Jack Lew is taking his message all across Europe: Your economies are on the brink of recession while the U.S. is growing because you haven’t governed like our administration.
“I think we’re at a moment when the U.S. economy is doing much better than other economies,” the Treasury secretary said Friday in an interview on CNBC from Davos, Switzerland.
Lew is in Davos to meet with top economic policymakers and business executives from other countries at the World Economic Forum’s annual gathering.
His trip will bring him across the continent in the days ahead, including to Paris for a meeting with France’s finance minister on Sunday and to Brussels to meet with European Commission officials on Monday. Then he will travel to Poland and Ukraine.
He has begun his trip by comparing Europe’s economic management unfavorably to that of the U.S.
“What we did in the United States was very important to move our economy forward. We took decisive action on fiscal policy, our Fed took decisive action on monetary policy, we reformed our financial system, and now here we are, and things are — we’re doing better,” Lew said Friday.
“There’re a lot of countries and a lot of regions where there has not been decisive action,” he added. “All of the levers need to be used. You need to use fiscal policy, you need to use monetary policy, and you need to do reforms, and a lot of countries, that’s the hardest part.”
Boasting about America’s relatively strong recovery has become a running theme for the Obama White House since late last year. Economic growth has picked up and job gains have accelerated at the same time that other advanced economies, especially the European Union and Japan, have headed toward deflation and recession.
“Since 2010, America has put more people back to work than Europe, Japan and all advanced economies combined,” Obama said in his State of the Union Address Tuesday night.
Of the Group of Seven advanced economies, only Canada and the United Kingdom have enjoyed recoveries even close to America’s. Canada has added 1.1 million jobs, and the U.K. 1.4 million, since 2010. The recovery from the 2008 financial crisis has been the slowest in the U.S. since the Great Depression.
Nevertheless, the U.S. economy’s weak recovery has been enough for the Obama administration to tout its own relative success.
“As I travel to other countries advocating for American workers and businesses, my counterparts often remark at how much better the United States has recovered, and they try to learn from the steps we have taken to turn around the U.S. economy,” Lew said Wednesday at a public appearance in Washington. “It is important to remember that this recovery is not an accident but rather the result of the determination of the American people, the resilience of our businesses, and policy choices made by President Obama, the prior administration, Congress and the Federal Reserve,” Lew said, giving rare credit to George W. Bush and the independent central bank.
The Fed, for its part, is moving toward easing away from stimulus and raising interest rates later this year, a function of the economy’s improvement. Meanwhile, the European Central Bank this week started a monthly 60 billion-euro quantitative easing program similar to the one that the Fed wrapped up in the fall to try to jumpstart its economy. It did so amid projections that it faced the possibility of falling into deflation and a triple-dip recession. The ECB also has moved to implement bank regulations intended to strengthen Europe’s still-damaged financial sector.
This week, the International Monetary Fund cut the growth forecast for the eurozone to 1.2 percent for 2015 and for Japan to 0.6 percent. Meanwhile, it raised its estimate for U.S. growth to 3.6 percent.
Obama economic adviser Jason Furman explained the IMF’s projections as the result of the Obama administration’s management of the economy. “We have the successful economic strategy,” he said.
