Op-ed: The G-20 and "Chermany": "It was easy to rail against mercantilism that, regardless of its intellectual pedigree, has doubtful moral connotations: mercantilism involves doing well but at someone else's expense. Fiscal consolidation, on the other hand, has the aura of moral correctness and virtue."
It is strange. The world does not care much for Midsummer in Sweden and has placed the G8 and G20 meetings this weekend. The US advocates spend now, save later, be mindful of growth. They are worried that Germany's fiscal austerity will cause a recession in Europe. Angela Merkel has defended Germany's position: it is foolish to spend money you don't have in a crisis. It causes bad vibrations among the people. Balanced budget on the other hand causes good vibrations and will cause people to spend to revive the economy. As usual lay people, have to make up their mind by non economical means when the schools clash. Most probably for political reasons?
So, the lucky Germans with their lowly valued Euro, boosting their exports, preach fiscal austerity to further boost their mecantilistic approach? As Christine Lagarde, the French Minister of Finance, said: "there is no Euro crisis"? China, apparently, decides to loose more than they have done on the lower Euro and raised the value of the renminbi. This could according to the article above depend on the fact that the discussion has moved from a bilateral "Chimerica" problem to a multipolar affair involving countries like Brazil and India as well. Some form of responsibility for balancing the world economy that would not in fact warrant the connotation "Chermany", a dual mercantilistic approach? Is China out picking easy public relation points among the world poor like during the COP15 conference?
I have heard people saying that the US is bankrupt and that they would default on their debt. I guess some US billionaires recently gave evidence to the opposite. There are apparently 403 billionaires in the US. If they lent the government 2-3bn each on average, the US would be saved. Angela Merkel probably have many good economical advisors. However, if it boiled down to who to believe, President Obama or Chancellor Merkel, it might be good to remember that Merkel was born and raised in East Germany. It is funny though that both Obama and Merkel currently flirts with Russia.
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