The Corner

Brussels on the Potomac

The Economist has a rather scathing piece this week about the fiscal-cliff deal. The deal, they argue, makes American lawmakers look remarkably more like European lawmakers in their dysfunction and denial about our fiscal problems. Here is the great cover illustration that comes with the piece.  

The deal, the author writes, is a temporary fix that ignores America’s long-term fiscal problems, doesn’t control Social Security, Medicare, and Medicaid spending, doesn’t reform  ”America’s hideously complex and distorting tax code,” and it doesn’t even raise revenue relative to the 2013 baseline. Moreover, the agreement is evidence of “the outsize influence of narrow interest groups” (see the list of extensions for tax expenditures that benefit big businesses) and the failure (or dishonesty) of politicians who tell voters what needs to be done to fix our fiscal mess (i.e., that we must cut spending, and that if we don’t, taxing the rich alone won’t work). Our prospect is grim:

Optimists will point out that America is unlikely to face a European-style debt crisis in the near future, but the slow-burning fuse is itself a problem. One positive side-effect of Europe’s crisis is that it has forced euro-zone countries to raise their retirement ages and rationalise pensions and health-care promises. America, which has the biggest structural budget deficit in the rich world bar Japan, will become an outlier in its failure to deal with the fiscal consequences of an ageing population. Its ageing is slower than Europe’s but, as its debt piles up and business and consumer confidence is dampened, the eventual crunch will be more painful.

President Obama will likely take issue with the magazine’s assessment of our fiscal situation however since, as Kathryn mentioned earlier, he supposedly doesn’t think the U.S. has a spending problem. Never mind that, for the past several years, the government has been spending $1 trillion more than what it collects in revenue, and that Medicare (Parts A, B, and D) and Social Security alone represent an unfunded promise of $66 trillion.

I do wonder what he thinks of being compared to French politicians. What we do know is that the French are not amused that the stripy T-shirt, red scarf, blue beret and baguettes are used on the cover of The Economist to mocked Obama especially since this image clearly conveys that French leaders are so bad that  they have “become the benchmark for how bad somebody else is doing.” Over at The French Observatory, Sophie Pilgrim reports:

Predictably, the French press responded to the cover with a lot of feet-stamping and spitting of feathers. Within hours of its publication dozens of articles – not to mention threads of garbled and angry comments – had appeared online.

The use of the marinière T-shirt will be particularly painful for France’s industry minister, Arnaud Montebourg, who only recently used it as a symbol of French-made success, sporting one himself, just months previously, on the front of a French magazine.

Montebourg has already made his feelings clear about The Economist, which he said in November “has never been known for its sense of moderation,” following uproar over an even harsher bout of France-bashing.

The Economist, of course, has made its own feelings clear about France on several occasions. In April this year, during the run-up to the French presidential election, the magazine featured rivals François Hollande and Nicolas Sarkozy reclining in a forest with bread rolls, fruit and naked companions, apparently unaware of the European crisis, in a take on Édouard Manet’s ‘The Luncheon on the Grass’.

Make sure to check out The Economist covers displayed in the article, too. Interestingly, she writes, so far the Germans have not responded to the illustration of Speaker Boehner wearing the Bavarian lederhosen. 

Thanks to Jerry Brito for the pointer. 

Veronique de Rugy — Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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