In Defense of Germans

Can I say a few words in defense of Germans? The Euro crisis that’s been building for years now, with Greece as its molten core, is hard to comprehend. I mean, I get the general idea. Two dozen nations (give or take) are united by one currency but lack a governing entity that can set fiscal policies. It’s like trying to run an orchestra without a conductor. But is it in fact true, as Paul Krugman has been repeating for years, that Brussels and its technocrats are “trying to run Europe on the basis of fantasy economics”? For an untrained person, the fine points (or any points) of macroeconomics and international finance can get pretty murky.

What has been clear is the role increasingly assigned to Germany, at least here in the United States: villain. A recent article from the New York Times, ominously titled “Germany’s Destructive Anger,”  faults the Germans not merely for being selfishly shortsighted in their economic policies, but for being rigid, vindictive, self-righteous and dyspeptic. The article is by an economist, and that’s significant. Most “average” Americans may only vaguely know that a Euro crisis is happening (“you mean, the soccer thing?”), but if you sketch for them the outlines of the current situation, most will say that the Greeks need to clean up their act and pay their debts. Why should the Germans be blamed?  But the opposite opinion prevails among economists, almost all of whom see Germany at fault. The main points:

1) Austerity in Europe has been a mistaken policy. When financial crisis hit here in 2008, our government responded with bailouts, government spending, and cheap money to inflate the economy. Europe should do the same.

2) Germany fails to grasp its own self-interest. If lesser countries are allowed to leave the Euro zone—or forced out—it will over time almost certainly damage Germany’s powerful export machine. But Germans are choosing to punish Greece, rather than taking a coolly systemic view of the situation.

3) Germans are conveniently forgetting the role debt and debt forgiveness played at critical moments in their own history: after World War I, when massive debt destabilized governments and led to fascism; and after World War II, when the victorious allies chose the Marshall Plan (another proposal, the Morgenthau Plan, which sought to keep Germany perpetually under-developed, was rejected), forgave war debts, and laid the foundation for the postwar “economic miracle” in West Germany.

Increasingly, though, the critique rests on the idea that Germans are mean and vindictive.

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