The GOP refrain has Obama turning the US into debt-wracked Greece – and never mind that their Irish poster-child bombed
As he left the G20 summit on Tuesday, President Obama told reporters he thought the ongoing European crisis "will potentially have some impact on the election". Well, no kidding.
The meltdown of the eurozone, simultaneously the most alarming and the most boring story of our times, remains the great unknown of this American presidential race. The formation of a new Greek government this week may delay the country's exit from the euro, but a controlled ejection this summer or autumn will rattle the US all the same. It now seems that Greece will go gently and not Lehman-style, at least. But nobody can predict what comes after – there and especially here.
And yet, however bad things get later this year, Europe is already weighing the president down. "I do not want to become Europe," Mitt Romney told a crowd in Frankenmuth, Michigan on Tuesday. "Look across the pond," he warned, and tremble at the sky-high unemployment. Frankenmuth, I have to mention, was a frankly weird place to say this, since the town is better known as "Little Bavaria" – visitors gawp at bogus Franconian houses and lederhosen-clad waiters serve weisswurst and imported beer. Maybe he was trying to make a point about German frugality.
But no matter: Romney, for well on a year now, has been insisting that under the president's leadership the US faces sclerotic European decline. Nothing new among GOP candidates, of course. But now that Europe really is in serious trouble, the line sticks a lot better.
Last week, Romney dismissed Obama's economic record and said he wasn't leading the country forward, but "forward on the way to Greece". This Greece bit is rather a refrain in the party now. "Unfortunately, we're on the road to Greece," warned Kelly Ayotte, the New Hampshire senator, at a rally with Romney last week. Obama has "put our country on the road to Greece", according to Connie Mack, the Florida representative and Senate nominee. "The president's budget isn't a blueprint for America; it's a road map to Greece," in the words of Washington Representative (and veepstakes dark horse) Cathy McMorris Rodgers. Stay on message, people!
Naturally, the "road to Greece" that these Republicans are cautioning against does not pass by a poorly designed currency union, insufficient tax collection, or political clientelism. To listen to these conservatives, Europe, and Greece in particular, are in freefall because of one thing only: government spending. Any state expenditure at all seems to be inadmissible – these new Republicans now deem it sensible to oppose paychecks for firefighters and teachers – and the debt Greece is now saddled with proves that government can never be trusted.
But as should be painfully clear by now, the eurozone is locked in a balance of payments crisis; debt in and of itself is not to blame. Greece and Portugal may have run large deficits during the good years, but so did Germany. Spain, which, with each passing week, looks more like the euro's final battleground, was running a surplus back in the day.
And anyone paying attention to Europe knows that there is zero correlation between the size of the state and the propensity for crisis. Austria and Finland, which are both eurozone members, rank near the top of the OECD for public spending and have remained strong during the crisis. Which eurozone state had the lowest public spending per capita? That would be Ireland: wrecked, miserable Ireland, junk-bond Ireland, which you may remember as the dream republic of every Cato Foundation fellow and drown-government-in-the-bathtub sandbagger.
Ireland, more than Greece, is the most telling case – because it reveals just how unstintingly the American right is committed to destroying the public sector, and how indifferent it is to evidence. In the boom years, as Ireland was transformed from one of the poorest European nations to one of the richest, US conservatives couldn't get enough of the place. Ireland was proof that trickle-down economics worked, the thinktanks enthused: keep taxes minimal and government tiny, and everyone gets rich! (And forgive me, but I cannot resist a nod to Thomas Friedman, the soi-disant center's favorite columnist, for telling German politicians that the Irish model was their only hope. The headline was "Follow the Leapin' Leprechaun".)
By the top of the boom, the Ireland worship had hit a fever pitch. John McCain, during his first debate against Obama, said the US had to cut taxes to Irish levels. He also mused that the first foreign trip of his blessedly unrealized presidency would be to Ireland, which Vice-President Palin might have heard of once from reading the back of the Lucky Charms box at breakfast. Romney himself, in 2008, enthused that "jobs have been flowing into Ireland" and that the US was in trouble because "money is all going to government and taxes."
We now know, of course, that the Celtic Tiger was, in fact, predicated on a massive property bubble, assisted by absurdly lax regulation, inactive government, and a healthy dose of corruption. Ireland now has zero economic growth; youth unemployment stands at 30%. Did this give any of the erstwhile Ireland boosters pause? On the contrary: apparently, Ireland was no free-market paradise at all! One Cato fellow, having praised Ireland for its Reaganite policies in the good times, suddenly concluded that the government was "spending like drunken sailors". The country that the right celebrated for its low taxes mutated into a redistributive hellhole. And as for the continued failure of the brutal austerity measures Ireland has since put into place – measures that look rather like the Republican economic plan here – the contortions are too ludicrous to summarize.
By now, really, it no longer comes as a surprise that these ideologues will never waver in their conviction that no taxes and nearly no state are the solution to every problem. In good times and in bad, the prescription is the same. All conflicting evidence is dismissed; any shred of support (Latvia!) is amplified a thousand fold.
But they can get away with it, still, because who's to stop them? Four whole years after the most ruinous disaster of laissez-faire capitalism most Americans have ever lived through, we still do not have a Democratic party willing to defend the economic role of government with a full voice. Until they do, we will be stuck in this trough of a Lesser Depression. And in the meantime, we must live in fear of the Romney economy, of American unfairness and European growth.
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