Angela Merkel, Chancellor of Germany, uttered inconvenient truths to those who would manage the world’s economies in a startling plenitude that could be neither ignored nor validly denied. Her speech made the front page of Wednesday’s Wall Street Journal.
While blasting both the power wielded by the US Fed and the Bank of England and the directions in which they are wielding it, Merkel may not have uttered the ultimate truth the government is not fit to “manage” the money supply or the economy, still she has opened the debate the legitimacy of their powers in a way that only the head of the government of Europe’s largest economy could do.
Is she our next Margaret Thatcher? Jawohl! I certainly hope so, because we need one!
Source link: http://archive.mises.org/10075/truth-from-power-merkel-on-the-fed/
Truth from Power? Merkel on the Fed
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I’ll tell you what, I’m not ready to call some of the Mises people (especially anarchists like Bob Murphy) crypto-fascists yet at this point, but it is getting really worrisome that nobody seems to be at all skeptical about a politician, the head of the government of Europe’s largest economy, no less, supposedly denouncing central banking.
I don’t know if people are reading between the lines too much or not enough, but if you ask me, all she called for was a “more perfect socialism,” not an end to banking socialism.
And Margaret Thatcher is now a free-market paragon? Come on, guys! THEY’RE POLITICIANS. If we ignore their rhetoric (which we should) and examine the actual, total effect of their policies and laws and regulations enacted during their time in office, I think it will be clear that even Margaret Thatcher was no “Margaret Thatcher.” That goes for Ronald Reagan, too.
Are Austrians forgetting the long-run consequences on time preference and the productive structure in praising the supposed short-run free-market scruples of their favorite politicians?
Me thinketh yes.
Quite a shame, quite disappointing.
Yeah, our fiscal policy is pretty bad. Oh well. Maybe we can print more money, and then buy euros to hedge against our own inflation.
Merkel is not an economy or philosophy genius, only an average political genius, much alike Sarkozy. That won’t save us.
She compensates the lack of real power to move things, with a strong strategical sense for rhetoric and compromise. She has no opinion at all about anything.
She has advocated “rhesponsiple” balanced budgets for years in Germany… so did we get it? for sure! It only cost us 3% national VTA increase from 16 to 19% to get it! So yep she didn’t lie, just fooled the population.
She is just satisfied when socialists in the coalition government make half of all rules. The fact that she supports “intepentence ov ze ECB” and meanwhile criticizes the bond purchase programm shows how absurd the statutes of the ECB are
The Margaret Thatcher comments are interesting. According to the “Great Global Warming Swindle”, for example, it was Margaret Thatcher who catalyzes government’s support for “green energy alternatives” as a way of decreasing the political power of the Middle East (through oil).
I have to agree with Taylor here. We complain about politicians around here all the time, but as soon as one of them spews rhetoric that we like, we sprout wide grins like mystified children. I guess such is the sway power and authority has over people. Don’t give in to this. Merkel may not shown herself to be the worst of their kind just yet, but politicians deserve nothing but a healthy feeling of pessimism from us common folk at best.
@JFC
I think they stretched that into something of a myth though. I really find it hard to swallow that all of these green lunatics somehow got their inspiration from Margaret Thatcher. As I recall Thatcher was mostly interested in curtailing the power of the coal worker’s union, regardless of what she may have said about pollution or reducing imports. She succeeded in that goal and it’s a good thing for Britain that she did.
Tim and Taylor have good points. I think we have become so used to politicians citing the State as panacea we get excited when a politician says the State is the problem. Reagan was also a master at the rhetoric of freedom and we know how his administration turned out. We have to tie ourselves to the mast whenever we hear a politician speak of freedom.
Thatcher and Reagan fail remarkably, Rothbard having written several articles on each makes it quite clear.
If she actually has shown action to back up her words, like a Ron Paul – then fair enough. Until then…
I observe Merkel’s actions and opinions for some time, she is just another socialist. There is no single point in this speech that would hint otherwise. She accepts without hesitation government monopoly over monetary affairs and she would like to regulate banking sector more strictly. Moreover she does not shrink from fiscal folly while denouncing monetary one. One example for all, so called “Schrott Geld”.
What did Margaret Thatcher do that was so great?
Rothbard was always harsh on everybody, with the exception on Mises. In the end he’s just a guy with a worldview, and with a certain opinion.
Margaret Thatcher wasn’t too bad by the classical liberal yardstick i.m.o., even though towards the end she faltered. Her political instincts were generally sound – it was not as if the British wanted more reforms, people in general don’t like change which is too rapid and overwhelming, and with transitory effects which are damaging. You can only do so much in a span of several years – especially if you’re talking political feasibility here (democracy, you know)… ten years is not sufficient to reverse decades of entrenched socialism.
Thatcher was no economic genius – she had to rely on the likes of Friedman and Hayek. But she did believe in a free society, and she was a conviction politician which steered the country – and the world – towards that goal.
I like her on the European Union – she was and still is a lone ranger on that one. Oh well.
Thatcher was concerned about the effects of human industrial activity on the environment, but if I recall correctly she was unhappy that it became politicized. Even then it was no longer a mere issue of science.
As for her supposed “warmongering”, to be fair when it comes to governing a country – the economics is quite straightforward, foreign policy is the tough one. Especially with interlocking interests, mutual dependency et cetera – foreign policy is not only economic concerns, but also security concerns and power.
You can decry military build-up for all you want – but if you were China, you too would rev up your military, dedicate funding to military research, and have a nuclear arsenal in order to protect your sovereignty. The Chinese learnt this the hard way in the 19th-2oth century, when foreign powers tried to carve it up.
There is a lot to criticize Margaret Thatcher for, certainly.
However, as a Brit I am very thankful to her. Before her the situation here was quite ridiculous. Every major industry was nationalized. The trade unions went on strike at the drop of a hat. The trade unions extorted huge sums from the taxpayer. Taxes were huge.
Things are now far better on most of those fronts. In many cases despite the Labour governments efforts. The labour government have managed to increase taxes almost back to where they were though.
Taylor says: “Are Austrians forgetting the long-run consequences on time preference and the productive structure in praising the supposed short-run free-market scruples of their favorite politicians?
Me thinketh yes.”
No were not. Let’s look at things realistically here. The masses are supporters of socialism, almost to a man. This is unlikely ever to change.
When it is reasonable to do so we should lend support to leaders who are less socialist than other alternatives. Otherwise nothing will change.
Rothbards ideas about a world without government are fantasies.
Pffff. China has had ‘The Bomb’ since the ’60s.
Don’t expect too much from this rethoric. She wants to be reelected in September.
The German public is afraid of the coming inflation, so she has to be critical of the 60 billion euros for which EZB will buy mortgage-backed bonds.
Only words. If the Germans want to shake things up then they need only do the following:
1. Withdraw from the EU.
2. Close their central bank.
3. Repeal any legal tender laws. Let people establish their own money.
4. Repeal any laws prohibiting victimless crimes.
This will really improve the lives of all citizens of the plant, especially those in the US and UK.
This makes me proud of my German heritage.
From a perspective of allowing only a “yes” or “no” to the answer “is it socialistic?” Merkel is socialistic.
But if one allows for answers other than “yes” or “no”, like “she is a bit socialistic” then there is a huge difference between Merkel and those people who openly call themselves socialist.
Merkel ran in 2005 with a pro-freedom and pro-market tendency. Her designated finance secretary was someone who had been promoting the for germany rather crazy idea, that a simple tax system is preferable to endlessly complicated one. (I know, austrians would reply that robbery is robbery, but if one is going to be robbed anyway knowing in advance how much will be robbed is preferable to being forced by the robber to waste hours calculating for him on his whims how much money he takes.) Of course he was demonized as an evil capitalistsm promoter and merkel was barely able to win the election with getting about 8% less votes than expected and was forced to govern with the social democrats, so this idea was quickly buried.
But to some extent this might have been only for tactical reason as in her party, the christian democratic union, such ideas are not completely irrelevant. In 1990 i read a article by the then finance secretary, that in the long run the CDU wants to reduce the state part of the GNI from then 45% to 40%, since to high state part of GNI threatens economic growth – and the aim to lower share of GNI to 40% is since long in the written aims of the party. In 1994 Schaeuble, who is in important positions since 1985 or so currently interior secretary, argued with a whole book that germany has to change the amount of interference by the state in the economy or otherwise the future could be bleak in long term.
The CDU also strongly pressured in the formulation of the maastricht treaty, which lead to the intrduction of the euro, that there is a 3% of GNI limit for deficits, which shows, that they are somewhat aware, that by just spending money, one cannot prevail in the long run. Currently mainly due to pressure from CDU there was a change in the constitution to restrict – of course only starting in 7-11 years – the amount of deficit the state is allowed to have to 0%-0.35% of GNI.
So there is some awareness, that one cannot just print money and order the economy to offer jobs and everything is ok. Of course, the practical results show a large difference between what they say they want and what they achieve.
But the difference is still large if one compares it to the head of the socialistic party, who said, that one cannot earn legally 10 billions and that therefore anyones wealth beyond that has to be confiscated.
In the political conflict about the maximum height of income tax the CDU is also arguing against an increase, unlike social democrats and socialist, who seem to think, that 45% is not enough.
So from a austrian point of view Merkel might be as a socialistic robber as any other, but i think there is a difference between a robber who steals 50% and one who steals everything.
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