Now we have a big government feedback loop between the EU and the EU wanna-bes. The Wall Street Journal reported over the weekend that our Treasury Secretary is urging the EU and its European Central Bank to “take stronger action” to get control over Europe’s potentially deteriorating debt crisis.
The success of the next phase of the crisis response will hinge on Europe’s willingness and ability, together with the European Central Bank, to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of markets[.]
Not, apply themselves to get out of the way of the markets and give them room to right themselves. No, the big government policies that created the economic disasters of the PIIGS and of the EU generally need to be applied even more so to stem the tide.
Indeed, as the WSJ went on,
Washington has long pressed Europe to bolster its emergency bailout funds and use them to backstop government debt. It has also urged the ECB to use all the weapons in its arsenal to calm financial markets.
How’s that working out for us, exactly?
The IMF is in on this tragicomedy, also. Its steering committee Issued a Communiqué with this sage advice for the euro zone:
[C]ontinued progress on ensuring debt sustainability, securing financial stability, and undertaking bold structural reforms will be crucial to boosting confidence and productivity, facilitating rebalancing within the monetary union, and promoting strong and balanced growth.
Most of this is pap, intended solely to give the impression of advisement. However, with apologies to Inigo Montoya, you keep using that phrase “undertaking bold structural reforms.” I do not think it means what you think it means.