Like his father Ron, who serves in Congress, Rand Paul clearly has a gift for stirring up controversy. Paul, an ophthalmologist and member of the Tea Party, scored a big primary upset in Kentucky when he defeated Trey Grayson to become the GOP’s candidate for the Senate. No sooner was he basking in his victory, however, than Paul recklessly entered a political Twilight Zone.
Paul went on a variety of liberal news shows, including National Public Radio and MSNBC’s The Rachel Maddow Show, to discuss ancient history—the Civil Rights Act of 1964. In raking over the old embers of the disputes over the Act, Paul declared that he wasn’t averse to allowing private businesses to discriminate against patrons on the basis of race. Say what? It would be hard to imagine a more maladroit statement, one calculated to ratify every stereotype about the GOP, even as it tries to shed its historical racial baggage with Michael S. Steele at the helm.
For Republicans, this episode should underscore the fact that the 2010 midterm election may not prove as favorable, or at least as easy to win, as they have been predicting. For several months, the GOP has been riding high, confident that it would topple the Democratic majority in the House and perhaps even in the Senate. But former Virginia Congressman Tom Davis had it right when he warned that Democrat Mark Critz’s defeat of Republican candidate Tim Burns in a special Pennsylvania election for John Murtha’s former seat should be cause for caution about Republican prospects in the fall. In addition, Democrat Joe Sestak’s defeat of Arlen Specter in the Democratic primary for the Senate was a big win for President Obama, since Sestak will be a much stronger candidate than Specter in facing Republican Pat Toomey.
So is Obama off the hotseat? Can he coast his way to the midterms? Not a chance. Obama’s biggest vulnerability remains the economy. Eight million jobs were lost in the financial crash and unemployment is hovering slightly under 10 percent—at least that’s the official number. Still, the economy has been showing some signs of life and Obama can point to the passage of a financial-reform bill as a big victory. No, Obama’s biggest threat comes from abroad and it isn’t terrorism. It’s the potential financial collapse of Europe.
As the euro depreciates in value, American exports are becoming more expensive. No doubt there are some upsides to the fall in the euro—oil prices are going down and the Treasury doesn’t have to raise interest rates to attract investors in American debt, which continues to soar. But Europe appears to be on the verge of cracking up and the culprit may be Germany. As Steven Pearlstein points out in the Washington Post, “in the long run, the eurozone won’t be fixed until Germany figures out how to generate growth and wealth without beggaring its neighbors and its trading partners.” Basically, Germany has been exporting its goods to Greece, Portugal, and Spain, while lending them the money to finance their purchases in the first place. Now this scheme has come crashing down (much as it might between America and China, which has been following a similar policy toward an insolvent Washington).
Obama was worried enough to tell German Chancellor Angela Merkel to produce a massive financial aid package for Greece. But Germany has been spinning out of control, banning naked short selling of the euro. Instead of propping it up, however, Merkel is raising fresh doubts about the viability of the currency.
Is it too much to suggest that Obama’s political future may, in some ways, even be hostage to Europe and, in particular, Germany? It wouldn’t be the first time that Germany has played a decisive impact on American history. For the Republicans, the chance to make significant gains by focusing on taxes and the national debt, at a time of political, economic and social upheaval, remains a strong one. But the party will lose its opportunity if it becomes sucked into arcane debates about the past rather than America’s future.
Jacob Heilbrunn is a senior editor at The National Interest.