April 3, 2013
By: Kelly Diamond, Editor
While the EU struggles to manage the crumbling economies within its union, some clamor for an Obama intervention as their only hope for recovery and peace.
With even a fleeting glance at Obama’s fiscal, regulatory and foreign policies, his name should not pop up in the top thousand when performing a search for: “Who can help the EU out of their sticky conundrum?”
In a recent CNBC/Yahoo contribution, Michael Ivanovich addresses the issue of the suffering Euro by putting the entire fate of Europe squarely into Barack Obama’s hands. The article reads like some old 50’s radio show, where kids would gather around the wireless, anxiously awaiting closure to the close adventures of the Lone Ranger: complete with decoder rings in their Ovaltine. “Only Obama Can Save Europe”, the title reads. Aside from the over-the-top melodrama, it happens to also be untrue.
First off, the LAST thing an ailing Europe needs is “help” from Obama. If the EU had problems being TOO prosperous, and didn’t know where to spend all its money, THEN you call Obama. What you don’t do is call him when you’re broke, and ask for advice on how to avoid bankruptcy. The man couldn’t even lead the predominantly Democratic Congress into creating a budget! That alone should tell the entire story about him with regards to his bona fides as a “Leader in Fiscal Policy”!
Our credit rating by S&P was downgraded! Obama’s time in office took us from a $9.6 Trillion debt to what is now $16.8 Trillion. He inherited a 7.8% unemployment rate in 2009, and as of February 2013, we are at 7.7%. In 2008, official unemployment was at 8.5 Million and actual unemployment was at 13.4 Million. Now, it’s 12.3 Million and 22.3 Million respectively. When he entered office, 29.6 Million Americans were on food stamps, now 47.9 Million are on food stamps.
Prior to becoming president, he condemned the plea to increase the debt ceiling. As president, he condemned Congressional Republicans for balking at raising the debt ceiling. He has every intention of doing it again this term. By his own standards, he is not your go-to guy for handling or averting fiscal crises:
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership.”
Second, the problem in Europe isn’t a failure to lead, it’s the inevitable failures begotten of central planning. Ivanovich even says as much when he calls Cyprus a failure in public policy. Merkel and company’s default of austerity, taxation and confiscation in its myriad forms is not the silver bullet solution for every – or any – troubled country in Europe. While austerity stands out as the ONE bastion of sensibility, taxation and wealth confiscation are arrows shot at the jugular of the Euro. Obama would only put an end to the austerity measures, hastening the introduction of the EU economy and its respective iceberg! Replacing leadership, while maintaining faith in some centrally planned solutions is like changing your underwear instead of taking a shower: it doesn’t address what really stinks.
Third, whatever strides or progress individuals point to with regards to Obama’s financial policies are more attributable to the safety nets associated with holding the reserve currency of the world, not because Obama is the pied piper of economic prosperity. That’s like giving Clinton credit for the dot-com boom during his presidency. Ivanovich addresses the slight rally in the USD, which has the EU to thank for it; but to celebrate such a thing is myopic in his view. Since one-fifth of our exports are to Europe, if their economy suffers, ours will as well. Not necessarily. Our greatest export is our dollar. We deliberately run trade deficits to maintain our Global Reserve Currency status. We keep printing, and so long as the money remains dead in the banks, but is traded globally, we don’t suffer the hit. Our second greatest export is essential staples such as grains and soybeans. As such, we can pretty much name our price, and other countries will pay. The irony of all this is, if the dollar makes a charge, we might actually manage to stumble into an opportunity to not totally break our necks while staggering about in our Keynesian stupor!
Finally, Ivanovich claims the “Euro crisis is a threat to peace”. (Evidently this man believes we HAVE peace right now, which begs the question: on what planet are you living, sir?) There are stirrings of a similar sentiment to that of 1930 Germany: scapegoating, tensions, animosity, and an economic crisis. Moreover, Western Europe holds some of our top allies in terms of foreign policy. The US just managed an agreement for the EU to kick in more for all the global patrolling so we weren’t left holding the bag and the bill. They certainly can’t do “their fair share” if they have no money.
To hear Ivanovich tell it, Obama still has a chance to actually EARN his Peace Prize! Obama is responsible for 297 drone strikes. And the fate of world peace hangs in the balance of his interference? He would simultaneously prevent an intra-European war while preserving the allies he needs to perpetuate his bloodbath in the Middle East. From a foreign policy perspective, the whole thing is ludicrous. The concept of peace alludes this man. It is antithetical to the Obama Doctrine on foreign policy.
Likewise, from a financial perspective, aside from having no sound advice to offer, to meddle in the financial affairs of other nations or conglomerated nations is off sides, to say the least. First, much like the banks, the EU must take ownership of its decisions and any failures which result from it. Every nation who signed on, must now accept the lot they were dealt by this centralized fallout. Second, Obama may very well be a leader in the Euro-Atlantic Community, but a member of the EU he is not. Having yet another arrogant nation come in and call the shots for HOW a country SHOULD fail is definitely not the answer. With no real authority, and therefore no real culpability for the intended or unintended consequences of such a maneuver, we amount to nothing more than backseat drivers.
Europe is no more our responsibility than the Middle East. We do not have the resources or the bandwidth to entertain notions as running interference and Obama supplanting the European Commission! Moreover, even if the EU were looking for some outside help – which isn’t the case yet – Obama’s resume and track record all but say, “Do NOT pick me!”