Europe to Romney and Obama - "Shut Up!"

Bruce Krasting's picture

Mitt Romney’s Economic advisor, Glenn Hubbard, wrote an OpEd for one of Germany’s leading newspapers ten days ago. I don’t think many Germans read it. Those who did, no doubt saw it for what it was, American electioneering. The article did, however, cause a stir in the US.



Hubbard’s message was that the Germans should reject the move away from austerity. He said that German money should not be used to bailout Greece.

The issue here is not the merits of Hubbard’s arguments. It’s Hubbard’s motivations for writing it, and putting it in a German newspaper. If Germany were to follow Glenn’s advice, it would precipitate a big recession in Europe and the inevitable blowback in the USA. The economic adjustment would happen pretty quickly. It would arrive in time to influence the presidential election.

One can be sure that Hubbard would be blowing a different whistle if Romney was running the show. Hubbard’s comments were ill timed, manipulative and overtly political. The White House agreed.

David Plouffe was on the Sunday talk show circuit over the weekend and he blasted Hubbard’s attempt to manipulate German opinion for political gain.



Obama thought it was a big enough deal to respond:




Obama’s team is playing just as dirty and stupid as the Republicans are. Larry Summers, the beard, unofficial spokesman for Obama, wrote an OpEd for the Washington Post on the eve of the G-20 meeting. He spelled out exactly what he (Obama) would like to see the Europeans do. Not surprisingly. Larry wants a mega bailout and mega-spending plan for Europe. This would be great news for Obama. Getting the European crisis off the front page is key to his getting re-elected.




Mr. Summers went over the cliff with his suggestions. His words on sovereign subordination and the costs of restructuring sovereign debt:

Now is the time for radical cuts in the rates official creditors charge European sovereigns; for a willingness to subordinate official debts

Larry’s proposal on subordination of official creditors is a complete U-Turn on existing policy. It runs counter to long-standing precedent regarding the seniority of official creditors.

The USA lost its seat at the table on the issue of Europe for two reasons:

I) The US took a pass on the $450Bb increase in the IMF’s lending capacity. While one can debate the merits of the US decision to abstain from contributing its share of the IMF capital raise, one can’t ague that the US, having taking a walk, should still have a say in the outcome.



II) If the US did have a role to play, it would be the responsibility of the Treasury Department to orchestrate and facilitate a plan to address the problem. The Treasury Secretary, Timmy Geithner, is a very lame, lame duck. I doubt that any European financial officials even return his calls any longer. Tim is functionally asleep on the job.



It amazes me to see the decline in America’s ability to lead and influence the outcome of global issues. I’m not at all surprised to see the candidates flailing in their attempt to show leadership. I’m also not surprised that beards spokesmen for the candidates are selling a program that suits there own, short-term political agenda.

The Europeans should tell the candidates to shut up. They have no say in the outcome. Their suggestions are self-serving and just plain wrong.



Larry Summers was the Under Secretary for International Affairs for Bill Clinton in 1994 when the US Treasury put together a $50B bailout for Mexico. In that deal the US secured the loans to Mexico with Mexican oil. The deal was so onerous to Mexico that they ended up prepaying the loan to get the US off of their backs.

Summers was actively involved with structuring the Mexican bailout. That he is now advocating subordination of these types of bailout loans is a complete reversal of what he has advocated in the past. I think Larry would say anything if it had a chance of boosting Obama in the polls.

In 1995 Clinton promoted Summers to Deputy Secretary of the Treasury. That was payback for his efforts in the Mexican Bailout. Larry's OpEd last week was his way of getting a foot in the door to become Obama's next Treasury Secretary. The expression, "Professional Blowtard", comes to mind.


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Gavrikon's picture



covert's picture

nothing is quite so popular as stupidity.


Snakeeyes's picture

I sent that to Glenn Hubbard. He laughed.

HoofHearted's picture

This American to Romney and Obama, "Shut up! I'd rather hear Ron Paul speak." (At least he is consistent and makes sense.)

Savyindallas's picture

I want Summers' head on a fence post near the border - I don't care where the rest of his body is. The dogs wouldn't touch it  - maybe the maggotts would.

Republi-Ken's picture

Let me explain what waters edge means Brucie...



Got that?

Overseas paper / foreign audience VS American paper / american audience.

A Difference. Right Brucie?

Benjamin Glutton's picture

apparently picking sides is more important to Bruce than objectivity. perhaps Mr. Hubbard is an old friend.


flame away.

SubjectivObject's picture

My, what a colorful surface you have there. 

What could possibly be under that oily sheen?

curmudgery's picture

who cares the election is a non-event as the banking/planner complex already owns both parties and candidates. doesn't even make good theater.

elwu's picture

"If Germany were to follow Glenn’s advice, it would precipitate a big recession in Europe and the inevitable blowback in the USA"

Don't worry, Germany will follow no 'advice' given by an US politician, economist, bankster and so on. She will decide on her own what is best for her and the fellow european countries.

Blowback in the US? Well, maybe. But then, this would be just, considering that the anglo-saxon perverse finance industry and the US bank Lehman collapse and the US housing bubble collapse brought desaster to the world.

Ah, if Germany were to follow Mr. Obama's and Mr. Geithner's and Mr. Krugman's and Mr. Roubini's (...) advices, it would within short be as bankrupt as the GIPSIFs and the USA.

mjk0259's picture

"It amazes me to see the decline in America’s ability to lead and influence the outcome of global issues"

It amazes me that we still have so much. We tried to drag Europe into Iraq - a trillion dollar disaster that resulted in a worse government than Saddam and no weapons found. We created the financial crisis. We export almost nothing significant except airplanes. We manufacture very little. Our GNP is based on financial engineering, military and a poorly run government. Health care the most expensive with worst outcome. Dragged them into Afghanistan. Let a quarter of Mexico move in. Worst education system. Even our airports, trains and roads look like crap compared to Europe. They make better cars , in Germany anyway. If not for the internet, they would have no reason to notice us.

elwu's picture

"If not for the internet, they would have no reason to notice us."

And even the internet was essentially created by a guy from Switzerland.

But hey, the US brought fake boobs to the world, there are worse things than that.

Like the anglo-saxon perverted capitalist version of a finance industry which socialises losses, and keeps bankrupt banks afloat with taxpayer's money.

Hm, this is also an achievement of the US...

So let's get back to the fake boobs.

Quantum Nucleonics's picture

Eh, the internet was created by DARPA.

Non Passaran's picture

No, it was just a typo - he meant to say that it was invented by guy from *Tennessee*, A.A.G.

TBT or not TBT's picture

HTTP and WWW and HTML were developed at CERN, which was a physics research consortium based in Europe, located in the French bit of Switzerland around geneva.    

DARPA's internet loooong predates those things, but

also the IDEAs of hypertext, hypertext markup language, distributed hypertext located on servers on a global network, etc ALSO LONG predate the standardization around the CERN developed version of those things.   Hell I wrote such a system myself in the summer of 1988.   Not a big deal to create.

New_Meat's picture

"It amazes me to see the decline in America’s ability to lead and influence the outcome of global issues."

No, no, no, you have it all wrong.  Our Dear President and his administration are "leading from behind."

- Ned

{and don't bend over...}

magpie's picture

Alas there is much to say, but i can't want a certain lady putting me on the drone watch list again...

disabledvet's picture

First off what is the solution? (none) second this is such a vast over-simplification what does this have to do with anything really? I mean TS Geithner has been telling Europe "do this, don't do that" for years now...all of which caused him to be excoriated both here and there. Of course he's turned out to be totally right as impolitic as he was I guess. Also the Senate Republicans are the one's saying nein to the IMF for Europe...something I thought this site agreed with en toto. Third the USA has already bailed out a vast swath of European banking in 2008 (no one knew about that until 2010 I believe.) Fourth the EZ is a trading bloc...why would the USA support that directly again? (of course we organized much of the IMF action...certainly by supporting Ms LaGarde as its leader but also by not torpedoing any aid...yes?) I'm sure there's a lot else out there...but hey, why let a bunch of stupid facts get in the way of rants against guys with beards.

MFL8240's picture

Given the money that Romney has made, I would suguest these assholes listen to him.  As for Obama, I think he is an clown so would agree with them on any fincial issues he should shut up.

americanspirit's picture

Larry Summers is just another very smart guy who doesn't understand that very smart guys are a dime a dozen. Brains aren't what matters. Character matters. And that's where almost all these very smart guys in charge are totally deficient.

Savyindallas's picture

summers is a swine and a crook. -also born with a silver spoon in his mouth. I don't think he is very smart at all.

Ned Zeppelin's picture

I'm leaving the country if Summers becomes Treasury Secretary.  God help us.

shovelhead's picture

Larry Summers giving financial advice is like Fire Marshall Bill giving a fire saftey lecture and burning the hall down to the ground.

Ask Harvard how much his brilliance cost them.

New_Meat's picture

"Ask Harvard how much his brilliance cost them."

The replies are hysterical!!!!!

- Ned

onlooker's picture

Thanks for the update Burce. I wonder if the US is telling Germany to front door the $, and the US will then back door the $ to Germany.

strange World,

HoofHearted's picture

I think Glenn Hubbard would do better going back to playing second base for the Braves in the 1980s. He had a great beard back then, a beard that would fit in with some of the blowtards in the Administration even. Take a look at some of the old baseball cards. I'm sure they captured his beard well. Man, Ramirez to Hubbard to Chambliss- the top double play combo in the majors...because someone was always on base against the Braves back then.

AlmostEven's picture

This just in: General Mubarrek is still dead.

cbxer55's picture

Couldn't have happened to a nicer fellow.

Dirt nap time. He'll be pushing up daisies within a week.

shovelhead's picture

You said the F word.

Gibbering spittal from Team Blue in 3...2...1...

Eireann go Brach's picture

Larry Summers is so fat he has not seen his feet in 40 years!

Animal Cracker's picture

Larry Summers is so fat he has stretch marks on his bath tub.

Uchtdorf's picture

Larry Summers is so fat that if Chuck Norris roundhouse kicked him into the Gulf of Mexico, the oil slick would dwarf the BP leak.

Non Passaran's picture

Larry Summers is so fat that if the US started fracking him, the peak oil theory would start generating more laughter than Chuck Norris jokes.

Temporalist's picture

Larry Summers is so fat he went to the beach and the "whales" welcomed him.

Arnold Ziffel's picture

Germany has been drifting away from being a puppet eveyr since the Iraq invasion (which they not only did not join, but said there was no reason for the invasion)....and avoiding The Sarkozy lead invasion of Libya.  Who  knows, at this rate Germany may become an independent nation once again.


Good article, Bruce.

Savyindallas's picture

The germans need nukes  -as smart as they are-France, the US and Britain are in the nuclear club. That is really important as ultimately the Germans are a second rate power without nukes. Maybe they can ally with the French and/or the Russians  -France seemed to do pretty well under german occupation in WW2-certainly fared better then they did in WW1.

Non Passaran's picture

What an idiotic comment.  Who on earth "needs" nuclear weapons?

(And also: what a stupid suggestion for a country that last year decided to phase out its perfectly functioning nuclear power!)

Gavrikon's picture

I like the word "idiotic."  I use it to describe Germany's decision to "phase out its perfectly functioning nuclear power!"  I don't even want to contemplate what this will do to my electric bill.

Zero-risk bias's picture

Then again, I used to live somewhere approximately 100 miles from Europes' dumping ground for unprocessable nuclear waste. Only an idiot would refute the increased dangers of leukemia via habitual evening strolls along the beach.

magpie's picture


Die Gedanken sind frei
wer kann sie erraten?


Snakeeyes's picture

But its ok for Obama to campaign in BERLIN, but Romney/Hubbard can't say anything in the USA?

Bruce Krasting's picture

When O was in Germany He wanted to speak at the Brandenburg Gate. Merkel and Co said Nein to that.

If O tried to this today, I don't think he would be so welcome. A lot has change in four years.

magpie's picture

What was Obama's speech about ? Can't remember.

Coincidentally, on that day i was in the USA and had to pinch myself when seeing that blatant case of electioneering tourism via FOX News.

HoofHearted's picture

I think it was something like, "I am your fuhrer. Remember- arbeit macht frei. Now help me with my final solution."

Big Ben's picture

Even if the US did have some useful advice for the Europeans (which we don't), it would be an extremely bad idea to offer it in public. It would seem condescending and would be resented by the Europeans. Also, tensions between the spenders and the savers in Europe may heat up soon and appearing to side with one side or the other could cause a lot of hate to be directed at us.

Finally, how can the US presume to lead anyone when we ourselves are on a road to nowhere?

Gavrikon's picture

Drück, Angela!  Drück!

Savyindallas's picture

dollar reserve status, military might and the fear that those who defy us will end upp sodomized and murdered like ghaddaffi -is the only thing that keeps us from collapsing.

azzhatter's picture

when you've demonstrated inability to manage yourself, how do you lead others?

shuckster's picture

Our debt is somewhere around the combined debt of all other nations 

Mitzibitzi's picture

While the dollar is the reserve currency, your debt technically IS the combined debts of all other nations. Plus, of course, your own debts as well.