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Giving advice is easier than taking advice

"It's hard to detect which matters more: German behavior over Libya or its course in the management of the euro crisis, but, in short, most US analysts believe that Germany got both wrong," writes Ulrike Guérot in the European Council on Foreign Relations' blog .

I think it is the Eurocrisis, as many US analysts were not in favor of the Libya mission either, at least until the rebels succeeded.

Naturally, US pundits and politicians have plenty of advice for Germany on how to get it right. Dr. Guérot concludes: "Whatever the solution, Germany needs more ears to listen to what is said about our country beyond our borders and be capable to integrate this into the domestic policy discourse."

I agree, but the German government disagrees.

Charles Hawley presents some quotes in Spiegel:

"It's always much easier to give advice to others than to decide for yourself. I am well prepared to give advice to the US government," said Finance Minister Wolfgang Schäuble. In an interview with the tabloid Bild am Sonntag last Sunday, Foreign Minister Guido Westerwelle said: "I can't understand some of the critical comments from our American friends regarding our policy of reducing debt."

Even Merkel herself joined in, blasting the US for its unwillingness to support an international financial transaction tax. "It can't be that countries outside the euro zone, which continuously push us to solve the debt crisis, comprehensively reject a financial transaction tax," she said. "I don't think that's okay."

The US isn't alone with its growing discomfort. Last week, Cameron told the Financial Times that European leaders should take a "big bazooka" approach to tackling the crisis.

Big Bazooka? Seriously? Are we in kindergarten? The financial transaction tax, which Merkel mentions, would not be a big bazooka, but just a 9mm. Cameron, however, is afraid of it anyway. London wants to keep making a fortune as a a major financial center rather than contemplating the manufacturing of real goods, which all require paying sales tax.

Obama does not dare to implement major reforms in the financial system either.

Nobel Laureate economist James Tobin suggested something like it in 1972 at Princeton. Progressive activists and some economists pushed for it in the 90s in response to financial crises. German conservatives used to be against it, but Merkel started supporting the financial transaction tax last year. I guess, it only takes one or two more financial meltdowns for Cameron and Obama to support such a tax. After all, as Winston Churchill said, Americans can always be counted on to do the right thing...after they have exhausted all other possibilities.

Of course, the financial transaction tax is just 9mm, and it takes much more to overcome the financial crisis AND to prevent such big crisis from happening again every few years, but is better than just firing the big bazooka and throwing even more money at the markets, which seems to be what Cameron and Obama want the Eurozone members to do.

Unrelated Endnote. Interesting article by Anne Applebaum in The Telegraph:

Despite all the loud talk of the "1 per cent" of Americans who, according to a recent study, receive about 17 per cent of the income, a percentage which has more than doubled since 1979, the existence of a very small group of very rich people has never bothered Americans. But the fact that some 20 per cent of Americans now receive some 53 per cent of the income is devastating. I would argue that the growing divisions within the American middle class are far more important than the gap between the very richest and everybody else. (.)

But if Americans are no longer "all in the same boat", if some of them are now destined to live better than others, then will they continue to feel like political equals? If Britons, Frenchmen and Germans no longer have much in common with their countrymen, will they still want to take part in the same national debates?

Categories: International Economics, Transatlantic Relations | DISQUS, 0 Trackbacks
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