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Posted by on Jun 17, 2012 in Business, Economy, International, Law, Places, Politics, Science & Technology, Society, War | 2 comments

Will America’s ‘War on Two Fronts’ Be Against Germany and China? (La Stampa, Italy)

Does German export-driven growth based on a weak euro pose a threat to the United States – and the West – similar to the threat posed by China? For Italy’s La Stampa, columnist Vittorio Emanuele Parsi writes what would have been heresy since the end of World War II: that Washington is beginning to worry about German predominance – and not only in Europe – and whether Berlin might seek greater global influence by detaching itself from what was once sacrosanct: the North American Alliance.

For La Stampa, Vittorio Emanuele Parsi writes in part:

For years, Washington saw Germany as its most loyal ally. European unification was supported by Washington as a way of anchoring the country in the Atlantic West – particularly when Germany sat on a militarized frontier along which an enemy presence was a daily reminder of the need to keep Germany within NATO. And Germany’s division reinforced the Atlanticist point of view. It has been over twenty years since the end of that era. What the wars in Iraq and Afghanistan failed to do – namely weaken the Alliance – may occur now because Germany, lacking the courage to consciously pursue a “grand plan” to address the current crisis, may simply be “stubborn” enough to undermine the foundations of the Western Alliance.

Which is why Washington is beginning to ask whether Germany’s predominance in Europe is really compatible with an “Atlantic West.” And rather than wondering whether a new China [Germany] will follow in the footsteps of Kaiser Wilhelm (attempting to create continental hegemony by force), one shouldn’t be more concerned about Angela Merkel’s Germany attempting to follow in the footsteps of today’s China, setting itself up as the planetary export champion, spurred on by a weak euro. What if the greatest challenge to American hegemony theorized by Pentagon strategists, a “war on two fronts,” was in fact economic in nature?

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  • merkin

    (This forum has the true misfortune of having a poster who worked for a German company for over thirty years including many years living in Germany and who has a lifelong interest in the dismal science, economics. And who believes that the economy is second only to defense in the priorities of a national government. Feel free to ignore this comment for any and all reasons.)

    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.

  • slamfu

    I’m still surprised that anyone thinks unfettered capitalism without some form of controls on some major aspects of public life is a good thing. By now it is obvious to me the ideal way for a nation to handle its economics is a blend of socialist and capitalist policies. Basically what we used to have before the 80’s. A tax rate that controlled the flow of money and preserved the middle class, regulations on industries that kept them from requiring massive bailouts or recession generating disruptions. Things worked. Lets get back to it.

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