It's always worth listening to former President Bill Clinton give a speech. So even though I was about a football field (or two) away from the Man from Hope at his lunchtime address at the Milken Institute Global Conference, I still enjoyed the full Clinton: folksy yet wonky, casual yet impassioned, and all of it delivered in a hoarse ramble that he blamed on allergy season back East, but that may have had as much to do with rising before dawn to fly to L.A. at the behest of conference host Michael Milken.
The warmup act was a panel about the problems of Europe. And you couldn't have had a more hilarious performance from Nouriel Roubini, the economist who was labeled "Dr. Doom" for his dire predictions before the financial crisis, if you had tried. Sample: "The sum of all trade balanced in the world has to be zero because we don't trade with the Moon and Mars." See what I mean? Hilarious!
But anyway, Clinton. He framed the speech by saying that all politics is intense debate over two questions and total ignorance of a third:
1. What are you gonna do?
2. How are you gonna pay for it?
Lost in all this, he insisted, is the question of: How do you propose to do what you're gonna do, once you've decided how you're gonna pay for it?
To connect this oversight with the current troubles in Europe, Clinton did what Clinton does: He told a story from the battlefield. He was, after all, there at the creation of the euro in the 1990s. He got the very first euro coin! But even then, he was thinking deep and strategically.
We'll give him the benefit of the doubt on that one, because he did deftly connect politics and economics. It's going to be like NATO, he had argued, after the Cold War ended. Everyone would want in. So a system had to be developed to admit new members — and part of that system was determining how a member would be kicked out.
So he said to the Europeans, who were flushed with joy that they had created a currency union but who were also dodging that whole fiscal-political union thing. "Decide now whether you want an exit strategy" was what Clinton counseled the Europeans to consider.
Fast forward to...now, and to the Greek debt crisis. When asked, Clinton countered, "Do you want Greece to be Ecuador or Alabama?" Backstory: Ecuador, before its own debt crisis, adopted the dollar as its currency. When it went off the dollar, it received no support from anybody. Meanwhile, Alabama, when the states got into trouble during the financial crisis, could count on a boost from the Federal government.
Unfortunately, if the Roubini & Co. panel was any indication, that's not in the cards for Greece. Most of the panelists think the eurozone will be absent one of its 17 members come this time next year. Hello new drachma!
Clinton, to use his own term, is a communitarian. He is not, to use his own term, a separatist, someone who figures that each new group effort will explode the size of government and bring down a hail of profligate spending. He wants us to figure out our "Hows" collectively, as a village, to borrow a term from his wife. He therefore doesn't think austerity will work, not for Greece, not for Portugal, not for Ireland, and certainly not for Spain or Italy. Gotta have growth, he maintains, which is an unsurprising recommendation for a guy who governed at a time when growth was growing on trees.
But we also needs systems, good systems, which should include exit strategies and contingency plans. This is the focus of much of his work today, he said. "Structured opportunities and systems are not prevalent in much of the world." His Clinton Global Initiative is trying to change that, one impoverished country at a time.
When confronted wit tactics like austerity and spending your way out of the problem, you'd expect Clinton to suggest a third option, and at least in the context of his speech, you wouldn't be disappointed. Roubini calls its "extend and pretend," "pray and delay," and doesn't think it will work. Clinton sees such things and doesn't perceive politics but a kind of innate democratic progress. "We have a process that enables us to stumble in the right direction," he said. "But we need to get out of the denial business and back into the future business."