Europe seems forever mired in adolescent denial and alibis-a malignant European character flaw.
On this side of the pond, greater realism is needed about U.S. budget challenges as the recovery continues, or America will join Europe down the proverbial drain of financial self abuse. Near term, demand must be fired up to significantly dent unemployment.
The economy must add more than 13 million mostly private sector jobs to bring unemployment down to 6 percent by the end of 2013.
Businesses need customers and capital to invest in new facilities and jobs, and private demand growing at less than 2 percent and troubles at regional banks remain huge problems.
The trade deficit-in particular, huge imports of oil and the imbalance with China-cuts a wide hole in demand for U.S. goods and services. Without addressing oil and China, creating enough new jobs is daunting.
Detroit has the technology to produce much more efficient vehicles now, and a shift in national policy to rapidly build these would push out imported oil and create many new jobs.
China maintains an undervalued currency that makes its products artificially cheap and deceivingly competitive on U.S. store shelves, and it practices virulent protectionism against U.S. exports.
China will not respond to diplomacy and reason. President Obama and Secretary Geithner should quit the hand wringing and implement comprehensive policies to counter Chinese abuse of free trade. That would begin with a tax on dollar-yuan conversions that would raise the price of Chinese imports to their true cost to the U.S. economy.
Regional banks, which serve small and medium sized businesses, remain burdened by failing commercial real estate loans and mortgage-backed securities. The TARP was intended to remove many of those loans from their books but has often been abused by policymakers to aid political constituents on Wall Street and Detroit.
A Savings and Loan Crisis era Resolution Trust could relieve regional banks of troubled loans, earn a profit for the government, and give small and medium sized businesses adequate bank credit again.
Peter Morici is a professor at the Smith School of Business, University of Maryland, and former Chief Economist at the U.S. International Trade Commission.