Steve Weissman and Frank Browning write: September 2008: The collapse of Wall Street giant Lehman Brothers provokes a worldwide economic meltdown.

May 2012: Barack Obama is warned before the Camp David G-8 summit that the financial maelstrom seizing Europe could turn out even worse. If much of Europe slides back into double-dip recession, as Britain has done, millions of Americans will be smacked hard, from Toyota workers in Kentucky to lettuce pickers in sunny California. And almost certainly, Mr. Obama will have turned over the keys to the White House come next January to the “vulture capitalist” Mitt Romney.

Here is the dreadful scenario that growing numbers of analysts fear: Long lines of Greeks, Spaniards and Portuguese pound on bank doors demanding to pull their money out before it is replaced by devalued drachmas, pesetas, escudos. Long-suffering Greek voters fail on June 17 to elect political parties that can form a governing coalition, and Greece takes a messy exit from the Euro. Europe’s already faltering financial system then collapses, sending the entire world into a long-lasting global depression for the new President Romney to tackle.

As one European insider put, the damage could be somewhere “between catastrophic and Armageddon,” while Mexico’s former central banker, Guillermo Ortiz, who was a leading candidate to head the International Monetary Fund (IMF), warned that a Greek exit from the Euro could have “an even bigger impact” globally than the Lehman bankruptcy. “If Greece leaves the eurozone, it could detonate a global financial crisis even worse than the 2008 credit crunch, dry up global trade financing and spur another U.S. recession.”

Seeing all this before the Camp David summit, President Obama joined with France’s mildly socialist president François Hollande in calling for new measures to stimulate European growth, against German Chancellor Angela Merkel’s insistence on austerity über alles. Obama went even further after the NATO summit in Chicago and urged European leaders to recapitalize their notoriously weak banks — and quickly. But his foresight will mean little if they do not come up with a hard-hitting and fast-moving plan of action, which their Wednesday night summit in Brussels failed to do. [Continue reading…]