One of the many reasons that we were told to put then-Sen. Barack Obama in the White House was that he would restore America’s standing in the world. After eight years of President George W. Bush’s go-it-alone cowboy act, the world would once again look to the United States as a beacon of freedom with Obama leading the way.
Of course, Obama has done nothing but ramp up the Bush terror policies alleged to be the source of global isolation. Obama’s liberal supporters can make of that what they will. But interestingly enough, Obama has found an all-new way to alienate the world.
As the recent G-20 summit in Toronto is making painfully clear, the U.S. is urging fiscal stimulus — more government spending — where leaders of most of the rest of the world are urging responsibility — less government spending.
“In the run-up to the summit, a clear plurality of G-20 countries has come up on the side of fiscal consolidation and not stimulus spending,” Dan Price, a senior partner at Sidley Austin and former Bush adviser for G-20 summits, told the Hill.
British Chancellor of the Exchequer George Osborne made his country’s position clear: “A credible plan to cut our budget deficit goes hand in hand with a steady and sustained recovery.”
The summit’s host, Canadian Prime Minister Stephen Harper, urges all G-20 members to cut their budget deficits in half. Japan has major deficit reduction plans in the offing, and the French government is taking on the country’s famously intractable unionists by raising the retirement age in an attempt to lower the deficit.
But Obama, vaunted internationalist, rejects this consensus among western governments that spending has gotten out of control. It’s gotten to the point that Der Spiegel notes the U.S. and Germany have an ongoing “Trans-Atlantic tiff” and are “trading barbs about whether the best strategy is to save or spend.”
Just before the summit, Obama dashed off a pleading letter to G-20 leaders. “To support the recovery and strengthen the ability of our financial systems to deliver needed credit, we must maintain the momentum of financial repair,” he wrote. That’s Keynesian economic gobbledygook for “more spending, please.”
The German retort is much more blunt. “Governments should not become addicted to borrowing as a quick fix to stimulate demand. Deficit spending cannot become a permanent state of affairs,” wrote German Finance Minister Wolfgang Schauble in the Financial Times.
European Central Bank President Jean-Claude Trichet is also siding with the Germans. “The idea that austerity measures could trigger stagnation is incorrect,” he said in the Guardian.
Recent domestic events suggest that the Germans have a point when they worry about the limits of fiscal stimulus to jump-start markets. After the $8,000 hombuyers’ tax credit was allowed to expire in April, the annualized rate of new-home sales fell to a 46-year low in May.
Now people are pointing to a weak U.S. housing market and warning of a “double dip” recession. Rather than acting as a stimulus, the tax credit appears to have been borrowing against future sales. The same pattern was seen in the auto industry with the infamous Cash for Clunkers sales subsidy program.
As for jobs, the National Association For Business Economics survey in late April found that 73 percent of business economists said the $862 billion stimulus bill had no effect on hiring at their company — and persistently high unemployment suggests they’re not hiring.
After exhibiting a near total unwillingness to make economic sacrifices, Obama is still demanding the world follow our reckless fiscal example. If you thought Bush was arrogant, how’s that for change you can believe in?
Mark Hemingway is a editorial page staff writer for The Washington Examiner. He can be reached at [email protected].
