Merkel rejects the Brown approach

Bocephus

Will the British public hear about this or will the media continue to parrot the Saviour Brown message?

I Dunnow

You're such a desperate, partisan hack that, in order to attack Brown, you're praising the *German* economy? Unbelievable.

CB-W

Given how useless our Government has been and how (apparently) sensible Merkel is being, I sometimes wonder whether we might not be better off in the euro.

Just a thought and I expect others will be appalled.

I'm certainly a eurosceptic for lots of reasons. But the German way of not having everyone rushing to buy homes at ruinous prices / putting your wealth in a range of assets / making things / not overburdening everyone with debt and governments thinking long and hard about what should be done not just rushing around with with a lot of sound and fury, signifying nothing is mightily attractive right now.

I suppose what I'm really saying is that I wish we had a sensible solid boring Government which did boring things like looking after the books and doing them even half-way competently. I can but dream.....

Ivy Eileen

Ross Clark wrote an article to the same effect in The Times a couple of weeks ago .... and I think Patrick Minford has too.

Eddy

Hear Hear! I'd love Cameron to raise this at PMQs next week - will certainly wipe the smirk off Brown's face.

Tobias Peters

I am afraid this is total bullshit.

Cameron is like nearly every other Tory of the past thirty years: a Thatcherite monetarist to his finger tips.

In that sense, the crisis undermines everything the Tories have been saying for decades - cut interest rates, deregulate the financial markets, let manufacturing go to the wall.

Leading to exactly the kind of asset bubbles and a big trade deficit.

Cameron knows this (surely you do too, Fraser) and this is why he has been so much at sea recently.

Speclo

Will be interesting to see how the german economy now develops compared to UK.

If the german recession is deeper that will become the benchmark for whether the stimulus worked.

Personally, as an economist by background, i dont see how an injection of 1% of GDP cant help to prop up the economy over the next year, but maybe that is just me.

Sally C

But will this get reported?
Who is going to do that?

dean

Fraser - as a regular reader of the Spectator, I distinctly remember an editorial, sometime in the last 12 months, describing Germany as a "basket case" economy. Time to eat some humble pie I think - that Anglo Saxon model doesn't look so superior now, does it?

Frederick

I suppose that is why Germany has been is recession since the start of the year and we havent. Because of Merkel and Camerons economic management skills?

Jim

Frederick - It's always possible that Germany reported entering recession at the start of the year because they were displaying a degree of honesty in their figures which ours sometimes lack.

oldtimer

The French finance minister, speaking on BBC radio yesterday, also came out against the use of VAT rate cuts as an economic stimulus.

@I Dunnow Germany has a very broadly based export industry, better placed than the UK for when world economic growth returns. The UK will have to rely on a devalued £.

@Specio The G-20 (in which Brown and Darling were participants) said "Use fiscal measures to stimulate domestic demand to rapid effect, as appropriate, while maintaining a policy framework conducive to fiscal sustainability."

Brown/Darling have done anything but retain fiscal sustainability. Taxes will go up and debt goes through the roof. The VAT rate cut is stupid and wasteful of taxpayers money.

Wilhelm

To quote Gordon Broons comment this morning about the Bombay bombings.

'' On behalf of the world '' the liebour party stinks.

What a meglomaniac Brown is that he is so presumptuous to speak on behalf of the entire planet earth.

Bexleyite

Brown borrowed his way out of prosperity, now he's trying to borrow his way out of recession.

George Laird

Dear All

Well done Angela Merkel for standing up and being counted.

In the next couple of years we will see the Germans weathering the storm better and yet again become the force in europe.

Us poor suckers will be drowning in debt as Brown continues his plan to get re-elected at any cost.

If we think things are bad then we haven't seen nothing yet.

The finanical roof is about to fall.

One wonders just how incompetent
Brown and Darling really are?

Darling opened his trap spouted a load of rubbish and sat back down again, then he had to admit the whisky problem and "fix" it.

We will see him stand up and have to admit more failure soon enough.

Save your beans and look for bargain and get out the padded jacket to cut down on the heating bills.

Personally I want to win the lotto and go to Germany, Berlin has potential.

Yours sincerely

George Laird
The Campaign for Human Rights at Glasgow University

ps Did I win the free booze in the Osbourne comp?

Ian C

The stupid thing about the Brown method is the inherent panic involved. It is about Gov't pretending it can do achieve something positive when history tells us that political intereference just extends the pain. Merkel is quite right to be saying what she has said.

The measures that Broon trumpeted and Paulson foolishly followed were measures for the 1930's, not the 'noughties. In short they are fighting the last war - but that's what bureaucrats led by politicians do. In fact they can't do anything else if you think about it - as they are elected/appointed on not making the same mistakes of the past. It is a fundamental weakness of democratic gov't as this is assumed to be 'the last threatened depression' in this case.

Far easier for the opposition to do nothing, than get it right in gov't as the result. Far easier for a gov't in recession to get it wrong - because they fight the last one.

A little humility from politicians would go oh so far. Well done Merkel - but Germany had different solutions to the 1930's that cannot be fought again. So she has the space to wisely think and not panic. We'll wait and see about Cameron, but he does not have to do much now because Brown has blown his own credibility completely as well as the economy.

Stephen Rothbart

The basic difference between Britain's and Germany's economies is that Germans prefer to rent rather than buy their own homes and thus the residential market was not forced up into unsustainable levels of value.

While Germany continued a flat but stable economic program, the British,encouraged by the banks, went on a spending spree that lasted for over 15 years and which was underwritten by increasing levels of debt leveraged against their homes.

Now that the bubble has burst, Gordon Brown is throwing tax reductions at the people in the hope that, instead of paying off all their debts to banks, building societies and credit card companies for the things they bought without paying for them before, they will actually go out and spend even more!

This is madness. Assuming Brown is not stupid, and that is beginning to be a questionable possibility, then his only reason for this insane idea is to convince the people that he has a plan, even if he is bribing the electorate with their own money, in order to get re-elected, and never mind the cost.

Unfortunately, years of dumbing down our schools is beginning to pay off, and it seems this shameless ruse may actually work.

Turkeys may be voting for Christmas, and it is not beyond the realms of possibility, that the people who Brown ruined by the last ten years of inept stewardship of the nations finances, are actually considering voting him back in.

Terence

Gordon doesn't need Angela Merkel. President Obama, saviour of lost causes, has agreed to be his prop.

Simon Stephenson

Stephen Rothbart

I'm actually quite sympathetic with your standpoint, but there are a couple of little doubts that prevent me from upping anchor and following your line:-

1. I've seen no proof that the rainy-day personal financial caution of the past is definitely a superior social approach to the borrow and spend of recent years. We need to be sure we're not using status quo bias to overstate the virtues of the tried and tested over the experimental.

2. We also need to realise that we're at least 10 years into the experimental regime, and that a decision to go back to square one, from where we are, is very different from a decision, before all this started, to carry on as we were.

Make do and mend, and the broader personal attitude that underpins it, is very much an alien concept to how the mainstream of young people of today have been brought up.

Are we really confident that the approach most likely to succeed is to attempt to cut back demands for debt/consumption? Could the social upheaval be better managed by focusing positively on satisfying these demands rather than denying them?

Perhaps the attitudes that we should really be looking to change are those of the older generations?

seb

Did He really say 'On behalf of the world' in his sermon on the Mumbai atrocities?

Ever since He appeared on the political stage, with the death of Smith, I've harboured the suspicion that the man was autistic or slightly schizoid [this does not mean the same as schizophrenic]. I'm sure this is now a probability rather than a hunch shared by a handful of us Saviour-watchers. How long can it be before the inert vegetables in His cabinet are forced to do something about this? Will the cabinet wait until Brown appoints a horse to a life peerage before contacting Broadmoor's Emergency Snatch Squad?

HJ

Tobas Peters:

"In that sense, the crisis undermines everything the Tories have been saying for decades - cut interest rates, deregulate the financial markets, let manufacturing go to the wall.

Leading to exactly the kind of asset bubbles and a big trade deficit"

Excuse me, but we had a small trade surplus when the Tories left office - now we have a vast deficit. Manufacturing output had grown by around 20% in the ten years to 1997 and was accelerating. Since then, manufacturing output has been exactly flat overall and on a worse-than-flat trajectory since around 2000. This is in contrast, for example, with the US where manufacturing output increased by 30% since 1997.