Our near panic over the deficit limit crunch has diverted attention from developments in Europe that are interesting to say the least. Stratfor has an analysis of a recent evolution in Europe’s ability to cope with financial crises within its weakest members, notably Greece, that suggests that the strongest member of the European monetary union, Germany, has agreed to take over primary responsibility both for keeping the Greek economy afloat and for setting down and enforcing behavioral changes that the Greeks will have to follow in return. To put it in the simplest terms, German frugality and industry has given it power, while Greece has gone on a spending binge and now must pay the piper by submitting to an abrogation of its sovereignty, with a German banker calling the tune. Until this summer, Greece’s policeman was the European Union, a loose organization by far, compared to what Greece can now expect with a German nanny keeping a beady eye on its financial habits.
Other spendthrift nations in the monetary union are next in line, including Portugal, perhaps Ireland, possibly Spain. To the extent they are desperate for funds to get out of their respective holes, they’ll have to turn to the German-run EFSF (European Financial Security Facility) to get them at reasonable interest rates.
It just goes to show you that hard work, frugality, putting savings ahead of consumption, all these ant-like qualities are the way to increased power and prestige, not the grasshopper qualities of conspicuous consumption. It sounds like a page out of the current Republican playbook. And any German with a sense of history will tell you it sure beats the tar out of trying to achieve domination by military conquest.
Let me get a bit personal here. My memories of Germany are old but vivid, dating back to the period after the Second World War. I was a bit too young to join the fighting but was sent over to Bremen in January 1946 and spent a year there as part of our occupation forces. Four years later I was back as a junior diplomat, assigned to a rural county as the local representative of HICOG, the Office of the High Commissioner for Germany. My first exposure was just after we’d flattened the country, at least the cities. Rubble as far as the eye could see. “Alles kaput” was heard as frequently then as “No problem” is heard here, now. People all over the city were picking up loose bricks and stacking them in orderly piles…Flash forward to 1950. The economic miracle was just taking hold, people were beginning to eat again, new buildings all over. The German administration was filling out, rapidly replacing HICOG and the likes of me. I hired a housekeeper who had to bicycle across town to do her day’s work for me. On inquiring, I learned that as a war widow she was entitled to a pension that was somewhat more than what I was paying her. To work with my family she had to give up her pension. Why? Well, she replied, to be without work is not respectable (“anstaendig”). What kind of culture, what kind of work ethic is this? Obviously, one that is going to get ahead.
It is that work ethic, more than any accidents of geography or history, that is responsible for the evolution in German-Greek relations I just described. And this little history does, I submit, have some important implications for my own country at its present moment of convulsions over a growing fiscal deficit. Yes, we have been overspending, way beyond reasonable limits, and yes, the time has come when we have to do something about it. But what?
The first thing we have to do is get over the illusion that military prowess is somehow the road to world leadership. The Germans fell for that idea, and pretty soon everyone else feared and hated them, and then they got beaten to a pulp and had to start over again. I regret to say we are well down that road ourselves at this point. Will we have the good sense to reverse course before it is too late? On present form, I wouldn’t bet on it. The way Congress is behaving, cutting the liver and lights out of everything except the military, we are going to have to suffer a lot worse than anything in living memory before we wake up.
The second lesson is that frugality, industriousness, and all the other attributes of a responsible and productive work ethic are in no wise incompatible with a sense of compassion for the less fortunate members of our society. Indeed, modern postwar Germany has risen from the ashes with a fine, efficient, and compassionate network of social services. If they can afford it why can’t we? And if they can afford to invest in a superb physical infrastructure, why can’t we? If they can afford to invest as they have in education, why can’t we? Why can’t we see that these investments are not only compatible with economic strength, they are essential building blocks!
Come on, America, let the scales fall from our eyes, put the fundies and extreme Ayn Rand types back on reservations where they belong, and get back with the rest of humanity!
Carl Coon 7/30/11