America Will Soon Need to Take Advice it Offers Europe
Posted by Stephen Cook
By Richard Blackden, New York, The Telegraph, UK – June 14, 2012
It should not have been a surprise that US Treasury Secretary Timothy Geithner veered between fits of laughter and a tone of chilling gravity when he spoke to the Council on Foreign Relations in Washington this week.
The only member of President Barack Obama’s original economic team still in office, Geithner must surely have a full-blown case of crisis fatigue. When he became the 75th Treasury Secretary in early 2009, the epicenter of the crisis was on Wall Street and rippling out with devastating effect across the rest of America.
As he embarks on his final five months – Geithner has said he is quitting even if Obama wins another four years in the White House – the darkest clouds are coming from across the Atlantic.
Although Europe is not causing the sharp gyrations in US stock markets that it did in the late summer and early autumn, there is
evidence that it is again eroding the confidence of American businesses and consumers. Retail sales fell for a second month in May, in a worrying sign that consumers are themselves starting to respond to indications that the economy is losing momentum.
Forecasters have already scaled back hopes for US exports because of Europe’s woes. Economists at Morgan Stanley, for example, predict exports will climb just 3pc this quarter compared with an original expectation of 8pc.
Geithner told his audience that European governments are constantly turning to policymakers in the US for ideas and suggestions on how to extinguish the immediate financial fires on the Continent while at the same time moving the 17 countries in the Eurozone towards closer political and economic union…