If you care about the economy, pay attention to Europe, and reelect President Obama

Graph by Mike Norman Economics President Obama and his conservative European counterparts sought very different solutions to the global economic crisis, and because Mitt Romney would pursue an economic path similar to that taken by the conservative European governments, the results of these different economic approaches could not be more instructive for those voting in the U.S. presidential election. The Republicans criticize President Obama for the state of the economy, and in so doing prove themselves dishonest and hypocritical. As I wrote two months ago:

As Dean Baker of the Center for Economic Policy and Research pointed out, Republican criticism of President Obama for the condition of the economy is akin to criticizing firefighters for the condition of a house right after the firefighters had stopped it from burning down. When President Obama took office, the economy was losing 800,000 jobs a month. When President Obama took office, the economy was shrinking at an annual rate of 8.9 percent. The economy was burning down. Then the firefighters arrived. The Obama stimulus created some 3,300,000 jobs. Under President Obama's stewardship, the economy has recovered all private sector job losses. The only justifiable criticism of the stimulus is that it wasn't large enough to have sparked a full recovery, but that's not the Republican criticism.

Republicans continue to oppose stimulus spending. Republicans oppose any potential stimulus by the Federal Reserve. In other words, Dean Baker's analogy didn't go far enough. It's not just that the Republicans are criticizing the firefighters for the condition of the house right after the firefighters saved it from burning down, it's also that the Republicans lit the fire in the first place, tried to stop the firefighters from getting to the house, and now are trying to stop the construction workers from getting to the work of rebuilding it, while themselves planning to add more fuel and light another match.

And this week's unemployment figures make it even more clear. In the United States, more jobs are being created than was expected, and unemployment is down to 7.9 percent. In the Eurozone, unemployment has risen to a record 11.6 percent. President Obama's stimulus policies are making things better. The conservative European austerity policies are making things worse:

According to a new study from the National Institute for Economic and Social Research, a London-based research organization, the austerity measures implemented across Europe in an attempt to get the continent's debt under control and stem its financial crisis have actually made matters worse, stunting growth and increasing debt

Mitt Romney and the Republicans want to impose European-style austerity on the United States. It would be disastrous to allow that to happen. A week ago, Nobel Prize-winning economist Paul Krugman explained:

Mr. Obama's camp argues for an active government role; his last major economic proposal, the American Jobs Act, would have tried to accelerate recovery by sustaining public spending and putting money in the hands of people likely to use it. Republicans, on the other hand, insist that the path to prosperity involves sharp cuts in government spending.

And Republicans are dead wrong.

The latest devastating demonstration of that wrongness comes from the International Monetary Fund, which has just released its World Economic Outlook, a report combining short-term prediction with insightful economic analysis. This report is a grim and disturbing document, telling us that the world economy is doing significantly worse than expected, with rising risks of global recession. But the report isn't just downbeat; it contains a careful analysis of the reasons things are going so badly. And what this analysis concludes is that a disproportionate share of the bad news is coming from countries pursuing the kind of austerity policies Republicans want to impose on America.

It's that simple. The U.S. economy is recovering, but the world economy as a whole is not; and one of the main reasons the world economy as a whole not only is not recovering but is in danger of sliding into a global recession is because of the economic austerity policies pursued by conservative governments that Mitt Romney would like to emulate. And given its globalized nature, the drag on the world economy by the austerity agenda of conservative European governments is making President Obama's job that much more difficult in creating a sustained recovery in the United States. But if Mitt Romney becomes president, that drag won't be coming only from the global economy, it will be coming from the domestic economy as well.

(Continue reading below the fold.)