What is with the Czechs
I can't resist commenting on Josh's post from last night, because I don't think Josh analyzed the situation quite correctly.
First, dramatis personae: Mr. Topolanek is the Czech Prime Minister, head of the now-outgoing government; also the current EU president, by virtue of being the leader of the country holding the rotating EU presidency. Mr. Klaus is the president of the Czech Republic, a role which is largely ceremonial; he is known for being a rabid Eurosceptic and a global warming denier. Mr. Havel is the former Czech president and a playwright, now more or less retired, and not relevant to this story (unfortunately, perhaps).
Here is a BBC report on Mr. Topolanek's speech. This was no "outburst". Mr. Topolanek is known for his tendency to say what he really thinks, which admittedly may have been strenghtened by the lost no-confidence vote in the Czech parliament, especially because his government fell for no good reason at the worst possible time (right before a summit with Obama's visit in Prague less than two weeks from now). His remarks about a "road to hell" were undiplomatic, but expressed the current thinking of European leaders (especially Germany, the largest EU member state).
The fundamental issue is that US and European economies have very different structure, and very different problems. Europe has no problem with a housing market bust (there was no bubble, either). There aren't widespread systemic problems in the banking sector. For a small, export-oriented economy like that of the Czech Republic, deficit spending is useless in a global downturn situation. It can run up a huge debt but it won't change the situation. For a large exporter country like Germany, the downsides of large-scale deficit spending are clear, the upsides far less so. That's why European countries (with the notable exception of the UK) are very reluctant to start massive spending.
Which is not to say that stimulus spending won't help in the US - just that Americans shouldn't be telling Europeans what to do, and vice versa. Simply because they rarely understand what's really going on across the pond, and tend to have too insular views.
First, dramatis personae: Mr. Topolanek is the Czech Prime Minister, head of the now-outgoing government; also the current EU president, by virtue of being the leader of the country holding the rotating EU presidency. Mr. Klaus is the president of the Czech Republic, a role which is largely ceremonial; he is known for being a rabid Eurosceptic and a global warming denier. Mr. Havel is the former Czech president and a playwright, now more or less retired, and not relevant to this story (unfortunately, perhaps).
Here is a BBC report on Mr. Topolanek's speech. This was no "outburst". Mr. Topolanek is known for his tendency to say what he really thinks, which admittedly may have been strenghtened by the lost no-confidence vote in the Czech parliament, especially because his government fell for no good reason at the worst possible time (right before a summit with Obama's visit in Prague less than two weeks from now). His remarks about a "road to hell" were undiplomatic, but expressed the current thinking of European leaders (especially Germany, the largest EU member state).
The fundamental issue is that US and European economies have very different structure, and very different problems. Europe has no problem with a housing market bust (there was no bubble, either). There aren't widespread systemic problems in the banking sector. For a small, export-oriented economy like that of the Czech Republic, deficit spending is useless in a global downturn situation. It can run up a huge debt but it won't change the situation. For a large exporter country like Germany, the downsides of large-scale deficit spending are clear, the upsides far less so. That's why European countries (with the notable exception of the UK) are very reluctant to start massive spending.
Which is not to say that stimulus spending won't help in the US - just that Americans shouldn't be telling Europeans what to do, and vice versa. Simply because they rarely understand what's really going on across the pond, and tend to have too insular views.
