A Damn Shame
September 12th, 2005 - 10:24 pm
Even if Angela Merkel becomes Germany’s new Chancellor, Anatole Kaletsky doesn’t think much will change:
But even if the conservatives do win convincingly, they will have to overcome a much more serious problem: Frau Merkel
I might have missed something here, but I got stuck on the snippet:
“…a currency devaluation…”
I can’t quite figure out how Ms. Merkel, or anyone else, can do that without exiting the Euro. While it seems clear that she’s leaning in the wrong direction, leaning toward logistical impossibilities won’t help.
And, as a separate matter, Germany is already the world’s largest exporter, so reduction in currency value, even if they still used the D-mark, wouldn’t be part of a rational economic policy.
I find myself, then, wondering whether Anatole Kaletsky knows what he’s talking about.
No where did I see mentioned the countries that have switched to a flat tax system and are growing their economies by leaps and bounds.
Well, the germans didn’t invent propaganda, but they did name it.
Germany is kaputt, done, over with, finished, etcetera. This doesn’t really please me, although as an inhabitant of a neighboring country that had the unpleasant experience of being visited twice by German armies I have plenty of reasons for Schadenfreude. But there is no real difference on economic policy between the Christian Democrats, the Social Democrats and the Liberal Democrats. They’re all equivalents of Great Society Democrats in the US. The amazing part is not that Schroeder will in the end win the elections because of his succesful smear job against Kirchof and his flat tax, what’s amazing is that there is even one single Christian Democrat who could conceive something like a flat tax.
The Germans don’t want reforms. There on average well over 50 years old, and as pensioners or soon to be pensioners they know full well that the accumulated riches of their economy suffice to pay for their retirement check, even if there’s nothing left in 25 years. But who cares ? There is no next generation of Germans (OK, technically there is, but it’s so small that it doesn’t matter). And the elderly Germans certainly don’t care about the Turks who will have to clean up the mess after they have died off.
I can’t quite figure out how Ms. Merkel, or anyone else, can do that without exiting the Euro. While it seems clear that she’s leaning in the wrong direction, leaning toward logistical impossibilities won’t help.
Perhaps the Times writer hopes the Euro will implode sooner rather than later?
Could someone point to a URL or just give the basics on how US/German relations might change with Frau Merkel as Chancellor?
thanks
Is it just me, or does Frau Merkel’s plan remind anyone else of Walter Mondale’s 1984 Presidential campaign platform?
I ran “merkel” through Babelfish:
“carter”
Peter:
“…on average well over 50 years old.”
Are you sure that is correct?
IIRC average age for Germany is 39.9 years ( compare to USA 35.3 years). That’s a significant difference for sure (and a growing one) but nowhere near 50 v 35.
And population aged up to 14 is around 15% of the total. Compared to 21% in US.
Worrying, yes, but not (yet?) “so small that it doesn’t matter.”
If my quick guesstimate is right, it’s about 12 millions.
Kaletsky may be right. The commentators comparing Merkel to Mrs. Thatcher may be overstating the Merkel’s radicalism and determination. But it is possible that she may repeat the Thatcher governments biggest problem: combining cautious fiscal retrenchment of spending cuts and limited marginal tax cuts AND high interest and exchange rates was a major factor in creating UK recession in the early 80′s.
It may have been unavoidable to redirect resources in the UK, but was still very nearly politically fatal to the project.
OTOH the problems of Germany now are not as deep as those of the UK in the 1970′s. If Merkel can reform the labour markets and shave the welfare system, while pushing taxes down, the underlying strengths of the German economy might be enough to do the rest.
The ideal solution would be to deconstruct the Euro, of course…