Ezra Klein argues that neither presidents nor congress, no matter which party, will be able to do much to influence the economy. What will either pull us down further or bring improvement is what happens in Europe. And so, if the state of the economy is what determines who gets elected president, our elections are in the hands of Angela Merkel:
Sometimes, the things driving the country’s economy are not passed by Congress. Sometimes, Congress has almost no influence over them. And this is one of those times.
Europe has reached a tipping point. Without a systemic solution — and fast — Greece will default. If Greece falls, chances are that Ireland and Portugal will follow. Desmond Lachman, a fellow at the American Enterprise Institute, compares it to Bear Stearns collapsing and dragging Lehman down with it.
If that happens, we’re going down, too. The European Union is a big economy. Bigger than ours, in fact. In 2010, the United States exported $240 billion worth of products to the European Union, and imported $320 billion. And our other major trading partners — Canada, Mexico, China, etc. — are similarly interlinked with the European economy. So just as a financial crisis that began in the United States was capable of creating an economic crisis around the world, a debt crisis that begins in the European Union has plenty of channels through which it can shatter a fragile global economy. . . .
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