Just been reading a report of the views of Peer Steinbruck, Angela Merkel's Finance Minister, on the response to the recession. He is not part of the Brownian Movement, not one who says, "Is it a bird? Is it a plane? No, it is Flash Gordon! Wow!"
He has various criticisms of Brownianism.
Too fast, untested. Not fair, imo. Sometimes quick action is necessary in an emergency, action whose testing in action. This is no time for cogitation.
VAT reductions are crap. Well, yes, the intentions were good, but small reductions, ones that may not appear in prices are marginally important. This was silly. I bet it was some civil servant who pushed that one.
Debt is going to go up. Yes indeedy. But there was no alternative, apart from a meltdown. The whole finance system is predicated on debt. It need not be, but it is. The Great Depression is thought to be worsened because the governments were more interested in balancing the books than charging in to help.
Crass Keynesianism. Depends on what he means here. Does he mean all Keynesianism is crass, or that Brown is peddling a crass kind of Keynesianism. If the former, then he is wrong, wrong, wrong. Keynes is the Man: now is the time for the Government to put money into the economy.
If on the other hand, he thinks Brown's formula of Keyneianism is crass, then I agree. His grasp of planetary realities is weak, as evidenced by the tiny amount in his pre-Budget package devoted to insulation - I am told that it will take 300 years to insulate Britain's houses given the amount he has put forward. Maybe it was 100 years. Whatever. Gordon doesn't Get It. Yet.
The origin of the crisis is credit financed growth. Well, yes. What other kind is there in this world where all money is created by credit? He's said a mouthful here, opened up an area into which we will not go at present because it is a major topic.
The Great Rescue Plan doesn't exist. This is getting interesting. Peer Steinbruck (and presumably Angela Merkel) are what we medics call therapeutic nihilists.
Then, it gets more interesting still:
It's not about to collapse. Ah, that explains it: the German economy is a bit more stable than the US/UK economies, so their perceptions are different.
In England, we have a saying: "He who laughs last has only just seen the joke". Contrariwise, "He who is not running away has not yet seen the bear".
Stenbruck and Merkel think this is a bit of a cyclical downturn, and so no need to do much because nothing much needs to be done.
I hope they are right. If only we could believe they are right. But the facts are otherwise.
Let's end on a bright note:
In his own words, "For me the only stimulus measures that make sense are those that create jobs and have a positive structural effect beyond the economic cycle".
Amen to that. No more money for the banks, unless to nationalise them. No money for the car industry. But yes, money for the structure of the economy itself, for the energy conservation, renewable energy, and the entire green economy. That's where the money should be directed. Into a Citizen's Income, or if that is beyond Gordon's ken, then a Green Wage Subsidy.