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Americans need to heed Europe

American stock exchanges have plummeted due to economic uncertainty in Europe, although a new poll shows many Americans don't see Europe's problems as a big threat to the US economy.
American stock exchanges have plummeted due to economic uncertainty in Europe, although a new poll shows many Americans don't see Europe's problems as a big threat to the US economy.
Mario Tama/Getty Images

As a fair-sized chunk of the world descends on Chicago this weekend for the NATO summit, a lot of Americans aren’t much interested in news from beyond our borders— even when that news might come back to bite them in the wallet.

A new poll from the Pew Research Center illustrates the point nicely. According to the survey, the economy is the story Americans pay closest attention to— 40% claim to follow domestic economic news carefully.

Yet only 17% consider news about the economies of Europe to be worthy of similar scrutiny, and economic woes across the Atlantic rank 4th when the poll asked about major threats to the US economy:

  • Size of national debt: 76%
  • Economic competition from China: 59%
  • Power of banks/financial institutions: 56%
  • Economic problems in Europe: 46%
  • Government regulation of business: 44%

People who know about money, though, seem to be very focused on Europe these days.

As this is being written, CNN’s Money web page describes another bad day on Wall Street: “Investors fled stocks and made a rush toward the safety of U.S. Treasuries Thursday, sending 10-year yield to a record low close, as worries about Greece's future in the eurozone continued to escalate.”

Thursday morning’s Washington Post quoted “Fed officials” as saying “Europe’s financial problems pose a significant threat to the economy — and that was before the latest concerns about political and financial disarray in Greece.”

In the 11 days since Greek and French voters threw new uncertainty into Europe’s recovery efforts, the Dow Jones Industrial Average has lost about 600 points (about 5%), after an April in which the Dow had risen nearly 3%.

Europe’s plight may be a much greater threat to US economic recovery than the primary focus of American news consumers— the deficit that’s ballooned over the last few years. The Chairman of the Federal Reserve and many other economists seem more worried about overzealous deficit remedy than about the deficit itself.

Drastic deficit-closing measures— tax increases and spending cuts— are scheduled to take effect January 1st, unless Congress can compromise. Chairman Ben Bernanke has called those measures a “financial cliff” over which the economy can’t afford to hurtle.

The deficit and debt numbers have boomed in the last decade. Bush-era tax cuts and warfare contributed mightily toward gushing red ink. But vast deficit growth during the recession has been an effective Republican rallying cry against Obama economic policies. Electoral politics has elevated deficit reduction to Holy Grail status among many Americans.

That’s one reason European economics gets such short shrift from US news watchers. Americans also have a long, rich history of ignoring events beyond our borders, often at our peril, with Chicago occupying a prized place in American isolationism.

The Tribune’s Phil Rosenthal recently unearthed some terrific, over-the-top bombast about NATO from his paper and the man who led it, back in the day. Trib editorials published in 1949 howled that joining the fledgling alliance would “wreck America and permit Stalin and the Communists to take over here”, calling the launching of NATO “the final sellout of the United States as an independent nation.”

Rosenthal also found Col. McCormick quoted, from an appearance on radio: "The European countries have nothing in common, excepting the Roman occupation and the crusades. They have nothing at all in common with the United States."

The statement is, of course, laughable in hindsight. Failing to recognize the ties that bind this country and Europe is folly, and America's attention deficit may wind up being at least as big a problem as America's budget deficit.

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