India Seems Impressed, How About Everyone Else?
Almost a week later—and at least a world away—it looks as if things are turning slightly sunnier for Team Obama. The President’s brief hiatus in India seems to be treating him kindly, even if the midterms didn’t. This is, as has been incessantly mentioned, the most time Obama has spent in a foreign country since assuming his place on Pennsylvania Avenue. And his stock, at least in the sub-continent, appears to be on the rise:
“The luster may have worn off for President Barack Obama at home, but the president found an adoring audience abroad.
Obama danced to a Marathi folk song with schoolchildren at a Diwali celebration, shook the small hands of underprivileged kids and took questions from college students. He also announced policy initiatives that deepened economic ties between the two countries and threw his support behind India’s bid to become a permanent member of the U.N. Security Council, an important goal of Indian Prime Minister Manmohan Singh.
But when Obama rolled up his sleeves and let loose a bit, he ultimately won over the world’s largest democracy.
‘Like so many before, we learned that you don’t simply visit India, you experience India,’ Obama said at a state dinner at the Presidential Palace in New Delhi on Monday night.”
That the President is making positive political headway in the planet’s largest democracy is clear. At the same time, however, it looks as if Obama’s hand might be stretched in dealing with the world’s most substantial economies:
“Like Republicans at home, German Chancellor Angela Merkel’s government is asking whether U.S. policies on spending and economic stimulus have robbed the president of the authority to lead – in this case, in the effort to recharge the world economy.
At issue is a U.S.-led proposal to prohibit currency manipulation of the kind that U.S. officials say China uses to give its exports an unfair advantage over U.S. made products.
Doesn’t it ‘look hypocritical,’ Obama was asked at the news conference, to make that demand after the United States last week announced a $600 billion plan to boost U.S. economic growth that will have the effect of driving down the value of the dollar?”
Obviously, the “United States” doesn’t “announce” anything. The plan in question is a FED initiative, and, thus, technically falls outside the purview of not only presidential power, but the bounds of the nation’s political apparatus writ large. The question, then, becomes one of whether or not these demarcations get lost in the shuffle of international relations? The answer, at least in this case, looks to be a simple “yes.”
In the wake of the Great Recession, the Treasury Secretary and Chairman of the FED work together closely. This much ought to be evident to any interested onlooker, and, needless to say, makes distinctions between America’s political powers and its economic authorities muddled and generally less applicable. As a result, “America” is being lumped into a single monolith—as, perhaps, it should be—and attracting criticism accordingly:
“‘The American growth model … is stuck in a deep crisis,’ said German Finance Minister Wolfgang Schauble in a magazine interview over the weekend. ‘It doesn’t add up when Americans accuse the Chinese of currency manipulation then, with the help of their central bank’s printing presses, artificially lower the value of the dollar.’”
Whether or not things actually “add up,” though, is wholly context dependant.
For overtly political reasons, Obama has no choice other than to take on America’s economic predicament. This, however, is a task of the trickiest type. The nation is presently met with a dueling set of deficits—one dealing with the budget and the other concerning unemployment. To make in-roads on the latter, it seems that spending might be in order. Increased spending, though, is an imperfect solution for the simple reason that it necessitates higher levels of government debt. So while ‘stimulus-ing’ might save and create jobs, it simultaneously works contrary to any efforts towards budgetary salvation. At the same time, were Obama to be strictly interested in working on debt reduction, his hand would be forced with regards to any federal expenditures for reasons of attempted job growth. Clearly, the POTUS has a bit of a bind on his hands.
The only real political solution, as it turns out, is to operate outside of the proverbial box—and that’s precisely what’s being done. Pressuring China to tweak its currency valuation could, it seems, have positive practical ramifications for the United States’ economy. Similarly, it holds potentially positive political ramifications for the Obama administration. By focusing on international monetary issues, the President has the capacity to look tough on macro-level fiscal troubles, without having to compromise—or appear hypocritical vis-à-vis—ambitions of micro-level job creation.
The problem, of course, is that before long hiding one’s expanding waistline becomes difficult when the cake is not only there to be had, but to be eaten too. And, as of the past few days, it appears as if the administration’s political belt is fitting a bit more snuggly than it might appreciate.