 |
|
FEBRUARY 23, 2011 |
 |
By Matthew Continetti |
|
 |
 |
 |
 |
|
COLD OPEN |
 |
 |
Last year, we published a cover story by Christopher Caldwell on the German economy. Because of that country's experience with hyperinflation in the 1920s, Caldwell observed, German policymakers have been reluctant to embrace the deficit-spending, aggregate-demand-managing "stimulus" policy advocated by the Obama administration. Even so, Germany has weathered the Great Recession quite well: Its economy is growing and unemployment fell in January 2011 to the lowest rate since 1992.
Not all countries are alike. Policies that work in some places may not work in others. Let's not pretend that Germany is some sort of Elysian (Teutonic?) paradise. Germany's record-low unemployment rate of 7.4 percent is still higher than the American unemployment rate of 5.8 percent in 2008.
Still, it's worth noting that in recent years German leaders have followed macroeconomic policies vastly different from those prescribed by Paul Krugman and his various Mini-Me's. And Germany is doing fine—better than fine, in fact. Doesn't that count for something? And isn't it worth trying a different approach to fiscal policy, in the name of "bold persistent experimentation," when two years of economic stimulus have left us with 9 percent unemployment, trillion-dollar-plus deficits, and red ink for as far as the eye can see? |
 |
|
LOOKING BACK |
 |
 |
"My own guess is that there is no such thing as a fox [a man who knows many things]; there are only different types of hedgehog [men who know one big thing]—actual and incipient hedgehogs, obvious and less-obvious hedgehogs, contented and struggling hedgehogs. A man may have many facets, interests, skills, and appetites—but he has only one personality. Believers and atheists divide over the question of whether man was created in God's image or God in man's. But everyone assumes implicitly that nature was created in man's image. The soul in its unity looks at the world in its endless variety and wants to see its own unity mirrored back. Wants to discover that, just as a man's varied actions reflect one mind or soul or personality, so also the moon's orbit and a falling leaf, a ball bouncing and water warming in the sun reflect one small, tidy packet of basic laws and forces. One of the craziest hypotheses in human history; also one of the most pregnant and productive."
—David Gelernter, "Ain't No Such Thing as a Fox," from our August 2, 1999, issue.
Remember you get full access to THE WEEKLY STANDARD archive when you subscribe. |
|
|
|
|
 |
|
FROM THE DESKTOP |
 |
 |
Matt Labash's Fly Fishing with Darth Vader is out in paperback
Uncle Leo, RIP
Michael Lewis: "When Irish Eyes Are Crying"
Iain Sinclair on cycling in London
Ken Jennings describes his encounter with Watson |
 |
|
QUOTE OF THE WEEK (SO FAR!) |
 |
 |
"The implications of turning home mortgages into bonds were mind-bogglingly vast. One man's liability had always been another man's asset, but now more and more of the liabilities could be turned into bits of paper that you could sell to anyone. In short order, the Salomon Brothers trading floor gave birth to small markets in bonds funded by all sorts of strange stuff: credit card receivables, aircraft leases, auto loans, health club dues. To invent a new market was only a matter of finding a new asset to hock. The most obvious untapped asset in America was still the home. People with first mortgages had vast amounts of equity locked up in the houses; why shouldn't this untapped equity, too, be securitized?"
—from Michael Lewis's The Big Short, p. 8. We all know what came next. |
 |
|
LOOKING AHEAD |
 |
 |
|
It's rare that you have major domestic and international stories happening simultaneously. Right now there are three: the Arab Awakening, the showdown in Wisconsin, and the fight over federal spending in Washington. Not to mention the war in Afghanistan, the rise of China, and the tumultuous state of the world economy. But don't worry, we'll have articles on all of those topics, plus a special transportation section featuring articles by Fred Barnes and Jonathan V. Last, in our upcoming issue. |
 |
|
PARTING SHOT |
 |
 |
Call it the Great American Firesale: In order to close its massive fiscal gap, the U.S. government might try selling some of our publicly owned assets. I first remember reading about the idea in this David Frum column from last year. Niall Ferguson seconds the motion in the current issue of Newsweek.
Now, I differ with both authors on some of the particulars: For instance, I don't think America ought to sell its gold, as Frum the monetarist advocates. Nor do I think that concerns over national security and national identity are as easy to dismiss as Ferguson does. Having said that, there's no question the American government could profit from shedding some real estate, Amtrak, and the TVA, among other things. Steven F. Hayward points out that expanding domestic carbon energy production would also earn revenue for the Treasury. Obviously, the Obama administration wants to do the exact opposite.
Ferguson also mentions the dollars to be made in selling or leasing American highways. This would not only raise money, but also likely increase investment in infrastructure and improve the quality of our roads. Mitch Daniels privatized a major highway in Indiana to great effect. In his paper on comparative approaches to fiscal crises, Ike Brannon of the American Action Forum writes that Puerto Rico leased its airport and major roadways to private companies as part of a successful fiscal consolidation.
A Great American Firesale wouldn't be a panacea. The only way out of this mess is changing the structure of our entitlement programs while holding the line on non-defense discretionary spending and writing a pro-growth tax code. But these days, Uncle Sam needs every dollar he can get.
See you next week. And don't forget you can write me at editor@weeklystandard.com.
--Matthew Continetti
 Share
P.S. To unsubscribe, click here. I promise not to take it personally. |
 |
|
 |
 |
 |
MORE FROM THE WEEKLY STANDARD |
|
 |
 |
 |
 |
 |
|
|
Online Store |
 |
|
Squeeze the head to the left to relieve stress. Yes you can! Only at our store. |
 |
 |
|
|
 |
|
 |
 |
 |
|
|
Subscribe Today |
 |
|
Get the magazine that The Economist has called "a wry observer of the American scene." |
 |
 |
|
|
 |
|
|
 |
 |
 |
Read probing editorials and unconventional analysis from political writers with a
dose of political humor at weeklystandard.com. |
 |
 |
|
