November 05, 2013
Chutzpah. I believe that’s the word for it.
Just days after learning the Americans have been tapping her phones and taping her conversations, Angela Merkel has been publicly upbraided by the U.S. Treasury for being a bad global citizen.
What did she do to deserve this?
Merkel just won a third term as chancellor with a record vote and has an approval rating near 80 percent. But she is a bad global citizen because Germany is running the world’s largest trade surplus.
The Washington Post thinks the Treasury’s tongue-lashing is overdue, as does Paul Krugman of the New York Times:
“In this environment, a country that runs a trade surplus is … beggaring its neighbors. It is diverting spending away from their goods and services to its own, and thereby taking away jobs.”
Is this not astonishing?
Competing successfully in world markets is now tantamount to stealing food off the table of one’s less-competent and less-successful neighbors.
By this standard, America was a selfish nation and a rotten global citizen for the first seven decades of the 20th century, when we ran trade surpluses every year, averaging 4 percent of GDP.
From the Civil War through the Roaring ‘20s, with a high tariff, we became the mightiest manufacturing power the world had ever seen. Our economic independence enabled us to stay out of two world wars. And when we did go in, we won within months in 1918, and we won again only a few years after Pearl Harbor.
Is this a record to be ashamed of?
Every modern nation that has risen to world power has done so through economic nationalism: Britain under the Acts of Navigation; the United States under protectionist Republicans from 1860-1914; Bismarck’s Germany; postwar Japan, which rose from the ashes of 1945 to become the world’s second economy; and China from 1980 to today.
Trade surpluses, run at the expense of rival powers, have been the hallmark of great nations in their rise to preeminence.
Though Germany is smaller than Montana, with a population not a fourth that of the United States, she is the powerhouse of the European Union, makes some of the finest products on earth, and sells abroad one-third of all she produces. Her unemployment rate is only 5 percent.
Why is that not a record to be admired? And whom are the Germans supposed to emulate? Answer, if you can believe it, Obama’s America.
The Post and Krugman feel the Germans must shake off their habit of working and saving and start spending to get Club Med countries like Spain and Greece out of intensive care. The Post wants Merkel to embrace the Social Democrats’ idea of raising the minimum wage to $11.50 an hour, which was too rich even for the mayor of D.C.
The need, says Treasury, is for “rebalancing.”
Basically, what the globalists want is for prudent counties with trade surpluses to start running deficits to get money flowing, like transfusions, into the moribund economies.