Sunday, January 4, 2009
SUV Sales Go Right Back Up
Now we can see as soon as gas prices head lower SUV sales head higher. At least some of those SUV inventories piling up in lots across American will go down but this is just a rollar coaster ride which at some point has to be addressed.
A dime increase is not even the point, we need at least $0.50/gal probably closer to a buck.
From Daily Press Newport News VA:
"It looks like the Highlander is in and the Prius is out — for now at least.Trucks and sport utility vehicles will outsell cars for the first time since February, according to a December report by Edmunds.com, which tracks industry statistics."Despite all the public discussion of fuel efficiency, SUVs and trucks are the industry's biggest sellers right now as a remarkable number of buyers seem to be compelled by three factors: great deals, low gas prices and winter weather," said Michelle Krebs of AutoObserver.com, a division of Edmunds.com, in a prepared statement."It was this summer that customers were concerned about the gas mileage. It hasn't been a topic of conversation lately," said Dave Lawson, the general sales manager at Pomoco Chrysler Jeep Dodge in Newport News"
http://www.dailypress.com/news/dp-local_suvsales_1230dec30,0,3236578.story
The De-volution Of Inaugural Balls
From WaPo:
"At the 1893 inaugural ball of Stephen Grover Cleveland, heralded as "a triumph of the electricians' skill" at the time, a canopy constructed of 10,000 square yards of gold bunting hung over a jubilant display of silk, flowers and incandescent light bulbs, which spelled out the names of all previous presidents in gargantuan twinkly letters. A 120-piece orchestra led by John Philip Sousa played for the guests, who could pause from dancing to nibble on 60,000 oysters, 10,000 chicken croquettes, 150 gallons of lobster salad and 1,300 quarts of ice cream, among other things.
For male attendees who arrived feeling disheveled, a team of 10 barbers stood at the ready to provide on-site cuts and shaves.
At the 1997 inaugural balls of William Jefferson Clinton, guests at certain venues could purchase a plastic box containing a ham and Swiss mini-biscuit for $5.50 and, for an extra $4, a glass of wine dispensed from an 18-liter box. Naturally, that wasn't true of every venue. Some places went the peanuts 'n' frozen cookies route. At the Tennessee ball in Union Station, one resourceful guest brought along her own box of Cheez-Its...
...The whole thing started to go all wrong, prospective ballgoer, in the '50s, that decade of Kinsey, Elvis and Ike. It wasn't his fault; he and Mamie loved to dance...
...When Dwight D. Eisenhower entered office in 1953, Democrats had been in the White House for two full decades, and Republicans were rarin' for a good bash.
And how. An official ball was planned and the Inaugural Committee sent out thousands of invitations to supporters -- way more than the D.C. Armory, the planned venue, could accommodate. By the time Inauguration Day rolled around, more than 90 percent of those invited had responded affirmatively, so the committee had decided to split the ball between two jampacked locations: the Armory and a Georgetown gymnasium. On the morning of the event, some 2,000 come-latelies rushed the ticket booth to learn which venue they had been assigned to, and in the process missed something important: the soon-to-be-sworn-in Eisenhower, passing by the booth on his way to the Capitol...
...Technology added another layer of frenzy to the Kennedy festivities: Those inaugural balls were televised, meaning that people around the country saw the first family in all its glamour and began, in later years, to angle for tickets like never before."
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/02/AR2009010200637.html
Things I Like - Odds & Ends

The experience started in San Francisco in 1986 where the first wooden structure was burned on Baker Beach with a crowd of 20 people in attendance. The crowds grew over the next several years until the event was moved to Black Rock in 1990. Numbers on Burning Man 2008 aren't out yet but 2007 was attended by over 47,000 people.
Imagine a temporary city (tents, campers and RVs), encircling the 'Playa' - a wide open space covered with temple structures and alternative art installations. Participants travel on bicycles (motor driven vehicles are not allowed, unless they are registered 'art cars') to the various camps and villages, meeting new people and enjoying the art. On the last night of the event, the wooden man is burned. Think hippies from 1960's San Francisco, but more organized.
If, like me, you will probably never actually attend Burning Man, check out the official Burning Man site for photos and an archive of past events. This documentary was filmed at the 2008 - the opening shot is of the 'city' from the air.
Welcome Home!
http://www.burningman.com/
Photo by Toby Keller
Saturday, January 3, 2009
Gaza: How Does It End?
From Joe Klein at Time:
"The brilliant Israeli writer David Grossman call[s] for a unilateral cease fire by the Israelis in Gaza. I agree with him.
It is significant that Grossman, who tends toward the peaceable and writes with the authority of a father who lost his son in the 2006 Lebanon fiasco, does not oppose the initial assault against Hamas. I agree with that, too. Hamas was asking for it. The constant missile strikes into Israel were intolerable, with the promise of worse to come. Hamas had taken the opportunity to build a considerable arsenal during the cease fire (a pause that Hamas, not the Israelis, abandoned). So, of course, Israel was justified in its targeted attacks on the Hamas weapons caches, military training facilities and military leadership in the first days of its offensive--and it is justified in its campaign to eliminate the tunnels from Gaza to Egypt that are the source of much of the weapons and contraband.
But the longer this offensive continues, the more it begins to seem that Israel is aiming for a "decisive blow" against Hamas--an impossibility, a fantasy promulgated by decisive blowhards, that raises the stakes in this operation and makes it more likely that Israel will emerge from this the perceived loser. Beyond the public relations consequences, there is also the likelihood that with the best targets taken out, lesser targets will yield increased civilian casualties and foolish over-targeting, which is what happened in Beirut in 2006. If Hamas survives a continued aerial onslaught and ground war, which it surely will, it wins.
If the offensive ends now--with a flood of humanitarian aid from Israel and its allies--a significant message will have been sent to Hamas: if you persist in lobbing rockets at our civilians, we will reserve the right to punish you severely, peremptorily, at a time of our choosing. (The current offensive has also sent Hamas a significant message from the neighboring moderate Arab countries, especially Egypt: don't expect any sympathy from us.)
Ultimately, the only solution to the situation in Gaza--if there is one--is intense, patient, long-term negotiations mediated by the United States and, perhaps, by Israel's neighbors. The Bush Administration, egged on by Jewish neoconservatives and Christian evangelicals, sided too often and without question with Israeli military overreactions and foolish strategies--such as the 2006 Lebanon war and the unilateral abandonment of Gaza (without fully negotiating the future relationship between Israel and Gaza). It thereby relinquished what should be the U.S. government's natural role, as an interlocutor trusted by both sides.
In the end, there are no decisive blows in Gaza. There are occasional military actions to limit the military threat of Hamas. And there are negotiations. If the negotiations--which should include direct talks with Hamas--work, ultimately there may no longer be a need for military actions. But that will require a more balanced U.S. foreign policy and a saner Hamas, chastened perhaps by this week's necessary Israeli kinetics."
http://swampland.blogs.time.com/2008/12/31/the-myth-of-the-decisive-blow/
The New Colorado Senator
From New Yorker:
"...a new superintendent named Michael Bennet, one of a loose cadre of former business, military, and government leaders, all education novices, who have taken control of some of the largest, most troubled school systems in the country...Bennet is, at forty-two, one of the youngest. A former editor-in-chief of the Yale Law Journal who had become bored by the legal profession, he spent his thirties making a small fortune as a corporate-turnaround artist. Then his thoughts shifted to public service.
In 2003, when a friend, John Hickenlooper, was elected mayor of Denver, Bennet became his chief of staff. Two years later, the superintendency came open for the fifth time in a decade, and Hickenlooper suggested that Bennet apply.
To Bennet, who aspired to public office, running an urban school district seemed more likely to end a political career than to launch it. Most of the children in the district were poor, and eighty per cent were minorities, including a huge number of Latino immigrants. Nationally, Latinas are twice as likely to become mothers in their teens, and Latinos of both sexes are two times as likely to drop out. Moreover, while student achievement is closely correlated with parental involvement, many Denver parents hadn’t attended high school in their native countries, and some were illegal residents in their new one. The illegals tended to steer clear of public institutions, including their children’s schools.
Still, Bennet was struck by the fact that a few schools across the country had raised the test scores of their poor and minority student bodies—successes that seemed counter to the idea that underlying social conditions had to be redressed before disadvantaged minority students could do well. As Bennet studied those exceptional schools—a Knowledge Is Power Program charter school in the Bronx, public schools in Norfolk and Aldine, Texas—he began to think about how some of their strategies might be expanded to reform a whole district. Ambitions began to coalesce, and the school board chose him over two strong minority candidates..."
http://www.newyorker.com/reporting/2007/01/15/070115fa_fact_boo
Well That Did Not Take Long
http://treylaura.blogspot.com/2008/12/these-privatization-programs-are-insane.html
From the Chi Trib:
"Just weeks after Mayor Richard Daley said the city's new budget wasn't overly optimistic, his chief financial officer announced Friday that revenue fell short by $31 million in recent months amid a worsening economy.If the downward trend continues, City Hall will have to find more ways to cut costs or boost revenue, said Paul Volpe, whom Daley has tapped to be his new chief of staff...Volpe also said the city could tap a $324 million rainy-day fund to be created when Chicago closes on the 75-year lease of its parking meters for nearly $1.2 billion"
http://www.chicagotribune.com/news/local/chi-daley-city-budget-03jan03,0,4749873.story
Things I Like - Chicago
Things I Would Like To See Happen In 2009: Open Up Cuba Relations
From Eugene Robinson at WaPo:
"President-elect Barack Obama will have more urgent matters to deal with after he takes the oath of office. But somewhere on his long to-do list, he should make a note to finally bring five decades of counterproductive American policy toward Cuba to a definitive end...
The laws and regulations that prohibit U.S. companies from trading with Cuba and forbid U.S. citizens to travel there made little sense during the Cold War. It was ironic that when Ronald Reagan went to Berlin and implored Mikhail Gorbachev to "tear down this wall," our government was maintaining an analogous wall -- one made of rules, not of concrete -- between the United States and Cuba.
U.S. policy for dealing with the rest of the communist world was always to push for more contact and exchange, on the theory that exposure to Western ideas, freedoms and prosperity would hasten communism's demise. It worked.
I'm convinced that it would have worked in Cuba, too. At the very least, if the U.S. government had treated Cuba the way it treated other communist nations, the onus would have been on Castro. If he wanted to keep Cuban society from being infected by democracy, consumerism and other yanqui diseases, he would have had to justify measures to keep Americans and American products out. Instead, he has been able to portray his revolution as a noble David, menaced by a hulking, aggressive Goliath to the north.
Over the years, I've made 10 reporting trips to Cuba. I've been struck by the fact that even Cubans who are harshly critical of the Castro regime -- privately, of course, since public criticism is not allowed -- are equally scornful of the U.S. trade embargo and travel ban, which they believe have hurt the Cuban people while bolstering hard-liners in the leadership..."
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/01/AR2009010101784.html
Friday, January 2, 2009
There Is Hope...I Think
Herman Talmadge was the Democratic governor of Georgia in the 1930's. He gave serious consideration to running against FDR in 1936 with the support of numerous politicos. His segment of the Democratic party has migrated to the Republicans (granted with enlightment relative to some issues).
From "The Politics Of Upheaval" by Arthur Schlesinger:
"The only way to make an honest government is to keep it poor. You can't help the people by giving them something. You weaken their soul and their heart, and dry up their muscles...
What you need in New York [City] is not LaGuardia [then mayor of NYC] but Mussolini. A little castor oil would go a long ways toward starting the wheels of industry goin' again...
[FDR was] that cripple in the White House...
No niggah's as good as a white man, because the niggah's only a few shawt year-ahs from cannibalism."
Herman Talmadge Democratic governor of Georgia from 1935
Sound Familiar?
He denounced spending, he denounced regimentation, he denounced centralization. For a positive program he offered only his old formula: retrenchment, the balanced budget, the gold standard, the tariff, the return of relief to the states."
Herbert Hoover 1935 from "The Politica Of Upheaval" by Arthur Schlesinger, Jr.
TW: btw it continues to amaze me that many Republicans are now trying to trash FDR's New Deal as ineffectual and by inference supporting the laissez-faire policies of Hoover.
Operation Ceasefire
From Economist:
"...For the past 15 years a single model of policing, developed in a single city, has dominated thinking about law and order in America. In the early 1990s New York hired thousands of extra police officers and told them to crack down on petty offenders in high-crime areas. Local commanders were held accountable for recorded crimes in their territory, which were tracked by means of a simple spreadsheet programme known as Compstat. The results were extraordinary. Murders fell from more than 2,200 in 1990 to fewer than 500 in 2007.
New York’s “zero tolerance” methods seemed simple, and have been widely copied. Yet no other city in America or anywhere else has achieved quite such good results. This may be because most cities are poorer and less densely populated than New York, and so find it harder to flood the streets with cops. And New York had two big advantages in the early 1990s: its police chief, William Bratton, who now manages the cops of Los Angeles, and its mayor, Rudolph Giuliani, who was last seen running for the American presidency. Both men had a superb feel for police culture and knew how to motivate officers through a combination of praise and fear.
The approach that will come to prominence in 2009 is almost the exact opposite of zero tolerance. Rather than cracking down on petty offenders such as turnstile-jumpers and squeegee men, the authorities will focus on those who are most likely to kill or be killed. Some may be drug dealers recently released from prison. Others may be the associates of people recently wounded by gunfire. What makes the approach particularly novel is that it depends on local people. Rather than insisting on zero tolerance from the police, it tries to change what the residents of crime-infested areas will tolerate.
The new method has been quietly honed for almost a decade in Chicago, where it is known as Operation Ceasefire. It has two main tools. The more conventional one is a team of outreach workers who try to mobilise communities to oppose violence, often in partnership with local clergy. Then, at night, “violence interrupters” hit the streets to sniff out trouble. Often former gang members and graduates of the prison system, the interrupters have a hard-nosed approach to law and order. They may, for example, encourage an aggrieved man to consider beating someone instead of shooting him, or try to convince rival drug-dealers that a turf war would be bad for business, as it would attract the police.
In May 2008 Operation Ceasefire was evaluated in a report for the Justice Department. The results were encouraging: in five out of seven areas examined, shootings dropped sharply. In four of these areas the decline was much steeper than in comparable parts of the city where Operation Ceasefire was not in place. But even these results do not explain why so many police forces are looking to Chicago for inspiration. The approach seems to offer a solution to what has become an intractable problem in inner cities from Los Angeles to London. Young people seem to be killing for inane reasons, such as somebody looking at their girlfriend the wrong way. And they appear to be unafraid of prison.
Operation Ceasefire’s chief architect is Gary Slutkin. An epidemiologist, he likens shootings to a health crisis and insists that they can be tackled in a similar way to unsafe sex or needle-sharing. Zero tolerance’s slogan was “take care of the small stuff and the big stuff will take care of itself”. Dr Slutkin’s slogan is even snappier: “violent crime is a disease”.
http://www.economist.com/theworldin/displaystory.cfm?story_id=12574177
Things I Like - Sciences

Per the American Thyroid Association:
“Iodine is an element that is needed for the production of thyroid hormone. The body does not make iodine, so it is an essential part of your diet. Iodine is found in various foods... If you do not have enough iodine in your body, you cannot make enough thyroid hormone. Thus, iodine deficiency can lead to enlargement of the thyroid (goiter), hypothyroidism and to mental retardation in infants and children whose mothers were iodine deficient during pregnancy.”Iodine is found naturally in sea salts but the further inland you go, the less there is. The salt mined in the Great Lakes region was light on iodine as was the majority of food produced in the area so I’m glad we had iodized salt on the table when I was growing up.
They say that most US diets are varied enough these days that iodized salt is no longer required. That is not the case throughout the world. An editorial by N. Kristof in the 12/4/08 issue of the International Herald Tribune took up the cause:
Mr. Kristof goes on to opine that US support for iodine initiatives would be a good thing:“Almost one-third of the world's people don't get enough iodine from food and water. The result in extreme cases is large goiters that swell their necks, or other obvious impairments such as dwarfism or cretinism. But far more common is mental slowness.”
“There is talk that President-elect Barack Obama may reorganize the American aid apparatus, perhaps turning it into a Cabinet department. There are many competing good causes - I'm a huge believer in spending more on education and maternal health, in particular - but there may be no investment that gets more bang for the buck than micronutrients.”So in addition to making the world a more attractive place (have you ever seen a goiter?) eliminating the iodine deficiency will also make it smarter. Plus, it’s an extremely cheap method of improving the health and mental capacity of a population – estimates range from $.03 - .05 per person per year. I’m with Mr. Kristof, we should strengthen this particular effort, we’ll all be better off with a smarter world population.
Oh yeah, I think I’m going to play it safe and continue to use iodized salt at home. No need to take a chance on the goiter.
www.thyroid.org/patients/patient_brochures/iodine_deficiency.html
www.iht.com/articles/2008/12/04/opinion/edkristof.php
www.iht.com/articles/2006/12/15/news/iodine.php
Obama's Bi-Partisan Approach To Foreign Policy
Obama's retention of Robert Gates as Sec Def, Jim Jones as Nat. Sec Advisor and work with Scowcroft provide a hopeful sign that Obama will restore bi-partisanship what should be the least partisan area of American governance.
From Joe Klein at Time:
"...Scowcroft's brand of low-key "realism" was derided as milquetoasty by the neocons...There were two signal moments during Scowcroft's tour as Bush the Elder's National Security Adviser that seem relevant to the job ahead for Obama. One was the patient construction of a vast international alliance to oppose Saddam Hussein's invasion of Kuwait--the alliance Bush the Younger was unable to construct when he invaded Iraq. The other moment, perhaps more significant in retrospect, occurred when Scowcroft and his boss agreed that it wouldn't be prudent for the President to go to Berlin to celebrate the fall of the wall in 1989. Didn't want them to feel "we were sticking our thumb in their eye," Bush the Elder allegedly said of the Russians, a strategy that proved essential to the quiet reunification of Germany...
Nuance, negotiation, alliances, diplomacy--and the use of force only in concert with others or when U.S. interests are directly threatened--are back...
In an example that has immediate relevance, both stand their ground in favor of a more balanced policy in the Middle East--balance is a loaded word, a euphemism, neocons complain, for making demands on Israel. Scowcroft says we have a "natural"--not a "special"--relationship with Israel, a "small, courageous democracy in a hostile land," but also an "equal commitment" to ease Palestinian suffering. Both sides need a "heavier hand by the United States than we have traditionally practiced."
http://www.time.com/time/magazine/article/0,9171,1869221-1,00.html
Thursday, January 1, 2009
The Return Of Competence (cont.): Trading Much Liberty For a Little More Security
From Cohen at Int'l Herald Tribune:
"I'm thankful for many things right now, despite the stock market, and first among them is the fact that the next U.S. commander-in-chief is a constitutional law expert and former law professor.
...the law, which is what defines the United States, for it is a nation of laws. Or was until Bush, in the aftermath of 9/11, unfurled what the late historian Arthur Schlesinger Jr. called "the most dramatic, sustained and radical challenge to the rule of law in American history."
There is no need to rehash here the whole sordid history of the Bush administration's work on Vice President Dick Cheney's "dark side": the "enhanced" interrogation techniques in "black sites" outside the United States justified by invocation of a "New Paradigm" that rendered the Geneva Conventions "quaint."
When governments veer onto the dark side, language always goes murky. Direct speech makes dirty deeds too clear. A new paradigm sounds bland enough. What it meant was trashing habeas corpus...
...Of the 770 detainees grabbed here and there and flown to Guantánamo, only 23 have ever been charged with a crime. Of the more than 500 so far released, many traumatized by those "enhanced" techniques, not one has received an apology or compensation for their season in hell.
What they got on release was a single piece of paper from the U.S. government. A U.S. official met one of the dozens of Afghans now released from Guantánamo and was so appalled by this document that he forwarded me a copy.
Dated Oct. 7, 2006, it reads as follows:
"An Administrative Review Board has reviewed the information about you that was talked about at the meeting on 02 December 2005 and the deciding official in the United States has made a decision about what will happen to you. You will be sent to the country of Afghanistan. Your departure will occur as soon as possible."
That's it, the one and only record on paper of protracted U.S. incarceration: three sentences for four years of a young Afghan's life, written in language Orwell would have recognized.
We have "the deciding official," not an officer, or a judge. We have "the information about you," not allegations, or accusations, let alone charges. We have "a decision about what will happen to you," not a judgment, ruling or verdict. This is the lexicon of totalitarianism. It is acutely embarrassing to the United States...
That is why I am thankful above all that the next U.S. commander-in-chief is a constitutional lawyer. Nothing has been more damaging to the United States than debasing the legal principles at the heart of the American idea...Give thanks on this day for the law. It's what stands between the shining city on a hill and the dark side.
http://www.iht.com/articles/2008/11/26/opinion/edcohen.php
Part 1 is here
http://treylaura.blogspot.com/2008/12/return-of-competence.html
Robert Reich Gets Gushy
"The biggest thing to happen to me this year was the birth of my first grandchild, a little girl named Ella. I know this kind of thing happens all the time and frankly I get bored with people who go all gushy about the birth of kids or grandkids.I’m bringing Ella up not so much because she’s special -- of course she is -- but because she was born right in the middle of the worst economic downturn in my lifetime and probably yours, and maybe even hers. Ella came with a crash.
Like almost everyone else, I’ve lost a big chunk of my savings this year. And the house I bought here in Berkeley at the very top of the housing boom is probably worth a lot less than I paid for it. I’m not too worried about my job because I have tenure here at the University of California, although maybe I should worry because the state is technically bankrupt. Still, I'm one of the lucky ones.Yet all of this seems somehow beside the point, relative to Ella.Having kids or grandkids expands your focus and also your time horizon. You pay a bit less attention to what the Dow is likely to do over the next quarter and more to the underlying wealth of the nation. By that I don't mean just its gross domestic product but also its gross domestic decency, if there were such a measure: The quality of our public schools and of our atmosphere, the extent of our openness and generosity toward one another, our national promise of opportunity to all. You find yourself less interested in the gossip surrounding Bernie Madoff or Rod Blagojevich than in the larger questions they raise about private greed and public morality.
Alright, maybe I am going all gushy. The point is, it's the Ellas of the world we're fighting for. This Mini-Depression is causing a lot of pain, to be sure, but it will be over in a year or three. Yet what kind of economy will we have on the other side? Will we have a more just society?Which brings me to the end of the year. I wish you not just a happy and prosperous new year. On that score, 2009 may be something of a bummer. I wish you and your kids and grandkids, and Ella, something more -- a decent, generous, and humane future."
Things I Like - Books

There are many books that have been turned into movies, but I know of only 3 books that were something else before they were written: 2001: A Space Odyssey, Star Wars (both movies) and The Hitchhiker’s Guide to the Galaxy (a BBC radio program first, later a movie). Isn't it odd that they’re all science fiction?
Of the three, the Guide (a Trilogy in Five Parts) is definitely the best as a book. Douglas Adams, who left us much too early in 2001 at the age of 49 from a heart attack, was the genius behind the Guide. While being a fan of the totally ridiculous helps, how can you not laugh at a robot that is depressed because it is smarter than anything else in the universe? Or the fact that we know the ‘answer’ (to life, the universe and everything) is 42, but that we don’t know the question?
The books are certainly not great literature but they are totally amusing and the imagination required to invent the worlds and characters in the series is on the order of J.K. Rowling or C.S. Lewis. And while Star Wars was definitely the great movie franchise, HHGG has become a multi-media phenomenon with reincarnations as a television series, a computer game and a stage show.
The computer game (which can be found at the BBC site below) is one of those interactive text-based adventure games that starts out like the books but quickly goes down its own road. The writing for the game is almost as funny as the books - wait until you've died the first time. And if you can figure out how to get to the pub without being killed by a flying brick, please let me know.
http://www.bbc.co.uk/radio4/hitchhikers/game.shtml
http://en.wikipedia.org/wiki/The_Hitchhikers_Guide_to_the_Galaxy
Trade Friction Will (Is) Emerge (ing)
He is quite concerned about emerging nationalistic economic behavior. Such behavior can take many forms, overt protectionism (e.g. tariffs, quotas etc.) is one but likely not the primary risk the world economy faces. A race to the bottom to lower currency exchange rates is one, the aggressive pursuit of exports (as opposed to spurring domestic demand) is another, lack of cooperation on fiscal stimulus yet another.
Another very large risk is merely incompetence on the part of various leaders. Right now the Western governments and the BRICs are playing more or less nicely economically with each other but for how much longer if things continue to contract?
From the Pettis blog:
"Earlier this week Ambrose Evans-Pritchard had an article in the UK paper The Telegraph which starts off with “For the first time in my life, I am starting to feel twinges of anti-German sentiment.”
The article goes on to lambaste the German government, and especially German finance minister Peer Steinbrück, for what Paul Krugman earlier called “boneheadedness” in refusing to participate in the European fiscal expansion and, worse, for calling British and French programs “crass Keynesianism.”
According to Krugman:
The world economy is in a terrifying nosedive, visible everywhere. The high degree of European economic integration gives Germany a special strategic role right now, and Mr Steinbrück is doing a remarkable amount of damage. There’s a huge multiplier effect at work; it is multiplying the impact of German boneheadedness.
Evans-Pritchard explains why a number of European countries, led by France and England, are so angry: Put bluntly, Germany is pursuing a beggar-thy-neighbour policy. It is not fulfilling its responsibilities as the world’s top exporter and pivotal power of Europe’s monetary union. It is leaching off global demand, even as it patronizes Anglo-Saxons, Latins, and Slavs. No doubt binge debtors in the Anglosphere are much to blame for this crisis. But Germany rode the boom too. It made those Porsches and BMWs driven by the new rich. Its banks are among the most leveraged in the world.
Nor should we not forget that the European Central Bank set interest rates at recklessly low levels early this decade to help Germany out of a slump...
The point he is making is that the imbalances were not created simply by “binge debtors in the Anglosphere” but also by those countries that subsidized directly or indirectly overproduction, which ultimately have had much to do with the very conditions that led to consumption binge. This includes not just Germany but any of the countries that created persistent and high trade surpluses...
What does all this have to do with China? The reasons I bring this up is because it is, I think, a foretaste of the type of nasty battles that are likely to erupt between the trade-surplus and trade-deficit countries as global demand continues to contract. The overconsuming trade-deficit countries cannot reduce their overconsumption except with a collapse in production (and sharply rising unemployment) if the overproducing countries do not also adjust. Furthermore, fiscal expansion aimed at generating employment in countries with large trade deficits will not be nearly as effective as they might be if they are not matched with programs in trade surplus countries (essentially demand boosting fiscal programs) that prevent domestic demand from bleeding out the trade account..."
http://mpettis.com/2008/12/germany-is-fighting-with-europe-can-china-be-far-behind/