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Why should Americans care what happens in Europe?
There's a good reason to care about what's happening in Europe. I mean a practical reason, beyond humanitarian concern for poor and middle class people having utterly pointless suffering inflicted on them by the austerians who control most European governments and seem unable to learn economics from either a textbook or from the effects of their policies. The economy of the European Union is big enough to drag down ours when it's caught in a recession as it is now, and in some countries it's an out and out depression (by "depression" I mean unemployment over 20%, nothing getting better even if it doesn't get worse). In fact, I fully expect European austerity is as much a drag on our economy as the austerity practiced by our state and local governments.
So if we want our economy to improve faster, we need the the Europeans to suddenly become keynesians.
Politically, the sad irony is that the economically destructive effects of conservative policies is damaging to the Democrats who pushed for economic stimulus policies, especially President Obama. The economy is still struggling, and Obama is the incumbent, so end of story for many voters. It's why some people who agree with Mitt Romney on nothing and think he's an empty jacket will still vote for him, just as they voted for crazy people in 2010 just because they weren't Democrats.
I take some comfort from recent electoral results in Europe. There's clearly a groundswell of opposition to austerity policies, though don't assume Europeans can explain those policies any better than Americans. Don't assume they can explain "austerity" or "stimulus" or "keynsian" any more than any American. People know the policies being pursued are called "austerity", and that these policies aren't working. They're turning against the incumbents because what they're doing isn't working, not because they're conservative. That's normal electoral behavior. Conservatives just got elected in Spain because the liberal party was in charge as the economy collapsed. They weren't in charge when Spain built a housing bubble, but they were in charge when it popped, so that's that. The Irish replaced a long-dominant conservative party with an even more conservative party, doing more of the wrong things, because they were a different party. Still austerians though.
So we care because we're human beings who can sympathize with Greek or Irish pensioners living on little to solve a problem they didn't cause, but also for our own economy and, let's face it, because it would be insult to injury if conservatives get full control of the US government because conservative policies failed.
Why won't they learn? Partly it's the same denialism rampant among modern conservatives. If they deny what's ideologically or theologically inconvenient about physical sciences and history, might as well deny economics too. That's only part of it though. Listen to arguments for austerity, and we hear a moral argument: debt is a sign of sin, and must be punished. The punishment isn't visited upon the wealthy elite that caused the problem and prescribe the solution, but upon people conservatives despise anyway, like public school teachers, pensioners, and government workers. Look past the hypocrisy and callousness though, and that's what we see: debt and deficits as moral issues, not economic issues, and that's why they must be reduced even if doing so causes greater harm.
Yes I know, they keep pushing for tax cuts that make deficits worse, but that seems to be mostly an American phenomenon. European conservatives haven't bought in to taxophobia yet, and have had anti-stimulative tax hikes.
What can we do? We have to push back against austerity. Something we learned from Arab Spring and Occupy Wall Street is that protest doesn't stay confined within national borders. No, Angela Merkel isn't taking my calls, but we can help make "austerity" a dirty word. The Republicans showed us how when the made "stimulus", which is merely economic jargon, a political swear word. Maybe we demand to know from the Obama administration why Joseph Stiglitz and Paul Krugman aren't their top economic advisers. Maybe they'd be ignored like Krugman says is already the case, but it would sure send a signal to the EU austerians.
Just to clarify something, this isn't a trend of two, just France and Greece. Britain simultaneously had local elections where the Conservative Party took a drubbing. Merkel's party lost big in a regional election, and the Dutch government just fell over objections to its austerity policies. The prime minister of Italy is talking about growth over austerity. So two years of utter failure and a crisis putting the very existence of the EU into doubt hasn't made conservatives rethink their orthodoxy, but popular protest and the actual loss of power is having its effect.
Now we need to replicate that in the American states. Our state and local governments have to balance their budgets, but there are ways to do that which are more or less harmful to vulnerable people and the overall economy. A renewed stimulus in the form of federal aid to the states, which covered many budget shortfalls in 2009, would be a quick way to juice the economy, if only we can make our own austerians see reason.