NYT: Fate of Obama Presidency May Depend on Europe (and its economy)

[pampango]

The recent downshift in the economy has dealt a powerful blow to President Obama’s chances of re-election in November. But perhaps most worrying for the president is just how little sway he retains over where the economy goes from here.

His attempts to convince voters as he stumps around the country that Europe’s financial mess and Republican obstruction are largely to blame for the faltering economy only underscore how his destiny hinges on decisions by other people, notably the German chancellor, Angela Merkel, and the Republican speaker of the House, John A. Boehner.

At home, the president’s plans to stimulate the economy with tax cuts and spending programs have invariably crashed against solid Republican opposition in Congress. As a result the government is becoming a big drag on the economy, cutting more than half a million jobs at the federal, state and municipal level since national employment bottomed out in February 2010.

In Europe, the political constraints are the same. Most economists, including those in the Obama administration, say they believe that for the euro to survive, weak European countries must grow. But this means curbing the harsh austerity policies imposed in return for aid from European institutions and the International Monetary Fund — policies that have only deepened the countries’ recessions. Germany, the only country in Europe with the wherewithal to backstop its poorer neighbors’ finances, has so far said no.

http://www.nytimes.com/2012/06/06/business/obama-presidency-may-depend-on-europe.html?_r=1

The article goes on to point out the idiocy of cutting spending when the economy needs a boost. And that is what the US (with republican "help&quot and Germany (austerity) are doing. This while interest rates for the US and German governments are near 0% so that the cost of borrowing to finance spending would be extremely low.

To the extent Obama is affected by the actions of Boehner and Merkel is not good. Those two conservatives have no sense of the bigger picture. And if the eurozone collapses this summer it will hurt the European economy and ours as well. Not good.

[BeyondGeography]

1. Because Europe will do so much better under Romney

Yeah, I know. Not the point.

What was the great NYT's point again...

[pampango]

2. Obama's vulnerablity. With Boehner and senate republicans blocking economic measures at home and

conservatives in Europe blocking growth and forcing austerity, Obama has less control over the US economy (and perhaps his political fate) than other presidents have had.