Evening Must-Read: Wolfgang Munchau: The Wacky Economics of Germany’s Parallel Universe

…and those that have not understood Keynes. To describe the economic mainstream in Germany as conservative misses the point…. As compelling as a comparison between the German mainstream and the Tea Party may appear, it does not survive scrutiny…. A good example of orthodox dogma was last week’s annual report of the Council of Economic Experts…. They did not criticise a lack of investment, excessive current account surpluses or overzealous fiscal rectitude. Instead they criticised the minimum wage and some minor relaxation to the retirement age. In other words: they want the government of Angela Merkel, chancellor, to be even tougher…. Macroeconomics in Germany and elsewhere are tantamount to parallel universes. In practice, German macroeconomic exceptionalism did not really matter all that much–until recently, when it started to matter a lot. When you have your own currency and engage with the rest of the world mainly through trade, a wacky ideology is your problem. That changes when you enter a monetary union, which is when policy makers have to work together…”