The Intransigent Tea Party and Germans, Part II

Contrast the positions taken by the NYT and WSJ editorial boards on the "obligation" of the Germans to save the Euro.

According to NYT:

"[I]t should be utterly clear that no country — including Germany — is immune [from the potential disaster]. ... German officials are still insisting that their profligate neighbors need to pay for their sinful ways — and that Germany’s virtuous taxpayers will not be made to foot the bill. ... The best solution would be for the European Central Bank, which can print money, to become the lender of last resort and buy the bonds of distressed European nations."

It is remarkable to me that NYT can simplistically assume that flooding the world with Euros will end the crisis. A much more likely result of such an action would be that the Euro would decline in value and inflation would ramp up across the Continent. Lenders would still demand exorbitant interest out of fear that the value of their loans would be inflated away by the ECB, through a kind of "soft default."

WSJ takes a more sensible position:

"Berlin's alleged sin is its reluctance to write a blank check to save the euro—either by underwriting a new euro-zone fiscal union, or granting permission for the European Central Bank to buy trillions in sovereign debt. The chant comes in unison from the debtor nations themselves, the bailout caucus in Brussels, an Obama White House concerned about its re-election, and liberal pundits worried that their welfare-state economic model is under assault. Like the "rich" in America who must pay their "fair share," the Germans are supposed to pay up to save a united Europe. The reality is that the Germans—along with the Dutch and the Finns—are the rare Europeans who understand that saving the euro requires more than a blank check. It requires a new political commitment to better economic policy. Chancellor Angela Merkel and her cabinet are as euro-centric as the French, but they realize that money alone won't solve Europe's more fundamental debt and growth problem."

Once again the Keynesian, liberal, tax and spend lobby is trying to stampede the world into accepting the "too big to fail" argument: "Italy and Spain are too big to fail. If we don't bail them out, global catastrophe will ensue. And that catastrophe will overwhelm even the innocent. In fact, there are no innocents. We all, including the Germans, are sinners."

Hold your ground, Mrs. Merkel.