As if the economic news is not worrying enough, politicians around the world have decided to make things worse. The Chinese regime treated vice president Joe Biden rudely on his visit to Beijing to discuss economic issues of mutual concern—the rapidly depreciating dollar worries the Chinese, while the too slowly appreciating yuan is on Biden’s list of woes. So much for a coordinated effort to cope with imbalances. French president Nicolas Sarkozy and German chancellor Angela Merkel met to sort out the eurozone crisis and agreed that more meetings are needed. So much for calls to increase the bailout fund and make Germany’s balance sheet available to poorer countries. The European Central Bank has decided that the eurozone, with growth somewhere between zero and negative, really needs higher interest rates, not a policy most economists would consider rational. The Finns say they won’t go along with further bailouts for Greece unless the Greeks find something of value (sunshine doesn’t count) to offer as collateral, and the Austrians say that what is good enough for Finland is surely good enough for Austria.
Here, in America, Republican presidential candidates tripped over one another to display their ignorance of economic affairs, with the entire field promising Iowans and a national television audience never to raise taxes even in the unlikely event that the Democrats agree to cut spending by ten times as much. And the newest hot entry in the race, Rick Perry, rode in from his Texas governor’s mansion to promise to do “ugly” things to Federal Reserve Board chairman Ben Bernanke if he dared show his face in the Lone Star state, and perhaps even to try him for the near treasonous behavior of printing money in order to stimulate the sagging economy. Meanwhile, President Barack Obama chided Congress for not acting on several trade agreements, neglecting to mention that he has not submitted the agreements for congressional approval lest he antagonize the trade unions.
