Goodbye to Berlin

So Mr. Scheiber, what do you propose Germans to do?

To just give away money to Greece, without any conditions whatsoever, thus damaging the credibility of the Euro and allowing the financial markets to go on with their feast while putting the rest of Europe on fire?

Fortunately, Germans are smarter than that! And if Americans are experiencing some difficulties, they should look at their own faults. If 40% of American GDP is made of "financial services" (meaning hot thin air), if they relied too much on the dollar instead of the fundamentals, etc., etc., the Germans are not to blame.

You surely do not expect Germany or any other country to destroy its own balances in order to keep American imbalances affloat, do you? For instance, at the end of the day, a currency (in this case, the dollar) can only maintain its reserve currency status if it remains with its own merits. If these are lost, there's no way it will keep that status through manipulation.

And on the case at hand, you should remember that Germany DID NOT refuse support to Greece. Hey, EU countries lended 130 billion euros to Greece! Much more than the US has ever lended anyone!

What was refused was to give the money without conditions. And guess what: those conditions actually stabilized the situation in the rest of Europe. Financial markets should have understood by now that they will not achieve anything substantial by pointing a gun at the head of the EU.

If you want to stabilize the situation in Europe, please do prevent rating agencies from downgrading countries with no objective reason the very day before they raise money (which they did to Ireland last week), investment banks from inventing absurd scenarios on the end of the euro, etc., etc..

Hey, it would also help if you corrected your own partial, uninformed visions on "the likes of Greece and Portugal" (Jesus, one is one step away from using the word "PIIGS")...

At the end of the day it's all about regulation and information. It's about growing out of the illusion that manipulation and blackmail will achieve anything at all.

If you expected Europeans not to defend themselves, you were surely mistaken...
And you should take something into account: not only Germans but Europeans in general are going to remain firm until the moment American markets give up (and the American press does its homework instead of relying on manipulative information). So, the more you attack, the more you loose.

And you should face it: Americans today depend much more on others than others depend on Americans. Germany is growing since it maintained an industrial base and is managing to export to emergent markets like China and India. They kept themselves virtuous and productive. If Americans were not able to do that, they surely are not going to be saved by the manipulation being used in order to keep their 40% GDP financial "industry" afloat.

Germany is doing things right ! They're growing at 2.3% rate and unemployment is much less than that in the US. Paul Krugman saw it as early as last year and pointed out how Germany focuses on saving jobs. They care about people, about skill levels, they have their corporations behave responsibly (the famed but little copied apprenticeship system).
How can a nation that has abandoned its industrial productions to the vagaries of globalization and chosen to play the financial services game (40% or more of GDP) preach anything to anybody.
American conservatives need to look at this conservative German solution. When the Germans take austerity measures they are cutting a very well funded and rationalized social safety net, they can afford to cut. American conservative suggestions are about cutting the bone, the infrastructure giving tax holidays to the rich and letting corporations ship jobs.
There's a world of difference between policy debates in Europe and America. One is a debate of adults facing realities (see The Brit Conservatives) and the other is the cacophony we associate with a school brawl. But i forget they don't have talk radio in Europe; imagine no FOX rabble ... .

No FOX rabble? Hmmmmm.

I think the point that our Industrial Leaders have abandoned America and its workers is directly on point.

Beyond that they've failed in terms of quality and keeping pace with global trends - for example look at our gas guzzlers. The government had to bail out Detroit.

The same people who get bailed out by the people then turn around and lead a witch hunt against the government and also the poor.

Corporate welfare is acceptable but medical benefits and basic survival.

No wonder we're in trouble.

Sorry, I meant "not" medical benefits etc.

Oh - while we're on the subject there's also our tax structure and the dual problem of Bush tax cuts combined with hugely expensive wars.

Rapid deindustrialization is what has put us where we are. There will be no decent jobs for average workers until we start manufacturing stuff again.

IMHO, Wall Street and venture capitalists who basically forced companies to move their manufacturing overseas are traitors and no better than double agents who pass secrets to our enemies.

Actually, Greece and the other PIIGS did Germany a huge favor by driving down the value of the Euro this past spring with their near-defaults. That made Euro-denominated German exports more affordable in China and other emerging markets that the Germans are happily tapping as their recovery proceeds in full swing. Meanwhile, the currency traders and bond buyers who dumped Euros put the money into US Dollars, thereby making American manufactured goods even less competitive abroad than ones from the Eurozone (Germany included). The Germans should be extending their hearty congratulations to their fellow Eurozone deadbeats for helping their recover!

Rigos, they don't have talk radio in Europe because Europeans don't commute that far by car. The ever-lengthening American automobile commute is about 9/10 of talk radio's success in this country, with the other 1/10 chalked up to entertaining personalities and all other factors combined. Frankly, it's no wonder Limbaugh and the other blabberers deny global warming with all their might -- it is a direct and tangible threat to their livelihood as it would eliminate or greatly reduce their audiences. They are no different than the Koch brothers in this regard.

"Actually, Greece and the other PIIGS did Germany a huge favor by driving down the value of the Euro this past spring with their near-defaults."

That's way too simplistic wildboy. The last numbers are from the 2nd quarter and reflected industrial orders made much before. The damage to the Euro happened mostly in May and June.

So, the numbers don't really have to do with the depreciation of the Euro. Plus, will the Chinese and Indian millionaires hold from buying their new Mercedes if it costs them 10% more? Don't bet on it.

And if one looks at competition, America is enjoying a weak dollar for years now. Did it do any good to its industry? None it could be seen, so the secret of a successful high tech industry doesn't really lie in a weak currency.

One other thing: you seem to be at ease when using the word "PIIGS". But have you ever compared the numbers of those "PIIGS" with the US ones? If you do that, you'll understand that most of them are in better shape than the US!

Anyway the most important point is: America is not going anywhere by forgetting its own faults. Incredible imbalances, 40% of GDP in financial services (services that only work if everyone else forgets the real data and goes on believing the lies constantly being produced), outsourcing all real jobs, that's not sustainable! And you can't expect others to create imbalances in order to perpetuate America's imbalances.

And going back to "PIIGS", these with all their faults are doing their homeworks -- precisely because Germany, and rightly so, did not accept to solve problems by throwing money at them. Money that would have to be borrowed from Wall Street. No wonder Wall Streeters and their press are so upset.

The Depression of the 1930s was caused by, among others, a devilish convergence of tariff barriers, conservative economics, under-production, Versailles Treaty punishment, and unemployment. Fascism and militarism became the solution in some advanced countries. What worries me about the Tea Party and similar phenomena now is that people claim they are angry at the current situation, with 9.5% joblessness (visible) and a sluggish economic recovery. What kind of fury will emerge in the U.S. if the spiral kicks in again, and we have, say 12% unemployment and decreasing economic activity? This mindless obsession with dissing government and invoking market-based solutions like magic spells when market failure is one of the reasons we got here has gone beyond politics to become a mental illness.

I worry about this too, ironyroad.

Things are getting scary as it is, irrational.

In Britain it's flat out wierd.