I think I’m more sympathetic to the plight of German Chancellor Angela Merkel than a lot of folks I speak to about this. I mean, the woman faces some extremely tough politics. You think TARP was unpopular? Imagine if it was bailing out Mexico, and you’ll get a feel for what she’s facing from her electorate.
But that said, the degree to which she’s stonewalling and blowing off solutions before they have the slightest chance to incubate is terribly discouraging. This AM’s NYT describes the agenda for an upcoming summit meeting as pushing towards “a more tightly knit European Union, with phased-in moves toward central banking supervision, unified deposit insurance and more sharing of the region’s debt burden.”
Although watered down from an earlier draft to try to appease Berlin, the proposals brought immediate criticism from Germany, with Chancellor Angela Merkel telling her partners in her governing coalition…that Europe would not have total sharing of debt “as long as I live.”
(Shades of Maggie Thatcher’s “the lady’s not for turning!”)
Such inflexibility is obviously antithetical to progress in Europe. The economic integration of the eurozone depends on moving from a currency union to one with the type of institutions noted above, where banking and fiscal oversight is much more unified across member states. Those are some of the very conditions upon which German officials have been insisting, but when sharing of the debt burden is brought into the mix—as it must be—they give ultimatums.
Again, I’m sympathetic. Suppose you asked the good people of states like New York and MA, which are net contributors to the coffers of states like Mississippi, West Va, Alabama, if they’d like to continue to send their federal tax dollars down there. I fear they might not be so forthcoming. But the question never comes up because the structures for such revenue sharing were in place from the beginning. What we’re watching now is what happens when you try to put such structures in place later.
But that’s where leadership comes in and it appears to be in short supply.
I don’t write much about electoral poll results, but I found some of the results in this AM’s WSJ to be pretty interesting and potentially revealing about voter sentiments. First, note the split among potential Obama and Romney voters as to favorability for their candidate. O’s voters are for him by a wide margin; R’s supporters are not for R as much as they’re against O.
Also, while the election is essentially tied by this poll, there’s a bigger difference favoring the President in battleground states (50/42). As some have suggested, this may relate to the fact that in some of these states, unemployment has fallen faster over the last couple of years than the national average. For example, over the last two years the jobless rate is down 4.5 and 2.8 percentage points in MI and OH, compared to 1.4 points on average across the nation.
Finally, Andrew Tisch, over on the WSJ oped page, believes that by referring to the magnitude of the national debt in trillions, we’re not generating enough alarm about it. He suggests the following:
…from now on, if you want to say “trillion,” say “one thousand billion” or “one million million,” or “one thousand thousand thousand thousand.” Our national debt, then, would go from $15.8 trillion to $15,800 billion. Doing this would show, among other things, that even cutting $100 billion from our debt would bring us down only to $15,700 billion.
There’s also a bunch of stuff in there about how many briefcases a $1 trillion would fill up (in $100 bills, $1 trillion weighs 22 million pounds!) and how if you stacked them you’d penetrate the earth’s atmosphere (though this kind of assumes that everybody understands astrophysics better than economics).
OK…maybe that’s the problem. It’s that we talk about trillions and don’t spend enough time weighing money.
Unless it’s that the vast majority of Republicans have pledged their fealty to Grover to never raise taxes, thus ensuring gridlock and an inability to achieve a balanced agreement on a fiscal plan. I hope I’m wrong and that we just have to start talking about a thousand thousand thousands etc. Worth a try, I guess.