September 28, 2008

The view from Europe

Posted by: Andoni

I’ve been on a Greek island (Santorini) for almost 2 weeks now and have not been keeping up with the day to day news in America. All I have to go on is what I hear here in Europe. So I thought I’d convey to you what they’re saying in the Greek tavernas about us.

First there was quite a bit of gloating over the fact that America, the country that has spent the past 50+ years telling every other country how to run their financial affairs, appears now to be in deep financial doo-doo itself.

However, after a few days of glee, most people realized that all our financial futures are intricately tied together, so then the talk got much more serious.

The locals' first question for me was, "Why is Bush still in power?" They thought that the elections of 2006 were a referendum on his government and he lost. How did he survive that? Now that there is a clear financial catastrophe tied to Bush’s government, and they are even more adamant is asking why his government hasn’t fallen. They are used a parliamentary system where the elections of 2006 would have changed governments --- and if that didn’t quite do it, the current financial crisis would have triggered a no confidence vote, with a new government taking over within days.

I tried to explain that our head of government and his team stay in power for 4 years no matter what (well almost no matter what – think Nixon), but they don’t get it.

Putting aside their fuzziness on how our government works, they are now worried that we may not make it out of our mess. They seem to have a different (and maybe more insightful) understanding our financial situation than we do. They explained to me that we have three, not one, trillion dollar time bombs about to explode our economy.

The first is the cost of the Iraq War, which they assure me will cost a trillion dollars by the time we are out of there. They claim this is unpaid for, off budget, and we will have to pay it back. I can’t argue against them because I honestly don’t know how much of the Iraq War we have paid for and how much of it is borrowed, and not paid for yet. But I am impressed that the ordinary person here seems to know this (or think they know this) better than the average guy in the street in our country.

The second trillion dollar time bomb is the amount of money that it is going to take to re-arm and rebuild our military. They seem to know we are stretched way to thin and that our personnel and equipment have been severely depleted. We will have to rebuild and that will cost big bucks. When I ask them how they know this they say they know because the US is actively strong-arming European nations to send money and troops to both Afghanistan and Iraq because the US doesn’t have the resources to send more.

Finally, now there is the near trillion dollar bailout for the current financial mess.

The Europeans know that 3 trillion dollars is one hell of a lot of debt to incur in such a short time. It would sink most nations and they are not so sure that even the US can dig itself out of such a deep hole without permanent harm.

I don’t know exactly what the US press is reporting, but the Europeans see how deep in doo-doo we really are and are worrying for us now, and for themselves because they now realize that we are all tied together and they can go down with our ship too.

Finally, they get around to asking me how is it that America elected this guy in the first place and why is it again that he still is in office?