In case you hadn’t noticed, the European Union is teetering on the brink of another recession and may even break up in the next few years. So? Well, in the short run a big European recession could to drag us down, too, either just by weakening world demand or through banking sector contagion as in 2007-08. In the longer run, a collapse of a united Europe would be an earthshaking event for U.S. interests and our hopes of resolving big world problems (climate, financial reform, even the Middle East). Europeans are battling fiercely (sometimes in the streets) over what to do next.
So are we. Typically, both left and right in America are drawing opposite lessons from the EU’s troubles. Conservatives applaud their austerity and budget slashing, and demand we do the same before we end up “another Greece.” Liberals have a hard time defending Greece, but we think the clear lesson of the last 25 years is that you can’t cut slash and burn your way out of one of these crises, and that the global financial system itself lies at the root of the problem.
I’m a little late starting this week. But, on Monday I’ll do a 10-15 minute opening that explains the basics of the crisis, with a focus on disagreements over how the EU responded. Then, I’ll quickly list some of the possible Big Lessons for us as we try to reduce our high debt levels without sinking our own weak economy.
Topics Reminder – I need two volunteers to help me select topics for Jan-April 2013. Let me know if you want to do it.
DISCUSSION QUESTIONS –
- What is the EU financial crisis all about? What caused it?
- What did the Europeans do to try to solve the crisis? Have their policies been consistent? Why are they so controversial?
- How is our situation similar to and different from Greece/Spain/Italy, et. al.?
- What are the lessons we should be learning from all this? What should American liberals and conservatives be learning?
Crisis Background –
- Wiki summary, history of crisis.
- Detailed timeline of the crisis.
- Krugman on causes.
- A funky, illustrated guide to causes of the crisis.
Lessons for the U.S. – .
- Five ways the crisis could affect us. Recommended.
- Five myths of the crisis (one is that it doesn’t affect us).
- Austerity has failed and is the problem. Also: Krugman: European austerity is madness. Recommended.
- A more conservative view. Recommended. [update: Changed to a better link.]