Thursday, May 10, 2012

Angela Merkel cons the American press

That's what the Roosevelt Institute's Jeff Madrick complains about in Germany's Attempt to Beat Greece into Submission Won't Work Next New Deal 05/09/2012:

"German Patience with Greece Wears Thin," says the New York Times headline. My patience with the mainstream media also wears thin. ...

Germany's basic refusal to take responsibility for its contribution to this situation continues to be stunning. First, it exploits a fixed euro that is too low given its competitiveness—much like the Chinese do and the Japanese did before them. Then its banks lend willy-nilly to the nations who are buying its exports, disregarding the quality of the loans and prospective inflation. (The Chinese similarly buy U.S. debt.) Third, it demands harsh cutbacks in Greece if the bad boys want money to pay their loans back. Which makes matters worse. Across the nations that have adopted austerity, debt as a proportion of GDP is higher than it was during the recession. ...

But the angry reaction to austerity is utterly, laughably predictable. To act as if the Germans have done everything right and the Greeks everything wrong is preposterous. When the media give credibility to these insinuations and implications, they should be called to task. We are suffering the worst economic leadership among rich countries in our lifetime. The Germans responsible should not be proud to be head of this class.
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