Yesterday’s post – which suggested that Germany’s fiscal austerity is outperforming Obama’s ‘spend ‘til you drop’ program – seems to have piqued some interest.
As a follow-on, here are some highlights a New Republic article on the topic:
For months, top U.S. officials have begged the Germans to stay the course on their modest stimulus measures, fearing that a too-quick withdrawal would hamstring the European recovery and pose risks to the global economy.
But the Germans have stood firm, rejecting the administration’s Keynesian logic with rhetoric that can sound gratingly reminiscent of Republican talking points.
The Germans even dragged their feet over a stress test of European banks, complicating efforts to restore confidence in the continent’s balky financial system.
* * * * *
Welcome to economic stewardship in the age of German parochialism.
For years, the Germans could be relied upon to play a stabilizing role in Europe, subsuming their national self-interest to lofty visions of continental solidarity.
But, over the last decade, as German leadership has passed to a younger generation less compelled by the war’s memory and unbothered by the Soviet menace, the Germans have ceased to view Europe’s safekeeping as their historical responsibility.
* * * * *
The Americans and Germans spent a stretch of the spring debating the right time to close the stimulus spigot and start narrowing their deficits.
The Americans, haunted by the Great Depression, worried that countries would cut back too quickly and relapse into recession.
The Germans, haunted by their own interwar experience, worried that deficits would lead to a debilitating inflation.
* * * * *
Goodbye to Berlin: How Germany became a thorn in America’s side, August 30. 2010
http://www.tnr.com/article/politics/magazine76973/america-germany-global-finance-conflict?passthru=N2FjMThhMmJmYjU3YzQ2YTQ2YWU3YTZkMTljYTFhNjU
The Homa Files 
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