Ron Paul « Dr Alf's Blog

One of a number of posters created by the Economic Cooperation Administration to promote the Marshall Plan in Europe (Photo credit: Wikipedia)

Germany (Photo credit: sanctumsolitude)

This is an excellent MUST READ article from Bruce Bartlett, written in the Economix column of the NYT. Check it out!

via How the Revival of Postwar Germany Began – NYTimes.com.

Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul.

Personally, I found the article extremely interesting having in my mind attributed the economic success of Postwar Germany almost exclusively to the Marshall Plan.

Reflecting a little, the underlying message is that the economic success of Postwar Germany was based upon economic liberalism. Sadly, economic liberalism in Germany seems to have in recent years given way to a policy of caution with too much power given over to legal checks and balances; this policy known as ordoliberalism is unique to Germany. Within Germany there are mixed views about Germany’s policy of ordoliberalism, compared to more naked economic liberalism. However, with Germany under Chancellor Angela Merkel increasingly trying to model the rest of Europe on Germany’s example, there are more serious concerns about ordoliberalism being the right economic platform. Also it is important to remember that Angela Merkel grew up in East Germany and missed out on the post WWII economic recovery in West Germany.

This thread leads me to some interesting open questions:

Should Germany give greater weight to economic management and less to legal checks and balances?
Should Germany learn by its post WWII success and revisit economic liberalism, especially for the wider EU?
Is the case for ordoliberalism still valid?

Any thoughts?

Share of financial sector in gross domestic product 1860 to 2006 (Photo credit: Wikipedia)

This is an excellent, well-researched,very pointed and MUST-READ article by Bruce Bartlett, published in the Economix column of the NYT.

via Bruce Bartlett: ‘Financialization’ as a Cause of Economic Malaise – NYTimes.com.

Bartlett “held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul“.

Personally, I think that Bartlett has a point and his argument is even more valid for the UK, which is more dependent upon financial services than the US.

For me the current explosion of financial services and subordination of real industries, can be traced back to the liberalization of the financial services industry in both the US and the UK. This led, via greed, to the financial crisis of 2008. Since 2008, world leaders have focused on greater bank regulation but have been ineffective in getting the financial sector to lend more to help traditional industries grow.

For those interested in a more detailed analysis open this link which contains one my earlier blogs on neoliberalism which provides the intellectual basis for economic liberalism and deregulation. Based upon my political beliefs, I still think there is hope for a more compassionate neoliberalism often called Third Wave Neoliberalism.

Any thoughts on what needs to be done?