Short Term Politics Trumps Long Term Strategy
"An American official, speaking on the condition of anonymity to avoid disturbing diplomatic relations, said the new financing pledges were not expected to change the voting shares within the fund. The $430 billion in new commitments represent a temporary buffer in case the I.M.F. needs additional capacity in the coming years, the official said, not a change in permanent quota contributions....
The United States has said it will not pledge any more money to the fund, arguing that Europe’s problems are its own to fix and that the I.M.F. has enough spare lending capacity.“Europe is a rich continent,” Timothy F. Geithner, the Treasury secretary, said in remarks at the Brookings Institution this week. Europe has to play “the dominant financial role” in its own crisis, he argued." I.M.F. Adds $430 Billion in Emergency Lending Ability, New York Times, April 21, 2012
We have a strong relationship with Europe that China is challenging. Further, the Euro crisis threatens our economic recovery. It is in long term self interest to help Europe. Instead, we chose not to because this is an election year and Obama fears the Republicans would use it against him at home. The “great communicator” should be able to do the right thing and explain it to the voters. More: http://goo.gl/lmGl5
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