It’s the Economy, Dummkopf!

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It’s the Economy, Dummkopf!Michael Lewis is one of, if not the best the best financial writers. In this very lengthy article, Michael Lewis discusses the history of Germany and weaves it into the current European debt crisis. He talks at length about the relationship of the Germans to the Greeks (I am of neither decent, but at times he seems to stereotype quite a bit), on this point though he does not discuss WWII and the German occupation of Greece, and Greek resistance. Hitler had great admiration for the Greeks and did not want to invade the country,it is off topic but Germany only got involved after  Italy’s failed invasion of Greece in 1940. Ironically, the invasion of Greece cost Germany the war as it delayed the invasion of Russia, and German troops got stuck in the Russian winter (although historian John Keegan disagrees with the conventional wisdom on this topic).

I am a mini-historian on WWII; so tying in some of the German history into the current Euro crisis I found to be completely fascinating. I am not sure yet if I am going to do a book review on it, but in my leasure time I am reading The Wages of Destruction by Adam Tooze. The author is not a revisionist historian by any stretch, but he dispels a lot of common misconceptions about the German economy pre and during world war II. For example, although it is true that unemployment decreased drastically under Hitler, the standard of living was far below any of the other Western countries in metrics like GDP per capita. It is important to remember that this was true in the 1930s, far before America got out of the Great Depression. Additionally, ideas like building the auto-Bahn, were in existence many years before Hitler even became chancellor in 1933.

Below is an interesting excerpt (I think the whole article is interesting, but had to pick one segment) from Lewis’ recent article, followed by a link to the full article:

A week or so earlier, in Berlin, I had gone to see Germany’s deputy minister of finance, a 44-year-old career government official named Jörg Asmussen. The Germans are now in possession of the only Finance Ministry in the big-time developed world whose leaders don’t need to worry whether their economy will collapse the moment investors stop buying their bonds. As unemployment in Greece climbs to the highest on record (16.2 percent at last count), it falls in Germany to 20-year lows (6.9 percent). Germany appears to have experienced a financial crisis without economic consequences. They’d donned head condoms in the presence of their bankers, and so they had avoided being splattered by their mud. As a result, for the past year or so the financial markets have been trying and failing to get a bead on the German people: they can probably afford to pay off the debts of their fellow Europeans, but will they actually do it? Are they now Europeans, or are they still Germans? Any utterance or gesture by any German official anywhere near this decision for the past 18 months has been a market-moving headline, and there have been plenty, most of them echoing German public opinion, and expressing incomprehension and outrage that other peoples can behave so irresponsibly. Asmussen is one of the Germans now being obsessively watched. He and his boss, Wolfgang Schäuble, are the two German officials present in every conversation between the German government and the deadbeats.

The Finance Ministry, built in the mid-1930s, is a monument to both the Nazis’ ambition and their taste. A faceless butte, it is so big that if you circle it in the wrong direction it can take you 20 minutes to find the front door. I circle it in the wrong direction, then sweat and huff to make up for lost time, all the while wondering if provincial Nazis in from the sticks had had the same experience, wandering outside these forbidding stone walls and trying to figure out how to get in. At length I find a familiar-looking courtyard: the only difference between it and famous old photographs of it is that Hitler is no longer marching in and out of the front door, and the statues of eagles perched atop swastikas have been removed. “It was built for Göring’s Air Ministry,” says the waiting Finance Ministry public-relations man, who is, oddly enough, French. “You can tell from the cheerful architecture.” He then explains that the building is so big because Hermann Göring wanted to be able to land planes on its roof.

Full article here-It’s the Economy, Dummkopf!

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