Skip to comments.The Germany That Said No
Posted on 11/02/2010 8:04:57 AM PDT by listenhillary
"You wont 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 theyre on. On the eve of last summers 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 wasnt warned.
And now the consequences of Germanys waywardness are clear. Germanys growth in this years 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 crisisindeed, the lowest in 18 years. The second-biggest Western economy appears to be handling this deep recession much more effectively than the biggestand emerging from it much earlier.
(Excerpt) Read more at weeklystandard.com ...
FTA The stimulus pleas of the Obama administration fell on deaf ears in Berlin. Guess whose economy is growing faster.
Deutschland ja; Amerika nein.
Has obamma’s financial policies ever worked in the past? I think not! Why does he insist his way is the right way, when history has proven otherwise? Surely his advisors and he himself cannot be this stupid?
Germany reminds me of America in the 1950s/1960s. 100% more common sense.
They do not appear to be brainwashed idiots like Americans who watch TV. I guess they learned their lesson about propaganda and brainwashing unlike NFL/NBA/MLB/NCAA fan idiots.
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 wasnt warned.
Once again Krugman serves as a perfect negative indicator. Ask Krugman what he would do and then do the exact opposite and you'll do well.
Only a complete and utter fool would put any credence in this Keynesianism garbage. It has never worked one time anywhere it has ever been tried. It’s nothing but a lefty religious belief that is completely immune to facts and results.
It appears the NHL is acceptable. Go Hawks!
Is Obama A Keynesian?
Friggin Krauts have always been like that.
Having lived with Germans, BO could not have acted worse than to try to browbeat them to spend more money. When you do that, Germans dig in their heals and get very stubborn. He may have gotten great reviews for his Berlin victory lap, but then he ruined it later by bringing up their real passion, holding on to their cash.
Either the Obama administration economic planners are like the souse described in the article or they know exactly what they are doing and believe that until every nation runs out of money they will not be able to foster the chaos necessary to usher in the supposedly beneficent utopia they think will fill the vacuum of that societal disorder. Sadly, history suggests that the most likely way that vacuum will be filled is with totalitarianism. The Germans know that all too well.
German policymakers do think the United States is misguided as a matter of economic reasoning. We think theyre wrong, says one top official. We think you dont get the multiplier they say. The multiplier is the measure of how much economic activity results from emergency government spending. Discussions of the multiplier were at the center of the debates over the Obama stimulus plan. Christina Romer and the presidents other economic advisers argued that the multiplier would be around 1.6the government would create $1.60 worth of economic activity for every dollar it spent. At those rates, who can afford not to stimulate? Our research says the multiplier is more like .60, says the German official. If he is correct, then a stimulus plan can actually deaden an economy rather than stimulate it. If he is correct, you might have been as well off to have taken the stimulus money and thrown it away.
“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 from that idiot, Barack Obama, in May, ‘09:
“The long-term deficit and debt that we have accumulated is unsustainable. We cant keep on just borrowing from China or borrowing from other countries. We have to pay interest on that debt and that means that were mortgaging our childrens future with more and more debt.
Absolutely right. Which means the Obama approach is even worse than the traditional Keynesian belief that you can stimulate the economy by burying money in fields and then paying people to dig it up. The Obamanomics approach is more like stacking it all in a pile (in a Union hall somewhere) and setting it on fire. Poof.
I'll drink a pint of Oktoberfest Hacker Pschorr to that!
Excellent example of how to facilitate the return of the 12th Iman.
NOW, since grown ups know that fairy tales are cute, we’ll pass on the stupidity & run a country properly.
The Obama administration blew $860 billion on stimulus and the unemployment rate now stands at 9.6% and anemic GDP growth of 2%. Germany spent 0 on stimulus and their unemployment rate stands at 4% and GDP growth annualized at 9%.’Nuf said
The Keynesians can't possibly come up with answers to those questions that make any sense in the real world.
As Albert Einstein said, insanity is doing the same thing over and over again and expecting to get different results, and the Keynesians utterly qualify as insane.
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.
Let's hope you're right.
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.
I’ll take that trade.
Hey...NFL fan idiots are not nearly as bad as NBA fan idiots!
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?
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.
Who actually likes beeing told what to do by drive-by consultants of wall street ?
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.