Germany Fails to Learn the Lessons of 1931

By Shlomo Maital



The leaders of Europe all hold shares in Eli Lilly, the drug company that makes and sells Prozac, an anti-depressant. That is the only way I can explain why they are causing a global Depression, and widespread despair among individuals.   The chief culprit is the leader of Germany, the brilliant (no sarcasm intended) Angela Merkel.

     This is not just my opinion. It is the opinion of Niall Ferguson, a  Harvard economist, and Nouriel Roubini, Columbia Univ. professor who foresaw the global crash of 2008-11.  They are writing in the Financial Times, June 9-10, p. 9.  What they say is deeply disturbing.

      The rise to power of a murderous German dictator in 1933 was preceded by massive German bank failures in 1931.  Today Spanish banks are failing, as are banks in Greece, and perhaps in Italy.  Only Germany can initiate a plan to bail them out.  Instead, Angela Merkel foresees a two-tier Europe.  Translation: the strong responsible countries in the North stay, the weak irresponsible spenders in the south, the lazy bums who don’t work or pay taxes, will leave.  The two-tier Europe is her solution. 

   It is pure folly.  Widespread bank failures in Spain will be the beginning of the end for the euro.  You either save the euro, or you abandon it. And according to Ferguson and Roubini, if the euro sinks, Germany will pay a devastating price.  So while Germany now battles the memory of the hyperinflation of the 1920’s,  what it really should fear is the deflation of the 1930’s.  There is no two-tier Europe. Only one tier, or no tier.

   The EU single market had a political vision – to have Germany and France trade and grow wealthy together, so that they would never again fight.  Economic wealth creates political unity.  Now, Germany has forgotten that vision, created by France’s Jean Monnet, and France is too weak to revive it.  Collapse of the economic union will bring political conflict back to Europe. Perhaps not war – but hostility, and the price will be very high, for Europe and for the world.  Blame Germany. 

    The closing paragraph of the article is chilling. “The EU was created to avoid repeating the disasters of the 1930s.  It is time Europe’s leaders –and especially Germany’s – understand how perilously close they are to doing just that.”