It seems slightly bizarre to me that the American business media is so strident when it comes to Europe's financial difficulties. Today's New York Times says "the endgame appears to be fast approaching for Europe." It said the pressure to arrive at a solution of the Greek/Italian woes was "at a new level of intensity." And it added, "the consequences of continued inaction are dire."
My first question is why does the American media have to look at Europe to find something that is worrisome? The real story is that the American economy has not recovered, as the economics profession said it would, and no one had a clear-cut plan to do anything about it. The failure of the congressional supercommittee is just the latest piece of evidence that there is no one at the helm of the American economy trying to create a national strategy or national consensus. Millions of Americans are being pushed downward in a relentless economic vice being driven by mortgage problems, rising health care costs and diminishing insurance, and an absence of jobs. These issues ought to be on the front pages of American newspapers. Journalists should be screaminig for solutions to what ails America, even while maintaining a measure of journalistic detachment.
The second question is, is it really that bad in Europe? Western Europe is not a banana republic. It has huge wealth and sophistication. Could Europe be beaten into a genuine crisis if Anglo-American financial institutions all retreat from it? Doesn't Continental Europe possess financial assets of sufficient size and scale to muddle through this situation? It seems that whipping up a foreign crisis sells newspapers, perhaps as a distraction from a domestic crisis. I've seen this syndrome when it comes to the Japanese economy. The Japanese are hugely sophisticated and affluent, yet the American media continues to pound on the theme of the "two lost decades."
It's time for the American business media to ask itself, where is the real crisis? And how should it be covering it?