John Maynard Keynes and Harry Dexter White built the IMF to handle situations like this...
Now on Broadway! Waiting for Euro: Last week Mr Obama told a gathering of donors that he spends “an awful lot of time making transatlantic phone calls.” It is time understandably spent. The Republicans could nominate a loose cannon for the White House and leopards could lie down with baby goats in the Middle East. But if Europe fails to stave off a collapse, Mr Obama’s re-election prospects would be downgraded to junk….
The US model no longer looks exceptional. Last week’s welcome fall in the US jobless rate – from 9 per cent to 8.6 per cent – illustrates why. On the surface, it looked like a big drop in unemployment. But more than half the fall was due to the number of people dropping out of the labour market, which exceeded the number of new jobs created.
US employment as a proportion of the population now stands at 58.5 per cent – the same level as in Europe. In the 1990s, America stood out as having both the highest proportion of employed workers and the most dynamic jobs turnover rate. Nowadays it is average….
[D]awning recognition of America’s inability to stop a faraway event with the potential to plunge the country back into recession may help explain why Newt Gingrich is surging in the Republican polls. The first response to loss is denial. Next comes anger. The Tea Party, whose enthusiasm has assisted the former Speaker’s surge, is nothing if not angry….
[W]e have no idea what is going to happen. The flawed Mr Gingrich could yet emerge with the nomination – it is hard not to believe Mr Obama would be happy with that. The US economy could keep adding jobs at a modest rate. Ditto. And Ms Merkel could empower the ECB to act more like the Fed. Or vice versa…