The Germany That Said No

Weeklystandard ^ | 10/30/2010 | CHRISTOPHER CALDWELL

[listenhillary]

"You won’t find a lot of Keynesians here,” explained one German economic policymaker in Berlin in September. That will not be news to anyone who has spoken to his counterparts in Washington. In their view, Germany is a skulker, a rotten citizen of the global economy, the macroeconomic equivalent of a juvenile delinquent, or worse. It is a smart aleck in the emergency ward that is the global economy. It is a flouter of the prescriptions of the new Doctor New Deal who sits in the White House.

Germany has been scolded, even browbeaten, by Obama administration officials, from Treasury Secretary Timothy Geithner on down, for saving too much and spending too little. It has refused to stimulate its economy as the United States has done, on the grounds that the resulting budget deficits would not be sustainable and the policies themselves would not work. Administration officials have not been the only ones to warn the Germans about the path they’re on. On the eve of last summer’s G‑20 summit in Toronto, the economist and New York Times columnist Paul Krugman gave an interview to the German business paper Handelsblatt in which he said that, while Germany might think its deficits are big, they are peanuts “from an American viewpoint.” Germany cannot say it wasn’t warned.

And now the consequences of Germany’s waywardness are clear. Germany’s growth in this year’s second quarter was 2.2 percent on a quarter-to-quarter basis. That means it is growing at almost 9 percent a year. Its unemployment rate has fallen to 7.5 percent, below what it was at the start of the global financial crisis—indeed, the lowest in 18 years. The second-biggest Western economy appears to be handling this deep recession much more effectively than the biggest—and emerging from it much earlier.

[newheart]

NOW, since grown ups know that fairy tales are cute, we’ll pass on the stupidity & run a country properly.

Let's hope you're right.

[USFRIENDINVICTORIA]

Canada — or more specifically, PM Stephen Harper, deserves a lot of credit for the G20 results. Canada was the host nation & Harper visited leaders in advance, to advocate for the austerity option.

Obama wanted to brow beat other nations to increase deficit spending. Canada went into deficit in 2009, for the first time in over a decade. The main reason was the intense pressure to support Obama’s “stimulus package”. Harper knew this was politically necessary — but, bad economics.

Obama wanted to coerce the G20 to support more deficit spending. He got a resounding “NO!, NIEN!, NON!” as an answer.

BTW, when Canada switched from a faux-Keynesian policy of perpetual deficits, to a policy of surplus budgets, and debt reduction — we experienced the same higher growth & lower unemployment as Germany. We also experienced lower interest rates, lower inflation, and, eventually, more money available for spending on government programs. The later has made debt reduction popular, even amongst leftists. They don't like seeing money going to “greedy bankers”, for interest payments.

[Lexinom]

I’ll take that trade.

[montag813]

I guess they learned their lesson about propaganda and brainwashing unlike NFL/NBA/MLB/NCAA fan idiots.

Hey...NFL fan idiots are not nearly as bad as NBA fan idiots!

[CharlieOK1]

I think that is what Krugman’s entire theory is based on. Why not spend infinite sums if you are going to get a $1.60 muliplier?

[wolf78]

The German people love Obama.How about an even up trade.We will take Angie Merkel and we will send them Obama decked out in lederhosen.

That is a misunderstanding. Germans love two things:

a.) Being right. Imperial German poet Geibel once famously rhymed: "Macht und Freiheit, Recht und Sitte, klarer Geist und scharfer Hieb zügeln dann aus starker Mitte jeder Selbstsucht wilden Trieb, und es mag am deutschen Wesen einmal noch die Welt genesen!" (Force and freedom, justice and moral standards, clear mind and sharp blow rein in from the sturdy center every wild selfish impulse, and thus the german way may heal the world some day).

Never try telling a German how to do something.

b.) Politely getting along. Compromise is an art form in Germany. E.g. gay marriage and abortion are total non-issues in Germany. They were settled in the 80s/90s (abortion is illegal but will not be punished if certain conditions are met / civil unions but no marriage) and that's it.

Therefore Germans liked Clinton but thought Carter was a moron. They loved Bush sen. but not Bush jr.. They liked Obama when he campaigned as a moderate. The don't like being lectured by Obama.

[jpl]

Why not spend infinite sums if you are going to get a $1.60 muliplier?

Precisely! It's a simple question, and there's no sensible answer to it. Only an ivory tower college professor could believe nonsense like this.

[Cacique]

btt

[Rummenigge]

Who actually likes beeing told what to do by drive-by consultants of wall street ?

[Euroconservative]

Great post.

Many like to think that a US liberal democrat (abortion at 24 week, gay marriage, massive amnesties for illegal aliens, overtax the rich and big corporations, endless public stimulus...) look like a european centre-right conservative. Not true at all.