I foresee, in the following New York Times reporting on the Eurozone economic crisis, the end of Barack Obama’s presidency:
Jens Weidmann, president of the Bundesbank, the German central bank, argued Monday that the core problem in the euro zone was a lack of faith in the soundness of governments’ fiscal health.
The only solution, Mr. Weidmann said at the Economic Club of New York, is to put public finances in order.
“There is little alternative,” said Mr. Weidmann, who is an influential voice on the governing council of the European Central Bank. “In the end, you cannot borrow your way out of debt; cut your way out is the only promising approach.”
Mr. Weidmann’s views are widely shared in Germany. But Germany is becoming isolated in Europe as an increasing number of economists and policy makers argue that euro zone countries could do more to offset the social effects of austerity on ordinary Europeans, which include a surge in suicides. […]
Leaders like Mr. Sarkozy may gripe about the stubbornness of Germany and the European Central Bank. But economists also fault those leaders for doing too little to encourage investment and job creation within their borders — for not doing the sorts of things that many experts say are the only way to achieve the long-term, sustainable economic growth that government spending can seldom achieve.
Most euro zone countries, including Germany, rank low on the World Bank’s annual rankings on the ease of doing business. The survey grades countries according to such factors as how long it takes to set up a new business or enforce a contract in court.
Germany was only 19th in the most recent rankings, behind Malaysia and Thailand. Italy was a dismal 87th and Greece was in 100th place out of 183 countries.
In many cases, countries could improve their rankings by cutting red tape, which would also save money. But changes to make it easier to start a business, for example, often run afoul of vested interests that fear increased competition.
Even leaders in some of the afflicted countries say that fiscal stimulus through more government spending could backfire, by taking off the pressure on political leaders to make necessary changes.
Vítor Gaspar, the finance minister of Portugal, said in an interview that his country — under a previous government — made a mistake when it responded to a downturn in 2008 by pumping money into the economy. The result, he said, was a deeper debt problem without creation of any lasting growth.
Isn’t it obvious that debt austerity politics is atrocious for politicians in power, liberal or conservative? Whatever President Obama promotes—austerity or yet another round of deficit spending—he looks to be damned. The dynamics of the European debate are what’s coming to America in this election cycle. Hitchcock’s birds are about to ensue. President Obama will be the one driving the car out of the final scene (unfortunately), and those on their perches watching him go will be Mitt Romney and the new Republican members of Congress.
The presidential election in November in the United States won’t even be close.