With global banking bailouts still not working, it's nice to see a rescue plan showing its intended effects: Germany's scrapping bonus, which pays new-car buyers €2,500 to ditch their old banger, has raised sales so fast that companies are struggling to fill orders.
It's easy to read the last few months as one vast refutation of self-regulating capitalism and the elites who nurtured it. Many observers have thus warned that Europe's voters will flock to far-left parties now loudly crowing "told you so." Or, in the opposite direction, to the populist right, whose xenophobic rants have taken aim at globalizing capitalists and immigrants.Instead, Europe's center has held steady, and possibly even gained in strength.
If Americans are in shock over the economic plight that the collapse of the housing bubble has wrought, Germans are simply baffled. In their view, they seem to have done everything right—they have a high savings rate, a solid manufacturing base and no exuberance in their real-estate market, while profligate Americans binge-spent their way to illusory growth.
This is a trick question. What big country is, by most measures, greener than Japan and Germany and produces more geothermal energy than all of Europe combined? It might help to know that this nation is also a pioneer in environmental stewardship, having passed many of the world's toughest regulations on vehicle emissions, energy efficiency and nature conservation.
Barely a month after German Finance Minister Peer Steinbrück blasted fiscal stimulus programs like Britain's cut in the value-added tax as "crass Keynesianism," he and Chancellor Angela Merkel cobbled together a €50 billion emergency spending package of their own last week.
Remember the deficit hawks? The critics of blown-up government spending finally took center stage last week, after staying largely in the shadows as countries around the world threw hundreds of billions of dollars, euros and yuans at their banks and economies to help stave off the worsening recession.
The market chaos has left no top investment bank standing. Of the Big Five, Lehman, Bear and Merrill are gone, while Morgan Stanley and Goldman are becoming commercial banks, which means they can no longer put up the house to borrow billions for high-stakes deals.
What was most interesting about the throngs who came to see Barack Obama in Europe last week was never articulated in public. It's that they adore him for America (the Bild tabloid called the German reaction "love at first sight") but would never get to vote for someone like him at home.To be sure, Europeans swinging American flags again instead of burning effigies of the U.S. president is a refreshing sight.