ALEC MACGILLIS MAY 4, 2012
I first saw Mitt Romney playing the dread Europe card on the campaign trail in Iowa. “I think President Obama wants to make us a European-style welfare state,” went the standard refrain. “What I know is that, if they do that, they’ll substitute envy for ambition. And they’ll poison the very spirit of America and keep us from being one nation under God.” At another stop, Romney warned that Obama’s policies were already “making us more and more like Europe. I don’t think Europe is working in Europe. I don’t want Europe here.” More recently, appearing in Charlotte, North Carolina, Romney quipped that, at this year’s Democratic convention, “You’re not going to see President Obama standing alongside Greek columns. He’s not going to want to remind anyone of Greece, because he’s put us on a road to become more like Greece.”
It’s an obvious attack: How better to undermine Obama’s attempt to tip the scales away from unchecked capitalism than to point to social democracies under fiscal duress across the pond? Never mind that the connection is highly dubious—that Europe’s debt troubles are rooted primarily in an ill-designed monetary union and the collapse of a real estate and credit bubble that originated in this country; or that the European social welfare state takes many forms, from the profligate Greek model, where too few pay taxes and too many retire young, to the reformed German model, where universal health care, stellar public transit, and widespread collective bargaining are not at all incompatible with a thriving economy. No, such complicating factors will not keep Romney from using Europe to denounce Obama. “On one level, it could work,” Jared Bernstein, Vice President Biden’s former economic adviser, told me. “On another level, it’s substantively quite wrong.”
Yet American liberals have done little to counter Romney’s attack on European-style social democracy. Instead, they’ve been busy taking their own shots at Europe for its austerity-minded approach to resolving the monetary crisis, which Democrats believe is not only hurting Europe but imperiling Obama’s reelection. Leading the way is Paul Krugman, who has dubbed the austerity medicine “economic suicide” and “a stunning failure of policy.” Chiming in recently was Larry Summers, Obama’s former chief economic adviser, who lamented that Europe had “misdiagnosed its problems and set the wrong strategic course.” Although Krugman and Summers are correct to point out the hazards of slashing budgets during a recession, this makes for a convoluted and incomplete debate: While Republicans attack Democrats by blaming European troubles on the region’s age-old social-welfare tradition, liberals are blaming those same troubles on the European leadership’s more recent embrace of austerity policies not dissimilar to those being pushed by Romney and Paul Ryan.
Complicating matters further is that Germany has weathered the recession relatively well, with its unemployment rate never rising above 8 percent. This success was not the result of doctrinaire austerity, as American conservatives like to claim—often overlooked is the extent to which the country pursued its own form of Keynesianism, at odds with its demands for its neighbors. When the recession hit, Germany’s automatic safety net kicked in, not least its program of kurzarbeit, wherein the government subsidizes private employers to keep workers on the job, at reduced hours but only slightly reduced pay, thereby keeping people earning paychecks until things pick back up. (In late 2009, I asked Summers, then still at the White House, why the administration had not invested in kurzarbeit—called “work-share” in the handful of U.S. states that have limited programs of this type—and was told: “It may be desirable to have a given amount of work shared among more people. But that’s not as desirable as expanding the total amount of work.” This past February, Congress finally tweaked unemployment insurance rules to facilitate work-share—three years after it could have been of use.)
And so, we are left with Republicans attacking Europe, with Democrats decrying German austerity—and with nobody, really, speaking up for the underlying social-democratic model that has delivered broadly shared prosperity to Europe for six decades. For American liberals, this is not a good situation. At some point in the months ahead, a forceful case will need to be made that this country’s attempt to expand health insurance to most of the people who lack it—by relying on the private sector, no less—will not lead to Greek-style despair and that, in fact, we could stand to learn quite a bit from Germany, even as it remains tiresomely obstinate about austerity for its southern neighbors. Obama’s reelection prospects, after all, are threatened not only by fallout from Germany’s handling of the euro crisis, but also by Republican attacks on a European model that remains arguably the most humane iteration of democratic capitalism the world has yet known. It is in both the short-term and long-term interest of American liberals to confront those attacks head on.
Alec MacGillis is a senior editor at The New Republic. This article appeared in the May 24, 2012 issue of the magazine.