A Great Achievement in Central Banking (II) | 120 comments (120 topical, editorial, 0 hidden)

Re: A Great Achievement in Central Banking (II) (4.00 / 6)

Speaking of the neolibs of SPIEGEL, the apparent insurrection within the editorial boards seems to be in attack mode in the past week:

Downthread afew quotes Flawed Role Model: Germany's Finances Not as Sound as Believed by Ralf Neukirch and Christian Reiermann. I frankly didn't expect this piece (from the current print issue) to be translated to English.

A few days earlier, the German-language Spiegel On-Line published a different version of the above article as a commentary under the byline of a different author (a new ex-FTD guy), which differs in being sharper. Already the title, which translates to "The Fairy Tale About The German World Champion In Saving". It also mentions Volker Kauder's "Europe now speaks German" comment and calls it chauvinistic, explicitly compares Germany's debt level with that of Spain, doesn't just mention Juncker's swipe but judges it correct, completely diverges in its argumentation by crediting Germany's good situation on deficit-boosting stimulus measures in 2009, and ends with:

Die aktuelle Regierung dagegen macht mit ihren überheblichen Lobgesängen auf die deutsche Staatsdisziplin vieles kaputt in Europa. In Griechenland, Spanien oder Italien - wo die Deutschen für ihre Tugenden einst zumindest geschätzt wurden - werden sie nun vor allem als arrogante Zuchtmeister wahrgenommen, die den Menschen auf dem Rest des Kontinents erklären wollen, wie sie zu leben und zu arbeiten haben. Das kann auf Dauer nicht gutgehen.

The current government, however, ruins a lot in Europe with its arrogant hymns of praise upon the German state discipline. In Greece, Spain or Italy - where once the Germans were at least valued for their virtues - they are now viewed primarily as arrogant taskmasters who want to tell the people on the rest of the continent how they have to live and work. This cannot go well on the longer run.

Two days ago, they published a guest commentary by the deputy chief editor of the Spiegel group's business magazine, which argues for allowing the ECB to act as lender of last resort and portrays the German government and central bank as being alone in their position in the world [which is unfortunately not entirely correct]. I found this most noteworthy because the author seems far from being free of neolib received wisdom (he says no central bank intervention is correct on the longer run), but recognises the short-term role in fighting the crisis. Also, he dismisses comparisons of the ECB to the pre-Euro Bundesbank on the basis of the different environment they operated in: federal Germany was a transfer union, and finance was not yet deregulated.
Yesterday, they published another guest commentary by Wolfgang Münchau, allowing him to call the two notions that the crisis is one of public finances (rather than private finances which became a problem for previously low-deficit/surplus countries too due to crisis mismanagement) and that Germany's pre-WWII main economic crisis was the hyperinflation of the twenties (rather than the ensuing depression of the thirties; also see comment by Metatone followed by debate between IM and afew) "old German lies".

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Nov 24th, 2011 at 04:11:34 AM EST
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A Great Achievement in Central Banking (II) | 120 comments (120 topical, 0 editorial, 0 hidden)

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