am not sure there is anything Obama can or should do. That said, let's not forget that if the Euro Zone fails the impacts are apt to be felt everywhere. But then so is the economic tailspin of the Chinese economy, which is beginning to occur (50% commercial real estate occupancy, 32% drop in factory output from a year ago, 25% to 35% decline in the costs for residential real estate forcing China's largest land developers close to bankruptcy). From highly credible sources at Oxford, I have heard Greek bankruptcy described as having a slightly larger impact on the US than the failure of Lehman Brothers. The failure of Italy, the sixth largest economy in the world, would be catastrophic and not just to Europe. Consider what occurred last week when Germany was unable to sell all of it's bonds. Consider the week before, bond traders PAID Switzerland for the pleasure of holding their money. If the Euro Zone fails, why it failed will determine the impact its failure has on the US. I do not know if people blogging here have noticed that in October the only Euro Zone failure subject to polite discourse was the possible failure of Greece. Then, a few weeks later we started hearing about a possible Italian failure, followed shortly thereafter by the first unelected PM in post World War II occupation Italian history...still this did not satisfy 'the markets.' Now we hear about the snowball effect that could affect Spain and Portugal. So, what should Obama do? Keep his fingers, arms, and legs crossed and hope that the turds do not start flying until after the next election. My sense is that it will hit the fan; it will hit in Europe first and it will spread and not just to the United States. The entire global economic order is built on fiat money and debt: This is the first time in world history that the entire world economic order is built upon fiat currency. The sheer amount of debt created by the ability of central banks to print money on demand makes the system unsustainable. Considering the size of the European debt problem, the honest response to repayment is that it will never be repaid in toto. For that matter, neither will American debt. One can only imagine how such talk would shake the markets. As for the solution: Has anyone be paying attention to lowly Iceland of late? If not, may I recommend doing so! I doubt such a solution would fair well in the US but it could work for Greece internally, while handing the Northern Europeans and the Americans a nice juicy turd burger to chew on. I strongly suspect that we are all in for a very long period of economic and possibly political unpleasantness. I do hope I am wrong about this.
Couves regurgitates an annoyingly naive narrative involving a morality of national balance sheets. Couves, please, if you're as enlightened as your lack of clarity and supporting data suggest you are, don't make such pointless posts.
Consider what occurred last week when Germany was unable to sell all of it's bonds. Consider the week before, bond traders PAID Switzerland for the pleasure of holding their money..Germany is still offering bonds at a sinfully low rate, and they're moving (and they can go the QE route, even if they don't). And last I checked, Germany's short term bonds, like Switzerland's and the US', pay a negative yield. That is, you have to pay those countries for the privilege of holding their paper.I wouldn't pay much attention to the idiot media yammering about how Germany is in trouble. They're not. When the PIIGS fail, one-by-one, German banks will not be exposed to the extent France's and the UK's are exposed, and that's the real squabble here.And this is all a perfect storm for poor Obama and the R stiffs he's running against. Italy, France and Spain are all going to have to roll over massive amounts of debt over the next 2-3 months, and it's hard to see how that all comes off without IMF and Fed involvement, and there will undoubtedly have to be Congressional action to bring that about. That is to say.... there will be blood.Which is a good thing. It's time we started arguing about real things instead of idiot media manufactured nonsense. So the establishment thought the Tea Party was too pesty last election? Ha! They better pay attention this cycle, if they dare to initiate another bailout for the Euros.
As a Doctor, I unfortunately face patients who are beyond the hope of conventional medicine. You make the person comfortable and, on occasion, suggest for help from above. The PIGS and perhaps the Euro are beyond any medicine that the US government can offer…..
"It would seem, then, to behoove an American President to wield the big stick that comes with leading the globe's only superpower in pressuring those PIGS to agree to Merkel's terms. Behooves the President personally, the country he leads, indeed the world. Why hasn't the actual President used his bully pulpit in this manner?""Pressure", unfortunately, is a descriptive term and not a prescription for action. What can he actually do? My own view is that he can't do much. He can send an envoy to put forth the view of the Administration.He could lend a big whack of dollars. I think that's unwise
"it's hard to see how that all comes off without IMF and Fed involvement, and there will undoubtedly have to be Congressional action "The debt is in euros. The ECB can easily handle the debt if it chooses. It is ridiculous to think the US should give them money.
What can he actually do?Well, I suppose he can't actually invade Greece, Italy, Spain, et al, mainly because he isn't a Republican :). Seriously, though, can't the US use its good offices to make those wretched countries on the periphery of Europe an offer they can't refuse? What good is being the biggest kid on the block if you can't use your size to get what you want?The WH released a statement on the Euro situation this morning, which said something to the effect of the WH expecting all governments in Europe to resolve their issues forthwith, or something. It had that classic, liberal, patronizing "scolding of all parties" feel (similar to how liberal old media stalwarts such as the Grey Lady make the "pox on both their houses" nonargument against liberal, in addition to conservative, manipulative dishonesty).Of course, Obama may not have enough levers at his disposal to push the European periphery to take their bitter pills. If those levers are at his disposal, he's clearly unwilling to pull them.As I considered this issue this morning, I recalled one of the most memorable moments of the Reagan Era: "Mr. Gorbachev, tear down this wall!" If the Gipper had been a liberal, he would have said "East and West Berliners, I expect you to work out your differences and submit a report to me, next Monday, outlining how you plan to get along".
Seriously, though, can't the US use its good offices to make those wretched countries on the periphery of Europe an offer they can't refuse? An "offer"? So far, you've seemed to suggest that he somehow bully them into total austerity and shutting up about it... so we can get on with our own credit-fueled excess consumption... for a while... well, frankly, before you accuse me of misstating your position, I'm not sure I don't understand what it is you expect the Kenyan Socialist to do, or what you imagine a non-Kenyan anti-Socialist Exceptionalist doing... not to mention the day after. Even under the dubious presumption that Obama prefers or should prefer enhanced austerity measures, if he scolded anyone in particular, it would inflame nationalist/anti-U.S. sentiments on their behalf, and force whomever he seemed to favor to distance themselves. He'd end up taking ownership for the resultant mess, even and especially if everyone did the opposite of whatever he demanded. It's almost as bad as dealing with the Republicans.
"The debt is in euros. The ECB can easily handle the debt if it chooses. It is ridiculous to think the US should give them money." Agreed. Yet the Fed is sending them dollars and preparing to send them a whole lot more:http://news.yahoo.com/u-federal-help-save-europes-banks-100000042.html
At The Washington Post
At The American Prospect