Thursday, December 8, 2011

David Brooks of the New York Times Travels into Odious World - That’s a World Where People are Deservedly Poor and Economic Difficulties Abound

Why, Because Unlike Americans and Germans, They are Lazy and Slothful.

How does one explain the economic difficulties of countries like Greece and Italy and Ireland and Spain and Portugal and others?  Well not in this Forum because the explanations are complex and tedious and would take several volumes not several paragraphs.  But David Brooks, the house Conservative opinion writer of the New York Times has the simple answer.

The U. S. and Germany for example are successful

because many people in these countries, as Arthur Brooks of the American Enterprise Institute has noted, believe in a simple moral formula: effort should lead to reward as often as possible.

People who work hard and play by the rules should have a fair shot at prosperity. Money should go to people on the basis of merit and enterprise. Self-control should be rewarded while laziness and self-indulgence should not. Community institutions should nurture responsibility and fairness.

See the Germans in particular are the good guys, and the people of those failing countries are the scum of the earth.

Over the past few decades, several European nations, like Germany and the Netherlands, have played by the rules and practiced good governance. They have lived within their means, undertaken painful reforms, enhanced their competitiveness and reinforced good values. Now they are being brutally browbeaten for not wanting to bail out nations like Greece, Italy and Spain, which did not do these things, which instead borrowed huge amounts of money that they are choosing not to repay.

And Germany should not be blamed for blocking implementation of European economic policy to alleviate suffering in these countries, Germany should be praised for causing economic suffering in these countries, it’s for their own good.

But our sympathy should be with the German people. They are not behaving selfishly by insisting on structural reforms in exchange for bailouts. They are not imprisoned by some rigid ideology. They are not besotted with some semi-senile Weimar superstition about rampant inflation. They are defending the values, habits and social contract upon which the entire prosperity of the West is based.

This is a re-writing of the truth of current events so vast that many Conservatives can only dream of reaching this level of fabrication. And given their history, it will be a long time before Germany can be said to be defending the values of western civilization.  The statutes of limitation on Auschwitz have not run out.

Here is Paul Krugman with, you know, facts, those things that have a huge anti-conservative bias.

So, one more time, here are some data (from the IMF World Economic Outlook database). Debt as a % of GDP for Spain and Italy:

Before the crisis Spain had low and declining debt. Italy had high debt inherited from the past, but it was steadily working that debt down relative to GDP. Neither country was being profligate — that’s just not what happened. Since the crisis debt has been rising relative to GDP, but that’s what happens when you have an economic crisis.
Yes, Greece. But Greece is now a tiny part of this story. As I said in today’s column, Greece (GDP of about $300 billion) is roughly Greater Miami ($270 billion). Italy and Spain are the big stories, and they were not, repeat not, fiscally profligate.

Germany is imposing austerity on these countries in order to punish them for their profligate ways and it is blocking ECB support of sovereign debt because it does fear any level of inflation that would result from monetizing the debt.  Germany is acting in its own, narrow, short term political and economic self interest, that is all it is doing.  The Dismal Political Economist has rightly commended Germany's internal policy for managing the Great Recession, but its management of current economic policy for Europe is wrong, absolutely, completely and entirely wrong.  When the history of this era is written that is what it will say.

But in the near term it will be Germany that will also suffer greatly.  As a nation dependent upon exports to drive economic growth, Germany is going to soon discover that when its customers have problems Germany has problems.  Already economic growth forecasts for Germany are being revised downward and a full blown European recession, including Germany is a distinct possibility. 

If that happens one wonders what people like Mr. Brooks will say.  Will he blame Germany’s bad economy on the fact that they abandoned what he deems, as self-appointed judge and jury (and other nations’) policy of requiring great harm to other people results in great economic harm to themselves.  Probably not, being Conservative means never having to say you were wrong.

The citizens of Greece, Italy and the other countries of Europe that are having difficulties are guilty of electing horrible, greedy, incompetent people to public office, people who use government power only for their own benefit and to further their own misguided ideology.  But if that is a capital crime, the voters of the United States should be sitting on death row.

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