In response to my post from yesterday, our friends over at the sans-green Daily Dish send along this Times piece by Anatole Kaletsky. In it, Kaletsky argues that the future of the American economy - and thus, American leadership around the world - rests on the results of yesterday's health care summit in Washington:
If nothing is done to change the US healthcare system, it can be stated with mathematical certainty that the US Government and many leading US companies will be driven into bankruptcy, a fate that befell General Motors and Chrysler largely because of their inability to meet retired workersâ?? contractually guaranteed medical costs.Todayâ??s summit represents Mr Obamaâ??s last chance to find a way forward, either by shaming some Republicans into supporting him or by embarrassing his own perennially divided Democratic Party into uniting around a single plan. If he is unable to do this, he will have almost no chance of passing any significant legislation on any other issueâ??â?? not on energy, budgetary responsibility, macroeconomic management or even on such seemingly popular issues as bank regulation and jobs.
In short, Mr Obama has staked his entire presidency on todayâ??s summit.
I don't know that this passes political or economic muster. I am no economist, so all I'll add here is that, to my knowledge, the largest economy in continental Europe, Germany, has been dealing with an aging and entitled work force for years. While economic discontent at home can of course impact all forms of policy - including foreign - I don't know that it has had any effect at all on Germany's role in Europe and around the world, respectively. On the contrary, Angela Merkel seems to have become more globally assertive in the face of Western financial crisis.
As for the politics, I believe the general consensus is that yesterday's summit moved no one and only further entrenched actors and voters in their respective camps.
Kaletsky goes on:
Gridlock over healthcare would imply similar stalemates on taxes, public spending, the budget, macroeconomic stimulus and financial reform. As a result, an active response to any future financial crisis might become impossible. Even worse, any important action to control US government borrowing could be ruled out. If the financial markets seriously reached this conclusion, all the debates about government debt and public spending in Britain, Greece and other countries would be a waste of breath. A genuine loss of confidence in Americaâ??s fiscal outlook would create a financial crisis so horrific that actions by the British or European governments would be swept away like beach huts in a tsunami.
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Did the United States not fight and win a world war in the face of economic depression and peril? Did economic ebb and flow affect the way in which the world perceived American leadership during the Cold War, or during the current War on Terrorism? Perhaps it did, which is why I open the floor up here to trade and economy wonks to fill in the gaps.
But I remain incredulous.
