‘It Doesn’t Exist!’

I think Mr. Steinbrück overestimates the U.S.'s flexibility and dynamism. It may be that we came out of past crises faster but now we are much more over-regulated, and we have taken to bailing out a plethora of mismanaged corporate behemoths that will drag on our economy for decades. With that dead weight expect our recovery to take a lot longer than in the past, and since Germany's policies seem more sensible this time around they may do better faster.

Why do you blame Peer not to burn money? He offered a total of 300 billion to Hypo Real Estate (30), to Bayerische Landesbank (20), to IKB (6,5) and others for good reasons: There the money gets to his classmates, people who never keep any personal risks and if they fail, the taxpayer has to pay for their "restructering". His Secretary of State Asmussen has been in the board of KfW/IKB and was the one, who suggested IKB to enter in structured finance in 2005.
Peer only wants to give the money to the right people: First to the state owned banks (that he needs to make new debts) , than to the friends of the big coalition, who asre to distribute the state loans via banks and insurances.
Of course the rest of the population is not in this portfolio.
All they have to do is to pay all their income to the state, to social security and of course for rents and interests. They are the slaves in a feudal system of corrupt polititians and their white collar fellows, giving them the feeling to be good neoliberals and understanding what economy really is: a Ponzi scheme, where they are in the first line.

I am seriously doubting anyone's democratic principles who either calls the SPD "right-wing" (which is an insult to all brave social democrats who stood up against the NAZI regime) or who wants to expell someone from the party for not sharing the same opinion. Wake up, this is not a working class but a global crisis! Frankly, I am also sick and tired of all these cheap promises made in France (the state is practically broke!) and GB leading nowhere, but to higher national debts. Who has to pay the rent? The young generation (that includes me)! That is why I keep saying: Go Peer, keep the course!

2008 Nobel prize-winning economist and New York Times columnist Paul Krugman thinks Peer Steinbruck is a moron:



There???s an extraordinary ??? and extraordinarily depressing ??? interview in Newsweek with Peer Steinbrueck, the Germany finance minister. The world economy is in a terrifying nosedive, visible everywhere. Yet Mr. Steinbrueck is standing firm against any extraordinary fiscal measures, and denounces Gordon Brown for his ???crass Keynesianism.???

You might ask why we should care. Germany???s economy is the biggest in Europe, but even so it only accounts for about a fifth of EU GDP, and it???s only about a quarter the size of the US economy. So how much does German intransigence matter?

The answer is that the nature of the crisis, combined with the high degree of European economic integration, gives Germany a special strategic role right now ??? and Mr. Steinbrueck is therefore doing a remarkable amount of damage.

Here???s the issue: we???re rapidly heading toward a world in which monetary policy has little or no traction: T-bill rates in the US are already zero, and near-zero rate will prevail in the euro zone quite soon. Fiscal policy is all that???s left. But in Europe it???s very hard to do a fiscal expansion unless it???s coordinated.

The reason is that the European economy is so integrated: European countries on average spend around a quarter of their GDP on imports from each other. Since imports tend to rise or fall faster than GDP during a business cycle, this probably means that something like 40 percent of any change in final demand ???leaks??? across borders within Europe. As a result, the multiplier on fiscal policy within any given European country is much less than the multiplier on a coordinated fiscal expansion. And that in turn means that the tradeoff between deficits and supporting the economy in a time of trouble is much less favorable for any one European country than for Europe as a whole.

It is, in short, a classic example of the kind of situation in which policy coordination is essential ??? but you won???t get coordination if policymakers in the biggest European economy refuse to go along.

And if Germany prevents an effective European response, this adds significantly to the severity of the global downturn.

In short, there???s a huge multiplier effect at work; unfortunately, what it???s doing is multiplying the impact of the current German government???s boneheadedness.

Germany produced the deepest philosophers mankind had known since the ancient Greeks. It has largely been a sleeping power on the world stage since WW2, slowly, quietly developing a political economy the like of which has never been seen: the EU.
Germany IS the EU: it's power, it's guiding light, it's philosphical underpining.
Let Brown, Sarkosy, and others rant and rage. Merkel, the new iron lady, will be proven correct.

Steinbrück is currently the only German and for sure one of very few European politician that has the guts to come forward with considerate, courageous and unpopular opinions and to enforce them, too. While such politicians are generally a good-thing for the well-being of the people or a state, you can't win an election with them. Quite a pity, actually.