Obama Lecturing On Euro Finance? Give Me a Break

Say what you will about George Soros, at least he has enough expertise as a slimy financier to put forth a solution to the Euro Zone crisis.

In what has to be the most vaguely pathetic advice column of the year, President Barack Obama has offered recommendations on what global leaders must do to stop the Euro crisis from spreading to America.  You know you are in trouble when a man who has never held a productive job in his career (children are capable of community organizing)   is lecturing on finance.

Even more ironic is how the political leader taking us down the pathway of Greece is now issuing a warning on fiscal calamities.  Does the President know no bounds? (Don't answer that).  From the Financial Times:

When leaders of the largest economies meet next week in France, our citizens will be watching for the same sense of common purpose that allowed us to rescue the global economy two years ago from a financial crisis that was sparked by years of irresponsibility.

Yes Mr. President, after George Bush ruined the world, you presided over the continued bailing out your campaign donators.  We have heard this narrative before and it makes no sense no matter how many times you repeat it.  The crisis occurred in late 2008, more than two years ago, and all you did during that period was win an election with empty phrases, a coal powered teleprompter, and a Hollywood smile.  Fed Chairman Bernanke and the New York Fed did most of the leg work to prop up the banks; that which certainly shouldn't be deemed a "rescue."  Heroine junkies aren't cured with another fiat injection of dopamine. 

Thank goodness another European vacation for world leaders funded by taxpayers is occurring.  Since all the world's problems seemingly melt away at G20 meetings, I expect gum drops to rain from the sky and free puppies for everyone at the close of the latest charade.

Because of the co-ordinated action the Group of 20 took then, the global economy began to grow again. Emerging economies rebounded. In the US, we've had 19 straight months of private sector job growth and added more than 2.5m private sector jobs.

Correction: Because of massive government intervention in response to fiscal disasters caused by previous government intervention, the U.S. ONLY added 2.5 million private sector jobs.  Had there been no stimulus and passage of such atrocities as Obamacare, private job growth would have been much more robust.

First, as the world's largest economy, the US will continue to lead. The single most effective thing we can do to get the global economy growing faster is to get the US economy growing faster. That's why my highest priority is putting Americans back to work. It's why I've proposed the American Jobs Act, which independent economists have said would create nearly 2m jobs, boost demand and increase US economic growth.

What Obama is really saying is that in order for the U.S. economy to lead the world, he needs to be reelected.  The best way to do this is the passage of a short sighted jobs plan that will slightly bring down the unemployment rate till after November 2012.  The American Jobs Act is essentially a bail out of his own floundering presidency.

At the same time, we're building on the nearly $1,000bn in spending cuts agreed this summer. I've put forward a comprehensive and balanced plan to substantially reduce our deficit over the next few years in a way that does not hamper the current recovery and that lays the foundation for future growth.

If you believe this proposal for one second, put on the "dunce" hat and proceed to the nearest corner. 

Second, the crisis in Europe must be resolved as quickly as possible. This week, our European allies made important progress on a strategy to restore confidence in European financial markets, laying a critical foundation on which to build.

Since European leaders put a gun to the head of Greece bondholders and forced a 50% haircut and the European Financial Stability (bailout) Fund was increased to 1 trillion euros, world markets have calmed down.  The haircuts were hilariously labeled "voluntary" when nothing government imposes is ever voluntary.  Greece bond losses will end up being more than 50% and the doubling of the EFSF won't be enough to shore up a crisis with French banks, but the can has been kicked for the time being.  Time to celebrate.     

Given the scope of the challenge and the threat to the global economy, it is important for all of us that this strategy be implemented successfully - including building a credible firewall that prevents the crisis from spreading, strengthening European banks, charting a sustainable path for Greece and tackling the structural issues at the heart of the current crisis.

If the crisis hits the U.S., which it inevitably will, banks here may see significant losses.  This means less money for Obama's reelection campaign and less government funding outside Federal Reserve monetization.  With his lackluster handling of the economy, all the President has left is buying votes.

Third, each nation must do its part to ensure that global growth is balanced and sustainable so we avoid slipping into old imbalances. For some countries, this means confronting their own fiscal challenges. For countries with large surpluses, it means taking additional steps to support growth. For export-oriented economies, it means working to boost domestic demand. A critical tool for accelerating that shift is greater flexibility in exchange rates, including exchange rates that are market-driven.

Obama is referring to China but not by name.  Since trade imbalances are the natural consequence of trading in general and the dollars lost find their way back to the U.S. in the form of other purchases, what the President really means is that China should drop its currency peg so Bernanke's printing press can work its magic.  China has been leading the world's currency race to the bottom long enough; it's now time for the U.S. to have its turn at the front of the pack.  Little does the President realize that China's enormous property bubble, fueled by its artificially low currency peg and cheap credit, is now in the midst of popping.

Finally, the G20 nations must deepen co-operation on the range of global challenges that affect our shared prosperity. We need to move ahead with our commitment to phase out subsidies for fossil fuels and transition to 21st-century clean-energy economies.

Yes, because crony capitalism for green energy always turns out well.

When we met in London two years ago, we knew that putting the global economy on the path to recovery would be neither easy nor quick. But together, we forged a response that pulled the global economy back from the brink of catastrophe. That's the leadership we've demonstrated before. That's the leadership we need now - to sustain economic recovery and put people back to work, in our own countries and around the world. 

The world economy was "saved" by bailouts and liquidity injections from central banks around the world.  Structural problems weren't actually fixed but politicians love taking credit for miracles.  This opinion article penned by the President, but most likely written by a White House intern, is no different.  Expect empty pronouncement of "coordinated action" and fantasy solutions from the next G20 meeting.  In other words, expect nothing and you won't be disappointed.