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(Since he chairs the ECB I am a bit of a fan)
Don't they teach the history of the Weimar Republic in German schools?
A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
And indeed, the great depression , Brüning and austerity and Schacht and Mefowechsel are all very much part of the curriculum.
Whatever you need to know about Germany, you will probably find it somewhere in Goethe's Faust. But it is rare that wisdom is found in part two of the tragedy, one of the most revered and least read books in all of German literature. Someone who managed to dig up something truly remarkable from it was Jens Weidmann. The president of the Bundesbank cited Mephisto's advice to the Emperor, quoted above, that the simple solution to a lack of money is to print it
Mephisto's speech encapsulates Germany's ultimate nightmare about fiat money and about monetary union. It was clear from the context and the timing of the speech that Mr Weidmann would cast Mario Draghi in the role of modern-day Mephisto, though, obviously, he did not say so explicitly. Mr Weidmann's remarks concluded one of the most extraordinary two-week periods in the history of central banking. We are on the cusp of an important new development, one the Bundesbank abhors. The US Federal Reserve has adopted a new programme of quantitative easing and has become much more determined in guiding future expectations. The European Central Bank, which Mr Draghi heads, has announced an unlimited - though conditional - programme of bond purchases; a programme that jars with everything the Bundesbank stands for and believes in.
As Wedimann should know, having certainly read Faust 1, Mephistopheles is the one who "stets das Böse will und stets das Gute schafft." Draghi, Merkel and all the rest seem more determined in showing us what the road to hell is paved with.
Weidmann's misreading of Faust pales when compared with the FT, of course
Mr Weidmann did not highlight another cautionary tale from the play for economists. Faust in the final earthbound scene comes up with a plan for universal prosperity and happiness ... and promptly dies.
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