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Sunday, September 01, 2019 5:19:37 AM
The World Has a Germany Problem
"Trump news: EU president launches blistering attack on president as Johnson vows to confront him over trade war"
The debt obsession that ate the economy.
By Paul Krugman
Opinion Columnist
Aug. 19, 2019
The European Central Bank in Frankfurt. Michael Probst/Associated Press
You might think that recent events — market turmoil, weakening growth, declining manufacturing production .. https://fred.stlouisfed.org/series/IPMAN — must be producing some soul-searching in the White House, particularly over Donald Trump’s view that “trade wars are good, and easy to win .. https://www.nytimes.com/2018/03/02/business/trump-calls-trade-wars-good-and-easy-to-win.html?module=inline .” That is, you might think that if you haven’t paid any attention to Trump’s past behavior.
What he’s actually doing, of course, is attributing the economy’s troubles to a vast conspiracy .. https://www.nytimes.com/2019/08/18/us/politics/trump-economy-recession.html?module=inline .. of people out to get him. And his recent remarks suggest, if anything, that he’s preparing to open a new front .. https://www.bloomberg.com/news/articles/2019-08-17/lost-in-trump-s-china-week-was-a-postcard-to-europe-you-re-next .. in the trade war, this time against the European Union, which he says “treats us horribly: barriers, tariffs, taxes.”
The funny thing is that there are some aspects of European policy, especially German economic policy, that do hurt the world economy and deserve condemnation. But Trump is going after the wrong thing. Europe does not, in fact, treat us badly; its markets are about as open .. https://www.ednh.news/does-europe-unfairly-tax-us-imports-a-detailed-look/ .. to U.S. products as ours are to Europe’s. (We export about three times .. https://ustr.gov/countries-regions/europe-middle-east/europe/european-union .. as much to the E.U. as we do to China .. https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china .)
The problem, instead, is that the Europeans, and the Germans in particular, treat themselves badly, with a ruinous obsession over public debt. And the costs of that obsession are spilling over to the world as a whole.
[... to end ...]
Most of the costs of German fiscal obstinacy fall on Germany and its neighbors, but there are some spillovers to the rest of us. Europe’s problems have contributed to a weak euro .. https://fred.stlouisfed.org/series/DEXUSEU , which makes U.S. products less competitive and is one reason American manufacturing is sliding. But characterizing this as a situation in which Europe is taking advantage of America gets it all wrong, and is not helpful.
What would be helpful? Realistically, America has no ability to pressure Germany into changing its domestic policies. We might be able to provide a little moral suasion if our own leadership had any intellectual or policy credibility, but, of course, it doesn’t. There’s a sense in which the whole world has a Germany problem, but it’s up to the Germans themselves to solve it.
One thing is for sure: Starting a trade war with Europe would truly be a lose-lose proposition, even more so than our trade war with China. It’s the last thing either America or Europe needs. Which means that Trump is probably going to do it.
https://www.nytimes.com/2019/08/19/opinion/trump-germany-europe.html
See also:
The Frauding of America’s Farmers
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=150873078
"Trump news: EU president launches blistering attack on president as Johnson vows to confront him over trade war"
The debt obsession that ate the economy.
By Paul Krugman
Opinion Columnist
Aug. 19, 2019
The European Central Bank in Frankfurt. Michael Probst/Associated Press
You might think that recent events — market turmoil, weakening growth, declining manufacturing production .. https://fred.stlouisfed.org/series/IPMAN — must be producing some soul-searching in the White House, particularly over Donald Trump’s view that “trade wars are good, and easy to win .. https://www.nytimes.com/2018/03/02/business/trump-calls-trade-wars-good-and-easy-to-win.html?module=inline .” That is, you might think that if you haven’t paid any attention to Trump’s past behavior.
What he’s actually doing, of course, is attributing the economy’s troubles to a vast conspiracy .. https://www.nytimes.com/2019/08/18/us/politics/trump-economy-recession.html?module=inline .. of people out to get him. And his recent remarks suggest, if anything, that he’s preparing to open a new front .. https://www.bloomberg.com/news/articles/2019-08-17/lost-in-trump-s-china-week-was-a-postcard-to-europe-you-re-next .. in the trade war, this time against the European Union, which he says “treats us horribly: barriers, tariffs, taxes.”
The funny thing is that there are some aspects of European policy, especially German economic policy, that do hurt the world economy and deserve condemnation. But Trump is going after the wrong thing. Europe does not, in fact, treat us badly; its markets are about as open .. https://www.ednh.news/does-europe-unfairly-tax-us-imports-a-detailed-look/ .. to U.S. products as ours are to Europe’s. (We export about three times .. https://ustr.gov/countries-regions/europe-middle-east/europe/european-union .. as much to the E.U. as we do to China .. https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china .)
The problem, instead, is that the Europeans, and the Germans in particular, treat themselves badly, with a ruinous obsession over public debt. And the costs of that obsession are spilling over to the world as a whole.
[... to end ...]
Most of the costs of German fiscal obstinacy fall on Germany and its neighbors, but there are some spillovers to the rest of us. Europe’s problems have contributed to a weak euro .. https://fred.stlouisfed.org/series/DEXUSEU , which makes U.S. products less competitive and is one reason American manufacturing is sliding. But characterizing this as a situation in which Europe is taking advantage of America gets it all wrong, and is not helpful.
What would be helpful? Realistically, America has no ability to pressure Germany into changing its domestic policies. We might be able to provide a little moral suasion if our own leadership had any intellectual or policy credibility, but, of course, it doesn’t. There’s a sense in which the whole world has a Germany problem, but it’s up to the Germans themselves to solve it.
One thing is for sure: Starting a trade war with Europe would truly be a lose-lose proposition, even more so than our trade war with China. It’s the last thing either America or Europe needs. Which means that Trump is probably going to do it.
https://www.nytimes.com/2019/08/19/opinion/trump-germany-europe.html
See also:
The Frauding of America’s Farmers
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=150873078
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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