Tuesday, November 9, 2010



It seems the whole world has been criticizing U.S. monetary and, by extension, economic and fiscal, policy of late. (See, inter alia, my already seminal 11/5/10 piece, THE BOYS FROM BRAZIL AND THE WESTERN AVENUE APPROACH TO MONETARY POLICY and my 10/8/10 piece, “AW, C’MON…ALL WE NEED IS A LITTLE OPTIMISM, A POSITIVE ATTITUDE!”) A few days ago, German Finance Minister Wolfgang Schauble joined in the fun. While one has to admit that it is far easier being criticized by the Germans than by the Brazilians on monetary policy, Mr. Schauble’s remark’s very profundity and its “right on the mark” or “hitting it right on the head” nature made it especially stinging. In defending German trade and monetary policy, and simultaneously delivering perhaps the best diagnosis of modern America’s economic maladies I have ever read, Mr. Schauble said (Wall Street Journal, 11/8/10, page A17):

Germany’s exporting success is based on the increased competitiveness of our companies, not on some sort of currency sleight-of-hand. The American growth model, by comparison, is stuck in a deep crisis. The USA lived off credit for too long, inflated its financial sector massively and neglected its industrial base. There are many reasons for America’s problems—German export surpluses aren’t one of them.” (Emphasis mine.)

Wow…talk about friends speaking the truth to friends.

A comment nearly as on the mark as Mr. Schauble’s was made by Luxembourg Prime Minister Jean-Claude Juncker, who, when addressing American monetary (overall economic, really) policy, said (Wall Street Journal, 11/9/10, page A15):

I don’t think it’s a good decision. You’re fighting debt with more debt.”

We know this is a brilliant statement because it reflects so much of the sentiment expressed over the last few years by the Insightful Pontificator, but I digress.

Messrs. Schauble and Juncker, as I mentioned before, were not alone in trying to get our once great nation off the path that is rapidly taking it (or, perhaps more properly, has rapidly taken it) to second class status. Japanese Prime Minister Naoto Kan, Brazilian (Brazilian! I just can’t get over the Brazilians being in a position to criticize us on our monetary policy. O tempora, o mores!) President-Elect and former socialist revolutionary Dilma Rousseff, Russian G-20 negotiator Arkady Dvorkovich, and Chinese vice finance minister Zhu Guangyao have all tried to tell us that we are on the verge of destroying perhaps the only thing we have left going for us in the world economy—our once strong and revered currency.

Will we ever learn? Perhaps not. Obsequious Ben Bernanke is digging in his heels, insisting that he is right and the rest of the world is wrong. His boss (To deny this employer/employee relationship any longer would be to go beyond disingenuousness to outright fatuousness.) seems to have the same attitude. See one of today’s other posts,
And why not? Such jingoistic puffery seems to work on the situation comedy addled electorate that dominates the home front.

No comments: