Insight: Swing states: Could Europe decide the U.S. election?

[WestVirginiaRebel]

Reuters:

(Reuters) - The busy shop floor at Miller Weldmaster Corp could make a great location for an Obama campaign ad.

As workers assemble the family-owned company's hot-air fabric welders, used to manufacture everything from inflatable rafts to truck tarps, it's hard to know the recession of 2007-2009 ever happened.

Ten clocks on the wall of the plant in Navarre, Ohio, show local time from Norway to New Zealand and tell Miller Weldmaster's comeback story in a word: exports. Sixty percent of the company's business now comes from outside the United States.

Manufacturing growth, surging exports: These are central promises of Obama's reelection bid, especially in blue-collar industrial states that could determine the election.

Mindful of the Indiana surprise of 2008, when a spike in unemployment helped Obama win the reliably Republican state, the White House has every reason to fear payback in states like Ohio, this time from any deepening of Europe's financial crisis.

Already there are warning signs. One in four of Miller Weldmaster's machines is sold in Europe, and sales are down 5 percent so far this year. A further drop could force the company to consider layoffs.

"We've taken a sigh of relief - we've been over the crunch," says Jeff Sponseller, the company's vice president of sales and marketing. "The chance that this could happen again brings a lot of anxiety."

Other Ohio manufacturers share that concern. Royal Phillips Electronics, which exports X-ray machines from a 1,200-employee facility near Cleveland, warned in April that budget cuts and other austerity measures in Europe could hurt demand for its products. Glassmaker Owens-Illinois Inc, based in Perrysburg, said Europe's volatility could hit its earnings as well.

The U.S. Commerce Department estimates that more than a quarter of all manufacturing workers in Ohio depend on exports for their jobs.

Against this backdrop, the Obama administration has been involved in intense, behind-the-scenes maneuvering to steer Europe away from the financial brink.

For the past two years, Treasury officials, including Treasury Secretary Timothy Geithner, have crisscrossed the Atlantic in pursuit of solutions to Europe's problems. The president has also been actively involved, speaking to European leaders by phone at key moments in the region's crisis.

His instant invitation to France's newly elected president, Francois Hollande, to White House talks on the eve of this weekend's Group of Eight summit is evidence of a central fact in the United States: The states that will do most to determine the outcome of November's presidential and congressional elections may not be swing states like Ohio but member states of the European Union.

On condition of anonymity, a senior EU official told Reuters it felt as if the Obama administration wanted the G8 to cooperate in the reelection campaign. "They see the debt crisis as the biggest likely drag on the U.S. economy between now and November," the official said, "and so they basically want to make sure that we find a way of muddling through."

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Obama wanted us to have a European-style economy. Be careful what you wish for...