Over the last week, there has been a torrent of stories illustrating the extent to which the Obama re-election team is observing the Republican presidential contest and developing their strategy for the general election season. And while I’m sure that the Obama team has devoted a fair amount of attention to events in the GOP, I’m also sure that they’ve devoted even more time to events across the Atlantic, where—as Carmel Crimmins and Gavin Jones note for Reuters—austerity has pushed Europe to the edge of another recession:
With the crisis spreading like wildfire through the currency bloc’s core, pushing up borrowing costs to unsustainable levels, countries are relying more on blunt budget cuts, than time-consuming and difficult structural reforms, to get results. The upshot is ballooning dole queues, shuttered businesses and public services stretched to breaking point.
There’s no question that a second European recession would trickle down to the United States and compromise our already-anemic economic growth. The issue, for Obama, is whether this would doom his re-election chances. My guess, for now, is that it will—at this moment, a substantial hit to the U.S. economy would arrest growth and spark an increase in unemployment. Yes, campaigns and candidates have a significant effect on the outcome of a presidential election. But even Gingrich stands a shot at winning the White House if conditions deteriorate over the next year.
All of which is to say that, as much as it’s fun to pay attention to the horse race, the most important election news for 2012 is likely to come from across the pond, and the Obama team knows it.