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Obama's political woes: made in Greece?

The Federal Reserve assures us that the economy is on the mend. Financial regulation reform seems on its way to some sort of resolution in the Senate. But given what’s happening in Europe right now, there is a part of me that worries we’re all fiddling while Rome -- Athens, actually -- burns.

“The Greek debt crisis is now morphing into something much broader,” writes Mohammed El-Erian in today’s Financial Times.

How much broader? Listen to Megan McArdle:

Not that I think we're going to get another Third Reich out of this, or even another Great Depression. But it means we should be wary of the infamous "double dip" that a lot of economists have been expecting. The United States is in comparatively good shape, but the euro is in crisis, and already-weak European banks seem to be massively exposed to Greece's huge debt load. They're even more exposed to the debt of the other PIIGS, which is far too large for it all to be bailed out. The size of the rescue package that Greece needs is already going to take a fairly substantial chunk of the IMF's war chest.

I agree with McArdle that another Third Reich emerging from the ruins of Southern Europe’s economies is not likely. However, we have only begun to see the potential political fallout from the tensions within the Euro zone.

Simply recall that German-Greek animosities have deep historical roots, and that the Greeks have an ancient historical affinity with Orthodox Russia -- and you begin to sense the potential for geopolitical mischief in this situation. And does anyone think that Britain’s zany election is the prelude to a sober assault by the winner on that country’s screwed-up public finances?

President Obama is not to blame for the mess in Europe. But to the extent it grows worse on his watch and the effects spill over into the U.S., it could threaten his political prospects and those of the Democrats in November and beyond.

By Charles Lane  | April 29, 2010; 11:01 AM ET
Categories:  Lane  | Tags:  Charles Lane  
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What ? Europe is in trouble ?

I thought Europe was our new model ?

Universal health care, BIGGER Government, more regulation, higher taxes, mega-debt...

Aren't we all Greeks now ?

What could go wrong ?

Posted by: pvilso24 | April 29, 2010 12:16 PM | Report abuse

Not only are we all Greeks, ala the message above, but the next Third Reich could happen right here. There are too many fingers pointing to it in the backgrounds of those in charge here now.

Posted by: annnort | April 29, 2010 1:47 PM | Report abuse

Good gosh, how about a little Occam's Razor here?

Couldn't you just say that many German people are angry that they are expected to bail out a government that overspends on the public sector and pensions while the German government cuts back in both?

While one can argue about the merits of such an opinion, it is a plausible explanation. Far better than blathering on about Greece's affinity for Orthodox Russia. Huh?

Posted by: Tarheelgermany | April 29, 2010 2:19 PM | Report abuse

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