The View From 1776
Monday, August 30, 2010
Keynesian Obamanomics Outperformed
Germany’s economy is recovering faster than ours, as noted by Professor Allan H. Meltzer in a recent posting.
Like a broken clock that displays the correct time twice a day, David Brooks gets it right.
Mr. Brooks is a liberal-progressive columnist for the New York Times, where, in contrast to his confreres, he sometimes appears to be a counter-balancing voice of conservatism. As he notes, German political leaders have rebuffed President Obama’s insistent demands that they too open the money spigots and, following the advice of Paul Krugman, another New York Times columnist, drown the economy in debased fiat dollars.
Ironically, Germany has long been one of the world’s most consistently socialist nations. In the middle 1800s, Ferdinand Lassalle created and led Europe’s strongest socialist political party, the General Union of German Workers. Hitler’s political base in the 1920s onward was the National Socialist German Workers Party. Even Ludwig Erhard’s “social market system” that revived Germany’s economy after World War II was a far-left welfare state with elements of fiscal conservatism.
That fiscal conservatism arises from Germany’s horrific hyperinflation in the 1920s and early 1930s, when Weimar Republic socialists employed the governmental deficit, stimulus spending model that John Maynard Keynes began to articulate after the end of World War I. It was Weimar’s fiscal profligacy and its inevitable inflation that gave Hitler a strong boost.