There was no way to avoid discussion of the fundamental differences of economic strategy…. Major disputes broke out between Washington and China, Britain, Germany and Brazil.
Each rejected core elements of Mr. Obama’s strategy of stimulating growth before focusing on deficit reduction. Several major nations continued to accuse the Federal Reserve of deliberately devaluing the dollar last week in an effort to put the costs of America’s competitive troubles on trading partners, rather than taking politically tough measures to rein in spending at home.
You see the influence of Hoovernomics on the story, as “tough measures to rein in spending at home” are taken for granted as an answer to “America’s competitive troubles”–rather than a sure way to exacerbate those troubles, as countries like Ireland, Spain and Greece are demonstrating anew (Guardian, 11/12/10).
After quoting German Chancellor Angela Merkel lecturing Obama (“I am not one, and Germany is not one, who says growth and fiscal consolidation are contradictory”), the story throws in an observation that has the effect of validating the conservative politician’s pro-austerity rhetoric: “Mrs. Merkel is credited with avoiding spending heavily on stimulus programs and emerging with the most successful recovery in Europe.”
There’s a couple things wrong here: It’s true that Merkel is credited with avoided stimulus, but in reality Germany had Europe’s biggest stimulus program–82 billion euros, or $110 billion. (Germany’s economy is roughly one-fourth the size of the U.S.’s.)
Secondly, the phrase “most successful recovery in Europe” conceals the fact that Germany’s recovery, so far, has been less successful than the United States’, at least in terms of GDP growth–from the latest figures available, the U.S. is at 99.4 percent of its pre-recession GDP, while Germany is at 97.3 percent. Pointing this out, though, might have put a wet blanket on what the Times obviously felt was a stirring call for responsible fiscal policy.