What about retired folks who live off what they’ve saved? They would not find widespread inflation meaningless. (Indeed, even working people who had lived within their means and had savings would be badly hurt.)
I don’t know if a fixed exchange rate is the answer. But by using any national currency whether it is the USD or EU, there are clearly conflicts of interest between domestic monetary policy and global monetary policy.
Actually, the euros have a point-most of the EU members are drowning in debt. Take Greece, for example-to gain EU memebership, the Greek Govt. has to pledge to keep debt below a certain percentage of GNP. Guess what? The Greeks hid their debt ala ENRON! Germany is in terrible fiscal shape-after blowing > 800 billion on East Germany (they essentially bought a bankrupt counytry), and paying welfare for the aliens seeking "asylum", they have no more tax base. Exports are big for the German economy-and nobody is buying > 100K M-B cars these days.
Germany is afraid of inflation (those memories of the 1920’s die hard), and will do anything to prevent it. Italy is running enormous deficits-and its population of retirees is going to skyrocket in the next 5 years.
I bet NORWAY is glad they stayed out of the EU-they are doing fine.
You could, and you’d be mostly right. But I still don’t think its fair to say “Look we’re doing all this, those lazy Europeans aren’t so it must be their fault!”
I think there’s a massive political division, because in most European countries there was a vocal left wing-saying “Neo-Liberalism is bad” but they were kind of overruled.
Which fairly or unfairly, they believe the USA contributed to by supporting the right wing ideology - and essentially the right could say “look how successful the US is!” which won them swing voters who desired that lifestyle, and now its all gone to pieces there’s a certain vindication. They’re just pissed that its dragging them down as well.
So to answer the title I’d says its neither warfare or self-defence, we’re simply just not sure what to do and there’s a large element that simply wants to see someone punished.
Oh and Ralph talk about cherry picking facts- how’s iceland doing outside of the EU? How well do you think Lithuania, Latvia and Estonia would be doing without some of the EU’s inherent stability? Also Denmark, Sweden and Finland aren’t doing particularly badly stability wise… So in effect your point is Nordic countries are generally better governed then Mediterranean ones? No shit.
(Although discussing why thats so would be pretty interesting.)
The USA is panicked. Almost like cutting a hole in the bottom of a boat that is taking on water, so the water will escape out the hole.
Watching that, who would want to chop a hole in their own boat?
This is part one - that the EU (and by that I mean Germany, because they’re the only ones with cash at the moment) is right to keep its powder dry for the big problem that pretty much everyone can see is around the corner. Eastern Europe is going to hit hard, and shooting everything off now is going to leave the EU defenseless against that particular host.
Part two is that the US’ desire to take a financial leadership position involves them going on the offensive in situations like this. Germany is the financial gatekeeper of the EU, and has to be the responsible relative when the idiot uncle Francois goes drinking with his Southern friends and wakes up having mortgaged the family home again. If they have to be the wallet of Europe, they’d rather not be the ATM of the rest of the world, too.
Part three is that it’s not going to work that well, because if Germany sends out a stimulus to its citizens most of them will save it, not spend it. So the same sorts of things that you’re seeing in Anglo-Saxon countries won’t work as well.
A basket will be the only choice other countries have right now until a peg is created for a fixed exchange and some kind of bound for reserves. I like the idea of a fixed exchange rate. It levels the playing field to allow true free global trade.
The situation with the U.S. needs to be solved before a new global monetary system evolves. Suddenly dumping the dollar and putting a heavily armed U.S. in a desperate position isn’t exactly a pragmatic solution.
Correct, should read bond. Blah.
Apart from that, though, I was surprised that the article seems essentially critical of the European attitude, considering that the New Yorker is considered relatively left-leaning. It doesn’t do much to encourage me as it seems indicative of the nearly ubiquitous obliviousness in this country. Worst of all is our inability to think outside the box; for example I think some of the effort now being expended toward a sustainable automotive technology should be directed instead on technology that allows us to get more things done without having go someplace else. Or in the area of health insurance there’s this sacred cow of patient choice and variety of coverage options, which really means that if you’re sick or poor you can’t get good coverage. I think the consensus here may change before long, but it’s interesting to note how unwilling anyone is to say it.
Looks like a compromise has been reached on a stimulus plan: Obama, G-20 Agree to $1 Trillion World Stimulus.
So I feel much better about things.
I get a good laugh when I read about the euro’s displeasure. For one thing, financial transparency doesn’t exist in most of the EC. Take Italy-anybody remember the PARMALAT Scandal? About 8$billion disappeared-and nobody said anything? How about the massive agricultural subsidies-which go to French vintners-who produce billions of gallons of wine (that nobody wants to buy).
Talk about the pot calling the kettle black!
Isn’t the US already putting a trillion dollar stimulus of its own (i.e., the Fed plan)?
As far as I can generalize the public opinion “here in Europe” (as already pointed out we are not a homogeneous group of people), the majority (me including) pretty much thinks that this crisis is the fault of the US. Therefore, we might not be as motivated to pay for the bailout.
Somebody mentioned GM and Opel: it appears that GM owes a couple of billion dollars to Opel for engineering work which has never been paid but financed by Opel. If GM goes belly up this will be lost for Europe.
IMHO the US and Europe are in a shadow economic war for a couple of years now. This started when the € was introduced, since this threatens the position of the US dollar as the worlds reserve currency. I share the opinon on Ron Paul and Peter Schiff on this. Although I am quite an Anti-fan of their economic positions, especially of the measures they propose, I think they understand the current situation very well.
Nobody wants French wine? You so crazy. Enophiles the world over value French wines. I like them because they are good, and wine is a healthful beverage.
That said, disposable income is becoming scarce, so luxury items like French (and any other) wines are certainly going to take a hit.
We live in interesting times. Scary, but interesting.
American legislators need to stock up on French wine so they can dump it in the gutter when the next freedom fries foolishness comes around.
The French were devastated to know the Americans had paid for the wine and then dumped it. Devastated, I tell you.
Actually, the crises might adjust Champagne prises to a reasonably level. As only sparkling wine from the region of Champagne is allowed be called “Champagne”, production cannot increase unless production per square meter increases, which is unlikely. Since demand was rising with the until-recent economic situation and the large number of new-rich russians, prises sky-rocketed.
The crisis will adjust this now, but I don’t think that there will ever be a real problem for French wine…
http://www.wines-info.com/Newshtml/200902/1892009022311014064.html
Yes, trying to regulate an international market like finances and not completly suceeding, instead of de-regulating like the US, is worth laughing at, because a solution that doesn’t work 100% isn’t even worth considering, right?
And of course, only the EU has farm subsidies, which aren’t controlled 100% and thus cause scandal and overproduction. It’s not like the US has farm subsidies or overproduction of wheat…