Europe doesn't want to do squat about the economy

[Kurt_and_Hunter]

Europe doesn't want to do squat about the economy.

These supposed socialists just inveigh against government spending and carry on about the threat of inflation like Larry Kudlow's little sister.

Some possible reasons:

They want to "free ride" on our stimulus--let us rack up the debt while they keep their balance sheets tidy.

Having a common currency robs the euro-zone nations of independent monetary policy and makes inflation harder to counter.

Being more export oriented than the US makes them more imperiled inflation.

Europe has a safety net so their fiscal/monetary risk-reward is different... weathering a major down-turn involves less real suffering.

Whatever the reason, I'm about ready for an order of 'stimulus fries'

Chart of Economic Policy Coolness
1) UK
2) USA
3) Japan
4) China
5) Europe
6) John Boehner

[Odin2005]

1. Despite it's "left-wing" reputation the EU is really not that open to true reform.

The EU is de facto controlled by a hide-bound class of "DLC-like" paternalistic "Eurocrats" that have no new ideas. Unfortunately would-be "reformers" on the left and the right in Europe have no new ideas, either.

[Kurt_and_Hunter]

2. Yup. Gordon Brown has been inventive and serious but the Eurozone players seem antique

[asphalt.jungle]

3. but in bad times doesn't that safety net become more expensive to maintain?

so if govt expenditure goes up significantly due to those great unemployment benefits then that's like a stimulus. and unemployment is always high so it didn't jump as much in the eurozone as it did in america.

[Kurt_and_Hunter]

4. Yes, I was thinking about that

On the other hand, they are used to social disaster in ways we are not.

Incredibly high unemployment is something most of them have been through in the last generation or two. Maybe it doesn't freak them out the same way.


Or maybe they feel they need to hang onto their cash because they know they WILL need it because they do have safety nets.

???

[baldguy]

5. They're already doing what we should have been all along.

[Skwmom]

6. Maybe they don't want to follow us off a cliff...

[denem]

7. The biggest stimulus package(s) were Australian:

$60 billion and counting in a country of 20 million people. Of course it helped that the budget was in surplus before September 09. First $10 billion pumped in October.

[Diclotican]

8. Kurt_and_Hunter

Kurt_and_Hunter

O Cry my a river... Most European would not get a foot into the same pile of extremely shit you have managed to get into yourself. Believe me, Europa, EU and so on is doing their bid for undoing some of the catastrophic economic policy that have been in place in the US for the last decade or two... But off course, it is easy to claim that Europe is going on a free ride of your "stimulants pacage"... It is far more easy...

Why do you think most of Europe have that SAFETY net, most american would kill to have now?. Because most european are USED to the knowledge about downturns and upturns. It is almost just in the States they still believed in the eternal way to the sky.. And that it never will be a downturn.. Specially when you lend most of your country's need in foreign money..

And for point it out one and for all. Which country get a free ride after World War Two, when most of Europe had to rebuild everything, and have just one source of trading parter, the other fellow was on political grounds not possible to trade with?: Who had in the World war two got Billions wort of IOU from European country?. Who after the war had to repay every single dime on that money.. Even that we go 50 year to repay it, and no "interest" to the loans.. Believe me, if SOMEONE in the world have gotten a Free ride of everything, it is the United States of America, who have since Wold War two gotten their lion share of everything from Europe - The whole idea of economical policy in Europe was changed a it, so it would benefit the US for the most pat...

Yes we have our safety net, because we have learned the very hard way, that if you don't, you can loose everything, and in the end it can end in revolution.. It is far more easy to have a safety net - and not have an revolution every now and then, then to have the same system as in the US... In Europe th government FEAR the people, because they know the power the people have.. In the USA, it looks like the people fear the government... To the point that even sense ideas as a safety net against downturns is rewoked... In Decades many american have told us in Europe to get rid of our "over expensive safety net".. Now when the reality hit the fan, it looks like most american would love the idea of something like the european form of safety net.. Specially here in Norway, we have been told time and time again by "expert" on the issue, that our wellfare system is to expencive.. I guess most of them would never been in any need of wellfare system anyway.. But for everyone else, our wellfare system is far better than the opposite.. And I suport it, even that I maybe pay more taxes than I would have, withouth the "net"..

Diclotican

[denem]

9. France and Germany are opposed to stimulus spending,

as opposed to bailouts because their already high budget deficits break the agreement on which the Euro was established. American taxpayers are bailing out their banks I believe through AIG.

Thanks for a virtually fact free rant.

[Diclotican]

11. Denem

Denem

Or, can it be that both France and Germany do have their own economical problems, and do not want to be involved into the F**** Mess the US have created on their own the last decade or two?.. Germany still have a lot of debt, from what they got when East Germany was Incorporated in the early 1990s, and still haven't find a way to get every german, from both sides to thing as one.. West germans still thing them self as member of BDR, and east germans still think them self as member of DDR.. Almost two decades after the Berlin Wall was down, and the two germans united again..

France have their own economical problems to try solve, and have been hit hard by the world downturn, many thanks to the greedy banks of Wall Street that believed that the sky was the limit, and the everything was okay.. Even to cut out things that was important, as have some control over what the capitalist system was doing business...

And yes, the EURO was established, with some string attach to it, no EURO land have to have more than 3.0 percent deficit, or else they might be punished. As long as it goes, it have never happened, because when the big country do it, the smaller one have not the same leverage as when the big ones is claiming something. And Germany and France is after all, two of the biggest country in Western Europe and in EU. Poland is maybe nr 3 or 4 on the largest country in EU..

It is correct that some banks in Germany and France get a lot of money from the US bailout of their own banks. Thanks to the fact that the business banks "Own" each other billions wort of dollar are sipping into our owns system and keeping the boat alive when the water is tight.. I for one would rather say, it is time for the money to go the other way too, not just to Ol Uncle Sam who for more than 60 year have had their balls in everything the Western Europe have been doing economical. If you for a second really believe that the US have not earned their share of money from the Marshall Plan and everyone else "recovery plan" they grace ry gave Europe after the War then you might is not that smart as you want to claim yourself to be... The US have earned a lot of money from the Western part of Europe over the year...

Thank you, for the fact that americans are like they ever have been... Even when hit by the storm (economical speaking this time) their still act as they own the world... Many in Project for the New American Century would be proud to se it... I know they have changed name, but the ideas is the same..

Diclotican

[denem]

15. Thank you for a thoughtful response.

Germany has seen it's currency made worthless twice in the 20th century. I understand the phobia, but believe it is misconceived. A strong welfare safety net makes the cost of plummeting demand all the greater.

[amandabeech]

17. The U.S. kicked the Nazis out of Western Europe, and caused their withdrawal from your country.

Hitler did not attack us, yet we sent our young men to die for those that Hitler had over run.

Words like yours make me think that the U.S. should never try to help other countries even when they beg for help, because no matter what we do, it is always the wrong thing later.

Don't bother to reply. It won't show up on my screen.

[Raineyb]

20. That was an incredibly ignorant thing to say.

You give Americans a bad name with that nasty attitude.

Regards

[amandabeech]

24. I like being nasty and ignorant.

You should try it sometime.

[depakid]

23. The US didn't do jack shit until the Japanese attacked

They sat by and let England and others bear the brunt.

and it was the Russians who have the better claim to defeating Hitler.

Just a little history that you might not have been taught in school.

[amandabeech]

25. Yeah, you should have studied reading more, too.

I actually have adjectives in my post. You might take note of them.

This place is so predictable that it's frightening.

[depakid]

26. THe US didn't even enter the war in Europe (actually North Africa) until May 1942.

Battle of Stalingrad- the turning point of the war, was over by February of 1943.

Prior to being attacked by Japan, the US role was limited to the paltry lend lease program. http://en.wikipedia.org/wiki/Lend-Lease

Given the politics and attitudes of the time- I think it's fair to say isolationist policies would have continued.

Now, reconstructing Europe- and instituting the rule of law at Nuremburg, that's another matter.

[Spider Jerusalem]

29. There was the little matter of Germany declaring war on the US...

on 8 December 1941.

You were aware of that, right?

And the British and Russians had more to do with defeating the Nazis than the Americans; the major turning points of the war against Germany came at El Alamein and Stalingrad (no Americans involved in either of those).

[Zynx]

21. You go on about the safety net, but the simple fact is that the Eurozone economies

are contracting just as quickly as the U.S. and the banking system in Europe is just as rotten. Fundamentally, the same problems persist and Europe must act.

[JVS]

10. A couple things you should remember in addition to the point post #9 made

The EU central bank is modeled after the West German Bundesbank in form and tends to be an successor to it in mentality. This results in two things.

1) the EU bank is a politically independent entity. The Germans were very adamant that this West German tradition be continued in order for a Euro to happen. So exerting pressure on the CB to act is nearly impossible.

2) The Bundesbank was always fetishistic about keeping the currency strong. It's monetary policy has consistently favored controlling inflation to promoting employment.

[Diclotican]

12. JVS

JVS

As to nr 2. The reason the Bundesbank was ekstreme about keeping the currency strong was maybe the experience most of them learned the hard way in the Weimar days?.. YOu know billions to get a bread and so one.. If you experienced a decade of two of bad housing and an economy in the toilet,you tend to be little picy about the currency if you have the opportunity do to something about it... And the West German Mark was the best and strongest currency in Western Europe for most of the post war Europe too...

Diclotican

[JVS]

14. I know the reason. And while their currency was the strongest, that does not mean it was the best.

The Bundesbank consistently kept currency tight to such a degree that employment and economic growth suffered. Such a policy is not in the citizen's interest, unless they happen to be citizens with massive cash savings. The Bundesbank mentality is a bad mentality when facing a deflationary cycle because its fear of inflation interferes with the need to prevent deflation, which is a much bigger problem.

[amandabeech]

19. I think that people in the Bundesbank have the murderous inflation

of the interwar years and the contribution of that inflation to the rise of Hitler indelibly etched in their brains.

I can hardly blame them, but I agree with you. The current problem is at least in part the deterioration of asset values backing up financial instruments. However, here, asset values reached extreme bubble valuations. Charting a course between inflation and deflation can be daunting.

[amborin]

13. not true: Europe has a HUGE social safety net == to 10 stimulus programs

Americans would call them marxists or socialists, which some states are

they have in place HUGE safety nets

so they're not feeling the recession the way we are

yes, factories have falling orders, etc.....

but there are all sorts of govt programs helping them, that are already in place

[Diclotican]

16. amborin

amborin

Most european country, specially in Scandinavia would be named Marxist or socialist by most american.. Because we have a social safety net that the US could just dream about.. Even that our social safety net have been remade the last couple of decades because it _is_ expensive to have them.. Most I know agree that this type of society who even the "weak" one have the right to a decent life is right. Even if it cost us a lot of taxes in the prosess... I would say if american would se behind their glasses and known it exist another system, who are not perfect, but who help people who is in need of help, then they would want it for them self. But because they are never been told it - or have been told that it is Marxist or socialism then they do not want it somehow.. Even a single payer health care is in many americans mind out of questing. Even that it in the end possible will cost less than your current system..

Many of us is feeling the recession because of layoffs and so on, but I would say that our system, with a safety net is prepared to some extent to help they who need help, over in other work types if necessary.. But if the whole economical system is melting down, no system in the world could possible helping anyone.. So it is difficult this thing.. A total Meltdown would kill most social safety net, but we do have a cushion, who is helping us to manage it somehow.. And as you point out, compared to US, where you really lost everything if you are laid off, we do have a lot of government program who is there to help... Even if the help sees not to help at the moment..

Diclotican

[doc03]

18. We caused the mess didn't we? n/t

[depakid]

22. Chart of Economic Policy Coolness

#1 is Australia.

Obama wishes he and the Democrats were anywhere near that cool.

It's paying dividends too- in more ways than one:

KEVIN RUDD is rivalling Bob Hawke as Australia's most popular prime minister while support for Malcolm Turnbull has slumped dramatically. The latest Herald/Nielsen poll shows Mr Rudd's approval rating has risen to 74 per cent as Labor forges a crushing lead over the Coalition.

http://www.smh.com.au/national/the-rudd-supremacy-20090329-9flo.html

I'm guessing that new Labour protections, limits on CEO remuneration and $900 bonuses to wage earners (in addition to similar payments to pensioners at Christmas that helped struggling retailers make through the season) might have something to do with it. :-)

BTW: Rudd's most influential economist? Stiglitz.

[Political Heretic]

28. Bam. There it is.

[Political Heretic]

27. Um... what the hell are you talking about.

Because it aint reality.

France and German have both been pouring recommendations out, so as the UK, as well as acting in their own countries.