Tag Archives: Europe

Erlernen Sie Von Uns, Amerika, Part III

David Leonhardt at NYT:

Remember the German economic boom of 2010?

Germany’s economic growth surged in the middle of last year, causing commentators both there and here to proclaim that American stimulus had failed and German austerity had worked. Germany’s announced budget cuts, the commentators said, had given private companies enough confidence in the government to begin spending their own money again.

Well, it turns out the German boom didn’t last long. With its modest stimulus winding down, Germany’s growth slowed sharply late last year, and its economic output still has not recovered to its prerecession peak. Output in the United States — where the stimulus program has been bigger and longer lasting — has recovered. This country would now need to suffer through a double-dip recession for its gross domestic product to be in the same condition as Germany’s.

Yet many members of Congress continue to insist that budget cuts are the path to prosperity. The only question in Washington seems to be how deeply to cut federal spending this year.

If the economy were at a different point in the cycle — not emerging from a financial crisis — the coming fight over spending could actually be quite productive. Republicans could force Democrats to make government more efficient, which Democrats rarely do on their own. Democrats could force Republicans to abandon the worst of their proposed cuts, like those to medical research, law enforcement, college financial aid and preschools. And maybe such a benevolent compromise can still occur over the next several years.

The immediate problem, however, is the fragility of the economy. Gross domestic product may have surpassed its previous peak, but it’s still growing too slowly for companies to be doing much hiring. States, of course, are making major cuts. A big round of federal cuts will only make things worse.

So if the opponents of deep federal cuts, starting with President Obama, are trying to decide how hard to fight, they may want to err on the side of toughness. Both logic and history make this case.

Let’s start with the logic. The austerity crowd argues that government cuts will lead to more activity by the private sector. How could that be? The main way would be if the government were using so many resources that it was driving up their price and making it harder for companies to use them.

In the early 1990s, for instance, government borrowing was pushing up interest rates. When the deficit began to fall, interest rates did too. Projects that had not previously been profitable for companies suddenly began to make sense. The resulting economic boom brought in more tax revenue and further reduced the deficit.

But this virtuous cycle can’t happen today. Interest rates are already very low. They’re low because the financial crisis and recession caused a huge drop in the private sector’s demand for loans. Even with all the government spending to fight the recession, overall demand for loans has remained historically low, the data shows.

Similarly, there is no evidence that the government is gobbling up too many workers and keeping them from the private sector. When John Boehner, the speaker of the House, said last week that federal payrolls had grown by 200,000 people since Mr. Obama took office, he was simply wrong. The federal government has added only 58,000 workers, largely in national security, since January 2009. State and local governments have cut 405,000 jobs over the same span.

The fundamental problem after a financial crisis is that businesses and households stop spending money, and they remain skittish for years afterward. Consider that new-vehicle sales, which peaked at 17 million in 2005, recovered to only 12 million last year. Single-family home sales, which peaked at 7.5 million in 2005, continued falling last year, to 4.6 million. No wonder so many businesses are uncertain about the future.

Without the government spending of the last two years — including tax cuts — the economy would be in vastly worse shape. Likewise, if the federal government begins laying off tens of thousands of workers now, the economy will clearly suffer.

Doug J.:

Bobo six months ago on German austerity:

The early returns suggest the Germans were. The American stimulus package was supposed to create a “summer of recovery,” according to Obama administration officials. Job growth was supposed to be surging at up to 500,000 a month. Instead, the U.S. economy is scuffling along.

[….]

The economy can’t be played like a piano — press a fiscal key here and the right job creation notes come out over there. Instead, economic management is more like parenting. If you instill good values and create a secure climate then, through some mysterious process you will never understand, things will probably end well.

An actual economics reporter (Dave Leonhardt) today:

With its modest stimulus winding down, Germany’s growth slowed sharply late last year, and its economic output still has not recovered to its prerecession peak. Output in the United States — where the stimulus program has been bigger and longer lasting — has recovered. This country would now need to suffer through a double-dip recession for its gross domestic product to be in the same condition as Germany’s.

[…..]

“It’s really quite striking how well the U.S. is performing relative to the U.K., which is tightening aggressively,” says Ian Shepherdson, a Britain-based economist for the research firm High Frequency Economics, “and relative to Germany, which is tightening more modestly.” Mr. Shepherdson adds that he generally opposes stimulus programs for a normal recession but that they are crucial after a crisis.

It’s pretty much a guarantee that any argument involving the idea of government as parent will be a faulty argument.

No one could have predicted that Paul Krugman would be right about austerity.

David Dayen at Firedoglake:

David Leonhardt is speaking simple economic truths in what must sound like a foreign language, given the tenor of debates over the past few months. Standard economic theories haven’t applied in Washington for a while, so Leonhardt’s essay has the force of the running man throwing the hammer into the Big Brother TV screen in the famous Apple 1984 commercial.

Leonhardt manages to mention that GDP is still growing too slowly in the US for mass hiring, even with a higher growth rate than Germany. He manages to note the state and local cuts that will blunt recovery. He manages to look at interest rates, which are historically low, and reason that government spending is not crowding out the private sector in any way. He calls John Boehner a liar for saying the federal workforce has grown by 200,000 employees since Barack Obama’s tenure in office (it’s about 1/4 that). He says that the problem right now is a lack of demand. He cites the much better example of Britain, which has gone whole-hog for austerity and seen negative job growth and negative GDP growth since.

I’d like to think that this kind of truth would, like resuscitating a dying patient, shock the political class back to life. More likely it will just fall down the memory hole, drowned out by the bipartisan cries of “we all want to cut spending.” The unemployed are still invisible, economic theory is still upside down, and one article won’t change that.

It would be nice if it did.

Andrew Leonard at Salon:

What do we learn from the correlation between states with the worst housing bust and budget shortfalls? If U.S. economic growth slows, the federal deficit situation will get worse. Republicans believe that cutting government spending will spur economic growth. But the evidence we have from countries that have attempted such a strategy since the Great Recession began to ebb — Germany and the United Kingdom — suggests exactly the opposite. Austerity policies are not the right medicine for a fragile economy.

Felix Salmon:

One of the best aspects of being a journalist is that you get to talk at length to the most knowledgeable and interesting experts on just about any subject you can think of. For me, yesterday was a prime case in point: a long and fascinating lunch with James Macdonald, the author of my favorite book on the history of sovereign debt. Turns out he also has a microscopic vineyard in Tuscany, so the conversation ebbed wonderfully from economics to wine and back.

Macdonald has an economic historian’s view of the current austerity debate, and he was very clear: if you look at the history of countries trying to cut and deflate their way to prosperity while keeping their currencies pegged, it’s pretty grim — all the way back to Napoleonic times. Sometimes, the peg is gold. For a good example of the destructive abilities of that particular peg, look at the UK in the 1920s, which Macdonald says was arguably worse than the US in the 1930s: shallower, to be sure, but substantially longer. The devaluation of the pound, when it finally came, was very long overdue.

At other times, the peg is simply political: Macdonald gives the example of southern Italy being locked into what was essentially the Piedmontese monetary system at the time of the Risorgimento. That might have been well over a century ago, but there’s a case to be made that it has hobbled just about everywhere south of Rome to this day — and that’s in a country with about as much internal labor mobility as between EU countries.

So from a historical perspective, the prospects for countries like Portugal, Ireland and Greece are pretty grim. They can cut their budgets drastically and stay pegged to the euro, but most of them would be better off in the position of Iceland, which can and did devalue in a crisis (and allowed its banks to default, too). So far, the Baltic states have stuck to their deflationary guns with the most determination and discipline, but such things work until they don’t: at some point it’s entirely possible that Latvia or Estonia could pull an Argentina and kickstart growth by devaluing.

Jonathan Chait at TNR:

I’m sure that, in the light of this new evidence, American conservatives will undertake a thorough rethinking of their anti-stimulus beliefs. After all, as they told us at the time, this was a natural experiment.

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Filed under Economics, Foreign Affairs, The Crisis

Silvio, Silvio, Silvio…

Rachel Donadio at NYT:

A Milan judge on Tuesday ordered Prime Minister Silvio Berlusconi to stand trial in April on charges of prostitution and abuse of office, dealing the most serious blow to his leadership in the 17 years that he has dominated Italian politics.

In a brief statement the judge said the trial would start on April 6. Mr. Berlusconi faces charges that he paid for sex with an under-age nightclub dancer nicknamed Ruby Heart-Stealer, and abused his office to help release her from police custody when she was detained for theft. The scandal has dominated political debate in Italy for months.

Mr. Berlusconi denies wrongdoing and has said he has no intention of stepping down. But in an increasingly tense climate after large anti-Berlusconi demonstrations on Sunday, analysts said the judge’s ruling makes it nearly impossible for the prime minister to govern and all but guarantees early national elections.

“The situation is more political than judicial now,” said Stefano Folli, a political columnist for the financial daily Il Sole 24 Ore. He predicted that in the short term Mr. Berlusconi would hold on, but “in the middle-term it’s an unsustainable situation.”

Joe Gandelman at Moderate Voice

J.H. at Newsbook at The Economist:

EARLIER today a judge in Milan, Cristina Di Censo, indicted Italy’s prime minister, Silvio  Berlusconi, on charges relating to his alleged use of prostitutes. She said he should be tried for paying an underage prostitute and then attempting to cover up the alleged offence by taking advantage of his official position, which is itself an offence in Italy.

But Ms Di Censo did more than just indict Mr Berlusconi. She accepted, in full, arguments put forward by the prosecution that have potentially devastating implications for Mr Berlusconi (who denies any wrongdoing). First, she agreed with them that, because of “the obviousness of the evidence” they had gathered against him, he should be put on trial without a preliminary hearing. The full trial is due to begin on April 6th, and by a twist of fate (or, as Mr Berlusconi’s followers will no doubt contend, malevolent design) all three judges at the trial will be women.

That development seemed particularly resonant against a background of protests by Italian women against Mr Berlusconi and the entrenched machismo his female critics see him as representing. On Sunday, several hundreds of thousands took to piazzas around Italy to demonstrate “for a country that respects women”.

Their protest was the latest challenge to a prime minister whose personal popularity has fallen significantly since the scandal broke last October. Mr Berlusconi also faces daily problems attempting to get legislation through parliament following a walk-out by some of his followers last year.

The Jawa Report:

The legal age of consent in Italy is, holy cow, 14. But it is unlawful to engage in prostitution until the age of 18. Ms. Ruby, her stage name, was 17 when she let the PM boink her.

Berlusconi has said, “I didn’t pay her for the sex”. Which is a round about way of saying, “Yeah I hit that.”

Rick Moran:

Italian feminists are naturally up in arms.

On Sunday thousands took to the streets in Italian cities and worldwide in coordinated demonstrations that organizers said were aimed at restoring the dignity of Italian women amid the latest sex scandal and after years in which Mr. Berlusconi has routinely appointed television showgirls to political office.

No misogyny there. And how about Berlusconi’s lawyer’s take?

Noting that Mr. Berlusconi would be tried before a panel of three women judges, he said: “Great. Women are always appreciated, sometimes even agreeable,” the center-left daily La Repubblica reported.

Makes me wish I understood Italian so I could follow every twist and turn being reported in the Italian media.

Elspeth Reeve at The Atlantic:

Despite the scandals, the angry women, and the splitting of his political coalition, Berlusconi has managed to hold onto power. Why? The Guardian’s Alexander Chancellor says it’s because he’s a master salesman. “When he was building his media empire,” Chancellor says, he demanded his sales team have “the sun in their pockets”–they had to be sunny, smiling, non-smoking, mustache-free. The rules made Berlusconi billions. And now, despite the bad headlines, “Berlusconi still has the sun in his pocket. Addressing political rallies, he always looks hopeful, confident, and in charge. … He may have fallen from grace among many women and Catholics, but most men, apart from those of the left, seem still to like him well enough. In Britain he would probably be resented for his wealth alone, but in Italy it works in his favour.”

Libby Copeland at The XX Factor:

Berlusconi is, after all, a guy who once called Rosy Bindi, the middle-aged woman who heads the opposition Democratic party, “increasingly more beautiful than you are intelligent.” Her response was to tell him “I am not one of the women at your disposal,” which prompted an “I’m not at your disposal” campaign in support of her. (Bindi’s rejoinder may have sounded more pithy in the original Italian.) Like that exchange, the insults in the so-called Rubygate scandal are fascinating for their degree of bile, if a little stilted in the translation.

A few days ago, before Berlusconi was indicted for allegedly hiring an underage prostitute, more than 100,000 people, mostly women, came out across the country to protest his dalliances with young women. (Not to mention his penchant for institutionalizing sexism by, among other things, putting skimpily clad showgirls on the networks he owns.) This prompted Berlusconi’s education minister, herself a woman, to label the protestors “the usual snob heroines of the left.” By American standards this is a fairly stunning thing for a high-ranking politician to say. Not to mention a great band name.

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Get Yr Water Boiling: Hitchens V. Ono

Caitlin Dickson at The Atlantic with the round-up.

Yoko Ono at The New York Times:

JOHN and I are in our Dakota kitchen in the middle of the night. Three cats — Sasha, Micha and Charo — are looking up at John, who is making tea for us two.

Sasha is all white, Micha is all black. They are both gorgeous, classy Persian cats. Charo, on the other hand, is a mutt. John used to have a special love for Charo. “You’ve got a funny face, Charo!” he would say, and pat her.

“Yoko, Yoko, you’re supposed to first put the tea bags in, and then the hot water.” John took the role of the tea maker, for being English. So I gave up doing it.

It was nice to be up in the middle of the night, when there was no sound in the house, and sip the tea John would make. One night, however, John said: “I was talking to Aunt Mimi this afternoon and she says you are supposed to put the hot water in first. Then the tea bag. I could swear she taught me to put the tea bag in first, but …”

“So all this time, we were doing it wrong?”

“Yeah …”

We both cracked up. That was in 1980. Neither of us knew that it was to be the last year of our life together.

Christopher Hitchens at Slate:

I simply hate to think of the harm that might result from this. It is already virtually impossible in the United States, unless you undertake the job yourself, to get a cup or pot of tea that tastes remotely as it ought to. It’s quite common to be served a cup or a pot of water, well off the boil, with the tea bags lying on an adjacent cold plate. Then comes the ridiculous business of pouring the tepid water, dunking the bag until some change in color occurs, and eventually finding some way of disposing of the resulting and dispiriting tampon surrogate. The drink itself is then best thrown away, though if swallowed, it will have about the same effect on morale as a reading of the memoirs of President James Earl Carter

Now, imagine that tea, like coffee, came without a bag (as it used to do—and still does if you buy a proper tin of it). Would you consider, in either case, pouring the hot water, letting it sit for a bit, and then throwing the grounds or the leaves on top? I thought not. Try it once, and you will never repeat the experience, even if you have a good strainer to hand. In the case of coffee, it might just work if you are quick enough, though where would be the point? But ground beans are heavier and denser, and in any case many good coffees require water that is just fractionally off the boil. Whereas tea is a herb (or an herb if you insist) that has been thoroughly dried. In order for it to release its innate qualities, it requires to be infused. And an infusion, by definition, needs the water to be boiling when it hits the tea. Grasp only this, and you hold the root of the matter.

[…]

If you use a pot at all, make sure it is pre-warmed. (I would add that you should do the same thing even if you are only using a cup or a mug.) Stir the tea before letting it steep. But this above all: “[O]ne should take the teapot to the kettle, and not the other way about. The water should be actually boiling at the moment of impact, which means that one should keep it on the flame while one pours.” This isn’t hard to do, even if you are using electricity rather than gas, once you have brought all the makings to the same scene of operations right next to the kettle.

It’s not quite over yet. If you use milk, use the least creamy type or the tea will acquire a sickly taste. And do not put the milk in the cup first—family feuds have lasted generations over this—because you will almost certainly put in too much. Add it later, and be very careful when you pour. Finally, a decent cylindrical mug will preserve the needful heat and flavor for longer than will a shallow and wide-mouthed—how often those attributes seem to go together—teacup. Orwell thought that sugar overwhelmed the taste, but brown sugar or honey are, I believe, permissible and sometimes necessary.

Patrick Kingsley at The Guardian:

As Hitchens himself acknowledges, his analysis places him within a canon of tea-based literature that dates back to George Orwell. But though Hitch is broadly in agreement with Orwell’s take on tea, the pair do deviate on some crucial matters. Hitch feels that Orwell’s preference for china teapots and “Indian or Ceylonese” tealeaf is outmoded. And while Orwell argues that it is “misguided” to add sugar, for Hitch, “brown sugar or honey are, I believe, permissible and sometimes necessary”.

But Hitch’s closing remarks are ones that Orwell would surely not quibble with. “Next time you are in a Starbucks or its equivalent and want some tea,” he writes, “don’t be afraid to decline that hasty cup of hot water with added bag. It’s NOT what you asked for.”

Andrew Sullivan:

Starbucks’ London Fog or Earl Grey Tea Latte unsweetened is the best approximation of my mother’s cup of cha that I have been able to find. Except she would proceed to add three teaspoons of sugar and one artificial sweetener.

Nate Freeman at The New York Observer:

When Chistopher Hitchens pontificates on the subject of beverage, it’s a safe bet to assume it’s concerning alcohol. Up until his diagnosis with cancer and subsequent chemo, Hitch would consume no less than a bottle of wine and few gulps of whiskey per day, he wrote in Hitch-22. And tales of larger excess are out there, even encouraged by the man. But we are greeted in Slate today by a tempered Hitch, one who simply wants to share with his readers the proper way to make tea. And no, spiking it with liquor is not part of the recipe (though feel free to make an amendment or two!).

Tom Scocca at Slate:

I applaud Christopher Hitchens’ tea-making instructions, including his tactful decision to give Yoko Ono a grace period before correcting the misinformation she had published in the New York Times in John Lennon’s name. Tea goes in first.

Please do not allow Hitchens’ contrarian reputation, Englishness, ideological fervor, or disparagement of teabags to distract you from his essential message: the water must be boiling.

This is not about being finicky or snobbish. The boiling-water rule applies at every level of quality. A cheapo Lipton teabag needs and deserves fully boiling water every bit as much as a handful of top-grade single-plantation Assam does. A cup of black tea made with less-than-boiling water is like a hamburger that’s still cold in the middle. Whether it’s a McDonald’s burger or a gourmet burger is beside the point.

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Filed under Food, Foreign Affairs

The Clash Or The Sex Pistols Surely Would Have Written A Song About This

Sebastian E. Payne at The Spectator had a liveblog of the protests

Fraser Nelson at The Spectator:

The revolution may not be televised, but protests certainly are – and the process magnifies the drama. Since last night, the news broadcasts have all had footage of two thugs trying to smash the windows of the Treasury and, in the process, familiarising themselves with the properties of bombproof glass. The attack on Charles and Camilla’s royal limo is splashed across all this morning’s front pages.

The script is so well-rehearsed now that I hesitate to repeat it: the vast majority are peaceful protesters, infiltrated by vandals who soak up the attention. Many of the protesters yesterday looked like they’d get a cab straight back home to their Notting Hill trust-fund houses. This is not 1968 or the Poll Tax riots: it’s some produced-for-television protest at cuts which are 3.3 per cent over four years. Milder even than the now-forgotten post-1976 cuts.

Yes, there’s a budget deficit to fix – but did the universities budget really have to take such a knock? The Lib Dem error, in my view, is accepting the Tory pledge not to cut the wasteful NHS budget. Had its budget been shaved by the same amount as other government departments, there would be no need to cut the uni budget. The axe could have been wielded more evenly. The lesson from Canada’s cuts was that there should be no protected departments: if you protect a budget as massive as that of the NHS (which accounts for a quarter of departmental spending), then you concentrate pain elsewhere. Someone – in Britain’s case, undergraduates – gets it in the neck.

That said, British university funding is an anomaly. Look at the websites of the top ten world universities and those of Oxford, Cambridge and Imperial jump out with the tiny amount they are able to charge undergraduates. The elite American unis are about £30k each.

Bagehot at The Economist:

The newspapers were duly full of pictures of the royal couple, as well as images of the smashed window of their car and a great smear across its gleaming bodywork where somebody had thrown a can of paint. But of course, this was effectively an accident. The prince had been on his way to an annual charity theatrical extravaganza, the Royal Variety Performance (a duty which is already one of the trials of the royal year), when his car had been stuck in traffic near Oxford Circus, far from the centre of the student protests. By chance, a smallish breakaway group of protestors were in the same spot, apparently intent on smashing up some posh shops when suddenly the poshest car in Britain purred up next to them, bearing a prince in black tie. Some sort of attack on the car was more or less inevitable at that point. The prince was a victim of dreadful luck (and arguably poor reconnaissance and teamwork by the police and his protection officers, a question which is even now being investigated). But even as I watched I found myself thinking, this could so nearly have been so much worse. And luck has been at the forefront of my mind all along, during this first wave of unrest.

Let me explain. I’m pretty sure that if the occupant of the Rolls Royce last night had been the Queen, an elderly lady who also commands much more public respect and loyalty than her son, the country would have woken this morning in a much darker mood. What if the armoured glass of the Rolls Royce’s window had given way, injuring the prince (or the Queen)? What if a police bodyguard had been injured, or pulled his gun? (There are reports in some newspapers that the policeman in the prince’s chase car was bashing protestors away with his car door, which sounds a bit close for comfort if true). What if the royal car had injured someone when it finally made its escape at some speed? A different outcome to any one of these what-ifs would, I think, make Britain feel a markedly edgier country right now.

I thought the same at the first student protests that saw windows broken at the Conservative party HQ, and a fire extinguisher thrown from the roof, narrowly missing the police below. If the extinguisher had been a foot to one side and killed a policeman, the politics of austerity would have taken a quite different turn.

Is this a turning point? Regular readers will know that my hunch 10 days ago, during the last student protests, was that this was not a revolution in the making. I still think that. It does not take very many trouble-makers to create the sort of violent scenes seen yesterday.

Nor were all of them students, though when I was on the streets last week I did not see too many of the “rent-a-mob anarchists” being talked about in some tabloids this morning. True, there were some of the older, tough anti-globalisation types you see at things like G8 or G20 protests. But the people who worried me were more the young 16 year old kids from tough outer suburbs, many with scarves over their faces. They radiated some of the same sort of anger of the “casseurs” seen at Parisian demonstrations, from the grim housing estates around the French capital. Though at French protests it is true that casseurs are often a group apart from the main body of demonstrators, and spend as much energy attacking students and passers-by as they do fighting the police.

In contrast, if teenagers were behind some of the serious vandalism and trouble yesterday, I would guess there was a solidly political core to their anger. The small number of teenagers I spoke to last week were incensed that a government full of posh millionaires was—as they saw it—removing the public support that would allow them any hope of attending higher education. It is an under-reported detail that many of the demonstrators are not just angry about the idea of rising tuition fees in the future, they are also very angry about the planned abolition of the Education Maintenance Allowance, a £30 a week bribe (for want of a better word) paid to pupils who turn up on time every morning at sixth form colleges. There are, as it happens, good arguments to be made for and against the EMA. But to the demonstrators, the only explanation was that a bunch of rich people in power are heartlessly taking something from poor kids, because they are selfish and do not care.

Michael White at The Guardian:

After watching last night’s TV news and reading this morning’s front pages about the attack on the royal Roller, protesting students, and their leaders, must be in despair. It elbows the purpose of their demo – condemnation of the coalition’s tuition fees hike – right out of sight.

Worse than that, it turns the whole agenda on its head. This morning, the BBC is talking all about security at public buildings and why the police were not protecting Prince Charles and his moll more effectively on their way to the Royal Command performance.

At least armed officers didn’t shoot anyone, the Met’s boss, Sir Paul Stephenson has just suggested on air.

It would be silly, as well as cynical, to imagine that David Cameron is privately pleased to see public indignation so easily deflected from his government’s controversial policy. Or that Nick Clegg is positively thrilled to have a day off from his new constitutional role as air raid shelter for the Tories.

Why? Because they’re not wicked or stupid. Trouble on the streets means political trouble and ill-affordable expense for the coalition. Two thousand coppers on overtime cost money.

Worse, today’s FT’s choice of page one photo is not Fleet Street’s obvious choice – Camilla looking as if someone has just pinched her bottom (Charles is in the clear, his right hand visible). No, it picked flames in Parliament Square. Feather-brained markets may push up interest rates on government debt if they see many more like that. Greeks will be shaking their heads as they sip their German-funded breakfast coffees.

I spent several hours on the streets yesterday, on both sides of the river and around Parliament Square. My impression was that the demo was mostly good-natured and that the police were on their best behaviour, certainly mostly cheerful and polite in my hearing on the Westminster Abbey corner of the kettle where a lot of the aggro took place.

When one officer slipped on grassy mud he got up and grinned. Students laughed too and shouted “Calmer”, or was it “Karma”? That incident was at least as typical as the student to whom I spoke after seeing him with a bleeding head. A truncheon did it, he said. The police pushed us “on the front line. We stood our ground”.

But what does a police commander do when faced with a small but determined cadre of people determined to smash property or provoke a fight? Were the troublemakers students? It’s not always easy to tell. Many students – including those still at school – struck me as well-dressed middle class kids who wouldn’t know how to hurt a fly.

There again, it’s sometimes to easy to dump all the blame on the feral youths who emerge from bad neighbourhoods in all great cities looking for a target for their anger. Old ladies or Damilola Taylor, royal cars, shatterproof Treasury windows. Student demos are a perfect cover for the mob.

Paul Pillar at The National Interest:

The attack by student protesters Thursday evening in London on a limousine carrying Prince Charles and his wife Camilla, the Duchess of Cornwall, offers some broader conclusions. None of them are, as some commentary has suggested, that we are on the verge of a new era of protest with students in the vanguard. My alternative lessons:

Security threats can emerge from just about anywhere. The main theme in commentary in Britain about the incident is recrimination over a breakdown in security. “How could this be allowed to happen?” is the most frequently asked question. Investigations and inquiries no doubt will retrospectively point to some error in judgment about the route selected, or some shortfall of communication between the royals’ security detail and other police elements. But even with terrorism—which this incident was not, although it could have been—the potential sources of threat are multitudinous. When non-terrorist agents of disruption such as rowdy students on a London street are factored in, the potential sources are essentially infinite. Even meticulous preparations cannot allow for them all.

Narrow self-interest can be behind wider trouble. Far from being the harbinger of a big new social movement, protesters who assaulted the royal limo and have been involved in other recent disruptions in Britain are overwhelmingly students upset about one very specific measure in the coalition government’s austerity program; the raising of university tuition fees. Similar issues help to explain why there have not been protests in the United States against its current wars that remotely resemble those forty years earlier over the Vietnam War. The different magnitude of the wars and the number of casualties is one difference, but the presence or absence of conscription—and how it affects the personal interests of college-age males—is clearly another.

Alex Massie at The Daily Beast:

The royal family was not the only unlucky target of protest. Rioting students and anti-capitalist groups smashed the windows of the Treasury building. Others urinated on the statue of Winston Churchill in Parliament Square, just across the street from the House of Commons, while one student was photographed swinging from the Union Flag that hangs from the Cenotaph—Britain’s principle memorial to her war dead.

This wasn’t some disadvantaged teenager from one of London’s tougher housing projects protesting against rises in university tuition fees but, rather, a bona fide “trustafarian” and history student named Charlie Gilmour—son of Pink Floyd guitarist David Gilmour.

Altogether now, every wag in the country quipped: “We Don’t Need No Education.”

Gilmour apologized today, but the damage had been done. It may have been just a minority of the 20,000 student protesters who captured the headlines, but they did more to discredit their cause than any argument the government could have produced.

The pictures and footage of violence were also a reminder of the role luck plays in politics. The riots led Thursday’s news bulletins and Friday’s newspapers, deflecting attention from the first serious parliamentary rebellion against David Cameron’s coalition. The government’s majority was cut from 84 to 21 as MPs voted on controversial—and painful—plans to triple university tuition fees.

(American readers are permitted a rueful smile at the fact that Britain’s leading universities will now be able to charge up to $14,000 a year.)

For Cameron’s coalition partners in the Liberal Democrats this was an agonizing moment. Nick Clegg, the Lib Dem leader and Deputy Prime Minister, had campaigned on a slogan of “No More Broken Promises” and every one of his MPs had signed a pledge to vote against any rise in tuition fees.

Power is about choices, however, and the Liberal Democrats found themselves in deep, uncharted waters. While Clegg tried to muster support for the government line, fully half his MPs rebelled against him and voted with the opposition. Clegg put his credibility on the line and may reap an electoral whirlwind after one of the more spectacular political flip-flops in recent memory.

The rioters, however, may prove his best allies. “Middle Britain” was horrified by the scenes of violence and the half of the population that never attended college is unlikely to be impressed by the sight of well-off students disgracing themselves and defiling national monuments.

For the coalition government, however, it was also a warning of what may be to come. As the deep spending cuts necessary to rebalance Britain’s broken public finances take their toll, and as the young are radicalized by their perception of an uncaring government, such scenes, more reminiscent of Paris than London, may yet become a regular and disconcerting part of the British political landscape.

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The News Out Of Stockholm

The Jawa Report:

Forbes:

STOCKHOLM — Two explosions shook central Stockholm on Saturday, killing one person and injuring two, rescue officials said.Police spokeswoman Petra Sjolander said a car exploded near Drottninggatan, a busy shopping street in the center of the city. Shortly afterward, a second explosion was heard higher up on the same street, and a man was found injured on the ground. He was later pronounced dead.

…”I saw some people crying, perhaps from the chock,” he said. “There was a man lying on the ground with blood coming out in the area of his belly, and with his personal belongings scattered around him.”

Gabiro said the blast was “quite loud” and he saw smoke coming from the area where the man was lying.

Few details except one familiar item. The vehicle was stuffed with gas canisters, which I take as propane cylinders and gasoline. Gee I wonder if anyone has tried that before?And it appears they wanted to blow up Christmas, excuse me, Cross Worshiping Shoppers.

Must have been those pesky Lutherans protesting the commercialization of Christmas?

Michelle Malkin:

They’re at it again. Cartoon jihadists hit Stockholm yesterday in a suicide bombing. Two innocent bystanders were injured; the jihadist died of stomach wounds. All for the pretextual crime of “insulting” Islam.

Lisa Lundquist at The Long War Journal:

Swedish police confirmed that the owner of the car used in the bombing has been identified as Taimour Abdulwahab, born Dec. 12, 1981; today would be his 29th birthday, according to Swedish journalist Per Gudmundson. The car was purchased as late as November of this year.

There was an R.I.P. page on Facebook for Abdulwahab, created earlier today, noting he “died an heros dead in Stockholm” on Dec. 11. Abdulwahab’s own Facebook page, which appeared under the nom de guerre “Taimour Al-Abdaly,” is replete with references to militant Islam and videos from Iraq and Chechnya, and listed “favorites” include “Islamic Caliphate State” and Sheikh Abu Muhammad al Maqdisi, the radical Jordanian cleric and mentor of Abu Musab al Zarqawi. Within the past few hours, both Facebook pages have been taken down.

One of the links on Abdulwahab’s Facebook page shows photos of him in what appears to be Jordan.

The warning emailed to Swedish authorities shortly before the bombing yesterday contained a request for forgiveness from the plotter’s family for deluding them about a recent trip to the Middle East; the trip was made for terrorist training purposes.

“I never went to the Middle East to work or earn money. I went there for Jihad,” he stated.

Jim Hoft at The Gateway Pundit:

Suspected Swedish bomber Taimour Abdulwahab Al-Abdaly used the Muslim dating site Muslima.com in his search for a second wife. (Daily Mail) The Swedish suicide bomber was a trained jihadist who was recently looking for a second wife.
He was a father of two young children.

Legal Insurrection

Aaron Goldstein at The American Spectator:

In an interview with the BBC, Swedish Prime Minister Fredrik Reinfeldt said he is “not sure” if e-mail threats sent minutes before two bombs exploded in downtown Stockholm are connected to yesterday’s bombing which killed the attacker and injured two civilians.

The threat stated in part, “Our actions will speak for themselves, as long as you do not stop your stupid war against Islam.”

While Prime Minister Reinfeldt (the leader of Sweden’s ostensibly conservative Moderate Party) might not be sure if the e-mail threat and subsequent bombings are connected, an Islamist website is very sure.  The website, Shumukh al-Islam, identified the bomber as Taimour Abdulwahib Al-Abdaly.  The jihadist forum referred to Al-Abdaly as “our brother” and indicated that Al-Abdaly had “carried out the martyrdom operation in Stockholm.”

The Daily Mail reports that Al-Abdaly was born in Iraq, had moved to Sweden nearly twenty years ago and had attended university in England.  The British daily also indicated that Al-Abdaly had a history of expressing jihadist sympathies posting videos concerning the War in Iraq, Chechnya and Guantanamo Bay.

mistermix:

How in the hell do you detonate a huge car bomb, and a suicide bomb, in the middle of a busy shopping area a couple of weeks before Christmas without killing anyone but yourself? I’m sure we’ll learn every little detail about the person who did this, and maybe there are more attacks to follow, but at the moment this looks like more confirmation of DougJ’s thesis that terrorism is for losers.

James Joyner:

We’ve been lucky in two respects.  First, most of the terrorist attacks in the West since the 9/11 attacks — now more than nine years ago — have been spectacularly inept.  Second, we’ve thus far been spared by the classical suicide bombers of the type that have plagued Israel for something like a quarter century.

Given that the security measures needed to defend against the latter are so onerous that they’re intolerable in a free society — indeed, a society which would tolerate them for more than the occasional high value target could not reasonably be described as “free” — it’s only a matter of time.

Bruce McQuain at Q and O:

As is obvious, people are out to kill Swedes and they don’t much care who it is that’s unlucky enough to be around the next bombing attempt (of course, the probability of being killed in a terror attack in the West is probably akin to the probability of being struck by lightning as it is – but it still scares people excessively.).

So … they can roll over, give up their liberty and freedom and someday see their children grow up in an oppressive culture that doesn’t value anything the Swedes value today.   Or Sweden can take a deep breath, hitch up its courage, declare real war on radical Islam and the killers it creates and sweep them from their country.  By doing so they can also serve notice that the dominant culture – Swedish culture – will remain as such and that those who’ve immigrated from other lands and other cultures can adapt to that culture or leave.  Here’s a basic truth that needs to be heeded: You cannot be tolerant with the intolerant.

When those who would kill you declare war on you as these killers have, you have two choices – fight the war or surrender.  You can’t decide not to participate.  It doesn’t work that way.  Hopefully Sweden will understand that and choose the former over the latter.

Moe Lane

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Erlernen Sie Von Uns, Amerika, Part II

Nicholas Kulish at NYT:

Germany has sparred with its European partners over how to respond to the financial crisis, argued with the United States over the benefits of stimulus versus austerity, and defiantly pursued its own vision of how to keep its economy strong.

Statistics released Friday buttress Germany’s view that it had the formula right all along. The government on Friday announced quarter-on-quarter economic growth of 2.2 percent, Germany’s best performance since reunification 20 years ago — and equivalent to a nearly 9 percent annual rate if growth were that robust all year.

The strong growth figures will also bolster the conviction here that German workers and companies in recent years made the short-term sacrifices necessary for long-term success that Germany’s European partners did not. And it will reinforce the widespread conviction among policy makers that they handled the financial crisis and the painful recession that followed it far better than the United States, which, they never hesitate to remind, brought the world into this crisis.

Derek Thompson at The Atlantic:

Germany is absolutely on a tear. The economy grew at an annualized rate of nearly 9 percent last quarter, stoked by huge export growth. In a weird way, the debt crisis has helped, at least temporarily. A weak Euro is making German products more affordable outside the Eurozone, just as the developing world emerges from the recession with income to buy the cheaper cars, machines and equipment that Germany is selling.

The question is whether or not this kind of growth is sustainable for a country whose largest export partner, the EU, is undergoing spending cuts and tax increases that will freeze some consumer demand. As the continent’s economy slows down in the second half of this year, there’s simply no way for Germany to keep up 9 percent growth all year.

Free Exchange at The Economist:

Unemployment in Germany has been steadily falling, in contrast to the trend in the rest of the euro zone—and America. Firms used a short-time working scheme and flexible hours to keep hold of workers when demand was weak. Many of the workers whose hours were cut have been drawn back into full-time work far more quickly than firms had dared hope. Unemployment in Germany is now lower than it was when the crisis began.

It seems almost strange that the euro-area economy was so strong at a time when a sovereign-debt crisis and regional imbalances seemed to threaten the single currency’s very existence. The GDP figures show that the latter problem has not gone away. Countries with strong ties to Germany’s export machine, such as Austria and the Netherlands, posted strong growth. The figures from France were solid, too (if based more on consumer spending than exports). But in Spain and Portugal GDP rose by a feeble 0.2% in the second quarter. Greece’s economy shrank by 1.5% (see chart).

That will not worry the German firms whose focus is increasingly Asia and Latin America. Nor will American complaints that Germany is living off the spending of others and adding little to global demand have much impact. There are some signs that Germany’s recovery is leading to more spending at home. The German statistical office said that consumer spending made a positive contribution to GDP. Some firms are already reporting skill shortages, which ought to be good for jobs, wages and (eventually) consumption. Even so, a more balanced recovery in Germany may yet be thwarted by fragile banks and by the inherent thrift of consumers. It is telling that Germany is one of the few places where sales of Mercedes cars have fallen this year.

The renewed hope in Europe contrasts with anxiety in America, where the economy is faltering and jobs growth is scarce. But just as these concerns are a warning to Europeans that the global recovery is not secure, the joy in Germany should comfort Americans. The fortunes of both economies are as tightly bound as ever. If German exporters are thriving, it means that someone out there in the world economy is still spending freely.

Donald Douglas:

Exports are driving the German economic boom, but an expansionary fiscal policy laid the basis for market oriented growth. See, from last year, “Germany agrees biggest economic stimulus package since World War II“:

The plan, which Christian Democrats and Social Democrats hammered out late Monday, includes €17-18bn in infrastructure investments for education and highways, and tax cuts for firms and individuals.

It also grants families a one-off extra child benefit payment, cuts health insurance costs, simplifies rules for creating temporary jobs, and provides subsidies to encourage purchases of environmentally friendly cars.

And Germany has actually been cutting taxes for a decade, “German businesses enjoyed record tax cuts in last decade.”

Dean Baker at The Center For Economic and Policy Research:

It would have been worth noting that it is not possible for every country to follow Germany’s path of relying on a large trade surplus (someone must have a corresponding deficit). Germany and some number of other nations can create domestic demand through trade surpluses, but this strategy cannot be followed everywhere.

It also would have been helpful if this article reported economic data that would have been meaningful to its readers. For example, GDP is always reported as an annual growth rate, not a quarterly rate. Also, it would have been more useful to present the OECD harmonized unemployment rate for Germany (7.0 percent), which is measured in the same way as the U.S. rate, rather than the German official rate, which counts part-time workers as part of the unemployed.

Tyler Cowen:

There is much more of interest here.  I would describe this as a major, still uninternalized lesson of the recent crisis, with its roller coaster-rapid dips.  In a highly specialized modern economy, it is much easier to prevent jobs from being destroyed than to create them again, at least assuming those are “good” jobs in the first place.  (Yes, people thought they knew this but it’s an even stronger difference than had been believed.)  The U.S. auto bailout, for instance, worked better than did most of the stimulus program.  Most of the Austrians would disown this point, but you can pull it right out of Lachmann’s Capital and its Structure.

We should have cut the payroll tax as soon as possible, an idea which I might add Alex was promoting quite early on.

Arnold Kling responds to Cowen:

Tyler strikes me as engaging in Krugmanesque intellectual combat here. First of all, he pulls a quote out of context, giving only the first sentence of a paragraph from the New York Times article that reads

A vast expansion of a program paying to keep workers employed, rather than dealing with them once they lost their jobs, was the most direct step taken in the heat of the crisis. But the roots of Germany’s export-driven success reach back to the painful restructuring under the previous government of Chancellor Gerhard Schröder.

Second, he says that the auto bailout “worked better than did most of the stimulus program,” which leaves him plenty of wiggle room to say, “I did not say that the auto bailout was a success.” Finally, when he says “assuming those were ‘good’ jobs in the first place,” he leaves himself room to wiggle out of being accused of advocating keeping unsustainable jobs around.On the larger point, keep in mind that in an ordinary non-recession month 4 million jobs are destroyed and about 4.2 million jobs are created. Suppose that in a bad month of a recession, 4.0 million jobs are created and 4.5 million jobs are destroyed. Which of those 4.5 million jobs ought to be saved, because they might come back in a stronger economy? No one in Washington knows.

Trying to save existing jobs is a fool’s errand, comparable to trying to keep defaulting mortgage borrowers in their homes. When a firm lets an employee go, it is making a cost-benefit calculation that takes into account the cost of rehiring for that position when the economy turns up. The firm is unlikely to be making such a large mistake that government should try to change the decision.

FrumForum

UPDATE: Paul Krugman

UPDATE #2: David Brooks at NYT

Steve Benen

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Erlernen Sie Von Uns, Amerika

Tyler Cowen at New York Times:

IN many countries, including the United States, there are calls for the government to spend more to jump-start the economy, and to avoid the temptation to cut back as debts mount.

Germany, however, has decided to cast its lot with fiscal prudence. It has managed rising growth and falling unemployment, while putting together a plan for a nearly balanced budget within six years. On fiscal policy and economic recovery, Americans could learn something from the German example.

Twentieth-century history may help explain German behavior today. After all, the Germans lost two World Wars, experienced the Weimar hyperinflation and saw their country divided and partly ruined by Communism. What an American considers as bad economic times, a German might see as relative prosperity. That perspective helps support a greater concern with long-run fiscal caution, because it is not assumed that a brighter future will pay all the bills.

Even if this pessimism proves wrong more often than not, it is like buying earthquake or fire insurance: sometimes it comes in handy. You can’t judge the policy by asking whether your house catches on fire every single year.

Keynesians have criticized fiscal caution at this point in the economic cycle, arguing that fiscal stimulus will give economies more, not less, protection against adverse events. But is that argument valid?

Certainly, in Germany, the recent history of fiscal stimulus wasn’t entirely positive. After reunification in 1990, the German government borrowed and spent huge amounts of money to finance reconstruction and to bring East German living standards up to West German levels. Millions of new consumers were added to the economy.

These policies did unify the country politically but were not overwhelmingly successful economically. An initial surge was followed by years of disappointing results for output and employment. Germany’s taxes remain high, and overall West German living standards failed to rise at the same rate as those of most other wealthy countries.

Persuading former East Germans to spend more as consumers turned out to be less important than making sure that they had the skills to mesh with the economic expansion of the country. It is no surprise that many Germans are now skeptical about debt-financed government spending or excessive reliance on domestic consumers.

In recent times, Germany has shown signs of regaining a pre-eminent economic position. Policy makers have returned to long-run planning, and during the last decade have liberalized their labor markets, introduced greater wage flexibility and recently passed a constitutional amendment for a nearly balanced budget by 2016, meaning that the structural deficit should not exceed 0.35 percent of gross domestic product.

More Cowen at his blog:

I would add a few points:

1. I am not sure why the American left so near-unanimously lines up behind Keynesian recommendations these days.  (Jeff Sachs is an exception in this regard.)  There are other social democratic models for running a government, including that of Germany, and yet a kind of American “can do” spirit pervades our approach to fiscal policy, for better or worse.  Commentators make various criticisms of Paul Krugman, but putting the normative aside I find it striking what an American thinker he is, including in his book The Conscience of a Liberal.  Someone should write a nice (and non-normative) essay on this point, putting Krugman in proper historical context.

2. You sometimes hear it said: “Not every nation can run a surplus,” or “Can every nation export its way to recovery?”  Reword the latter question as “Can every indiviidual trade his way to a higher level of income?” and try answering it again.  Productivity-driven exporting really does matter, whether for the individual or the nation.  It stabilizes the entire global economy,

3. There really is a supply-side multipler, and a sustainble one at that.

4. The phrase “fiscal austerity” can be misleading.  Contrary to the second paragraph here, even most of the “austerity advocates” think that the major economies should be running massive fiscal deficits at this point.  (And Germany had a short experiment with a more aggressive stimulus during the immediate aftermath of the crisis.)  They just don’t think it works for those deficits to run even higher.

5. The EU is an even less likely candidate for a liquidity trap than is the United States.  That said, how to distribute and implement additional money supply increases would be a serious political problem for the EU.  Simply buying up low-quality government bonds would work fine in economic terms, but worsen problems of moral hazard, perceived fairness, and so on.  This problem should receive more attention.

Instapundit

Ryan Avent at Free Exchange at The Economist:

This is all very nice, but it’s worth pointing out that Germany’s programme of fiscal stimulus was among the largest in Europe (across developed nations). Germany’s unemployment rate is low, and it declined through some of the worst portions of the recession, but it’s important to point out that this is due in part to an ambitious work-sharing arrangement, in which employers are encouraged to reduce individual hours worked rather than lay off employees. This policy certainly helps to mitigate job losses during a downturn (which makes for great countercyclical policy, and which reduces the fiscal cost of recession) but it’s more likely to delay necessary structural reforms than accelerate them.

And finally, as you can see at right, Germany is one of the few large European economies to increase its deficit from 2009 to 2010. And its planned deficit reduction in 2011 is among the smallest in the euro area. If Germany is more successful than other economies at pulling through recession, it may be because it’s better at performing the ideal policy move—a move the that Mr Cowen appears to criticise when it’s urged by members of the American left—bigger short-term deficits followed by a credible switch to fiscal tightening down the road.

Mr Cowen’s point still stands, to some extent; other countries shouldn’t berate Germany for having the good sense to do what they ought to be doing. But I don’t think it’s quite accurate to sell the German experience as one of a triumph of structural savvy over countercyclical good sense.

Paul Krugman:

Here’s the latest, from Tyler Cowen:

Certainly, in Germany, the recent history of fiscal stimulus wasn’t entirely positive. After reunification in 1990, the German government borrowed and spent huge amounts of money to finance reconstruction and to bring East German living standards up to West German levels. Millions of new consumers were added to the economy.

These policies did unify the country politically but were not overwhelmingly successful economically. An initial surge was followed by years of disappointing results for output and employment.

This passage makes me want to stick a pencil in my eye. Let’s consider the case:

1. This was not an effort at fiscal stimulus; it was a supply policy, not a demand policy. The German government wasn’t trying to pump up demand — it was trying to rebuild East German infrastructure to raise the region’s productivity.

2. The West German economy was not suffering from high unemployment — on the contrary, it was running hot, and the Bundesbank feared inflation.

3. The zero lower bound was not a concern. In fact, the Bundesbank was in the process of raising rates to head off inflation risks — the discount rate went from 4 percent in early 1989 to 8.75 percent in the summer of 1992. In part, this rate rise was a deliberate effort to choke off the additional demand created by spending on East Germany, to such an extent that the German mix of deficit spending and tight money is widely blamed for the European exchange rate crises of 1992-1993.

In short, it’s hard to think of a case less suited to tell us anything at all about fiscal stimulus under the conditions we now face. And the fact that a prominent commentator on current events apparently doesn’t know that, after a year and a half of debating this issue — well, as I said, I’m feeling fairly despairing.

Pejman Yousefzadeh at The New Ledger:

Concerning Krugman’s first and second points, while no one was concerned about the West German unemployment rate post-unification, there certainly were concerns about the East German unemployment rate, which means that there were, at the very least, regional deflationary concerns specific to East Germany; note Krugman’s own comment that high unemployment brings about deflation as a “proximate risk.” As noted here, the unemployment rate in East Germany in 1992 was a whopping 15%. It went up to 16% in 1993, and remained steady in 1994. It was between 7-8% in West Germany during those periods. Unemployment in the former East Germany remains higher than it does in the West. Thus, contra Krugman, there were very real unemployment concerns post-unification, as East Germany struggled on the labor front, which helped raise legitimate deflationary concerns. The German government’s spending, as a consequence, did take place in depressed demand conditions, with high unemployment in East Germany haunting German policymakers.

But what about Krugman’s third point, which is that the Bundesbank’s decision to raise rates showed that there was no zero bound? Krugman makes it sound as though inflationary concerns stemmed from the fact that the German economy was doing well and did not have unemployment concerns, but as the above paragraph shows, the German economy was suffering significant unemployment in the East, which naturally raised deflationary concerns. To the extent that deflation was avoided, it was not because the employment situation was ideal. Rather, it was because of policies concerning the post-unification exchange rate, which Wikipedia actually covers (and Krugman does not):

When a customs union was created between the former East Germany (German Democratic Republic) and West Germany (the “old” Federal Republic of Germany), there was a dispute over the rate of exchange for conversion of East German money to Deutschmarks. The Chancellor (Helmut Kohl) decided to ignore the advice of the Bundesbank, and chose an exchange rate of 1:1. The Bundesbank feared that this would be excessively inflationary as well as very significantly impairing the economic prospects of the area of the former East Germany. This dispute was particularly public because of the Bundesbank policy of communicating openly on such matters. Although public opinion normally supported the Bundesbank in matters of combating inflation, in this case Helmut Kohl prevailed, and the President of the Bundesbank, Pöhl, resigned. The Bundesbank had to use monetary measures to offset the inflationary effect.

So deflation was avoided, and rates had to be raised. But they weren’t raised because the German economy had reached anything resembling full employment, with low demand. No one could argue that it had, with East German unemployment rates hovering in the 15-16% range. Yet, reading Krugman, one would naturally think that East German unemployment simply was not a factor.

All of this shows, of course, that Cowen has the better of the argument, both in terms of the debate over the German economy in the immediate post-unification stage, and in the debate over what Germany–and the United States and other developed countries–ought to do with regard to future fiscal and economic policies. I understand that Krugman is loath to admit that Keynesian stimulus policies don’t work, and anytime anyone brings forth an example of them not working, Krugman tries to argue that said example is not apt. It should surprise no one that his arguments on this issue have a tendency to be highly misleading.

Mark Thoma:

About to hit the road for a long travel day, so don’t have time to do anything except point to the latest debate on fiscal policy: Tyler Cowen says the US could learn some things about fiscal policy from Germany, see here for his summary. But as Paul Krugman points out, it’s not clear what there is to learn since key conditions for fiscal policy effectiveness such as high unemployment and interest rates at the zero bound are not present in one of the key examples from Germany given in the column.

Henry Farrell and Daniel Drezner at Bloggingheads

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