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European Elections’ Impact on Economy, Austerity

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  • Description

    FBN’s Lou Dobbs on the uncertain future for the European economy.

  • Duration 4:23
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Anger swept over Europe this weekend as incumbents from France -- Greece getting slapped by voters.

Were unhappy about stagnating economy selections.

Brought to light the unpopularity of austerity programs that virtually no emphasis on tax cuts and other growth incentive.

Lou Dobbs host of Lou Dobbs tonight is here in -- this is my honor to -- -- chat with you on television for the second time today.

And what was most striking to me earlier was how you described this outlook that you see the US and European economies now is decoupling.

Because of analysts have.

I think we're we're you know Americans we made these we may be can kind of stupid from time to time.

But you know you give us ninety days a 120 days notice and we can even figure out what's going on in and all of the shorts this morning just got their tails kicked.

Or whatever debts they were trading and they thought this was their big moment they got a big surprise in this -- the shorts came in had to cover and and we saw what's happening.

The market's showing great resilience.

The Europeans revealing themselves for what they are right now they are of people without leadership.

With the exception of Angela Merkel.

Who is definitively a leader she also got her comeuppance at the polls.

Over the weekend but nonetheless she is a real leader.

What the French have -- the direction they have chosen the the fact that the Greeks the Greece continued pictures no direction.

These are some of the most confused ten million people on the planet.

In creating and out side is in all proportion to into the to the strength of their economy reaction in world markets.

-- they were taking advice from the IMF of all all institutions you don't listen to the -- the IMF has has very similar advice to frankly any country goes into whether -- developing or developed nations.

That is to raise taxes which causes austerity.

And it usually to devalue the currency of course are not in control that.

But you don't advise a country that's trying to grow to raise taxes.

Slowly invariably this in the history has been with ai and map that they are trying to work -- -- under -- government they sovereign structure.

That is intent upon inflating its way out of whatever its indebtedness is.

So they're sort of reflex and we've had the spectacle of Christine Lagarde they -- of that -- While prancing around this country and Europe's a call but we must do this through and we won't need a lot of money from you have but some people a year -- -- want to take advice from her -- whether they wanna see some of our policy or whatever we've got neo liberals in this country we've got conservatives in this country who still think that they're somehow.

Ultra sophisticated.

And beyond provincial -- they would embrace the I -- map.

My -- The when you look at the IMF and look at its track record of success in going to austerity measures as you say is the -- -- universal panacea.

-- its a joke and this nonsense of giving them the attention and are billions of dollars as we -- -- just about 20%.

To the IMM budget it's an absurdity exactly -- How closely linked to the -- central banks -- because we do know we'll see printing more than likely in Europe but how much of an obligation and does that put on the Fed.

To keep up with -- to keep interest rates -- well interestingly the for the Fed has managed to drive into the broad measure of money supply in this country.

While backing off of its easing we've got wrapped up you know -- transition across the spectrum.

In terms of bond purchases they're going to the -- -- of Operation Twist.

But the European Central Bank.

If it under its requirements has to inject money into governments -- government it's -- the Central Bank to governments rather than to the banks.

So they've got -- entirely different kind of proposition -- on their hands.

And by the way their money supply has and then -- it.

As a result each one of these new leaders and there are now nine new leaders in Europe over the course of the past three years.

They've got an entirely different proposition a look at -- resolved.

I think coming out it is from the perspective of socialistic.

Or how are they knew what ever.

What you really big interest in to see how these have -- Coalitions formed mopped around real solution Caribbean homework assignment new socialist you're always hearing about new socialist 170 -- formula -- -- aren't Lou Dobbs.

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