by Mario Rizzo
Macro-policy economists are in a bad way. They cannot stand dissent. The New York Times reports that Angela Merkel’s government refuses to start spending as if it were going out of style. She sees the current crisis as the result of distortions caused by excessive and misdirected credit. Paul Krugman has also expressed frustration with the German lack of enthusiasm for a big stimulus. To give the reader the feel for this apoplexy:
Right now everyone sees the need for a large, pan-European fiscal stimulus.
Everyone, that is, except the Germans. Mrs. Merkel has become Frau Nein: if there is to be a rescue of the European economy, she wants no part of it, telling a party meeting that “we’re not going to participate in this senseless race for billions.”
Last week Peer Steinbrück, Mrs. Merkel’s finance minister, went even further. Not content with refusing to develop a serious stimulus plan for his own country, he denounced the plans of other European nations. He accused Britain, in particular, of engaging in “crass Keynesianism.”
Read the rest of it. Not only must the planners circumvent, when convenient, the legislative process in the US but they demand that the whole world follow in lock-step. One World, One Macro Theory, One Policy.