The problems that Germany has that are preventing a solution for the euro crisis are the now all too obvious flaws in the structure of the Europe Monetary Union, the EMU, and an unique piece of Germany’s economic history. Actually, many argue that it is the unique piece of German economic history that caused the flaws in the structure of the EMU when it was formed.

And no, the piece of economic history isn’t the hyperinflation of the post WWI Wiemar Republic. Saying that hyperinflation is bad for an economy is about as useful as saying that a fire in a crowded theater is bad for orderly exiting by said crowd. The Germans would be better served in the current crisis if they did look at the Wiemar hyperinflation and considered why the Wiemar government had to print all of those banknotes that drove the inflation. They did it to pay the punishing war reparations demanded by the Allies. Reparations that had to be paid in gold. It would help the Germans to understand how futile and counterproductive it is to demand repayment of a debt from people who don’t have the means to do it.

No, the unique piece of economic history that still forms a large part of the German mind is the Ordoliberalism that is credited with the post World War II Wirtschaftswunder. The English translation is “Economic Miracle,” but like many German compound words it has a meaning beyond the words that make it up. It is hard to describe the pride that the Wirtschaftswunder brings up in Germans today. The Germans in spite of the odds and with no real help from the outside built the German economy from nothing after the war into the third largest economy in the world in about 15 years.

And no, my Americancentric friends, the Marshal plan was only a minor help to the Germans. It aided the Germans late in the cycle, after the recovery had been started by the Germans themselves, it paled in comparison to the money that we Americans took out of Germany, we made them pay the costs of the occupation for example, and the money provided to the Germans under the Marshall Plan was in the form of loans which Germany repaid completely in 1980, if my memory serves me well.

Ordoliberalism is the economic philosophy that American conservatives say is impossible, socially responsible free market economics, with the rewards of the economy distributed through society, with competition maintained by responsible government regulation. And most importantly price stability through strictly monetary controls, twenty years before Milton Friedman. The one thing that Ordoliberalism absolutely didn’t accept was fiscal policy controls for price stability. Possibly as a reaction to the Nazi era of corporate authoritarian dictatorship, fascism.

And of course, fiscal controls are what is needed now, with monetary controls ineffective at the zero bound. I am talking about some EMU wide stimulus and some good old fashioned magic money printing to erase the debts. Germany won’t do it. And thanks to the charter the Germans wrote EMU concerning the European Central Bank, the ECB can’t do it.