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"Merkel for the Fed"

The Wall Street Journal used to be very critical of Germany's economic and fiscal policies and big government, but now the paper is a big fan of the Merkel government. In March the conservative paper declared that Old Europe was right in rejecting Obama's calls for a huge global stimulus. And currently The Wall Street Journal (HT: John) is so thrilled by Chancellor Merkel ("Hallelujah, sister") that it wants to nominate her for chairperson of the Federal Reserve.

What happened? Chancellor Merkel rebuked the world's central bankers for being too politically accommodating:

"The independence of the European Central Bank must be preserved and the things that other central banks are now doing must be retracted," Mrs. Merkel told a meeting sponsored by Germany's association of metal- and electrical-industry employers. "We must return together to an independent central-bank policy and to a policy of reason, otherwise we will be in exactly the same situation in 10 years' time." Referring to the U.S. central bank specifically, she said "I view with a great deal of skepticism the extent of the Fed's powers." Usually when a politician lobbies a central bank, it's to demand easier money. We can't recall a similar tight-money intervention from a national leader, save perhaps Ronald Reagan's quiet support for Paul Volcker in the 1980s.

Conservative bloggers used to complain that Germany is so biased towards the Democrats. They said even a center-right party like Merkel's CDU would have more in common with the Democrats than with the Republicans. That still may be the case, but it seems that Germany's fiscal policy is now more in line with those from conservative Americans. And on a personal level, Merkel might got along better with Bush than with Obama.

Related posts:

Big Spending: What America Can Learn from Germany

National Temperaments Explain Reactions to Economic Crisis


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Pat Patterson on :

"They said...?" Now I can admit that at least I understood that Chan. Merkel was not a follower of either the Chicago or Aurstrian theories of capitalism and free markets but I also knew that compared to the SDU her being in the same neighborhood was good enough. Maybe I am having a senior moment because I found that most of the conservative periodicals at least talked about her adherence to fiscal rather than economic policy. I also have to say aside from some general allusions to how really conservative a conservative party in Europe isn't there were very few criticisms of her and comparing her to the Democrats. In fact for a brief moment, about five minutes, conservatives in the US pointed out that many of the most vocal opponents of invading Iraq had been replaced by a more subtle crew. But she has kept this idea even today in rejecting calls for any change in monetary policy and also rejecting any, well almost any, policy that would inflate the money supply. Most of the criticism, especially from The Weekly Standard, was on high taxation practices of Germany and the Salome-like dance to approve a new European constitution. Those veils are still coming off but the Europeans are no closer to getting a peek at that document today than in 2005.

Detlef on :

[i]That still may be the case, but it seems that Germany's fiscal policy is now more in line with those from conservative Americans.[/i] Was that a joke? Or did you mean the tiny minority of "old" conservatives? Which probably doesnīt include the WSJ. After all, conservatives in the Republican party and the media didnīt say a thing when former President Bush added around $5 trillion to US federal public debts. From $5.7 trillion in January 2001 to $10.6 trillion in January 2009.

Pat Patterson on :

That's a rather interesting take on the deficit considering that after the 2006 it was the Republican conservatives that were most vocal in rejecting even more spending. Quite a few conservative Republicans in a variety of media were quite opposed to the extra spending. It was a majority of the Democrats and some liberal and moderate Republicans that claimed that they were doing the "adult" thing and increasing spending. Most conservative Republicans have been hollering about the deficit for years but being somewhat sotto voce because they saw some of that spending going to the two war efforts and the bill for trying to repair the economy after an almost 25% contraction after 2001.

Detlef on :

Pat, [i]after the 2006 it was the Republican conservatives that were most vocal in rejecting even more spending.[/i] After the 2006 elections, Republicans lost their majority in Congress. Remember? Iīd be more impressed if they had rejected deficit spending in 2003 or 2004. And not after they lost their majority! And that "sotto voce" is ridiculous. If youīre in a war you either raise taxes or cut spending to pay for a war. You donīt vote for tax cuts and Medicare D while raising defense spending from $300 billion to $600 billion. I do remember quite a few "paleo"-conservatives / Republicans opposing such massive deficit spending. Especially since you borrowed it mostly from China. I canīt quite remember that many Congress Republicans worried about deficits. Although I admit that I might be wrong here. Since I could only read blogs and the websites of US newspapers, I might have been missing these protests.

Pat Patterson on :

I think my entire comment is self-expalnatory. Most moderate Republicans, practically all the Democrats and a few conservative Republicans supported the rise in deficit spending during the period after 2001. Remember that in the US the president does not have to face a vote of confidence and call new elections is one of his bills is defeated. This is one of the checks placed on the congress in that they do not elect the president and if the numbers are correct members of the minority party and parts of the majority party can consistently vote against these bills. Your comment specifically referred to conservative Republicans as being tongue tied which is not an accurate description as enough of the rest of the party had no problem with extra spending. Any back issue of the National Review, Commentary, American Spectator or the Weekly Standard would reveal dozens if not hundred of anti-deficit arguments which contributed to a below average turnout in 2006 because many conservatives simply pulled a Nader. But as I said most conservative Republicans were extremely unhappy about the rising deficit spending but were out voted consistently by a soldi bloc of Democrats and a majority of the rest of the Republicans. Traditionally I would agree that cutting spending in some areas to pay for a war effort was the norm but throughout the years the spectacular rise in the GDP and tax revenues made passe that old bromide.

Detlef on :

Pat, Sorry, I just donīt believe you. If you had mentioned "" or "The American Conservative", then yes, youīd be right. Unfortunately they were a tiny minority. Citing the "Weekly Standard" or "National Review Online" you fail. They were mostly avid supporters of "shock and awe" wars without any regard to costs. And their hero was Vice President "Reagan proved that deficits donīt matter" Cheney. And voting against any "war bill" proved that Democrats werenīt supporting the troops. Although of course the writers of these publications didnīt feel that "they" might have to answer the call to arms. But I might be wrong. :) So, how about you give some sources where a war bill might have failed? As in, not enough Republican support? It only survived because of Democrat support? Your Republican party consistently accused any Democrats of being traitors. Not supporting the troops. Max Cleland? [i]But as I said most conservative Republicans were extremely unhappy about the rising deficit spending but were out voted consistently by a soldi bloc of Democrats and a majority of the rest of the Republicans.[/i] That is ridiculous. The Republicans did have a majority from 2002-206. And with a few exceptions they all voted for the Bush budgets. The Bush deficits are Republican deficits. George W. Bush was your Republican candidate and President in 2000 and 2004. His deficits are conservative Republican deficits.

Pat Patterson on :

I certainly wasn't arguing that the deficits were not done with Republican approval but to state as you did that conservative Republicans supported the deficits is simply wrong. As to the two sources you cited one is primarily a leftist site, antiwar, and Buchanan's rag is just that a rag. But you have changed your initial point from deficit spending to support for the war. It should also be pointed out that the majority of Democrats also voted for deficit spending in all those years and now that they have both branches of government are spending even more on the war effort and tripling the deficit. Blaming the Republicans, moderate, liberal or conservative, at this point is like trying to explain a speeding ticket for going 200 mph by blaming one of the cars you passed that was going at 85 mph. They sped first? BTW, Medicare D has ended up costing 1/3rd less than predicted and it is currently projected to cost $395 billion over ten years compared to a one year deficit under the current administration of $1.75 trillion. Drop in the bucket especially since this program will be reimbursed by the individual states for some 75% of the costs. Deficits, aside from a small spike after 2001, had been trending down the last five years and then doubling during the political and economic panic of 2008 after the first full year of Democratic control of the legislature by 2008. I can't respond to every point you make simply because they are not pertinent to your original claim that conservatives sat silent in regards to the deficit. But I find your claim of support for the shock and awe doctrine somewhat funny as that concept didn't even survive the first bombing of a restaurant targeting Saddam Hussein. From that point on the initial bombing campaign went from strategic to primarily tactical and ground support While the land campaign was primarily one of manoeuvre vs a numerically superior static force, or so it seemed. The mad dash into Baghdad was accomplished by an RCT on two different days and not once did either unit have logistical or numerical advantage over the defenders of Baghdad. Just because a news magazine puts out a cover declaring shock and awe doesn't mean that is what happened. One mor caveat, doubling the debt sounds horrible but the national debt was steadily declining as a percentage of GDP every year since 2002.

Joe Noory on :

Really? Is [url=]this[/url] that horrible defecit you're talking about? Ypu're forgetting how the non-economic press STOPPED discussing the horrors of debt on 5 November 2008.

Detlef on :

What is your problem? I simply said that Republicans arenīt fiscal conservatives. Doubling the public debt in just 8 years should be proof enough. I didnīt say anything about the Obama budget. Just to make you happy, both Democrats and Republicans arenīt fiscally responsible. Happy now?

Pat Patterson on :

The comment at #2.11111 was certainly not mine nor was the comment #10 on the Turkey thread. My suggestion, aside from the obvious, is to look carefully at the spelling and punctuation of a stolen identity before responding to any outre comment.

Pamela on :

Completely off topic but you don't want to miss this. Larisa and Sipura. Congrats to the Berlin zoo!

Pat Patterson on :

Pres Obama seems to have accomplished a reorganization of the Fed without the untidy neccessity of actually going before Congress and getting the enabling legislation passed. A few of the Fed governors are not happy that instead of controlling an elastic currency and being a bank of last resort the Federal Reserve has simply become the mouthpiece for the administration. What William Jennings Bryan and others demanded over a hundred years ago has come about simply by Obama, the Treasury and Bernarke steamrolling compliance. The long term debt is irresposibly saddling future generations but the seeming disregard for basis points regarding inflation and then throwing cheaper money out of the back of semis will leave the US even more susceptible to the next exuberant period. And the truly irritating thing is that the banks are still hunched over conserving cash and the initial cause of the crash, housing and retail property, are still in the tank.

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