June 7 (Bloomberg) -- At an Obama fundraiser in Manhattan on June 2, Bill Clinton previewed a new economic script for the president’s campaign. “Why aren’t things roaring along now?” he asked. “Because Europe is in trouble and because the Republican Congress has adopted the European economic policy.” That European policy, he said, was “austerity and unemployment now at all costs.” He’d rehearsed the same line four hours earlier at a fundraiser in the private home of a hedge fund executive, Bloomberg Businessweek reports in its June 11 issue.
For a campaign known for its cool-headedness, there’s an unmistakable note of fear lurking in the effort to draw a line from Europe’s troubles to the GOP and Mitt Romney. The subtext: If Europe collapses and drags down the U.S. economy with it, blame the Republicans. Blame Greece.
Just don’t blame Barack Obama. This is not likely to be a winning argument. If the economy does take a downward turn before November, it isn’t Europe that voters will hold to account.
Europe bashing, a feature of every modern presidential campaign, is never about winning an argument. It’s about making Americans feel superior -- and about changing the subject. When Karl Rove said in 2004 that John Kerry’s hair “looked French,” it didn’t matter that it made no sense. The line got a knowing laugh. When American politicians caution against “European-style” [fill in scary word here: “socialism” for Republicans; “austerity” for Democrats], what they’re really doing is probing at baser emotions.
European countries all had their own empires, once. And now the empires are gone. Europe exposes Americans’ darkest political fear -- that they, too, may suffer a long decline that ends in tourism, artisanal food, precision manufacturing, and the occasional Olympic gold medal.
It was Romney who first pulled the Europe card this campaign. In May he said Obama’s plan is to “follow in the pathway of Europe, to shrink our military smaller and smaller to pay for our social needs.” This is a ready theme for Romney. In his 2008 campaign for president, he warned that unless America changed course, it could become “the France of the 21st century -- still a great nation, but not the leader of the world, not the superpower.”
See how easy that is? “Europe” can be made into a backdrop for any frightful scenario. In Romney’s version, the continent has weakened itself through social spending. As Clinton -- acting as Obama’s proxy -- tells it, Europe is a victim of drastic spending cuts.
Republicans who want to repeal the health-care reform law warn against heading down the path toward government-run socialist systems like Sweden’s. Yet social spending has worked out fine for Sweden--even if less so for Greece.
“It’s so funny, because Europe has very different health-care systems,” says Thomas Risse, who runs the Center for Transnational Relations, Foreign and Security Policy at the Free University of Berlin. “The most socialist is the British system, which no American knows. They think of Britain as their main ally.”
Clinton’s critique of European austerity is almost as simplistic. Austerity is not a country-by-country choice. The U.K. forced it on itself, and Germany has forced it on others. Clinton, who knows better, conveniently lumped all of Europe together. Philip Lane, an economist at Trinity College in Dublin, agrees with Clinton that it’s a bad idea to rapidly reduce a country’s deficit.
Austerity, he says, is for “when you’ve got no choices,” as with Ireland, which must accept the terms of its lenders. Still, he says that taken as a whole, the euro zone looks a lot like the U.S., with comparable rates of public debt to GDP. If all of Europe could borrow against that economy, as the U.S. can, “the level of austerity would be a lot less,” he says.
For Obama, who’s counting on the EU to stabilize before the election, there’s a risk in mocking America’s closest allies. “Obama should realize that Europeans actually listen to what he’s saying in an election campaign,” says Risse. The administration has been gently pushing Germany to relax its austerity policies, hoping to goose demand in Europe and, ultimately, in the U.S. “If Europe and Germany are now used by the Democrats as an attack line against the Republicans,” says Risse, “then the U.S. loses all the leverage it has on Europe and on Germany. If Obama thinks he can gamble on this, not good. Not good.”
Editor: Wes Kosova