U.S. Response to Europe's Debt Crisis Is Not Evidence of Decline

In the wake of last week's G-20 Summit in Cannes, France, a number of commentators have weighed in on the U.S. response -- or lack thereof -- to Europe's ongoing financial crisis. Most notably, articles in the New York Times and the Los Angeles Times suggested that the lack of a U.S. contribution to Europe's bailout fund is a clear sign of American decline. As further support for the "decline narrative," both trot out examples from the 1990s, when the U.S. led the way in bailing out Mexico and East Asian countries as financial crises gripped their economies.

Yet, on two counts, the analysis is flawed. First, the U.S. has in fact offered financial assistance to Europe, albeit in an under-the-radar fashion. Second, it is a mistake to compare the threat posed to the U.S. economy by Mexico in 1995 and East Asia in 1997 to that posed by Greece today. In short, the United States' prudent reaction to what is happening in Europe should not be surprising. Indeed, it is quite consistent with U.S. behavior over the past 25-plus years. ...