On January 6th Romney was overheard delivering this Special Message to Europe:
“No, not a single cent. Europe got into this trouble on its own, and has to get out of it on its own. Germany, France, Italy. They all have the resources to pay their debts. They can solve the crisis, invest and start to grow again, possibly through (creating) a real market economy. The United States has to take care of its own crisis, and will not give a single dollar for saving Europe.”
Seriously, if gigantic red flags are not bursting wildly in your head, then perhaps you’re suffering from the same degenerative memory-eating microbe as Romney.
Hello, Mitt…in what silver-spooned luxury resort spa were you bunkered during the fall-out from the great American-engineered subprime mortgage crisis? You don’t remember it? It went something like this---the US at its epicenter.
- American dream legislation ups low-income home ownership
- Housing speculation and ballooning housing stock
- US housing bubble bursts
- US interest rates rise; housing prices peak
- Precipitating defaults and foreclosures; furthering drops in home values
- Stock market falters
- Banks freeze; Washington Mutual, Wachovia and Lehman Brothers go bankrupt
- Consumers drained of “paper” wealth; consumer confidence tanks
- Consumers repress spending urge; job blood-letting begins
- Federal Reserve slashes interest rates to zero; injects liquidity into the financial system
- Congress passes assorted rescue packages
- Unemployment rate at 8.5% (BLS); unofficial estimate closer to 15%
- US poverty rate above 16%
- US debt ($15.2T) to GDP ratio is now a 100+%
- Fed balance sheet swell to over $2T total assets
And here we are in 2012…government deeper in debt; consumers deleveraged of assets and jobs!
The good news: were not alone! By 2007 the tentacles of the American-born crisis had reached deep into the heart of Scandinavian country. Iceland went bankrupt. International investors lost billions on their holdings of subprime mortgage derivatives. Foreign stock markets flagged. Credit tightened worldwide. Trade slowed, driving growth rates south. European governments pumped the stimulus lever. And European central banks coordinated effort with the US to stem the global contraction.
Does any of this sound familiar, Mitt? I appreciate history is not everyone’s strong suit.
But the mark of a true 21st century statesman is the ability to see the world as it is…in its full 360 degree panorama mode where local disturbances propagated outward, generating impacts at regional and global scales. Global connectivity through our markets (financial, product, currency) has woven the livelihood of our communities together. Our well-being is highly contingent upon those over whom we have neither authority nor control.
Europe is not your neighbor’s pregnant daughter…and she certainly did not get into this trouble on her own!
Kay Strong, Ph.D., Southern Illinois University, M.T., University of Houston, M.A., Ohio University; Associate Professor at Baldwin-Wallace College; Areas of expertise: international economics, contemporary social-economic issues, complexity and futures-based perspectives in economics. E-mail: email@example.com