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Everybody's been mocking the eurozone authorities for pushing the euro too high and being stuck on damaging "hooverian" policies that worry about imaginary inflation at a real cost in jobs (and people like redstar have made that case here as well), while lauding the more pragmatic UK and US approach which effectively amounts to a devaluation of the currency.

Now that the euro is going down a bit, is this seen as good news? No - it's yet again a sign of terrible things for Europe.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Feb 12th, 2010 at 04:37:27 AM EST
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And our idiot politicians believe it.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Carrie (migeru at eurotrib dot com) on Fri Feb 12th, 2010 at 04:39:25 AM EST
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Heh, I just want to blow everything up and go back to the Deutsche Mark.  There's a "Fight Club" instinct there where all the corporate headquater's buildings get blown up in the end.  I will be Ikea-boy no more.

Of course that is purely a selfish wish as it would help me personally at the expense iof the population as a whole.  It's also a wish shared by most of my German friends for equally selfish reasons.  Then again, they also long for the good ole' days of the DDR.

So maybe all of our selfish opinions are really not credible after all.

Nevertheless, it is how a lot of us feel and that can translate easily into politics, for better or for worse.

"Schiller sprach zu Goethe, Steck in dem Arsch die Flöte! Goethe sagte zu Schiller, Mein Arsch ist kein Triller!"

by Jeffersonian Democrat (rzg6f@virginia.edu) on Fri Feb 12th, 2010 at 08:10:04 AM EST
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That would be an incredibly short-sighted policy.

Germany benefits enormously from being one of the big players in a European Union that's expanding its authority and sphere of influence.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Feb 12th, 2010 at 09:30:57 AM EST
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Pretty much what I am saying in my comment above.  It is very short-sighted policy but it is also very populist.

I mean, I try very hard to see the big picture but at the same time living on 974 USD a month which has just now broken over the 700 euro mark this week.

That's going to be the conundrum, imho - personal economics over the general welfare.

"Schiller sprach zu Goethe, Steck in dem Arsch die Flöte! Goethe sagte zu Schiller, Mein Arsch ist kein Triller!"

by Jeffersonian Democrat (rzg6f@virginia.edu) on Fri Feb 12th, 2010 at 10:29:30 AM EST
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You are mixing criticisms.

In Q4 2008 people like me were seeing aggregate demand plummet in the Eurozone in real time and wondering why people like Merkel and especially Steinbrueck were sitting on their hands, After all, they had an even more comprehensive look at aggregate demand in their countries than some of us in industries  which, while well correlated to overall economic growth, were in single industries all the same.

And that is indeed what I was seeing in Q4, starting in the second half of October and accelerating in November of 2008, making obvious the case for government demand to bridge the output gap, or government action of some sort to cushion coming shocks.

Not doing anything in the face of the biggest downturn since the 1930's may not be Hooverian...if the American moniker is off-putting, perhaps you would prefer "Austrian"...  this being said, it was not a particularly social stance, and coming from so-called "social democrats" like Steinbrueck belied a certain rhenish conservatism which had nothing to do with the left or with worker's progress.

Devaluating the currency is indeed what is in order. As is higher inflation targets. That is the pragmatic and, yes, left approach to the crisis which is still about us., and in this sense a strong Euro was bad policy (and still is).

Today's criticism is something different however. Rather than criticizing the ECB's legendary tightfistedness and economically stupid no-growth and instability act (as we will soon see in Greece and perhaps elsewhere) pact...this time the criticism is of the EU's legendary lack of central economic stabilizers and economic governance vacuum at the center. This is the explanation for the weak Euro now, which I still think is a good thing.

It's hard to argue in my view with the first criticism. The second different one also has a point, but the counter point is that it is precisly from such crises that the need to fill the power vacuum in Bruxelles becomes obvious, and stabilization mechnaisms and further fiscal coherence are likely now to be formalized. (And if they are not....then there is no need for Bruxelles...)

 

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sun Feb 14th, 2010 at 02:38:14 PM EST
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