Obama op-ed sets up other governments as scapegoats for failure

Is Obama setting up other nations’ governments to blame if his spending spree doesn’t work? Certainly appears so.

There’s been no shortage of news that other world governments have no intention of following the Obama/Pelosi/Reid heist of taxpayer dollars. On March 11th, NPR reported on the impending clash of economic policies in the upcoming G20 meeting.

The Obama administration has set out on what could be an economic policy collision course with some of its closest allies. Treasury Secretary Timothy Geithner is heading to a weekend meeting of Group of 20 finance ministers and central bank governors with this message: The United States thinks other governments should be spending more on economic stimulus programs.

The message may not go down well with European leaders, however, many of whom have different ideas about what needs to be done to get the world economy back on track.

The Treasury Department announced Wednesday that Geithner will urge the G-20 governments to implement stimulus-spending programs worth at least 2 percent of their gross domestic products this year and next.

At that time, the only country with significant capital – China – was willing to spend that much. And much of that may have to do with how intrinsically woven their economic success is with the US economy.

But the Europeans are finding such language “not to our liking”.

Many Europeans say a U.S. failure to oversee and regulate its financial system more carefully was the factor that led to the global economic crisis, and they now bristle at being told what policies their governments should follow.

“Basically policymakers on both sides of the Atlantic are proceeding on their own domestic agendas,” says Daniel Gros, director of the Center for European Policy Studies in Brussels. “Neither takes much notice of what the other is doing, and the agendas are different.”

Two days later, IBD also reports on the firm “no” to spending. And one of the reasons may just be they’ve already traveled the Euro-socialist road, and are more than well aware of it’s economic drawbacks.

On Friday, the EU resisted pressure — from the pork-happy U.S. — to pump more cash into its recession-hit economies. It had already shoveled out a $270 billion stimulus package of its own, and came up with a $67 billion bailout fund for Eastern Europe. With all that done, the EU wanted to end it.

“You can’t think you can solve everything with taxpayers’ money. Stimulus packages are already in place and taking us through this challenging time,” said Fredrik Reinfeldt, the prime minister of, brace yourself, Sweden.

“There is no alternative to globalization as a motor for growth and employment, thus fostering prosperity worldwide,” wrote German Chancellor Angela Merkel and Dutch Prime Minister Jan Peter Balkenende in Der Spiegel on March 19, arguing against spending for its own sake.

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After more than 100 years of socialism, starting with German Iron Chancellor Otto von Bismarck’s 1883 move to install the basis for Europe’s social welfare state, which was rapidly imitated by other states and led to a heavy hand of government through the Continental economies, most of Europe has a pretty good idea what socialism is, where it leads and what its limits are.

While not keen on killing such a central part of their culture, they’re also not blind to its ill effects. These include high unemployment, lack of job mobility, failure to foster business startups, talent flight, hyperinflation and generally slow economic growth.

All of that comes from the kind of government spending that exceeds the productive capacity of a private sector to finance it. It’s the very stuff Democrats, still steeped in 1940s nostalgia, are gunning for as they spend beyond what they can imagine.

On the same day, Time magazine also spread the message of “enough!” from the EU countries. Most notably a Brussels think tank economist who, in essence, said Obama’s charm is not reason enough to follow the US off an economic cliff. And they are also quick to point out that sweeping global regulations/reform are hard to find consensus on, and to enforce.

President Barack Obama this week urged the world’s top economies to adopt aggressive, America-sized spending programs. “It’s very important to make sure that other countries are moving in the same direction, because the global economy is all tied together,” he said.

But on the other side of the Atlantic, European Union governments have spurned entreaties to let funds flow into their staggering economies. “Europe has done what it needed to do,” says Luxembourg Prime Minister Jean-Claude Juncker, who is also chairman of the 16-member euro zone, adding that the U.S.’s appeals “were not to our liking.”

The issue is expected to dominate next month’s London summit of leaders from the G-20 group of top economies. “I do not have high expectations for London,” says Nicolas Véron, a scholar at the Brussels-based economic think tank Bruegel. “Not everyone will follow the U.S. just because of Obama. Global solidarity solutions are fiendishly difficult both to decide and to enforce. There is a growing realization that regional or national responses are preferable wherever possible.”

None of this has stopped Obama and Geithner’s concerted attempts to increase the major players in the desired lemming herd…. to no avail.

By two days ago, the EU foreign policy blog was reporting of the “almost audible tone of defensiveness”, chafing at US criticism.

Europe has been feeling pressure, most especially from the US administration, to contribute in a bigger way to global efforts at recovery through economic stimulus. So far, according to the International Labour Organisation, who have been tracking stimulus expenditure, 30 countries have announced stimulus plans which amount to 3.16% of global GDP (detailed word doc with figures here). The major plans include China’s €586 billion and the $700 billion Obama Stimulus plan (and 2 previous Bush plans which together add to almost a trillion dollars). As an aside, the whole debate on whether stimulus will actually work is considered by the Presdent of my alma mater, DCU here.

In contrast, the headline Stilulus Plan that was agreed at the European Council last Thursday was only €5 billion, leading to the below cartoon [by Martin Turner] in the Irish Times which reflects a perception that the EU is not pulling its weight in reviving the Global economy.

The US is pressurising Europe to increase spending nonetheless and as I blogged before Obama sent this message with the Irish Prime-Minister from St. Patrick’s Day celebrations in the White House last Tuesday. Also last Tuesday Paul Krugman, an American economist and Nobel laurate was in Brussels expressing his concerns about the low levels of expenditure of the European (and the US) stimulus plans. Guenter Verheugen, the Enterprise and Industry Commissioner in the EU responded to Krugman’s statement, saying that “We think it is a little bit too early to judge whether the stimulus packages which we have produced are working or not.”

“too early to judge”… let’s not muddy the waters with logic, right? Europe is taking the spend a little, and wait and see road – the opposite tangent of the Obama approach to throwing out tons of taxpayer cash as quickly as possible, and see what happens later.

The EU blogger says the union appears to be satisified with the member-states response to the economic woes.

Europe also appears to have a different view of how Europe can contribute to recovery. The European stimulus funds are targeted to generate “new investments, boost demand, create jobs and help the EU move to a low-carbon economy”. The “global” aspect of this is the pledge to give €75 billion more to supplement the IMF’s funds contingent on reciprocation from the US/China.

During the summit, leaders expressed satisfaction with how Member-States had used spending plans to ameliorate the worst parts of the Global recession. Chancellor Merkel said in the German Parliament last Thursday that her nation “was doing more than most to support the world economy through higher spending and lower taxes”. She ended the summit by saying that “A competition to outdo each other with promises will not calm the situation” – Europe certainly looks like it will not be attempting to raise the stakes anytime soon.

This leaves Obama as the loan… er…. *lone* master of spending by a government with an economy of consequential size. And that must be a very lonely limb indeed.

This *also* leaves the TOTUS extremely vunerable to impending criticism…. (like they haven’t been doing that all along???) So what’s the community-organizer-in-chief strategy now? Same ol’ Alinsky tactics… reaching out to the global masses to unite against the enemy… non-cooperative leaders.

Thus Obama’s penned himself an op-ed for foreign release. Apparently he thinks he can “stimulate” the masses into prodding their governments into a change of heart.

You can read the text of his op-ed at the above link, but I’ll just provide some excerpts here. For the most part, it’s filled with the usual “must act” doom and gloom with which we American’s are already too familiar.

But I can’t help but notice Obama, in his arrogance, is setting up the governments who do not increase their spending as the reason the US economy may fail to respond…. stating that altho the nations have done some spending, the G20 stimulus efforts must remain “robust and sustained until demand is restored”.

Our leadership is grounded in a simple premise: We will act boldly to lift the American economy out of crisis and reform our regulatory structure, and these actions will be strengthened by complementary action abroad. Through our example, the United States can promote a global recovery and build confidence around the world; and if the London Summit helps galvanize collective action, we can forge a secure recovery, and future crises can be averted.

Our efforts must begin with swift action to stimulate growth. Already, the United States has passed the American Recovery and Reinvestment Act — the most dramatic effort to jump-start job creation and lay a foundation for growth in a generation.

Other members of the G-20 have pursued fiscal stimulus as well, and these efforts should be robust and sustained until demand is restored. As we go forward, we should embrace a collective commitment to encourage open trade and investment, while resisting the protectionism that would deepen this crisis.

Second, we must restore the credit that businesses and consumers depend upon. At home, we are working aggressively to stabilize our financial system. This includes an honest assessment of the balance sheets of our major banks, and will lead directly to lending that can help Americans purchase goods, stay in their homes and grow their businesses.

This must continue to be amplified by the actions of our G-20 partners. Together, we can embrace a common framework that insists upon transparency, accountability and a focus on restoring the flow of credit that is the lifeblood of a growing global economy. And the G-20, together with multilateral institutions, can provide trade finance to help lift up exports and create jobs.

Third, we have an economic, security and moral obligation to extend a hand to countries and people who face the greatest risk. If we turn our backs on them, the suffering caused by this crisis will be enlarged, and our own recovery will be delayed because markets for our goods will shrink further and more American jobs will be lost.

More setting the stage for the future blame game in the event of failure?

Only coordinated international action can prevent the irresponsible risk-taking that caused this crisis. That is why I am committed to seizing this opportunity to advance comprehensive reforms of our regulatory and supervisory framework.

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This G-20 meeting provides a forum for a new kind of global economic cooperation. Now is the time to work together to restore the sustained growth that can only come from open and stable markets that harness innovation, support entrepreneurship and advance opportunity.

The nations of the world have a stake in one another. The United States is ready to join a global effort on behalf of new jobs and sustainable growth. Together, we can learn the lessons of this crisis, and forge a prosperity that is enduring and secure for the 21st century.

These Chicago’esque Alinsky scare tactics may work well in Obama’s America on the vacant eyed O’faithful. But I doubt they will do much overseas.

Obama and Geithner have plead with, and cajoled the world leaders to no avail. Now, in a more desperate attempt, they turn the Obama charm offense on to international citizens… all with the not-so-veiled threat that non-cooperation for their governments can be the reason for failure.

Always looking for a scapegoat, this one. How’s that for “political courage”?

Obama’s op-ed appears in the following foreign media:

Other misc media: in South Africa (Sunday Times), Australia (Syndey Morning Herald and The Australian) and the United States (Chicago Tribune, the Los Angeles Times and the Baltimore Sun).