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Friday, December 2, 2011

My Sincerest Apologies to the Great German Nation (for having an imbecilic government)

In my last post I got carried away and turned Polish Foreign Minister Sikorski's description of Germany as the 'indispensable nation' into 'imbecile nation.' Of course what I meant was the current German government, not the industrious, intelligent and forbearing people of Germany, who, like their similar compatriots in other EU countries, are confused and anxious about the Eurozone turmoil. The ordinary people of the Eurozone (from Germany to Greece, yes, even the Greek people are innocent) did nothing to bring this tragedy unto themselves, but they will be the chief victims of the misguided policies of their deluded leaders. I trust that intelligent followers of this blog were clear about this distinction, but I want to spell it out explicitly  once again just so that there is no misunderstanding about where I stand.

And today, what does a quick perusal (despite spotty Internet connections from Agonda Beach) of the New York Times reveal but another instance of extreme cognitive dissonance. First, we have Paul Krugman succinctly summarizing the basic economics of the Eurocrisis, and why fiscal irresponsibility does not lie at its heart. Then we have German chancellor Angela Merkel, in a speech before the German parliament, comparing her rescue efforts with a marathon that will take years to finish. And what do these rescue efforts consist of (as far as I can make out)? Fiscal control of the debtor countries and more spending cuts, just what Paul Krugman points out will only accelerate the collapse, when what is needed is expansion and more inflation in the core. Two more contradictory takes on the same reality are hard to imagine. Yes, in the words of Martin Wolf  in the FT (citing an unnamed observer from 'outside the eurozone'), 'they just do not get it.'

So, instead of years of a recovery marathon, we appear to be facing just days of unprecedented (and avoidable) economic turmoil. Ein Ende mit Schrecken, statt ein Schrecken ohne Ende.

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